We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Will These 4 Insurance Stocks Deliver a Q2 Earnings Surprise?
Read MoreHide Full Article
Key Takeaways
{\"0\":\"MFC is expected to post 7.6% EPS growth on strength in Global WAM and Asia insurance sales.\",\"1\":\"AIG may see a 36.2% EPS surge, driven by higher underwriting income and lower loss ratios.\",\"2\":\"ROOT\'s EPS could soar 303.9%, backed by policy growth and lower net loss and LAE ratio.\"}
The second-quarter 2025 earnings season is in full swing, and the spotlight is now on the insurance sector. So far, several major S&P 500 constituents, including Marsh & McLennan, Aon, and Hartford Financial, have reported their quarterly results, each surpassing earnings expectations and setting a positive tone for the broader industry.
The Insurance space belongs to the Finance sector (one of the 16 broad Zacks sectors within the Zacks Industry classification), overall earnings of which are projected to jump 16.7% from the year-ago quarter. Revenues are expected to edge up 5%, as indicated by our latest Earnings Preview.
Several notable insurance players, including Manulife Financial Corporation (MFC - Free Report) , MetLife, Inc. (MET - Free Report) ,American International Group, Inc. (AIG - Free Report) and Root, Inc. (ROOT - Free Report) , are scheduled to report their results tomorrow. Before diving into company-specific expectations, it’s important to understand the broader industry trends likely to influence these outcomes.
Important Points for Investors
The second-quarter earnings for insurance companies are expected to reflect a solid foundation of underwriting strength, supported by continued digital innovation, healthy client retention, strategic rate increases, and effective use of reinsurance. Gains from investments, particularly for life insurers and annuity providers, solid policy renewals, and organic growth in the commercial sector are likely to have further lifted the industry’s overall performance.
A rise in catastrophe-related events like the severe Midwest storms in May 2025 is expected to have pressured P&C insurers' underwriting margins. On the flip side, it may have further accelerated policy renewals and supported favorable pricing adjustments. According to Market Scout’s Market Barometer, the commercial insurance market experienced a 2.8% composite rate increase, with sectors like commercial auto and general liability seeing the uptick at 6.7% and 3.7%, respectively.
Rising vehicle repair costs and parts inflation are likely to have kept auto loss ratios elevated during the quarter under review. Positive reserve releases are expected to have aided underwriting profits in the casualty lines. Strong cash flows from operationsare also likely to have boosted performance across the sector. While rising operating expenses remain a concern, advances in Insurtech and process automation likely helped offset some of the cost burden and improved overall efficiency.
As MFC, MET, AIG and ROOT prepare to report, investors are asking the big question: Will strong industry tailwinds outweigh the challenges and deliver another round of earnings surprises?
What’s in Store for MFC, MET, AIG & ROOT on Aug. 6?
Our proprietary model clearly indicates that a company needs to have the right combination of two key elements — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Against the above backdrop, let’s find out how the following five companies are placed ahead of their second-quarter earnings release tomorrow.
Manulife Financial: The company is likely to have witnessed continued business growth in Global WAM and Asia in the second quarter. New fund launches in mainland China, as well as higher net sales through the retail wealth platform in Canada, are likely to have aided its Global WAM division. Higher sales volumes in the U.S. division are likely to have provided some respite from lower investment spreads. Continued demand from affluent customers for accumulation insurance products is expected to have positively impacted its APE sales and NBV.
The Zacks Consensus Estimate for the second-quarter earnings stands at 71 cents per share, indicating growth of 7.6% from the corresponding year-ago quarter’s actual. Manulife’s earnings beat the Zacks Consensus Estimate in three of the last four quarters and missed once, the average surprise being 4.1%.
MetLife: The Zacks Consensus Estimate for total adjusted group benefits for the to-be-reported quarter suggests an increase of 2.9% from a year ago. Favorable underwriting and improved variable investment income are likely to have aided the Asia segment, while the Latin America business is expected to have gained from higher volumes. However, rising costs and expenses are likely to have offset the profit growth levels.
The Zacks Consensus Estimate for the second-quarter earnings and top line stands at $2.19 per share and $18.4 billion, respectively, indicating an earnings decrease of 4% and a revenue decline of 1.5% from the corresponding year-ago quarter’s figures. As far as earnings surprises are concerned, MetLife’s earnings beat the Zacks Consensus Estimate only once in the last four quarters and missed thrice, the average surprise being negative 1.9%.
Our proven model does not conclusively predict an earnings beat for MetLife this time around. This is because the stock has an Earnings ESP of +0.67% but a Zacks Rank #4 (Sell).
American International Group: This leading multiline insurer’s second-quarter revenues are expected to have been supported by 3.7% net premium earned growth. The Zacks Consensus Estimate for the second quarter General Insurance underwriting income indicates a 34.4% year-over-year jump. The consensus mark for loss ratio is pegged at 59.6%, an improvement from the year-ago level of 61%.
The Zacks Consensus Estimate for the second quarter earnings and top line is pegged at $1.58 per share and $6.8 billion, respectively, indicating an earnings surge of 36.2% and a revenue increase of 2.7% from the corresponding year-ago quarter’s readings. AIG’s bottom line beat the Zacks Consensus Estimate in three of the last four quarters and missed once, the average surprise being 1.7%.
American International Group, Inc. Price and EPS Surprise
Our proven model predicts a likely earnings beat for AIG this time around, as the stock has an Earnings ESP of +0.18% and a Zacks Rank #3.
Root: The Zacks Consensus Estimate for ROOT’s net premiums earned indicates 18.9% year-over-year growth. The consensus mark for net loss and LAE ratio is pegged at 67%, an improvement from 72.7% witnessed a year ago. The consensus estimate also predicts a 12.2% year-over-year jump in policies in force and 6% increase in premiums per policy.
The Zacks Consensus Estimate for the second-quarter earnings and top line stands at $1.06 per share and $337 million, respectively, indicating an earnings surge of 303.9% and revenue growth of 16.5% from the corresponding year-ago quarter. ROOT’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average surprise being 208.9%.
Image: Bigstock
Will These 4 Insurance Stocks Deliver a Q2 Earnings Surprise?
Key Takeaways
The second-quarter 2025 earnings season is in full swing, and the spotlight is now on the insurance sector. So far, several major S&P 500 constituents, including Marsh & McLennan, Aon, and Hartford Financial, have reported their quarterly results, each surpassing earnings expectations and setting a positive tone for the broader industry.
The Insurance space belongs to the Finance sector (one of the 16 broad Zacks sectors within the Zacks Industry classification), overall earnings of which are projected to jump 16.7% from the year-ago quarter. Revenues are expected to edge up 5%, as indicated by our latest Earnings Preview.
Several notable insurance players, including Manulife Financial Corporation (MFC - Free Report) , MetLife, Inc. (MET - Free Report) ,American International Group, Inc. (AIG - Free Report) and Root, Inc. (ROOT - Free Report) , are scheduled to report their results tomorrow. Before diving into company-specific expectations, it’s important to understand the broader industry trends likely to influence these outcomes.
Important Points for Investors
The second-quarter earnings for insurance companies are expected to reflect a solid foundation of underwriting strength, supported by continued digital innovation, healthy client retention, strategic rate increases, and effective use of reinsurance. Gains from investments, particularly for life insurers and annuity providers, solid policy renewals, and organic growth in the commercial sector are likely to have further lifted the industry’s overall performance.
A rise in catastrophe-related events like the severe Midwest storms in May 2025 is expected to have pressured P&C insurers' underwriting margins. On the flip side, it may have further accelerated policy renewals and supported favorable pricing adjustments. According to Market Scout’s Market Barometer, the commercial insurance market experienced a 2.8% composite rate increase, with sectors like commercial auto and general liability seeing the uptick at 6.7% and 3.7%, respectively.
Rising vehicle repair costs and parts inflation are likely to have kept auto loss ratios elevated during the quarter under review. Positive reserve releases are expected to have aided underwriting profits in the casualty lines. Strong cash flows from operationsare also likely to have boosted performance across the sector. While rising operating expenses remain a concern, advances in Insurtech and process automation likely helped offset some of the cost burden and improved overall efficiency.
As MFC, MET, AIG and ROOT prepare to report, investors are asking the big question: Will strong industry tailwinds outweigh the challenges and deliver another round of earnings surprises?
What’s in Store for MFC, MET, AIG & ROOT on Aug. 6?
Our proprietary model clearly indicates that a company needs to have the right combination of two key elements — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Against the above backdrop, let’s find out how the following five companies are placed ahead of their second-quarter earnings release tomorrow.
Manulife Financial: The company is likely to have witnessed continued business growth in Global WAM and Asia in the second quarter. New fund launches in mainland China, as well as higher net sales through the retail wealth platform in Canada, are likely to have aided its Global WAM division. Higher sales volumes in the U.S. division are likely to have provided some respite from lower investment spreads. Continued demand from affluent customers for accumulation insurance products is expected to have positively impacted its APE sales and NBV.
The Zacks Consensus Estimate for the second-quarter earnings stands at 71 cents per share, indicating growth of 7.6% from the corresponding year-ago quarter’s actual. Manulife’s earnings beat the Zacks Consensus Estimate in three of the last four quarters and missed once, the average surprise being 4.1%.
Manulife Financial Corp Price and EPS Surprise
Manulife Financial Corp price-eps-surprise | Manulife Financial Corp Quote
Our proven model predicts a likely earnings beat for Manulife this time around, as the stock has an Earnings ESP of +1.98% and a Zacks Rank #2.
You can see the complete list of today’s Zacks #1 Rank stocks here.
MetLife: The Zacks Consensus Estimate for total adjusted group benefits for the to-be-reported quarter suggests an increase of 2.9% from a year ago. Favorable underwriting and improved variable investment income are likely to have aided the Asia segment, while the Latin America business is expected to have gained from higher volumes. However, rising costs and expenses are likely to have offset the profit growth levels.
The Zacks Consensus Estimate for the second-quarter earnings and top line stands at $2.19 per share and $18.4 billion, respectively, indicating an earnings decrease of 4% and a revenue decline of 1.5% from the corresponding year-ago quarter’s figures. As far as earnings surprises are concerned, MetLife’s earnings beat the Zacks Consensus Estimate only once in the last four quarters and missed thrice, the average surprise being negative 1.9%.
MetLife, Inc. Price and EPS Surprise
MetLife, Inc. price-eps-surprise | MetLife, Inc. Quote
Our proven model does not conclusively predict an earnings beat for MetLife this time around. This is because the stock has an Earnings ESP of +0.67% but a Zacks Rank #4 (Sell).
American International Group: This leading multiline insurer’s second-quarter revenues are expected to have been supported by 3.7% net premium earned growth. The Zacks Consensus Estimate for the second quarter General Insurance underwriting income indicates a 34.4% year-over-year jump. The consensus mark for loss ratio is pegged at 59.6%, an improvement from the year-ago level of 61%.
The Zacks Consensus Estimate for the second quarter earnings and top line is pegged at $1.58 per share and $6.8 billion, respectively, indicating an earnings surge of 36.2% and a revenue increase of 2.7% from the corresponding year-ago quarter’s readings. AIG’s bottom line beat the Zacks Consensus Estimate in three of the last four quarters and missed once, the average surprise being 1.7%.
American International Group, Inc. Price and EPS Surprise
American International Group, Inc. price-eps-surprise | American International Group, Inc. Quote
Our proven model predicts a likely earnings beat for AIG this time around, as the stock has an Earnings ESP of +0.18% and a Zacks Rank #3.
Root: The Zacks Consensus Estimate for ROOT’s net premiums earned indicates 18.9% year-over-year growth. The consensus mark for net loss and LAE ratio is pegged at 67%, an improvement from 72.7% witnessed a year ago. The consensus estimate also predicts a 12.2% year-over-year jump in policies in force and 6% increase in premiums per policy.
The Zacks Consensus Estimate for the second-quarter earnings and top line stands at $1.06 per share and $337 million, respectively, indicating an earnings surge of 303.9% and revenue growth of 16.5% from the corresponding year-ago quarter. ROOT’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average surprise being 208.9%.
Root, Inc. Price and EPS Surprise
Root, Inc. price-eps-surprise | Root, Inc. Quote
Our proven model predicts a likely earnings beat for ROOT this time around as well, as the stock has an Earnings ESP of +58.29% and a Zacks Rank #1.