The Zacks Property and Casualty Insurance industry is placed within the top 10% of the 243 Zacks industries. It currently carries a Zacks Industry Rank #24. Insurers remain well-poised for growth, riding on better pricing, prudent underwriting, increased exposure, an improving rate environment, a solid capital position and ongoing economic expansion.
Though the property and casualty (P&C) insurance industry has returned 12% in the year-to-date period, compared with the Finance sector’s growth of 15% and the Zacks S&P 500 composite’s rise of 19%, here are three P&C insurance stocks that have outperformed in the year-to-date period, riding on strong fundamentals. Stocks like Heritage Insurance Holdings, Inc. HRTG, The Travelers Companies, Inc. TRV and HCI Group, Inc. HCI, have not only crushed the S&P 500 composite but also outperformed the industry and the sector in the year-to-date period. These stocks are poised to maintain the rally, given their solid prospects.
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Global commercial insurance rates declined 4% in the third quarter of 2025. This marked the fifth consecutive global quarterly decrease following seven years of quarterly increases, per the Marsh Global Insurance Market Index. The key reasons behind the rate decline were growing competition among insurers, favorable reinsurance pricing and increased market capacity, per the Marsh Global Insurance Market Index.
Price hikes, operational strength, higher retention, strong renewal and the appointment of retail agents should help write higher premiums. Per Deloitte Insights, gross premiums are estimated to exceed $722 billion by 2030.
Non-life insurers are exposed to catastrophe losses, and their profitability is vulnerable to the same. According to the Swiss Re Institute, global insured losses from natural catastrophes reached $80 billion in the first half of 2025. This is nearly double the 10-year average and more than half of the $150 billion (in 2025 prices) estimated for 2025, following the long-term annual growth trend of 5-7%. Insured losses from severe convective storms were $31 billion in the first half of 2025, per the Swiss Re Institute. According to Aon, global insured losses from natural disasters reached $114 billion in the first nine months of 2025. Total economic losses were at a minimum of $203 billion, per Aon. Higher catastrophe losses continue to provide impetus to policy renewal rates.
The insurance industry is rate-sensitive. An improving rate environment is a boon for insurers, especially long-tail insurers. The Federal Reserve lowered its benchmark interest rate by 25 bps to the range of 3.75% to 4% in late October 2025. This marked the second rate cut of the year. This latest cut brought the target for its key lending rate down to its lowest level in three years, which lowered borrowing costs across the United States. With a large invested asset base, investment income should remain healthy, even if the Fed cuts rates later this year.
A solid capital level supports insurers in pursuing strategic mergers and acquisitions to gain market share, expand in niche areas, and diversify operations into new business lines and geography, as well as increase dividends, pay special dividends and buy back shares.
Players in the insurance industry are investing heavily in technology to expedite business operations. Increased use of blockchain, artificial intelligence, advanced analytics, telematics, cloud computing, Chatbot, RoboAdvisory and insurtech solutions curbs costs and improves basis points, scale and efficiencies. Per the Deloitte FSI Predictions article, insurers are likely to generate around $4.7 billion in annual global premiums from AI-related insurance by 2032, yielding a CAGR of nearly 80%.
With the help of the Zacks Stock Screener, we have selected three insurance stocks with an impressive Value Score of A. The stocks mentioned below either carry a Zacks Rank #1 (Strong Buy) or a Zacks Rank #2 (Buy) at present. Back-tested results have shown that for stocks with a solid Value Score and a favorable Zacks Rank, the returns are even better. You can see the complete list of today’s Zacks #1 Rank stocks here.
Heritage Insurance: It provides personal and commercial residential insurance products. HRTG offers personal residential insurance, commercial residential insurance for properties and personal residential and wind-only property insurance, licensed in the state of Pennsylvania. Its growing commercial residential business, expanding E&S business and improving pricing are expected to deliver better margins and boost earnings. Rate adequacy, selective profit-oriented underwriting criteria and restricting new business in over-concentrated markets or products should drive profitability for Heritage Insurance.
The excess and supply (E&S) business is another growth lever for Heritage. HRTG stated that it will consider and evaluate growth opportunities in a greater number of states. Its reinsurance program shields Heritage Insurance from exposure to hurricanes and other severe weather events in the coastal area.
The Zacks Consensus Estimate for Heritage Insurance’s 2025 earnings per share indicates a year-over-year increase of 155.7%. The consensus estimate for revenues is pegged at $844.62 million, implying a year-over-year improvement of 3.3%. The consensus estimate for 2026 revenues indicates an increase of 7.2% from the 2025 estimates.
The consensus estimate for 2025 and 2026 has moved 25.3% and 6% north, respectively, in the past 30 days. The company’s earnings have improved 17.6% in the past five years. Heritage Insurance delivered a four-quarter average earnings surprise of 100.05%. HRTG shares have rallied 140.1% in the year-to-date period.
The company’s return on equity in the trailing 12 months was 41.44%, better than the industry average of 8%. The stock currently sports a Zacks Rank #1.
The Travelers Companies: It provides a wide variety of property and casualty insurance, and surety products and services to businesses, organizations and individuals in the United States and select international markets. Strong renewal rate change, retention, and increased new businesses, supported by a compelling portfolio and a solid capital position, position TRV well for growth. The company raised its dividend for the 21st consecutive year at a compound annual growth rate of 8% over that period.
The Zacks Consensus Estimate for TRV’s 2025 earnings per share indicates a year-over-year increase of 14.6%. The consensus estimate for revenues is pegged at $48.83 billion, implying a year-over-year improvement of 5.1%.
The consensus estimate for 2026 earnings per share indicates a year-over-year increase of 6.7%. The consensus estimate for 2026 revenues is pegged at $50.49 billion, implying a year-over-year improvement of 3.4%.
The consensus estimate for 2024 and 2025 has moved 1.2% and 1.5% north, respectively, in the past 30 days. The company’s earnings have improved 17.2% in the past five years. The expected long-term earnings growth rate is pegged at 4.1%. TRV delivered a four-quarter average earnings surprise of 89.26%. The insurer also has a favorable VGM Score of A.
The company’s return on equity in the trailing 12 months was 20.28%, better than the industry average. Shares of TRV have rallied 21.6% in the year-to-date period. The stock currently sports a Zacks Rank #1.
HCI Group: It is a holding company that conducts its business activities through its subsidiaries. HCI is engaged in diverse business activities, including property and casualty insurance, information technology, real estate and reinsurance. HCI provides property and casualty insurance. HCI’s insurance product includes property and casualty homeowners’ insurance, condominium-owners’ insurance and tenants’ insurance for individuals owning property.
The Zacks Consensus Estimate for HCI Group’s 2025 earnings per share indicates a year-over-year increase of 173.8%. The consensus estimate for revenues is pegged at $892.05 million, implying a year-over-year improvement of 18.9%. The consensus estimate for 2026 revenues indicates an increase of 3.6% from the 2025 estimates. HCI has an impressive Growth Score of A.
The consensus estimate for 2025 and 2026 has moved 18.5% and 2.3% north, respectively, in the past 30 days. The company’s earnings have improved 19% in the past five years. HCI Group delivered a four-quarter average earnings surprise of 61.78%. The insurer has a favorable VGM Score of A. HCI shares have rallied 52.5% in the year-to-date period.
The company’s return on equity in the trailing 12 months was 31.18%, better than the industry average of 8%. The stock currently sports Zacks Rank #2.
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This article originally published on Zacks Investment Research (zacks.com).
