Q2 2025 Results Show Varied Performance Among U.S. P&C Insurers
The Q2 earnings season revealed mixed outcomes for U.S. property & casualty (P&C) insurance stocks, with the sector overall showing modest revenue growth and resilience in share prices. The cyclical nature of P&C insurance, influenced by market conditions such as premium rate trends, interest rates, catastrophic loss frequency, and litigation cost inflation, continues to shape company performances. Collectively, 33 tracked P&C insurers surpassed revenue forecasts by 1.5% and experienced an average 5.4% increase in share prices since earnings announcements.
CNA Financial, a longstanding commercial P&C insurer, posted a 5.6% year-over-year revenue increase to $3.72 billion, although slightly below analyst expectations. Its shares gained 8.8% post-report, supported by robust underwriting and balanced growth strategies emphasizing profit opportunities. Root, a technology-driven auto insurer leveraging mobile data and behavioral pricing, reported a significant 32.4% revenue increase to $382.9 million, outperforming analyst estimates, but its stock declined 18%, reflecting market caution.
Selective Insurance Group faced a challenging quarter with an 89.3% revenue decline and substantial missed expectations, triggering an 11.8% share price drop. Conversely, Markel Group, noted for complex risk underwriting combined with investments and business ownership, achieved a 24.3% revenue rise to $4.60 billion and exceeded revenue and premium estimates but saw a slight book value miss, with a modest share price decline.
Enact Holdings, a private mortgage insurer facilitating access for first-time homebuyers, reported a modest 2% revenue increase and delivered mixed results in premiums and earnings per share, with a 12.8% share price rise following its report. The broader economic context includes Federal Reserve interest rate adjustments aimed at managing inflation without triggering recession, contributing to a stable outlook for the insurance sector amid ongoing macroeconomic and policy uncertainties.