The Zacks Property and Casualty (P&C) Insurance industry has been benefiting from Solid retention, exposure growth across business lines and improved pricing, driving higher premiums and helping insurers maintain profitability. The industry remains focused on personalized offerings to enhance customer experience, leveraging digitalization. However, catastrophic activities, both natural and man-made, might have weighed on underwriting profit.
The industry has lost 11.6% over the past year against the Zacks S&P 500 composite's growth of 18.6% and the Finance sector’s return of 6.9%.
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Here we focus on two property and casualty insurers, namely Axis Capital Holdings Limited AXS and Palomar Holdings, Inc. PLMR.
Axis Capital, with a market capitalization of $7.81 billion, provides various specialty insurance and reinsurance products. Palomar Holdings, with a market capitalization of $3.18 billion, is a specialty insurance company that provides property and casualty insurance, as well as personal and commercial specialty insurance products. AXS and PLMR carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Global insurance rates declined 4% in the fourth quarter of 2025, which marked the sixth consecutive quarter of declines in the Global Insurance Market Index, per the Marsh Global Insurance Market Index.
Price hikes, operational strength, higher retention, strong renewal and the appointment of retail agents should help write higher premiums. Per Deloitte Insights, gross premiums are estimated to increase sixfold to $722 billion by 2030.
Per Swiss Re's modeling, insured losses are expected to reach $320 billion in 2026, underscoring the continued need for well-designed adaptation and risk mitigation measures.
Insurers are direct beneficiaries of a rising rate environment. They invest a portion of their premiums. With a lower rate of return, investment income will suffer. The Fed left the federal funds rate steady at the 3.5-3.75% target range for a second consecutive meeting in March 2026, in line with expectations.
A solid capital level supports insurers in pursuing strategic mergers and acquisitions to gain market share, expand in niche areas and diversify operations into new business lines and geography, as well as increase dividends, pay special dividends and buy back shares.
The P&C insurance industry is witnessing increased use of technology like blockchain, artificial intelligence, advanced analytics, telematics, cloud computing and robotic process automation that expedite business operations and save costs. Insurers continue to invest heavily in technology to improve basis points, scale and efficiencies.
Let’s delve deeper into specific parameters to ascertain which P&C insurer is better positioned at the moment.
Price Performance
Shares of Axis Capital have climbed 0.3% in the past year against Palomar Holdings’ decline of 15.7%.
Return on Equity
Palomar Holdings, with a ROE of 25%, exceeds Axis Capital’s ROE of 18.7% and the industry average of 7.3%.
Valuation
The price-to-book value is the best multiple used for valuing insurers. Compared with Palomar Holdings’ P/B ratio of 3.36, Axis Capital is cheaper, with a reading of 1.35. The P&C insurance industry’s P/B ratio is 1.4.
Growth Projection
The Zacks Consensus Estimate for 2026 earnings indicates 22.5% growth from the year-ago reported figure for Palomar Holdings, while the same for Axis Capital implies an increase of 2.9%.
Net Margin
PLMR’s net margin for the trailing 12 months was 22.5%, higher than AXS’ reading of 15.3%.
Revenue Estimates
The Zacks Consensus Estimate for Palomar Holdings and Axis Capital's 2026 revenues implies a year-over-year increase of 34.4% and 7.5%, respectively.
Therefore, PLMR is at an advantage on this front.
To Conclude
Our comparative analysis shows that Palomar Holdings is better positioned than Axis Capital with respect to return on equity, net margin, growth projection and revenue estimates. Meanwhile, AXS scores higher in terms of price and valuation. With the scale majorly tilted toward PLMR, the stock appears to be better poised.
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Axis Capital Holdings Limited (AXS): Free Stock Analysis Report
Palomar Holdings, Inc. (PLMR): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).