Per the latest Earnings Preview, the Finance sector’s first-quarter 2025 earnings are expected to improve 7.1%. Revenues are estimated to rise 3.4%. First-quarter results of insurance, one of the Finance sector industries, are likely to reflect better pricing and exposure growth, accelerated digitalization and a favorable interest rate. However, cat losses are likely to have weighed on the upside.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
With the help of the Zacks Stock Screener, we have identified four insurers, namely Brown & Brown, Inc. BRO, Palomar Holdings, Inc. PLMR, Assurant Inc. AIZ and Primerica, Inc. PRI, which are poised to outperform the Zacks Consensus Estimate in first-quarter earnings. These stocks have the ideal combination of two ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy), #3 (Hold) — to surpass expectations. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Factors Likely to Impact Q1 Results
Solid retention, exposure growth across business lines and improved pricing are likely to have boosted premiums. An active catastrophe environment is expected to have accelerated the policy renewal rate and led to better pricing in the first quarter of 2025. Per a recent analysis by MarketScout’s Market Barometer, the commercial insurance sector saw a composite rate increase of 3%. Per the report, the personal lines composite rate has increased 4.9% in the first quarter of 2025, up from 4% in the fourth quarter of 2024.
Per Aon, the first-quarter insured losses from natural catastrophes are projected at more than $53 billion, which represents the second-highest total on record after the first quarter of 2011. California wildfires contributed nearly $38 billion, or 71% of the total insured losses, per Aon. According to Intact Financial Corporation, total catastrophe losses in the first quarter of 2025 are expected to be $244 million, pre-tax and net of reinsurance.
Underwriting profit is likely to have benefited from better pricing, reinsurance arrangements, portfolio repositioning, reinsurance covers and favorable reserve development.
Auto premiums are likely to have improved, given increased travel across the world. A low unemployment rate is likely to have aided commercial insurance and group insurance.
A larger investment asset base, strong cash flow from operating activities, higher bond yields, as well as an increase in interest income from fixed-maturity securities, are expected to have aided net investment income.
Life insurers’ continuous focus on protection products is likely to have aided solid sales, given a rise in demand for protection products. Life insurers continue to roll out investment products that provide bundled covers of guaranteed retirement income, life and healthcare to cater to customers preferring policies with “living” benefits more than those with death benefits.
The insurance industry’s increased use of technology like blockchain, artificial intelligence, advanced analytics, telematics, cloud computing and robotic process automation expedites business operations. Insurers continue to invest heavily in technology to improve basis points, scale and efficiencies. These investments are likely to have curbed costs and aided the margins of insurers in the fourth quarter.
A solid capital position is likely to have aided insurers in strategic mergers and acquisitions to sharpen their competitive edge, expand geographically and diversify their portfolio. Sustained wealth distribution to shareholders via dividend hikes, special dividends and share repurchases instill confidence in the insurers.
4 Potential Outperformers This Earnings Season
Brown & Brown is a leading insurance brokerage firm that markets and sells insurance products and services internationally. Organic and inorganic growth across Brokerage and Retail segments is likely to boost BRO’s first-quarter results. Both segments are likely to have benefited from higher core commissions and fees, profit-sharing contingent commissions, guaranteed supplemental commissions and investment income. Core commissions and fees in the first quarter are expected to have benefited from net new and renewal business. Expenses are likely to have increased owing to higher employee compensation and benefits, amortization, as well as other operating expenses and interest expense.
The Zacks Consensus Estimate for BRO’s first-quarter earnings is pegged at $1.30, suggesting an increase of 14% from the year-ago reported figure. BRO has an Earnings ESP of +0.77% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Brown & Brown, Inc. Price and EPS Surprise
Brown & Brown, Inc. Price and EPS Surprise
Brown & Brown, Inc. price-eps-surprise | Brown & Brown, Inc. Quote
Palomar Holdings focuses on the provision of catastrophe insurance for personal and commercial property. It provides specialty property insurance products to both individuals and businesses in its target markets. Premiums are expected to have benefited from new business generated with existing partners, strong premium retention rates for existing businesses and expanded products’ geographic and distribution footprint. Higher average balance of investments and an increase in fixed-income yields are likely to have favored investment income. Expenses are likely to have increased owing to higher incurred losses and loss adjustment expenses.
The Zacks Consensus Estimate for PLMR’s first-quarter earnings is pegged at $1.59, suggesting an increase of 45.8% from the year-ago reported figure. PLMR has an Earnings ESP of +1.57% and a Zacks Rank #2 at present.
Palomar Holdings, Inc. Price and EPS Surprise
Palomar Holdings, Inc. Price and EPS Surprise
Palomar Holdings, Inc. price-eps-surprise | Palomar Holdings, Inc. Quote
Assurant is a global provider of risk management solutions in the housing and lifestyle markets, protecting people’s homes and the goods they buy. Solid performance at the Global Housing segment, as well as growth in Global Lifestyle, is likely to have aided the first-quarter performance of Assurant. Net investment income is likely to have gained from higher yields and asset balances in fixed-maturity securities, cash and cash equivalents and short-term investments. Total benefits, losses and expenses might have escalated because of higher underwriting and selling, general and administrative expenses. Continued share buybacks are likely to have aided the bottom line in the to-be-reported quarter.
The Zacks Consensus Estimate for AIZ’s fourth-quarter earnings is pegged at $3.00, suggesting a decrease of 37.2% from the year-ago reported figure. AIZ has an Earnings ESP of +1.53% and a Zacks Rank #3 at present.
Assurant, Inc. Price and EPS Surprise
Assurant, Inc. Price and EPS Surprise
Assurant, Inc. price-eps-surprise | Assurant, Inc. Quote
Primerica is the second-largest issuer of term-life insurance coverage in North America. Solid sales growth, persistency and a strong network of life-licensed sales representatives are likely to aid PRI’s first-quarter results. Sales and policy persistency are likely to have benefited from the strong demand for protection products. Adjusted direct premiums are likely to have been driven by premiums from new sales. An improved interest rate environment is likely to have favored net investment income.
The Zacks Consensus Estimate for PRI’s first-quarter earnings is pegged at $4.77, suggesting an increase of 21.9% from the year-ago reported figure. PRI has an Earnings ESP of +0.47% and a Zacks Rank #3 at present.
Primerica, Inc. Price and EPS Surprise
Primerica, Inc. Price and EPS Surprise
Primerica, Inc. price-eps-surprise | Primerica, Inc. Quote
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