Earnings results often indicate what direction a company will take in the months ahead. With Q1 behind us, let’s have a look at Fidelis Insurance (NYSE: FIHL) and its peers.
This is a cyclical industry, and the sector benefits when there is 'hard market', characterized by strong premium rate increases that outpace loss and cost inflation, resulting in robust underwriting margins. The opposite is true in a 'soft market'. Interest rates also matter, as they determine the yields earned on fixed-income portfolios. The primary headwind remains the immense and concentrated exposure to large-scale catastrophe losses, as the growing impact of climate change challenges traditional risk models and creates significant earnings volatility. Additionally, they face the risk of adverse prior-year reserve development, where claims prove more costly than anticipated, while the eventual influx of new capital from alternative sources threatens to soften the market and compress future returns.
The 7 reinsurance stocks we track reported a mixed Q1. As a group, revenues beat analysts’ consensus estimates by 4.9%.
While some reinsurance stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 2.2% since the latest earnings results.
Fidelis Insurance (NYSE: FIHL)
Founded in Bermuda in 2014 and designed to adapt nimbly to evolving market conditions, Fidelis Insurance (NYSE: FIHL) is a global specialty insurer and reinsurer that provides customized coverage across property, specialty, and bespoke risk solutions.
Fidelis Insurance reported revenues of $658.4 million, up 26.6% year on year. This print exceeded analysts’ expectations by 5.5%. Overall, it was a strong quarter for the company with a narrow beat of analysts’ book value per share estimates.
Dan Burrows, Group Chief Executive Officer of Fidelis Insurance Group, commented: "During the first quarter, we capitalized on new business opportunities across the portfolio and delivered 14% top-line growth. The strength of our balance sheet also enabled us to repurchase $41.5 million of common shares year-to-date, which at our current valuation, is highly accretive to our book value.
Unsurprisingly, the stock is down 6.3% since reporting and currently trades at $15.98.
Is now the time to buy Fidelis Insurance? Access our full analysis of the earnings results here, it’s free.
Best Q1: 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 $768.8 million, up 16.7% year on year, outperforming analysts’ expectations by 28.3%. The business had an exceptional quarter with a solid beat of analysts’ EPS and net premiums earned estimates.
Hamilton Insurance Group delivered the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 10.1% since reporting. It currently trades at $21.12.
Is now the time to buy Hamilton Insurance Group? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: Everest Group (NYSE: EG)
Rebranded from Everest Re in 2023 to reflect its evolution beyond just reinsurance, Everest Group (NYSE: EG) underwrites property and casualty reinsurance and insurance worldwide, serving insurance companies, corporations, and other clients across six continents.
Everest Group reported revenues of $4.26 billion, up 3.1% year on year, falling short of analysts’ expectations by 4.2%. It was a disappointing quarter as it posted a significant miss of analysts’ net premiums earned estimates and a significant miss of analysts’ EPS estimates.
As expected, the stock is down 3.4% since the results and currently trades at $333.07.
Read our full analysis of Everest Group’s results here.
Arch Capital Group (NASDAQ: ACGL)
With roots dating back to 1995 and now operating across insurance markets on six continents, Arch Capital Group (NASDAQ: ACGL) provides specialty insurance, reinsurance, and mortgage insurance services worldwide through its three main business segments.
Arch Capital Group reported revenues of $4.67 billion, up 18.6% year on year. This number topped analysts’ expectations by 1%. Overall, it was a strong quarter as it also logged a solid beat of analysts’ net premiums earned estimates and an impressive beat of analysts’ EPS estimates.
The stock is down 6.4% since reporting and currently trades at $88.70.
Read our full, actionable report on Arch Capital Group here, it’s free.
Reinsurance Group of America (NYSE: RGA)
Operating behind the scenes of the insurance industry since 1973, Reinsurance Group of America (NYSE: RGA) provides life and health reinsurance services to insurance companies, helping them manage risk and meet regulatory requirements.
Reinsurance Group of America reported revenues of $5.34 billion, down 17.5% year on year. This print came in 2.9% below analysts' expectations. More broadly, it was a mixed quarter as it also logged a solid beat of analysts’ book value per share estimates but a significant miss of analysts’ net premiums earned estimates.
Reinsurance Group of America had the slowest revenue growth among its peers. The stock is down 2.5% since reporting and currently trades at $194.81.
Read our full, actionable report on Reinsurance Group of America here, it’s free.
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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