A Look Back at Property & Casualty Insurance Stocks' Q3 Earnings: W. R. Berkley (NYSE:WRB) Vs The Rest Of The Pack

The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how property & casualty insurance stocks fared in Q3, starting with W. R. Berkley (NYSE:WRB).

Property & Casualty (P&C) insurers protect individuals and businesses against financial loss from damage to property or from legal liability. This is a cyclical industry, and the sector benefits when there is 'hard market', characterized by strong premium rate increases that outpace loss and cost inflation, resulting in robust underwriting margins. The opposite is true in a 'soft market'. Interest rates also matter, as they determine the yields earned on fixed-income portfolios. On the other hand, P&C insurers face a major secular headwind from the increasing frequency and severity of catastrophe losses due to climate change. Furthermore, the liability side of the business is pressured by 'social inflation'—the trend of rising litigation costs and larger jury awards.

The 33 property & casualty insurance stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 14.9%.

In light of this news, share prices of the companies have held steady as they are up 3.6% on average since the latest earnings results.

W. R. Berkley (NYSE:WRB)

Founded in 1967 and operating through more than 50 specialized insurance units across the globe, W. R. Berkley (NYSE:WRB) underwrites commercial insurance and reinsurance through specialized subsidiaries serving industries from healthcare to construction to transportation.

W. R. Berkley reported revenues of $3.77 billion, up 10.8% year on year. This print exceeded analysts’ expectations by 1.7%. Despite the top-line beat, it was still a slower quarter for the company with a significant miss of analysts’ book value per share estimates and EPS in line with analysts’ estimates.

Unsurprisingly, the stock is down 4.6% since reporting and currently trades at $70.28.

Is now the time to buy W. R. Berkley? Access our full analysis of the earnings results here, it’s free.

Best Q3: Root (NASDAQ:ROOT)

Pioneering a data-driven approach that rewards good driving habits, Root (NASDAQ:ROOT) is a technology-driven auto insurance company that uses mobile apps to acquire customers and data science to price policies based on individual driving behavior.

Root reported revenues of $387.8 million, up 26.9% year on year, outperforming analysts’ expectations by 4.5%. The business had an incredible quarter with a beat of analysts’ EPS and net premiums earned estimates.

Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 15.3% since reporting. It currently trades at $75.82.

Is now the time to buy Root? Access our full analysis of the earnings results here, it’s free.

Weakest Q3: Progressive (NYSE:PGR)

Starting as a small auto insurance company in 1937 with a pioneering focus on high-risk drivers, Progressive (NYSE:PGR) is a major auto, property, and commercial insurance provider that offers policies through independent agents, online platforms, and over the phone.

Progressive reported revenues of $22.51 billion, up 14.2% year on year, in line with analysts’ expectations. It was a softer quarter as it posted a significant miss of analysts’ EPS estimates and a miss of analysts’ book value per share estimates.

As expected, the stock is down 11.5% since the results and currently trades at $212.76.

Read our full analysis of Progressive’s results here.

American Financial Group (NYSE:AFG)

With roots dating back to 1872 and a business model that empowers local decision-making, American Financial Group (NYSE:AFG) is an insurance holding company that specializes in commercial property and casualty insurance products for businesses through its Great American Insurance Group.

American Financial Group reported revenues of $2.20 billion, down 1.3% year on year. This print beat analysts’ expectations by 1.8%. It was a strong quarter as it also recorded an impressive beat of analysts’ revenue estimates and a decent beat of analysts’ book value per share estimates.

The stock is up 2.8% since reporting and currently trades at $135.13.

Read our full, actionable report on American Financial Group here, it’s free.

NMI Holdings (NASDAQ:NMIH)

Founded in the aftermath of the 2008 housing crisis to bring new capacity to the mortgage insurance market, NMI Holdings (NASDAQ:NMIH) provides mortgage insurance that protects lenders against losses when homebuyers default on their mortgage loans.

NMI Holdings reported revenues of $178.7 million, up 7.6% year on year. This result topped analysts’ expectations by 0.7%. Taking a step back, it was a slower quarter as it recorded EPS in line with analysts’ estimates.

The stock is up 7.8% since reporting and currently trades at $40.46.

Read our full, actionable report on NMI Holdings here, it’s free.

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