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

Industry Overview - The Zacks Property and Casualty Insurance (P&C) industry is experiencing softer pricing after years of improvement, but is expected to benefit from prudent underwriting, exposure growth, and accelerated digitalization [1] - The industry includes companies providing commercial and personal property insurance, casualty insurance products, and services, with premiums being the primary revenue source [3] - The industry is currently ranked 173 in the Zacks Industry Rank, placing it in the bottom 29% of over 250 Zacks industries, indicating weak prospects in the near term [8][9] Trends and Challenges - Global commercial insurance rates fell by 4% in Q3, marking a decline after seven years of rising rates, with personal auto insurance expected to perform strongly due to improved investment returns and reduced claims [4] - The property and casualty insurance industry is vulnerable to catastrophe events, which can negatively impact underwriting profits, with estimated insured losses from natural catastrophes reaching approximately $107 billion by 2025 [5] - Increased adoption of technology, including blockchain and AI, is transforming the industry, although it also introduces cyber threats [7] Company Insights - Skyward Specialty Insurance Group, Inc. (SKWD): Focuses on complex, underserved risk segments and is well-positioned for growth, with a consensus estimate for 2026 earnings suggesting a 29.4% year-over-year growth [17][18] - Cincinnati Financial Corporation (CINF): Continues to grow through better pricing and strong renewal rates, with a consensus estimate for 2026 earnings indicating a 16.2% year-over-year growth [21][22] - Hagerty Inc. (HGTY): A specialty insurer with a diversified model, expected to achieve 17.6% year-over-year growth in 2026 earnings [24][25] - Chubb Limited (CB): One of the largest P&C insurers, focusing on middle-market businesses and cyber insurance, with a consensus estimate for 2026 earnings suggesting an 8.9% year-over-year growth [27][28] - The Travelers Companies (TRV): A leading writer of auto and homeowners' insurance, expected to see a 6.9% year-over-year increase in 2026 earnings [30][32] Financial Performance - The Property and Casualty Insurance industry has underperformed compared to its sector and the S&P 500, with a collective stock increase of 6.9% versus 16.8% for the sector and 19.8% for the S&P 500 over the past year [10] - The industry is currently trading at a trailing 12-month price-to-book (P/B) ratio of 1.46X, significantly lower than the S&P 500's 8.69X and the sector's 4.23X [13]