Stocks get boost from Wall Street banks as trade risks linger. Photo: Michael Nagle/Bloomberg
While the broader financial sector has cooled, Wall Street traders continue to invest in insurance stocks as property and casualty insurers ride a wave of better underwriting, premium growth and high interest rates.
Over the last 12 months, the insurance industry is up nearly 22%, beating the S&P 500. Meanwhile, premiums coming in crossed the $1 trillion mark for the first time. Reserves have also been managed tightly and investment income is improving with existing rates.
“It's one of the few sectors where the outlook is clear, and property and casualty carriers are holding up well because the fundamentals are stronger than they’ve been in years,” said Trevor Saliba, CEO of NMS Capital Group.
“Underwriting’s tightened, the pricing environment is still rational and carriers are being smarter about risk,” he added. “On the reinsurance side, capacity hasn’t flooded back in the way some expected, so we’re seeing firm conditions stick, particularly after this year’s cat events.”
Year-to-date, insurance names like Root and Heritage are up big—after the stocks skyrocketed nearly 150% and 90% respectively the last 12 months. Other big winners in 2025 include American International Group with a rough 51% spike since January, Berkshire Hathaway near 23% and Travelers Companies around 21%.
Meanwhile, industry mainstay Allstate is up roughly 0.14% year-to-date after catastrophe losses and competitive pricing helped shape deal activity and valuations.
“We're looking at around $90 billion in insured losses, which makes it the second-highest first half on record,” said Saliba.
“The LA wildfires alone generated between $30 to $40 billion of that total,” he continued. "And we're seeing renewal rates move up in those affected markets and better-run operators are coming out stronger.”
Saliba said there is also ‘real appetite’ for embedded insurance.
“It’s expected to grow from $156 billion to over $700 billion globally in a few years, and that’s showing up in mergers and acquisitions too,” he added. “Nine out of ten insurers expect to close more deals this year, but the market favors quality. If you’re not differentiated, if you’re not tech-forward, you’re getting squeezed.”
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