Winners And Losers Of Q3: Fidelity National Financial (NYSE:FNF) Vs The Rest Of The Property & Casualty Insurance Stocks

As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q3. Today, we are looking at property & casualty insurance stocks, starting with Essent Group .

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 2.6% on average since the latest earnings results.

Essent Group

Serving as a crucial bridge between homebuyers and the American dream of homeownership, Essent Group provides private mortgage insurance and title services that enable lenders to offer home loans with down payments of less than 20%.

Essent Group reported revenues of $311.8 million, down 1.5% year on year. This print fell short of analysts’ expectations by 1.6%. Overall, it was a softer quarter for the company with a significant miss of analysts’ EPS and revenue estimates.

“We are pleased with our third quarter results, which again demonstrate the strength and resilience of our business model,” said Mark A. Casale, Chairman and Chief Executive Officer.

Interestingly, the stock is up 2.5% since reporting and currently trades at $62.31.

Read our full report on Essent Group here, it’s free.

Best Q3: Root

Pioneering a data-driven approach that rewards good driving habits, 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 estimates and an impressive beat of analysts’ 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 11.5% since reporting. It currently trades at $79.21.

Weakest Q3: Progressive

Starting as a small auto insurance company in 1937 with a pioneering focus on high-risk drivers, Progressive 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 10.2% since the results and currently trades at $215.81.

Read our full analysis of Progressive’s results here.

Lemonade

Built on the principle of giving back unused premiums to charitable causes selected by policyholders, Lemonade 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 $194.5 million, up 42.4% year on year. This number surpassed analysts’ expectations by 4.8%. It was a stunning quarter as it also logged a beat of analysts’ EPS estimates and an impressive beat of analysts’ revenue estimates.

The stock is up 46.2% since reporting and currently trades at $86.58.

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

Trupanion

Born from a vision to help pet owners avoid economic euthanasia when faced with expensive veterinary bills, Trupanion provides medical insurance for cats and dogs through data-driven, vertically-integrated products priced specifically for each pet's unique characteristics.

Trupanion reported revenues of $366.9 million, up 12.1% year on year. This print topped analysts’ expectations by 1.3%. Overall, it was an exceptional quarter as it also recorded a beat of analysts’ EPS estimates and a solid beat of analysts’ book value per share estimates.

The stock is down 13.1% since reporting and currently trades at $36.58.

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

What a brutal six months it’s been for Bowhead Specialty. The stock has dropped 25.7% and now trades at $25.87, rattling many shareholders. This might have investors contemplating their next move.

Following the drawdown, is now the time to buy BOW? Find out in our full research report, it’s free for active Edge members.

Why Are We Positive On Bowhead Specialty?

Named after the Arctic bowhead whale known for navigating challenging waters, Bowhead Specialty Holdings is a specialty insurance company that provides customized coverage for complex and high-risk commercial sectors.

1. Net Premiums Earned Skyrocket, Fueling Growth Opportunities

Net premiums earned are net of what’s paid to reinsurers (insurance for insurance companies), which are used by insurers to protect themselves from large losses.

Bowhead Specialty’s net premiums earned has grown at a 37.9% annualized rate over the last two years, much better than the broader insurance industry.

2. Projected Revenue Growth Is Remarkable

Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite, though some deceleration is natural as businesses become larger.

Over the next 12 months, sell-side analysts expect Bowhead Specialty’s revenue to rise by 20.5%. While this projection is below its 42.1% annualized growth rate for the past two years, it is eye-popping and suggests the market is baking in success for its products and services.

3. Growing BVPS Reflects Strong Asset Base

Book value per share (BVPS) serves as a key indicator of an insurer’s financial stability, reflecting a company’s ability to maintain adequate capital levels and meet its long-term obligations to policyholders.

Fortunately for investors, Bowhead Specialty’s BVPS grew at an incredible 74.5% annual clip over the last two years.

Final Judgment

These are just a few reasons why we're bullish on Bowhead Specialty. After the recent drawdown, the stock trades at 2.1× forward P/B (or $25.87 per share). Is now the right time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .

As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q3. Today, we are looking at property & casualty insurance stocks, starting with First American Financial .

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 14.7%.

In light of this news, share prices of the companies have held steady as they are up 4.7% on average since the latest earnings results.

First American Financial

Tracing its roots back to 1889 when California was experiencing its first major real estate boom, First American Financial 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 $1.98 billion, up 40.7% year on year. This print exceeded analysts’ expectations by 6.2%. Overall, it was a stunning quarter for the company with a solid beat of analysts’ revenue estimates and a beat of analysts’ EPS estimates.

The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $61.44.

Best Q3: Root

Pioneering a data-driven approach that rewards good driving habits, 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 estimates and an impressive beat of analysts’ 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 19.9% since reporting. It currently trades at $71.69.

Weakest Q3: Progressive

Starting as a small auto insurance company in 1937 with a pioneering focus on high-risk drivers, Progressive 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 5.1% since the results and currently trades at $228.12.

Read our full analysis of Progressive’s results here.

RLI

Founded in 1965 and named after its original focus on "replacement lens insurance" for contact lens wearers, RLI is a specialty insurance company that underwrites property, casualty, and surety products through wholesale brokers, independent agents, and carrier partnerships.

RLI reported revenues of $449 million, up 5.3% year on year. This number met analysts’ expectations. Aside from that, it was a mixed quarter as it also logged a beat of analysts’ EPS estimates but a significant miss of analysts’ book value per share estimates.

The stock is up 7.3% since reporting and currently trades at $63.98.

Read our full, actionable report on RLI here, it’s free for active Edge members.

Assured Guaranty

Serving as a financial safety net for over $11 trillion in debt service payments since its founding in 2003, Assured Guaranty provides credit protection products that guarantee scheduled payments on municipal bonds, infrastructure projects, and structured finance obligations.

Assured Guaranty reported revenues of $207 million, down 23% year on year. This result topped analysts’ expectations by 12.2%. It was an incredible quarter as it also logged a beat of analysts’ EPS estimates and an impressive beat of analysts’ revenue estimates.

Assured Guaranty had the slowest revenue growth among its peers. The stock is up 10.3% since reporting and currently trades at $89.87.

Read our full, actionable report on Assured Guaranty here, it’s free for active Edge members.

Earnings results often indicate what direction a company will take in the months ahead. With Q3 behind us, let’s have a look at Stewart Information Services 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 33 property & casualty insurance stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 14.7%.

Thankfully, share prices of the companies have been resilient as they are up 5.4% on average since the latest earnings results.

Stewart Information Services

Founded in 1893 during America's westward expansion when property records were often disputed, Stewart Information Services provides title insurance and real estate services, helping homebuyers, sellers, and lenders verify property ownership and protect against title defects.

Stewart Information Services reported revenues of $796.9 million, up 19.3% year on year. This print exceeded analysts’ expectations by 31%. Overall, it was a stunning quarter for the company with an impressive beat of analysts’ revenue and EPS estimates.

"I am proud of our third quarter results as they demonstrate our momentum," commented Fred Eppinger, chief executive officer.

Unsurprisingly, the stock is down 6.4% since reporting and currently trades at $70.27.

Best Q3: Root

Pioneering a data-driven approach that rewards good driving habits, 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 estimates and an impressive beat of analysts’ 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 19.7% since reporting. It currently trades at $71.87.

Weakest Q3: Progressive

Starting as a small auto insurance company in 1937 with a pioneering focus on high-risk drivers, Progressive 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 4.3% since the results and currently trades at $230.10.

Read our full analysis of Progressive’s results here.

First American Financial

Tracing its roots back to 1889 when California was experiencing its first major real estate boom, First American Financial 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 $1.98 billion, up 40.7% year on year. This print surpassed analysts’ expectations by 6.2%. Overall, it was a stunning quarter as it also logged an impressive beat of analysts’ revenue estimates and a beat of analysts’ EPS estimates.

The stock is up 1.1% since reporting and currently trades at $62.06.

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

Trupanion

Born from a vision to help pet owners avoid economic euthanasia when faced with expensive veterinary bills, Trupanion provides medical insurance for cats and dogs through data-driven, vertically-integrated products priced specifically for each pet's unique characteristics.

Trupanion reported revenues of $366.9 million, up 12.1% year on year. This number beat analysts’ expectations by 1.3%. It was an exceptional quarter as it also produced a beat of analysts’ EPS estimates and a solid beat of analysts’ book value per share estimates.

The stock is down 9.4% since reporting and currently trades at $38.14.

Read our full, actionable report on Trupanion here, it’s free for active Edge members.