Key Takeaways Insurers like TRV, AXS, JXN, LNC, and GL have beaten the market in 2025 with more gains expected in 2026.Strong underwriting, capital position and digital upgrades helped insurers thrive despite catastrophe losses.Insurers continue to boost dividends, expand via M&A, and benefit from diversified investment portfolios.As we move closer to wrapping up 2025, we are all hoping for a prosperous 2026, which, in turn, will be reflected in our investment portfolio. Despite an active catastrophe enviro ...

Core Insights - The Travelers Companies, Inc. (NYSE:TRV) is recognized as one of the 12 Best Performing Dow Stocks in 2025 [1] - Morgan Stanley has raised its price target for TRV from $285 to $295 while maintaining an Equal Weight rating, anticipating a softening cycle in the property-and-casualty market until 2026 [3] Financial Performance - In Q3, net written premiums for The Travelers Companies reached $11.5 billion, with Business Insurance increasing by 3% year-over-year to $5.7 billion, Bond & Specialty Insurance totaling $1.1 billion, and Personal Insurance at $4.7 billion [4] - The company expects an expense ratio of 28.5% for 2025 and plans to maintain this level in 2026 [5] - Fixed-income net investment income is projected to be approximately $810 million after taxes for Q4 2025, with expectations to exceed $3.3 billion in 2026 [5] Strategic Initiatives - The Travelers Companies plans to increase share repurchases to around $1.3 billion in Q4 2025, reflecting an improved capital position and investment income outlook [6] - The company benefits from a strong economic moat due to its robust commercial insurance business, offering a diverse range of solutions in both commercial and personal insurance lines [6]

Industry Overview - The Property and Casualty (P&C) insurance sector is expected to benefit from improved pricing, prudent underwriting, increased exposure, and a strong capital position, ranking in the top 12% of the Zacks Industry Rank [1] - The industry is projected to outperform the market over the next three to six months due to these favorable conditions [1] Technological Advancements - Insurers are heavily investing in technology, with an expected generation of approximately $4.7 billion in annual global premiums from AI-related insurance by 2032, reflecting a CAGR of nearly 80% [2] - The adoption of technologies such as blockchain, AI, advanced analytics, telematics, and insurtech solutions is enhancing efficiency and reducing costs for P&C insurers [2] Company Highlights The Travelers Companies Inc. (TRV) - TRV has a strong market presence in auto, homeowners', and commercial property-casualty insurance, with a high retention rate and positive renewal premium changes [6] - Expected revenue and earnings growth rates for TRV are 3.4% and 6.7%, respectively, for the next year, with a 1.5% improvement in earnings estimates over the last 30 days [8] RenaissanceRe Holdings Ltd. (RNR) - RNR is experiencing steady premium growth, with a projected 5.4% year-over-year growth in net premiums earned in 2025 [10] - Expected revenue and earnings growth rates for RNR are -1.8% and 9.4%, respectively, for the next year, with a 0.9% improvement in earnings estimates over the last 30 days [11] The Allstate Corp. (ALL) - ALL is witnessing consistent premium growth, with a 7.6% year-over-year increase in net premiums earned in the first nine months of 2025 [12] - Expected revenue and earnings growth rates for ALL are 5.7% and -14.5%, respectively, for the next year, with a 5% improvement in earnings estimates over the last 30 days [14] Mercury General Corp. (MCY) - MCY is positioned for top-line growth due to sustained premium increases and a higher number of policies written [15] - Expected revenue and earnings growth rates for MCY are 6.7% and 23.5%, respectively, for the next year, with a 13.5% improvement in earnings estimates over the last 30 days [17] Hagerty Inc. (HGTY) - HGTY specializes in insurance services for collector cars and enthusiast vehicles, offering bundled memberships with various benefits [18][19] - Expected revenue and earnings growth rates for HGTY are 7.3% and -14.3%, respectively, for the next year, with a 6.1% improvement in earnings estimates over the last 30 days [20]

New York-based The Travelers Companies, Inc. (TRV) is a leading provider of commercial and personal property, and property casualty insurance for auto, home and business. Valued at $65.3 billion by market cap, the company’s diverse business lines offer its global customers a wide range of coverage sold primarily through independent agents and brokers. Companies worth $10 billion or more are generally described as “large-cap stocks,” and TRV perfectly fits that description, with its market cap exceeding th ...

Industry Overview - The Zacks Property and Casualty Insurance industry ranks within the top 10% of 243 Zacks industries, currently holding a Zacks Industry Rank of 24, indicating strong growth potential driven by better pricing, prudent underwriting, increased exposure, an improving rate environment, solid capital positions, and ongoing economic expansion [1] Price Performance - The property and casualty (P&C) insurance industry has returned 12% year-to-date, compared to the Finance sector's 15% and the Zacks S&P 500 composite's 19% growth. Notable outperformers include Heritage Insurance Holdings, The Travelers Companies, and HCI Group, which have shown strong fundamentals and are expected to maintain their growth trajectory [2] Driving Forces - Global commercial insurance rates fell by 4% in Q3 2025, marking the fifth consecutive quarterly decline due to increased competition among insurers, favorable reinsurance pricing, and expanded market capacity [3][8] - Catastrophe losses are influencing policy renewal rates, with global insured losses from natural catastrophes reaching $80 billion in the first half of 2025, nearly double the 10-year average [5] Premium Growth - Price hikes, operational strength, higher retention, and the appointment of retail agents are expected to drive higher premiums, with gross premiums projected to exceed $722 billion by 2030 [4] Technological Investment - The insurance industry is heavily investing in technology, including blockchain, AI, and advanced analytics, which is expected to generate around $4.7 billion in annual global premiums from AI-related insurance by 2032, with a CAGR of nearly 80% [11] Company Highlights Heritage Insurance - Heritage Insurance is focused on personal and commercial residential insurance, with a consensus estimate for 2025 earnings per share indicating a year-over-year increase of 155.7% and revenues projected at $844.62 million, reflecting a 3.3% improvement [15] - The company has a Zacks Rank of 1 and has seen its shares rally by 140.1% year-to-date, with a return on equity of 41.44%, significantly above the industry average [16] The Travelers Companies - The Travelers Companies offers a wide range of property and casualty insurance products, with a consensus estimate for 2025 earnings per share indicating a 14.6% year-over-year increase and revenues projected at $48.83 billion, a 5.1% improvement [18] - The company has raised its dividend for 21 consecutive years at a CAGR of 8% and has a Zacks Rank of 1, with shares up 21.6% year-to-date [20] HCI Group - HCI Group operates in property and casualty insurance, with a consensus estimate for 2025 earnings per share indicating a year-over-year increase of 173.8% and revenues projected at $892.05 million, reflecting an 18.9% improvement [22] - The company has a Zacks Rank of 2, with shares rallying by 52.5% year-to-date and a return on equity of 31.18%, also above the industry average [23]

Market Overview - The Dow Jones Industrial Average closed higher on November 28, 2025, gaining 289.30 points (0.61%) in a shortened Black Friday trading session, reflecting strong optimism around the holiday retail season [1] - Dow Futures also showed positive sentiment, rising 253.00 points (0.5327%) [1] - The primary narrative driving the market was robust consumer spending expectations during the Black Friday shopping period [1] Key Performers - JPMorgan Chase (JPM) led the gains among Dow components with an increase of 1.77% [2] - Other notable performers included IBM (1.74%), Amazon (1.72%), Walmart (1.37%), and Microsoft (1.33%), all contributing to the positive sentiment around holiday sales [2] Underperformers - Nvidia (NVDA) was the biggest laggard, declining by 2.04%, potentially due to profit-taking or sector rotation [3] - Other notable declines included Travelers Companies (TRV) down 0.56%, Johnson & Johnson (JNJ) down 0.31%, and McDonald's (MCD) down 0.13% [3] - Despite these individual declines, overall market sentiment remained positive, extending a week of gains for major indexes [3]

Core Insights - The AI-driven bull run of 2023 and 2024 has continued into 2025, with stock prices of AI-centric companies increasing by 300-500% during this period [1] - Old economy stocks from sectors such as industrials, finance, auto, materials, and construction have also seen significant gains, indicating a broad-based market rally [2] Old Economy Stocks - Five old-economy stocks have rallied over 15% year to date and have favorable Zacks Ranks indicating further upside potential in 2026: Comfort Systems USA Inc. (FIX), The Travelers Companies Inc. (TRV), General Motors Co. (GM), JPMorgan Chase & Co. (JPM), and Crane Co. (CR) [3][9] - Each of these stocks carries a Zacks Rank of 1 (Strong Buy) or 2 (Buy) [3] Comfort Systems USA Inc. (FIX) - FIX operates primarily in the HVAC markets and is benefiting from the data center boom driven by AI and cloud computing [6][7] - The company has an expected revenue growth rate of 14.7% and earnings growth rate of 16.4% for the next year, with a 20.1% improvement in the Zacks Consensus Estimate for next year's earnings over the last 30 days [8] The Travelers Companies Inc. (TRV) - TRV has a strong market presence in auto, homeowners' insurance, and commercial property-casualty insurance, with a high retention rate and positive renewal premium changes [10][11] - The expected revenue growth rate is 3.4% and earnings growth rate is 6.7% for the next year, with a 2% improvement in the Zacks Consensus Estimate for next year's earnings over the last 30 days [12] General Motors Co. (GM) - GM holds a 17% market share in the U.S. automotive market, supported by strong demand for its brands and a 10% year-over-year sales increase in China [13][14] - The expected revenue growth rate is -0.8% and earnings growth rate is 11.5% for the next year, with a 6.5% improvement in the Zacks Consensus Estimate for next year's earnings over the last 30 days [15] JPMorgan Chase & Co. (JPM) - JPM is expected to see net interest income growth driven by business expansion initiatives and high interest rates, with a projected CAGR of 3.3% by 2027 [16] - The expected revenue and earnings growth rate for the next year is 3.7%, with a slight improvement in the Zacks Consensus Estimate for next year's earnings [18] Crane Co. (CR) - Crane manufactures engineered industrial products across various regions and has an expected revenue growth rate of 6.1% and earnings growth rate of 9.5% for the next year [19] - The Zacks Consensus Estimate for next year's earnings has improved by 2.5% over the last 30 days [19]

Core Insights - Rising costs and changing customer expectations are impacting satisfaction levels in the insurance and mortgage industry, as highlighted by the American Customer Satisfaction Index (ACSI) study [1][2] Industry Performance - Life insurance scored the highest satisfaction at 78, despite a 1% decline [1] - Health insurance and property and casualty (P/C) insurance both scored 76, with P/C considered the industry average [2] - Mortgage lenders ranked lowest at 74, also experiencing a 1% drop [2] Customer Expectations - Customers across all industries are seeking clarity, responsiveness, and human interaction [2] - The future of insurance and mortgage lending is seen in blending technological convenience with personal connection, enhancing customer understanding and support [3] Company-Specific Insights - USAA leads the P/C industry with an ACSI score of 85, up 2%, while State Farm follows at 79, down 1% [4] - Progressive achieved the largest year-over-year gain in the P/C sector, increasing by 3% to 78 [4] - Geico, Farmers, and Travelers saw significant declines in their scores, with Travelers dropping 8% to 72, the lowest among major providers [5] Customer Experience Metrics - Overall customer experience metrics declined, with claims processing speed at 73, call center satisfaction at 76, and agent courtesy at 72, all down by 5% [7] - Policy discounts and rewards metrics fell by 3% to 74, while mobile app quality and reliability decreased by 2% to 81 [8]

Core Viewpoint - Travelers (TRV) has shown strong stock performance, with a 6.2% increase over the past month and an 18.8% gain since the start of the year, outperforming both the Zacks Finance sector and the Zacks Insurance - Property and Casualty industry [1] Financial Performance - In the last earnings report on October 16, 2025, Travelers reported an EPS of $8.14, significantly exceeding the consensus estimate of $6.01, and beat the consensus revenue estimate by 0.74% [2] - For the current fiscal year, Travelers is expected to post earnings of $24.71 per share on revenues of $48.83 billion, reflecting a 14.5% change in EPS and a 5.11% change in revenues [3] - For the next fiscal year, the company is projected to earn $26.17 per share on revenues of $50.5 billion, indicating a year-over-year change of 5.89% in EPS and 3.43% in revenues [3] Valuation Metrics - Travelers currently trades at 11.6 times the current fiscal year EPS estimates, which is a premium compared to the peer industry average of 11 times [7] - On a trailing cash flow basis, the stock trades at 5.1 times, while the peer group's average is 13 times [7] - The stock has a PEG ratio of 2.54, which does not place it among the top echelon of stocks from a value perspective [7] Zacks Rank and Style Scores - Travelers holds a Zacks Rank of 1 (Strong Buy) due to rising earnings estimates, meeting the criteria for investors looking for strong stocks [8] - The stock has a Value Score of B, a Growth Score of B, and a Momentum Score of D, resulting in a combined VGM Score of A [6] Industry Comparison - Travelers' performance is strong, but Arch Capital Group Ltd. (ACGL) is also a notable competitor with a Zacks Rank of 2 (Buy) and strong style scores [9] - ACGL is expected to post earnings of $9.50 per share on revenues of $18.72 billion for the current fiscal year, having beaten consensus estimates by 26.48% last quarter [10] - The Insurance - Property and Casualty industry is in the top 7% of all industries, indicating favorable conditions for both Travelers and ACGL [11]

Core Insights - The Travelers Companies, Inc. (TRV) is a significant American insurance provider with a market capitalization of $63.80 billion, offering property and casualty coverage across various segments [1] Financial Performance - TRV's stock has risen 10.7% over the past 52 weeks and 6% over the past six months, reaching a 52-week high of $287.95 in October [2] - The company's revenue for Q3 fiscal 2025 increased by 5% year-over-year to $12.47 billion, exceeding Wall Street's expectations of $12.34 billion [4] - TRV's quarterly core return on equity was 22.6%, up six percentage points from the previous year, with core income growing by 55% to $8.14 per share, surpassing the expected $6.32 per share [5] Future Projections - Analysts project TRV's EPS to grow by 14.5% year-over-year to $24.71 for fiscal year 2025 and to increase by 5.9% annually to $26.17 in fiscal 2026 [6]