3 Insurance Stocks Poised to Outshine Q2 Earnings Expectations

Per the latest Earnings Preview, the Finance sector’s second-quarter 2025 total earnings are anticipated to rise 16.7% from the prior-year quarter’s figure. These companies’ revenues are anticipated to improve 5%. Second-quarter results of insurance, one of the Finance sector industries, are likely to reflect improved pricing, exposure growth, portfolio streamlining, solid retention, renewals, reinsurance agreements and accelerated digitalization. However, catastrophe losses and continued inflationary pressures are likely to have weighed on the upside.

With the help of the Zacks Stock Screener, we have identified three insurers, namely American International Group Inc. AIG, Manulife Financial Corp MFC and Primerica, Inc. PRI, which are poised to outperform the Zacks Consensus Estimate in second-quarter earnings. These stocks have the ideal combination of two ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy), #3 (Hold) — to surpass expectations. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Factors Likely to Impact Q2 Results

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 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.

Life insurers’ continuous focus on protection products is likely to have aided solid sales, given a rise in demand for protection products. Life insurers continue to roll out investment products that provide bundled covers of guaranteed retirement income, life, and healthcare to cater to customers preferring policies with “living” benefits more than those with death benefits.

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 instills confidence in the insurers.

3 Potential Outperformers This Earnings Season

Primerica is the second-largest issuer of term-life insurance coverage in North America. Solid sales growth, persistency, and a strong network of life-licensed sales representatives are likely to aid PRI’s second-quarter results. Sales and policy persistency are likely to have benefited from the strong demand for protection products. Adjusted direct premiums are likely to have been driven by premiums from new sales. An improved interest rate environment is likely to have favored net investment income.

The Zacks Consensus Estimate for PRI’s second-quarter earnings is pegged at $5.17, suggesting an increase of 9.7% from the year-ago reported figure. PRI has an Earnings ESP of +0.14% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Primerica, Inc. Price and EPS Surprise

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

Manulife Corporation: Headquartered in Toronto, Canada, this life insurer is one of the three dominant life insurers within its domestic market and possesses rapidly growing operations in the United States and several Asian countries. Continued business growth momentum, higher expected earnings on insurance contracts, and higher expected investment earnings, with notable growth from the largest in-force business and expanding distribution network, are likely to boost MFC’s second-quarter results. Strong volume growth and attractive margins are likely to boost the Asia division, the fastest-growing insurance segment. The Global Wealth and Asset Management business is likely to have benefited from the geographic and line-of-business diversification. 

The Zacks Consensus Estimate for MFC’s second-quarter earnings is pegged at 71 cents, suggesting an increase of 7.5% from the year-ago reported figure. MFC has an Earnings ESP of +1.98% and a Zacks Rank #2 at present.

Manulife Financial Corp Price and EPS Surprise

Manulife Financial Corp price-eps-surprise | Manulife Financial Corp Quote

American International Group: American International’s revenues are expected to have benefited from higher net premiums earned from the General Insurance business. The General Insurance business might have gained from strong performances of its North America Commercial, International Commercial and Global Personal segments. The North America Commercial unit is likely to have been aided by new business growth, strong retention rates and strength in Glatfelter and Retail Property. Meanwhile, strong contributions from Property and Global Specialty are expected to have driven the results of the International Commercial segment. The Global Personal might have benefited on the back of rate hikes and new business growth in Personal Auto. 

The Zacks Consensus Estimate for AIG’s second-quarter earnings is pegged at $1.58, suggesting an increase of 36.2% from the year-ago reported figure. AIG has an Earnings ESP of +0.18% and a Zacks Rank #3 at present.

American International Group, Inc. Price and EPS Surprise

American International Group, Inc. price-eps-surprise | American International Group, Inc. Quote

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

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