Despite rising premiums in some lines, insurance stocks are beginning to lag as investors favor securities firms and asset managers that benefit more directly from higher market activity and easing financial conditions.
Over the summer of 2025, Wall Street traders lifted some equities to milestone highs as property and casualty insurers rode a wave of better underwriting, premium growth and high interest rates. At the same time, the insurance industry was up nearly 22% in late July 2025, beating the S&P 500 as premiums crossed the $1 trillion mark for the first time.
“Pricing momentum in property and casualty has normalized after a strong cycle, which has prevented big rallies in equities,” Global Head of Market Strategy at TradeStation, David Russell, told PropertyCasualty360.com.
"Looking ahead, investors may show more interest in life insurers with the steeper yield curve and equity markets climbing,” he added.
Meanwhile, smaller insurance stocks like Root and American International Group have plummeted the last six months and are now nearly down across the board, including the last month and quarter. Heritage, despite slipping the last month, quarter and year-to-date, is up big the last year, rising 127.50%.
“Insurance checks a few important boxes,” said Trevor M. Saliba, chairman and CEO of NMS Capital Group.
“The revenue is recurring, the cash flow is visible and the business doesn’t rely on economic expansion to work,” he added. “Premiums are collected upfront, claims are paid over time, and that creates predictable cash generation. In the current rate environment, the investment income on that float has become more meaningful, which improves returns without changing the risk profile.”
The slideshow above was illustrates the top insurance stocks as selected by PropertyCasualty360.com.
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