Property and Casualty Insurance Stocks to Watch Amid Digitalization and Pricing Challenges

The Property and Casualty Insurance industry is expected to benefit from better pricing, prudent underwriting, and exposure growth, despite a rise in catastrophic events. Insurers like Berkshire Hathaway, Progressive, Chubb, Travelers, and Allstate are poised to grow. However, insurers are witnessing a decline in pricing after several years of rate rises, and the imposition of tariffs and higher inflation will impact pricing. Despite this, an improvement in surplus and accelerated economic activities set the stage for a better M&A environment.

The Property and Casualty (P&C) Insurance industry is poised to benefit from better pricing, prudent underwriting, and exposure growth, despite a rise in catastrophic events. Industry players such as Berkshire Hathaway (BRK.B), Progressive Corporation (PGR), Chubb Limited (CB), Travelers Companies (TRV), and The Allstate Corporation (ALL) are expected to grow, driven by these favorable factors.

However, insurers have been witnessing a decline in pricing after several years of rate increases. The imposition of tariffs by President Trump and higher inflation are also expected to impact pricing. Despite these challenges, the industry is set to see an improvement in surplus and accelerated economic activities, creating a better environment for mergers and acquisitions (M&A).

The Zacks Property and Casualty Insurance industry is expected to benefit from better pricing and prudent underwriting, which will help navigate claims and exposure growth. The industry's Zacks Rank indicates bright prospects in the near term, with the industry's Zacks Industry Rank of #92 placing it in the top 38% of more than 250 Zacks industries [1].

The industry's recent stock-market performance has been mixed. While it has underperformed its sector and the Zacks S&P 500 composite year to date, it has shown resilience with a trailing 12-month price-to-book (P/B) ratio of 1.53X compared to the S&P 500's 8.5X and the sector's 4.27X [1].

Progressive Corporation (PGR), a major auto insurer, is expected to deliver steady profitability driven by its solid market presence and underwriting expertise. The Zacks Consensus Estimate for PGR's 2025 earnings suggests 23.4% year-over-year growth [1].

Berkshire Hathaway (BRK.B), one of the largest P&C insurance companies, is expected to continue benefiting from its growing insurance business and other segments. The Zacks Consensus Estimate for BRK.B's 2026 bottom line suggests a year-over-year increase of 5% [1].

Chubb Limited (CB), a global leader in P&C insurance and reinsurance, is poised for long-term growth by capitalizing on the potential of middle-market businesses and enhancing traditional core packages and specialty products. The Zacks Consensus Estimate for CB's 2026 earnings suggests 18.9% year-over-year growth [1].

Travelers Companies (TRV) is expected to benefit from high levels of retention, improved pricing, increased new business, and a positive renewal premium change, banking on the strength of its compelling product offerings [1].

Despite the challenges posed by catastrophic events and economic uncertainties, the P&C Insurance industry is well-positioned to grow and adapt, driven by technological advancements and strategic initiatives. The industry's focus on better pricing, prudent underwriting, and exposure growth will continue to shape its future.

References:
[1] https://finance.yahoo.com/news/5-p-c-insurance-stocks-174600150.html