Property & Casualty Insurance Stocks Q4 Teardown: Erie Indemnity (NASDAQ:ERIE) Vs The Rest

Wrapping up Q4 earnings, we look at the numbers and key takeaways for the property & casualty insurance stocks, including Erie Indemnity (NASDAQ:ERIE) and its peers.

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 37 property & casualty insurance stocks we track reported a strong Q4. As a group, revenues beat analysts’ consensus estimates by 4.8%.

In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.

Erie Indemnity (NASDAQ:ERIE)

Operating under a unique business model dating back to 1925, Erie Indemnity (NASDAQ:ERIE) serves as the attorney-in-fact for Erie Insurance Exchange, managing policy issuance, claims handling, and investment services for this reciprocal insurer.

Erie Indemnity reported revenues of $951 million, up 2.9% year on year. This print fell short of analysts’ expectations by 2.5%, but it was still a very strong quarter for the company with a beat of analysts’ EPS estimates.

Interestingly, the stock is up 1.2% since reporting and currently trades at $266.82.

Read why we think that Erie Indemnity is one of the best property & casualty insurance stocks, our full report is free.

Best Q4: HCI Group (NYSE:HCI)

Starting as a Florida "take-out" insurer that assumed policies from the state-backed Citizens Property Insurance Corporation, HCI Group (NYSE:HCI) provides property and casualty insurance, primarily homeowners coverage, while leveraging proprietary technology to improve underwriting and claims processing.

HCI Group reported revenues of $246.2 million, up 52.1% year on year, outperforming analysts’ expectations by 3.8%. The business had an incredible quarter with a solid beat of analysts’ book value per share estimates and a beat of analysts’ EPS estimates.

The market seems happy with the results as the stock is up 6.4% since reporting. It currently trades at $173.94.

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

Weakest Q4: Old Republic International (NYSE:ORI)

Founded during the Roaring Twenties in 1923 and weathering nearly a century of economic cycles, Old Republic International (NYSE:ORI) is a diversified insurance holding company that provides property, liability, title, and mortgage guaranty insurance through its various subsidiaries.

Old Republic International reported revenues of $2.36 billion, up 9.5% year on year, exceeding analysts’ expectations by 1.6%. Still, it was a softer quarter as it posted a significant miss of analysts’ EPS estimates and a significant miss of analysts’ book value per share estimates.

As expected, the stock is down 1.9% since the results and currently trades at $42.30.

Read our full analysis of Old Republic International’s results here.

First American Financial (NYSE:FAF)

Tracing its roots back to 1889 when California was experiencing its first major real estate boom, First American Financial (NYSE:FAF) provides title insurance, settlement services, and risk solutions for residential and commercial real estate transactions across the United States and internationally.

First American Financial reported revenues of $2.05 billion, up 21.6% year on year. This print topped analysts’ expectations by 15.2%. It was an incredible quarter as it also put up a beat of analysts’ EPS estimates and an impressive beat of analysts’ revenue estimates.

The stock is up 9.2% since reporting and currently trades at $70.28.

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

Lemonade (NYSE:LMND)

Built on the principle of giving back unused premiums to charitable causes selected by policyholders, Lemonade (NYSE:LMND) is a technology-driven insurance company that offers homeowners, renters, pet, car, and life insurance through an AI-powered digital platform.

Lemonade reported revenues of $228.1 million, up 53.3% year on year. This result surpassed analysts’ expectations by 4.8%. Overall, it was an incredible quarter as it also produced a beat of analysts’ EPS estimates and a solid beat of analysts’ net premiums earned estimates.

The stock is down 19.6% since reporting and currently trades at $52.88.

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

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