What to Expect From These 4 Insurers This Earnings Season?

Continued improved pricing, exposure growth, portfolio streamlining, solid retention, renewals, reinsurance agreements and accelerated digitalization are expected to have enhanced insurance stocks’ June-quarter performance. However, catastrophe losses and continued inflationary pressures are likely to have weighed on the upside. Insurers yet to report their second-quarter results on Aug. 5 are Aflac Incorporated AFL, Lemonade, Inc. LMND, Heritage Insurance Holdings, Inc. HRTG and Assurant, Inc. AIZ.

The insurance space is housed within the broader Finance sector (one of the 16 broad Zacks sectors within the Zacks Industry classification). Per the latest Earnings Preview, the total earnings of finance companies for the second quarter are anticipated to rise 16.7% from the prior-year quarter’s figure. These companies’ revenues are anticipated to improve 5%.

Factors Likely to Shape Insurers’ Performance in Q2

Better pricing, solid retention, as well as exposure growth across business lines, are likely to have driven premiums. Per the new data released by MarketScout, insurance rates across the United States continued their upward trend in the second quarter of 2025. For commercial insurance, average rates rose by 2.8% during the quarter. According to the MarketScout Market Barometer, the composite rate for U.S. personal lines increased in the second quarter to 4.6%.

Auto premiums are likely to have improved, given increased travel across the world. A low unemployment rate is likely to have aided commercial insurance and group insurance.

Jefferies estimated global insured catastrophe losses for the second quarter of 2025 totaled approximately $30 billion, with the vast majority, around 85%, stemming from events in the United States, per the Reinsurance News. J.P. Morgan estimates that total insured catastrophe claims in the second quarter of 2025 are likely to come in slightly above $10 billion, which is well below the recent average of around $20 billion.

Underwriting profit is likely to have benefited from better pricing, reinsurance arrangements, portfolio repositioning, reinsurance covers and favorable reserve development.

For a fifth straight meeting, the Fed held rates steady at 4.25-4.50%. The rates were held steady so far as inflation is likely to remain above the Fed's 2% target until next year due to the impact of tariffs. 

A larger investment asset base, strong cash flow from operating activities, higher bond yields, as well as an increase in interest income from fixed-maturity securities, are expected to have aided net investment income.

The insurance industry’s increased use of technology like blockchain, artificial intelligence, advanced analytics, telematics, cloud computing and robotic process automation expedites business operations. Insurers continue to invest heavily in technology to improve basis points, scale and efficiencies. These investments are likely to have curbed costs and aided the margins of insurers in the second quarter. 
  
A solid capital position is likely to have aided insurers in strategic mergers and acquisitions to sharpen their competitive edge, expand geographically and diversify their portfolio. Sustained wealth distribution to shareholders via dividend hikes, special dividends and share repurchases instill confidence in the insurers.

Let’s find out how the following insurers are placed before their second-quarter 2024 results on Aug. 5.

Per our proprietary model, the combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Aflac: The Zacks Consensus Estimate for second-quarter total net earned premiums indicates a 3.4% year-over-year increase. While the consensus mark signals a 3.3% increase in total adjusted revenues in the Aflac U.S. unit, due to higher premiums, the same for the Aflac Japan unit predicts a 2.6% fall from the year-ago quarter. The consensus mark for net investment income predicts a 17.2% decline from the year-ago period. Total benefit to premium ratio in Aflac U.S. is pegged at 47.8, up from 46.7 a year ago. Yet, the same for Aflac Japan stands at 65.3, down from 66.9 in the year-ago period. The Zacks Consensus Estimate for pre-tax adjusted earnings from Aflac U.S. indicates an 8.1% year-over-year fall. Similarly, Aflac Japan is likely to have witnessed a 13.2% decline in pre-tax adjusted earnings. The negatives are likely to have been partly offset by significantly improved pre-tax adjusted earnings figures from Corporate and other. (Read more: Aflac Gears Up for Q2 Earnings: Ready to Quack or Set to Crack?)

The Zacks Consensus Estimate for AFL’s second-quarter 2025 earnings is pegged at $1.75 per share, indicating a 6.5% decline from the prior-year quarter’s figure. The consensus mark for revenues is pinned at $4.43 billion, implying a 13.7% decrease from the year-ago quarter’s figure. AFL has an Earnings ESP of -1.25% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

AFL’s earnings surpassed estimates in two of the last four reported quarters while missing in the other two. The same is depicted in the chart below:

Aflac Incorporated Price and EPS Surprise

Aflac Incorporated price-eps-surprise | Aflac Incorporated Quote

Lemonade: In-force premium in the second quarter is likely to have improved on expanding customer base, higher premium per customer, product and geographic diversification and contribution from the Metromile acquisition. Management expects the in-force premium as of June 30, 2025, to be between $1.061 billion and $1.064 billion. Premium per customer is likely to have increased owing to rate increases. Gross written premium is likely to have increased, given the success of digital advertising campaigns and partnerships, as well as geographic and product offering expansion. Investment income is likely to have benefited from a diversified portfolio with higher returns. Revenues are likely to have improved owing to an increase in gross earned premium and a rise in investment income. (Read more: Can Lemonade Keep its Beat Streak Alive in Q2 Earnings?)

The Zacks Consensus Estimate for LMND’s second-quarter 2025 loss is pegged at 81 cents per share. The consensus mark for revenues is $162.39 million, implying a 33.1% increase from the year-ago quarter’s figure. LMND has an Earnings ESP of +2.40% and a Zacks Rank of 2 at present. 

LMND’s earnings surpassed estimates in each of the last four quarters. The same is depicted in the chart below:

Lemonade, Inc. Price and EPS Surprise

Lemonade, Inc. price-eps-surprise | Lemonade, Inc. Quote

Heritage Insurance: HRTG’s second-quarter results are likely to benefit from rate adequacy, managed exposures and enhanced underwriting discipline. Gross premiums earned are likely to have improved, driven by rate adequacy and organic growth in commercial, residential and surplus lines business. Premiums-in-force are likely to have improved banking on proactive rate hikes and growth in the E&S business. Net investment income is likely to have benefited from a high-quality portfolio of short-duration assets. Total revenues are likely to have increased, driven by a rise in premiums and net investment income. The company’s strategic lowering of exposure in over-concentrated and unprofitable areas, while increasing presence in profitable geographies and products, is likely to have driven profitability. (Read more: Heritage Due to Report Q2 Earnings: Here's What to Expect)

The Zacks Consensus Estimate for HRTG’s second-quarter 2025 earnings is pegged at $1.03 per share, indicating an increase of 68.8% from the prior-year quarter’s figure. The consensus mark for revenues is $212.13 million, implying a 4.2% increase from the year-ago quarter’s figure. HRTG has an Earnings ESP of 0.00% and a Zacks Rank of 3 at present. 

HRTG’s earnings surpassed estimates in each of the last four quarters. The same is depicted in the chart below:

Heritage Insurance Holdings, Inc. Price and EPS Surprise

Heritage Insurance Holdings, Inc. price-eps-surprise | Heritage Insurance Holdings, Inc. Quote

Assurant: Solid performance at the Global Housing segment, as well as growth in Global Lifestyle, is likely to have aided the second-quarter performance of Assurant. Revenues are likely to have benefited from improved net earned premiums and higher net investment income. Net earned premiums are expected to have benefited from higher premiums in the Global Housing and Global Lifestyle segments. Net investment income is likely to have been affected by reduced partnership income and lower yields on cash and short-term investments. The downside is likely to have been partially offset by an increase in fixed maturity securities related to higher yields and assets. (Read more: Is a Beat in the Cards for Assurant This Earnings Season?)

The Zacks Consensus Estimate for AIZ’s second-quarter 2025 earnings is pegged at $4.43 per share, indicating an increase of 8.5% from the prior-year quarter’s figure. The consensus mark for revenues is $3.11 billion, implying a 5.7% increase from the year-ago quarter’s figure. AIZ has an Earnings ESP of +2.21% and a Zacks Rank of 3 at present. 

AIZ’s earnings surpassed estimates in each of the last four quarters. The same is depicted in the chart below:

Assurant, Inc. Price and EPS Surprise

Assurant, Inc. price-eps-surprise | Assurant, Inc. Quote

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research