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 insurance stocks, starting with Kemper (NYSE: KMPR).
The insurance industry absorbs and diversifies risk, providing financial protection against unforeseen life, health, property, and liability events. Profits come from underwriting—collecting more in premiums than paid in claims—and investing the 'float'. This cyclical industry benefits from 'hard markets' with strong pricing power and higher interest rates that enhance investment income. AI adoption is improving underwriting through sophisticated data analysis and reducing costs via automation. However, 'soft markets' and low rates create headwinds, while the industry faces elevated claims costs from climate catastrophes, inflation, and rising litigation expenses.
The 57 insurance stocks we track reported a satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 3.8%.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
Kemper (NYSE: KMPR)
Originally known as Unitrin until rebranding in 2011, Kemper (NYSE: KMPR) is an insurance holding company that provides automobile, homeowners, life, and other insurance products to individuals and businesses across the United States.
Kemper reported revenues of $1.24 billion, up 4.8% year on year. This print exceeded analysts’ expectations by 1.5%. Despite the top-line beat, it was still a softer quarter for the company with a significant miss of analysts’ EPS and book value per share estimates.
“Our results for the quarter were disappointing and below our expectations,” said C. Thomas Evans, Jr., Interim CEO.
Unsurprisingly, the stock is down 13.9% since reporting and currently trades at $36.70.
Read our full report on Kemper here, it’s free for active Edge members.
Best Q3: Hamilton Insurance Group (NYSE: HG)
Founded in 2013 and operating through three distinct underwriting platforms across four countries, Hamilton Insurance Group (NYSE: HG) operates global specialty insurance and reinsurance platforms across Lloyd's, Ireland, Bermuda, and the United States.
Hamilton Insurance Group reported revenues of $667.7 million, up 30.2% year on year, outperforming analysts’ expectations by 10.3%. The business had an incredible quarter with a beat of analysts’ EPS and revenue estimates.
The market seems happy with the results as the stock is up 10.3% since reporting. It currently trades at $26.01.
Is now the time to buy Hamilton Insurance Group? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q3: Brighthouse Financial (NASDAQ: BHF)
Spun off from MetLife in 2017 to focus specifically on retail financial products, Brighthouse Financial (NASDAQ: BHF) provides annuity contracts and life insurance products designed to help individuals protect wealth, generate income, and transfer assets.
Brighthouse Financial reported revenues of $2.17 billion, flat year on year, falling short of analysts’ expectations by 4%. It was a disappointing quarter as it posted a significant miss of analysts’ revenue and net premiums earned estimates.
The stock is flat since the results and currently trades at $65.54.
Read our full analysis of Brighthouse Financial’s results here.
Stewart Information Services (NYSE: STC)
Founded in 1893 during America's westward expansion when property records were often disputed, Stewart Information Services (NYSE: STC) 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 result beat analysts’ expectations by 31%. 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 down 5.1% since reporting and currently trades at $71.25.
Assured Guaranty (NYSE: AGO)
Serving as a financial safety net for over $11 trillion in debt service payments since its founding in 2003, Assured Guaranty (NYSE: AGO) 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 print surpassed analysts’ expectations by 12.2%. It was an incredible quarter as it also put up a beat of analysts’ EPS estimates and a solid beat of analysts’ revenue estimates.
The stock is up 8.1% since reporting and currently trades at $88.09.
Read our full, actionable report on Assured Guaranty here, it’s free for active Edge members.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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