5 P&C Insurers Stocks to Watch As the Industry Witnesses Soft Pricing

The Zacks Property and Casualty Insurance (P&C) industry is witnessing softer pricing after several years of improvement. However, it is likely to benefit from prudent underwriting, exposure growth and accelerated digitalization. Industry players like Chubb Limited CB, The Travelers Companies TRV, Cincinnati Financial Corporation CINF, Skyward Specialty Insurance Group, Inc. SKWD and Hagerty Inc. HGTY are poised to grow despite all odds. Given an active catastrophe environment, the policy renewal rate should accelerate. The increasing adoption of technology and the emergence of insurtech help the industry players function smoothly.

The Fed has been lowering interest rates and has hinted at the possibility of more throughout the year. Though insurers are direct beneficiaries of an improved rate environment and rate cuts are headwinds, investment income is expected to remain strong, given insurers’ diverse investment portfolio as well as continued growth of private market investments. Also, an investment portfolio skewed toward fixed-income maturities provides some upside.  The imposition of tariffs by President Trump, as well as higher inflation, will have an impact on pricing. Nonetheless, an improvement in surplus and accelerated economic activities set the stage for a better M&A environment. Per Fitch Ratings, personal auto is expected to stay strong, and, coupled with better investment results and lower claims, should fuel insurers' performance.  

About the Industry

The Zacks Property and Casualty Insurance industry comprises companies that provide commercial and personal property insurance, and casualty insurance products and services. Such insurance helps to safeguard property in case of any natural or man-made disasters. Some industry players also provide liability coverage. The insurance coverage offered also includes automobiles, professional risk, marine, excess casualty, aviation, personal accident, commercial multi-peril, and professional indemnity and surety. Premiums are the primary source of revenues for these insurers. Better pricing and increased exposure drive premiums. These companies invest a portion of premiums to meet their commitments to policyholders. However, rate cuts by the Fed pose downside risk.

4 Trends Shaping the Future of the Property and Casualty Insurance Industry

Proper pricing to help navigate claims: Catastrophes remain a major concern for insurers due to the high losses incurred, leading to rate increases to ensure claims payouts. Per Global Insurance Market Index by Marsh, global commercial insurance rates fell 4% in the third quarter, following seven years of rising rates. Marsh’s Global Insurance Market Index noted a rate decline across all regions and most product lines.  Fitch Ratings expects strong performance in personal auto insurance, driven by improved investment returns and reduced claims. S&P Global projects that underwriting profits in this segment will stabilize as insurers aim to grow policy volumes while keeping rates steady or slightly reduced. Deloitte estimates gross premiums to grow sixfold to $722 billion by 2030, with China and North America accounting for over two-thirds of the total. Swiss Re predicts premium growth of 4% in 2026.

Catastrophe loss induces volatility in underwriting profits: The property and casualty insurance industry is susceptible to catastrophe events, which drag down underwriting profits.  Swiss Re estimates 2025 insured losses from natural catastrophes to approximate $107 billion, largely driven by LA wildfires and severe convective storms in the United States. Swiss Re estimates the combined ratio to improve to 98.5% in 2025 but deteriorate by 50 basis points to 99% in 2026. Underwriting profitability is expected to be under pressure, primarily due to soft performance in personal lines, which are expected to witness higher catastrophe losses per Insurance Information Institute and Milliman. The first nine months of 2025 recorded an underwriting gain of $35 billion, about a 10-fold increase from the year-ago period, per AM Best. Exposure growth, better pricing, prudent underwriting and favorable reserve development will help withstand the blow. Also, frequent occurrences of natural disasters should accelerate the policy renewal rate. 

Merger and acquisitions: Consolidation in the property and casualty industry is likely to continue as players look to diversify their operations into new business lines and geography. Buying businesses along the same lines will also continue as players look to gain market share and grow in their niche areas. With a sturdy capital level, the industry is witnessing a number of mergers, acquisitions and consolidations.

Increased adoption of technology: The industry is witnessing increased use of technology like blockchain, artificial intelligence, advanced analytics, telematics, cloud computing and robotic process automation that expedite business operations and save costs. The industry has also witnessed the emergence of insurtechs or technology-led insurers. The focus of insurtech is mainly on the property and casualty insurance industry. Insurers continue to invest heavily in technology, generative AI in particular, as it is expected to improve basis points, scale and efficiencies. However, the use of technology poses cyber threats.

Zacks Industry Rank Indicates Weak Prospects

The group's Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates dull prospects in the near term. The Zacks Property and Casualty Insurance industry, which is housed within the broader Zacks Finance sector, currently carries a Zacks Industry Rank #173, which places it in the bottom 29% of more than 250 Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.

The industry’s positioning in the bottom 50% of the Zacks-ranked industries is a result of a positive earnings outlook for the constituent companies in aggregates. Earnings estimates for 2026 have decreased 5.3% year over year.

Before we present a few property and casualty stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture. 

Industry Underperforms Sector and the S&P 500

The Property and Casualty Insurance industry has underperformed its sector and the Zacks S&P 500 composite in a year. The stocks in this industry have collectively risen 6.9% compared with the sector’s increase of 16.8% and the Zacks S&P 500 composite’s increase of 19.8% in the said time frame.

Price Performance

Current Valuation

On the basis of the trailing 12-month price-to-book (P/B), which is commonly used for valuing insurance stocks, the industry is currently trading at 1.46X compared with the S&P 500’s 8.69X and the sector’s 4.23X.

Over the past five years, the industry has traded as high as 1.73X, as low as 1.17X and at the median of 1.45X.

Price-to-Book (P/B) Ratio (TTM)

Price-to-Book (P/B) Ratio (TTM)

 

5 Property and Casualty Insurance Stocks to Watch

Here, we are discussing one Zacks Rank #1 (Strong Buy) stock, two Zacks Rank #2 (Buy) stocks and two Zacks Rank #3 (Hold) stocks from the P&C Insurance industry. You can see the complete list of today’s Zacks #1 Rank stocks here.

Skyward Specialty: Headquartered in Houston, TX, Skyward Specialty underwrites commercial property and casualty insurance products in the United States. Its focus on complex, underserved risk segments with underwriting expertise and diversified products positions this growing specialty commercial property & casualty insurer well for growth. Its recent Apollo acquisition is aimed at the expansion of Skyward’s life sciences solution globally. It sports a Zacks Rank #1.

The Zacks Consensus Estimate for SKWD’s 2026 earnings suggests 29.4% year-over-year growth. It delivered a four-quarter average earnings surprise of 13.7%.  It has a VGM Score of A.

Price and Consensus: SKWD

 

Cincinnati Financial: Headquarters in Fairfield, OH, Cincinnati Financial markets property and casualty insurance.  Cincinnati Financial continues to grow on better pricing, strong renewal, solid retention, exposure growth and a disciplined expansion of Cincinnati Re, which is making a nice contribution to its overall earnings. The company intends to grow the commercial lines segment through additional agency appointments, expansion of local field presence, enhanced expertise and a robust product catalog. It carries a Zacks Rank #2.

The Zacks Consensus Estimate for 2026 earnings suggests 16.2% year-over-year growth. It delivered a four-quarter average earnings surprise of 52.36%. It has a VGM Score of B. The expected long-term earnings growth rate is pegged at 5.3%.

Price and Consensus: CINF

 

Hagerty: Headquartered in Traverse City, MI, Hagerty is a specialty insurer and automotive-enthusiast platform blending high-growth insurance with lifestyle services. Its diversified model, coupled with an expanding policy count, fuels sustained revenue generation and cross-sell opportunities. Continued investments in technology and strategic fronting arrangements accelerate profit and scale policies toward long-term growth. It carries a Zacks Rank #2.

The Zacks Consensus Estimate for HGTY’s 2026 earnings suggests 17.6% year-over-year growth and moved 1 cent north in the past 30 days. The company delivered a four-quarter average earnings surprise of 0.6%.  It has a VGM Score of A.

Price and Consensus: HGTY

Chubb Limited: Headquartered in Zurich, Switzerland, Chubb is one of the world’s largest providers of property and casualty insurance and reinsurance and the largest publicly traded P&C insurer based on market capitalization. Chubb is poised for long-term growth as it capitalizes on the potential of middle-market businesses (both domestic and international) as well as enhances traditional core packages and specialty products. Investments in various strategic initiatives bode well for growth. It focuses on cyber insurance, which has immense room for growth. This Zacks Rank #3 insurer has increased dividends for 32 straight years. 

The Zacks Consensus Estimate for CB’s 2026 earnings suggests 8.9% year-over-year growth. The expected long-term earnings growth rate is 3.7%. The consensus estimate for 2026 earnings has moved 2 cents north in the past 30 days. Chubb delivered a four-quarter average earnings surprise of 13.7%.  

Price and Consensus: CB

Travelers Companies: Based in New York, NY, Travelers Companies is one of the leading writers of auto and homeowners’ insurance, plus commercial U.S. property-casualty insurance. High levels of retention, improved pricing, increased new business and a positive renewal premium change, banking on the strength of a compelling product portfolio of coverages across nine lines of business, position it well for growth. Travelers’ commercial businesses should continue to perform well on the back of stability in the markets where it operates, as well as the execution of its strategies. It has a Zacks Rank #3. 

The Zacks Consensus Estimate for TRV’s 2026 earnings suggests 6.9% year over year increase. TRV delivered a four-quarter average earnings surprise of 89.26%. It has a VGM Score of A. The expected long-term earnings growth rate is pegged at 4%.

Price and Consensus: TRV

 

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Chubb Limited (CB): Free Stock Analysis Report
 
The Travelers Companies, Inc. (TRV): Free Stock Analysis Report
 
Cincinnati Financial Corporation (CINF): Free Stock Analysis Report
 
Hagerty, Inc. (HGTY): Free Stock Analysis Report
 
Skyward Specialty Insurance Group, Inc. (SKWD): Free Stock Analysis Report

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

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