The Progressive Corporation, an insurance holding company, provides personal and commercial auto, personal residential and commercial property, business related general liability, and other specialty property-casualty insurance products and related services in the United States. It operates in three segments: Personal Lines, Commercial Lines, and Property. The Personal Lines segment writes insurance for personal autos and recreational vehicles (RV). This segment's products include personal auto insurance; and special lines products, including insurance for motorcycles, ATVs, RVs, watercrafts, snowmobiles, and related products. The Commercial Lines segment provides auto-related liability and physical damage insurance, and business-related general liability and property insurance for autos, vans, and pick-up trucks used by small businesses, as well as non-fleet taxis, black-car services, and airport taxis; tractors, trailers, and straight trucks primarily used by regional general freight and expeditor-type businesses, and long-haul operators; dump trucks used by light contractors and heavy constructions; log trucks and garbage trucks used by dirt, sand and gravel, logging, garbage/debris removal, and coal-type businesses; and tow trucks and wreckers used in towing services and gas/service station businesses. The Property segment writes residential property insurance for homeowners, other property owners, and renters, as well as offers manufactured homes, personal umbrella insurance, and primary and excess flood insurance. The company offers policy issuance and claims adjusting services; acts as an agent to homeowners, general liability, workers' compensation insurance, and other products; and reinsurance services. It sells its products through independent insurance agencies, as well as through mobile applications and over the phone. The Progressive Corporation was founded in 1937 and is headquartered in Mayfield Village, Ohio.

Progressive looks like a high-quality insurance business with very strong profitability, but the market is already pricing in a noticeably high level of expectations. ROE of 35.4%, ROA of 9.51%, and ROI of 28.75% are significantly above industry medians and have remained stable across several periods, confirming high capital efficiency. EPS and forecast EPS remain strong, while revenue, net income, and operating income are generally growing compared with last year, which supports the fundamental valuation. At the same time, the P/E ratio is above the industry median, and P/B is very significantly above the market, indicating a quality premium and limiting the potential for further re-rating. On the other hand, P/S and P/FCF look moderately more attractive than the industry, so the company does not appear overheated across all metrics at once. The debt burden relative to equity is below the median, which is a positive, but absolute debt has increased, and current and quick ratios remain weak, which is typical for an insurance balance sheet but still calls for caution. Profit margin and operating margin remain high, although both are below industry benchmarks based on the provided data, so part of the strong profitability is already reflected in the price. Dividend yield is virtually absent, meaning the investment case is based not on income but on business quality and earnings growth. Taken together, the fundamentals more likely support the current valuation than justify aggressive upside, so only a slight positive adjustment to the forecast is appropriate. For an investor, this is a story of sustainable profitability, strong returns on capital, and a moderate risk balance, but with a notable valuation premium that limits the scale of upward revision.

Progressive Corporation (The)

Сильный индекс, незначительно упал. Быки в растерянности.

Strong index, slightly down. The bulls are confused.

Средний индекс, незначительно вырос. Рынок не поддерживает быков.

Medium index, slightly up. The market does not support the bulls.

Средний индекс, значительно вырос. Увеличился приток средств в лонги.

Medium index, significantly up. The inflow of funds into longs has increased.

Strong profitability and profit growth support PGR’s valuation, but the high P/B premium and weak liquidity limit re-rating potential.

Mercury General Corporation MCY appears well positioned to continue growing its policy base even as competition intensifies in the U.S. personal auto insurance market. MCY’s second-quarter 2026 performance provides evidence of this momentum. Personal auto policies in force increased 2.5% from year-end 2025 to 1.07 million, while total company policies rose 4.2% to 2.36 million. Direct premiums written also increased 9.3% year over year, suggesting that policy growth is increasingly supplementing rate-driven premium expansion.
Competition in the personal auto insurance market is increasing as insurers shift from aggressive rate increases toward competing more actively for profitable customers. As pricing momentum moderates, insurers with strong underwriting capabilities, technology, distribution networks and financial strength are likely to gain an advantage.
This environment could benefit MCY. Mercury General competes through competitively priced products, disciplined underwriting, risk segmentation, strong customer service, effective claims management and established relationships with independent agents.
MCY has also identified auto as an important growth opportunity. In its 2025 annual report, MCY noted that the private-passenger auto market had softened as insurers returned to profitability, while maintaining its expectation of growing its private-passenger auto business in 2026. This suggests that MCY is seeking to capitalize on improving market conditions while maintaining underwriting discipline.
Continued policy growth accompanied by a stable or improving combined ratio would indicate that the company is winning business through competitive pricing, risk selection and execution rather than underpricing risk. Conversely, if competition forces MCY to become overly aggressive on pricing or marketing, new-business economics, retention and margins could come under pressure.
Overall, MCY appears capable of continuing to gain auto policies in a more competitive market, provided it maintains its underwriting discipline.
What About Its Peers?
The Progressive Corporation PGR is well positioned to benefit from the increasingly competitive U.S. personal auto market. Its strong brand, scale, sophisticated pricing and risk-segmentation capabilities, and growing use of telematics and technology can help it attract profitable customers. As industry rate increases moderate, PGR’s ability to combine competitive pricing with disciplined underwriting should support continued policy and market-share gains while protecting margins.
The Travelers Companies, Inc. TRV is also well positioned to navigate a more competitive personal auto market. Its strong underwriting capabilities, sophisticated pricing and risk-selection tools, telematics and extensive claims-management expertise should help it compete for profitable customers as rate increases moderate. Travelers can potentially gain or retain market share by offering competitive pricing while using data and technology to better differentiate risks.
MCY’s Price Performance
Shares of MCY have gained 29.9% in the past year, outperforming the industry.
MCY’s Overvaluation
The stock is overvalued compared with its industry. Its forward price-to-book value of 2.01X is higher than the industry average of 1.43X. It carries a Value Score of A.
Estimate Movement for MCY
The Zacks Consensus Estimate for MCY’s fourth-quarter 2026 EPS has moved up 0.9% in the past 30 days. The Zacks Consensus Estimate for full-year 2026 and 2027 EPS has moved up 7.3% and 1.1%, respectively, in the past 60 days.
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The consensus estimate for MCY’s 2026 and 2027 revenues indicates a year-over-year increase.
MCY stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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Can MCY Sustain Policy Growth Amid Rising Auto Competition?

The Progressive Corporation PGR continues to use its extensive driving data and telematics capabilities to improve pricing, risk selection and claims management. Its Snapshot program uses actual driving behavior to help assess individual risk, giving Progressive a valuable data advantage as artificial intelligence adoption accelerates.
In the second quarter of 2026, net premiums earned increased 6% year over year to $21.57 billion, while policies in force rose 7% to 40.09 million. Personal Lines Business remained the key growth engine, with policies in force increasing 8% to 38.86 million. Progressive reported an 87.3% combined ratio compared with 86.2% in the prior-year quarter.
The opportunity is becoming more important as competition in the U.S. personal auto market intensifies. After several years of significant rate increases, insurers are shifting toward competing more actively for profitable customers. This puts greater emphasis on accurate risk selection, customer retention, claims execution and operating efficiency.
Progressive's telematics and data capabilities could help it navigate this trend. Increasing use of AI could further enhance these capabilities by helping the company improve claims processing, fraud detection and pricing models. As the company continues to expand its customer base, these capabilities could support underwriting discipline.
Progressive’s data advantage could become a durable competitive strength and position PGR as one of the strongest operators in U.S. auto insurance.
What About Its Peers?
The Travelers Companies, Inc. TRV is investing heavily in data and technology to strengthen underwriting. TRV’s IntelliDrive 365 program uses driving behavior to help personalize auto pricing, while the company is deploying AI across underwriting and claims.
The Allstate Corporation ALL is also using telematics to sharpen auto insurance pricing through its Drivewise program, which tracks driving behavior such as speed, braking and time of day. This creates a similar data-driven approach to risk assessment.
PGR’s Price Performance
PGR shares have declined 12.8% in the past year against the industry’s growth of 3%.
Image Source: Zacks Investment Research
PGR’s Valuation
Shares of Progressive are trading at a trailing 12-month price-to-book value of 3.64X, higher than the industry average of 1.43X. Yet, it carries a Value Score of B.
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Estimates for PGR
The Zacks Consensus Estimate for Progressive’s 2026 earnings per share (EPS) indicates a year-over-year decrease of 2.8%.
The consensus estimate for revenues is pegged at $92.3 billion, implying a year-over-year improvement of 6.1%.
The consensus estimate for 2027 EPS indicates a decrease of 9%, while revenue estimates indicate an increase of 5.4% from the corresponding 2026 estimates.
The Zacks Consensus Estimate for 2026 earnings has moved up 2.1%, while the 2027 estimate has moved down 0.2% over the past 30 days.
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PGR stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Can PGR's Telematics Edge Strengthen Its Underwriting Advantage?

Root Inc. ROOT is increasingly using partnerships to diversify its distribution and support long-term profitable growth. In the second quarter of 2026, partnership and independent-agent channels accounted for approximately 51% of new writings, up from 44% a year earlier. However, acquisition expenses also rose year over year, making cost efficiency a key to profitable partnership growth.
ROOT has built partnerships across automotive and financial services. Its Carvana integration has generated more than 200,000 policies, while newer relationships with Jerry and Experian provide access to customers through high-intent digital platforms. ROOT also lists partnerships with Hyundai Capital America and Toyota.
These relationships could become increasingly important to ROOT's economics. Embedded distribution allows customers to buy insurance within platforms where they are already shopping, potentially reducing acquisition friction and improving efficiency. Independent-agent partnerships further expand ROOT's reach without requiring the company to rely solely on its direct channel.
The benefit grows as ROOT's underwriting improves. Its net underwriting margin rose 310 bps year over year to 7.9% in the second quarter of 2026, while the net combined ratio improved to 92.1%.
If the company can continue expanding its partnership channels while maintaining disciplined pricing and risk selection, a growing policy base could generate attractive underwriting economics. Over time, the ability to scale partnership-driven growth while improving acquisition-cost efficiency could make partnerships an important driver of ROOT’s long-term earnings growth.
What About Its Peers?
The Progressive Corporation PGR continues to strengthen its distribution through independent agents and strategic partnerships. Its integrations with automotive platforms allow customers to access auto insurance during the vehicle-buying process, helping Progressive reach them at key points in their purchasing journey.
Lemonade, Inc. LMND is also expanding its digital distribution through technology partnerships. Its API enables third-party platforms to integrate insurance quoting, policy issuance and payments, allowing Lemonade to reach customers directly through digital channels.
ROOT’s Price Performance
Shares of ROOT have increased 23.2% over the past six months compared with the industry’s 4.3% growth.
Image Source: Zacks Investment Research
ROOT’s Valuation
The stock is currently trading at a price-to-book multiple of 2.93, higher than the industry average of 1.52X. Yet, it carries a Value Score of A.
Image Source: Zacks Investment Research
Earnings Sentiment for ROOT
The Zacks Consensus Estimate for 2026 earnings per share (EPS) indicates a year-over-year improvement of 89%, while the estimate for 2027 indicates a 40.4% year-over-year decline. ROOT has a Growth Score of A.
The consensus estimate for 2026 and 2027 earnings has witnessed no movement in the last 30 days.
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ROOT stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
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Root, Inc. (ROOT) : Free Stock Analysis Report
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ROOT's Partnership Strategy Push Could Unlock Profitable Growth

The U.S. insurance industry is entering a transition phase. The extraordinary earnings tailwinds from higher pricing, favorable reserve development and strong investment income are beginning to fade, while competition is increasing across several major insurance markets. The industry remains profitable, but investors are increasingly focusing on underwriting quality, sustainable organic growth and market-share gains rather than rate-driven premium expansion.
Competition in the U.S. personal auto insurance market is increasing as the industry shifts from a period of rapid rate increases to one in which insurers are competing more aggressively for profitable customers.
After several years of elevated claims inflation, insurers raised premiums significantly to restore underwriting profitability. As loss ratios have improved, carriers now have greater flexibility to pursue growth and compete more actively for customers. Several major insurers have begun filing rate reductions in certain markets, signaling a shift toward a more competitive pricing environment.
Higher premiums have also encouraged consumers to shop around and switch providers, increasing competition for both customer retention and new business. As shopping activity rises, insurers must offer more competitive prices while maintaining adequate risk-adjusted returns.
Technology is further intensifying competition. Telematics, advanced pricing models, digital distribution and automated underwriting allow insurers to assess risk more precisely and compete selectively for attractive customers. Companies with superior data and analytics can offer competitive prices to lower-risk drivers while avoiding underpriced business.
As a result, personal auto is moving from a “raise rates to restore profitability” phase to a “compete for profitable growth” phase. This means less reliance on pricing and greater emphasis on underwriting discipline, technology, customer retention, claims execution and market-share gains.
Importantly, a more competitive personal auto market can benefit the strongest insurers. Companies with superior underwriting capabilities, technology and distribution can compete aggressively without necessarily sacrificing profitability.
Leading insurers have advantages in data, telematics and pricing analytics that allow them to identify and selectively target lower-risk customers. Large carriers can also benefit from established brands, broad agent networks and digital channels, giving them multiple ways to attract customers who are shopping for better prices.
Scale is another important advantage. Large insurers can spread advertising, technology and customer-acquisition costs across a broader policy base, potentially giving them a lower cost of acquiring and servicing customers. Their diversified product offerings also allow them to use auto relationships to cross-sell homeowners, renters and other insurance products, improving customer economics and retention.
Therefore, as personal auto moves from rate-driven growth to competition-driven growth, the likely winners are insurers with superior underwriting, technology, distribution, claims management and balance-sheet strength. These advantages should allow the strongest operators to gain market share and sustain attractive returns even as industry pricing moderates.
The pricing, growth appetite and market-share strategies of companies such as The Travelers Companies, Inc. TRV, The Allstate Corporation ALL and The Progressive Corporation PGR can materially influence the competitive environment for the entire personal-auto market.
The insurance industry has returned 4.5% in the past year compared with the Finance sector’s growth of 12.7% and the Zacks S&P 500 composite’s appreciation of 20%.
3 Insurers to Watch
With the help of the Zacks Stock Screener, we have selected three insurance stocks with an impressive Value Score of A or B. TRV and ALL sport a Zacks Rank #1 (Strong Buy) each, while PGR has a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Travelers: Based in New York, The Travelers provides a wide variety of property and casualty insurance and surety products and services to businesses, organizations and individuals in the United States and select international markets. Strong renewal rate change, retention and increased new business, supported by a compelling portfolio and a solid capital position, poise TRV well for growth.
For diversified insurers, personal auto is only one part of the earnings equation. They can offset weaker auto economics with commercial lines, specialty businesses and investment income.
The Zacks Consensus Estimate for The Travelers’ 2026 earnings per share indicates a year-over-year increase of 22.6%. The consensus estimate for 2027 revenues indicates an increase of 2.9% from the 2026 estimates.
The consensus estimate for 2026 and 2027 has moved 20.7% and 5.6% north, respectively, in the past 60 days. Earnings have grown 19.2% in the past five years. The expected long-term earnings growth rate is pegged at 4.4%. TRV delivered a four-quarter average earnings surprise of 41.68%. Shares of TRV have rallied 34.5% in the past year.
Allstate: Headquartered in Northbrook, IL, Allstate is the fourth-largest property-casualty (P&C) insurer and the largest publicly-held personal lines carrier in the United States. The company also provides a range of life insurance and investment products to its diverse customer base. Growing premiums, Protection Services, business streamlining efforts and solid cash flows are expected to drive long-term growth. The insurer also has a favorable VGM Score of A.
Allstate's focus is increasingly on underwriting profitability and improving its book. A competitive auto market could provide opportunities to grow selectively, but investors will want evidence that growth isn't coming at the expense of margins.
The Zacks Consensus Estimate for Allstate’s 2026 earnings per share indicates a year-over-year increase of 1.9%. The consensus estimate for revenues is pegged at $71.25 billion, implying a year-over-year improvement of 5%.
The consensus estimate for 2027 revenues indicates an increase of 4% from the 2026 estimates. The consensus estimate for 2026 and 2027 has moved 15% and 5% north, respectively, in the past 30 days. Earnings have grown 21.7% in the past five years. The expected long-term earnings growth rate is pegged at 12.5%, better than the industry average of 7.9%. ALL delivered a four-quarter average earnings surprise of 45.34%. Shares of ALL have gained 29.6% in the past year.
Progressive: Headquartered in Mayfield, Ohio, Progressive is one of the country’s largest auto insurance groups, the largest seller of motorcycle and boat policies, the market leader in commercial auto insurance and one of the top 15 homeowners carriers based on premiums written. Progressive’s leadership in Personal Auto remains a major driver of long-term growth. Its growth strategy is its push toward bundled offerings, particularly auto and home bundles, which deepen customer engagement and improve retention economics. The insurer also has a favorable VGM Score of B.
Potentially one of the biggest beneficiaries of the competitive environment because it has demonstrated strong pricing and underwriting capabilities and is gaining market share.
The Zacks Consensus Estimate for Progressive’s 2026 and 2027 revenues indicates an increase of 6.1% and 5.3%, respectively, from the 2026 estimates. Earnings have grown 23.7% in the past five years, better than the industry average of 22.7%. The expected long-term earnings growth rate is pegged at 4.2%. Shares of PGR have lost 11% in the past year.
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3 Insurers to Watch as Competition in Personal Auto Intensifies

Shares of Chubb Limited CB are trading at a premium compared with the industry. Its trailing 12-month price-to-book value of 1.62X is higher than the industry average of 1.43X. However, it currently carries a Value Score of B.
The premium valuation reflects investors' confidence in Chubb's strong profitability, underwriting discipline and growth prospects. However, the higher multiple raises the question of whether the company's fundamentals are strong enough to justify the premium.
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Shares of some of its peers, like The Travelers Companies, Inc. TRV, W.R. Berkley Corporation WRB and The Progressive Corporation PGR, are trading at a multiple higher than the industry average.
CB’s Strong Return on Equity
Return on equity (ROE) for the trailing 12 months was 14.5%, significantly above the industry's 7.5%. Core operating return on tangible equity was 21.2% in the second quarter of 2026. Moreover, ROE has remained around 14% over the past three and five years, reflecting the company's consistent ability to generate returns from shareholders' funds.
CB Is an Outperformer
Chubb shares have gained 21.3% in the past year, outperforming the industry’s growth of 0.8%.
Shares of other insurers, including TRV, have gained 31.1%, while PGR and WRB have lost 11.1% and 6.5%, respectively, in the past year.
1-Year Price Performance: CB, TRV, WRB, PGR & Industry
Image Source: Zacks Investment Research
CB’s Growth Projection Encourages
The Zacks Consensus Estimate for Chubb’s 2026 earnings per share (EPS) indicates a year-over-year increase of 10.3%. The consensus estimate for revenues is pegged at $64.34 billion, implying a year-over-year improvement of 7.3%.
The consensus estimate for 2027 EPS and revenues indicates an increase of 5.6% and 4.1%, respectively, from the corresponding 2026 estimates. The expected long-term earnings growth is pegged at 7.7%.
Optimist Analyst Sentiment on CB
The company has witnessed 13 upward earnings estimate revisions for 2026 over the past 60 days, against no movement in the opposite direction. For 2027, it has witnessed five upward revisions against one downward movement. Thus, the Zacks Consensus Estimate for 2026 and 2027 earnings have moved up 2.7% and 0.2%, respectively, over the same time frame.
Image Source: Zacks Investment Research
Factors That Benefit CB Stock
Chubb's underwriting operations remain a major earnings driver. The company prioritizes profitability over premium growth by exiting inadequately priced business, particularly in large-account property insurance. P&C underwriting income increased 18.8% year over year to $1.94 billion in the second quarter of 2026, while the combined ratio improved to 83.8% from 85.6% in the prior-year quarter, reflecting strong underwriting profitability.
Chubb continues to benefit from broad-based premium growth across its businesses, supported by strong performance in its middle-market and international commercial businesses. Middle-market and small commercial premiums increased 8.9% in the second quarter, while overseas commercial insurance premiums rose 8.8%.
CB pursues strategic mergers and acquisitions to diversify its portfolio, add capabilities and synergies, and expand its geographic footprint. Acquisitions, including Catalyst Aviation Insurance and Liberty Mutual's operations in Thailand and Vietnam, have strengthened its product offerings, distribution network and presence in key international markets. Continued investments in AI, digital capabilities and distribution, along with strong broker relationships, are driving new business growth and improve renewal rates.
Higher investment income, supported by the company's fixed-income and alternative asset portfolios, provides an additional source of earnings growth alongside underwriting operations. Adjusted net investment income reached a record $1.88 billion in the second quarter of 2026, up 11.4% year over year.
Chubb's strong cash generation supports shareholder returns and continued capital deployment. The company returned $1.37 billion to shareholders in the second quarter of 2026 through dividends and share repurchases, bringing total capital returned in the first six months to $2.90 billion.
Chubb continues to generate strong growth in book value. As of 30 June 2026, tangible book value per share rose 17.1% to $131.93. The continued growth in book value and tangible book value reflects the company's strong earnings generation and supports the case for its valuation.
Risks for CB
Chubb remains exposed to catastrophe losses from hurricanes, wildfires, earthquakes and other severe events, which induce volatility in underwriting profitability and affect the combined ratio. Pretax catastrophe losses totaled $475 million in the second quarter of 2026.
Softening commercial insurance pricing remains a headwind for Chubb, as continued rate declines could weigh on premium growth and profitability.
Conclusion
Chubb is positioned to deliver continued earnings and book-value growth through strong underwriting profitability, middle-market and overseas commercial expansion, higher investment income and disciplined capital management. Favorable estimates, optimistic analyst sentiment and higher ROE are other positives. A VGM Score of A instils confidence.
While the premium valuation appears justified by Chubb's profitability and growth profile, continued earnings growth and underwriting discipline will be important to sustain the higher multiple. Catastrophe losses and softer commercial pricing remain risks. It is wise to retain this Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners Up
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This article originally published on Zacks Investment Research (zacks.com).

CB Stock Trades at 1.62x Book Value: Is the Valuation Worth It?

Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the Avantis U.S. Large Cap Value ETF (Symbol: AVLV) where we have detected an approximate $517.7 million dollar inflow -- that's a 2.5% increase week over week in outstanding units (from 224,300,000 to 229,800,000). Among the largest underlying components of AVLV, in trading today Costco Wholesale Corp (Symbol: COST) is off about 0.9%, Morgan Stanley (Symbol: MS) is up about 1.7%, and Progressive Corp. (Symbol: PGR) is up by about 1.2%. For a complete list of holdings, visit the AVLV Holdings page » The chart below shows the one year price performance of AVLV, versus its 200 day moving average:
Looking at the chart above, AVLV's low point in its 52 week range is $70.10 per share, with $95.315 as the 52 week high point — that compares with a last trade of $94.39. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Further AVLV Research:

Noteworthy ETF Inflows: AVLV, COST, MS, PGR

Key Points
Major insurance companies, including Progressive, Chubb, and Prudential, are buying back large amounts of their own stock.
P&C insurance companies have performed well over the past few years, but the industry outlook is softening.
Buying back stock could help P&C insurance companies offset weak pricing conditions.
In the first half of 2026, Progressive (NYSE: PGR) bought back roughly $1 billion worth of its own stock. Chubb (NYSE: CB) bought back $1.37 billion in shares in the second quarter alone (bringing its first-half repurchases to $2.12 billion). Those numbers make Prudential's (NYSE: PRU) $250 million in second-quarter share repurchases sound like chump change, even though that's still a massive amount of cash to devote to a stock buyback.
Stock buybacks are often pitched as a way to return value to shareholders, and they are. However, there's another issue to consider here that may be just as important: Property and casualty insurance pricing is softening.
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What does a buyback do?
When a company buys back its own stock, the number of shares in the market decreases. That sounds simple, but it's worth putting some numbers on this with a simple example. If a company has 100 shares and buys back 10, then there are only 90 shares left for investors to trade.
That has a significant impact on any financial measures based on shares. For example, if the company earns $100 and it has 100 shares, then earning per share are $1. If that share count falls to 90 and it still earns $100, then earnings per share improves 11% to $1.11. That said, if earnings fall, stock buybacks remain beneficial. An earnings drop to $90, along with that 10 share buyback, would keep earnings per share at $1.
But there's an important middle ground. If earnings only dropped to $95, the 10-share buyback would leave the company with earnings per share of roughly $1.05. In other words, a moderate drop in earnings could still lead to higher earnings per share, with the reduction in the share count effectively offsetting the impact of a weakening business environment. Now it's time to start looking at the insurers and their stock buybacks.
The P&C insurance market is getting more competitive
In a recent industry report, Marsh estimated that global insurance rates fell 6% in the second quarter. That said, casualty rates were estimated to have increased by 2%, while property rates dropped by a fairly sizable 12%. Property is typically a major line of business for most public P&C insurance companies.
What's going on, according to Marsh, is that after several strong years, companies are competing more aggressively, including on price. That's a fairly typical cycle in the insurance industry. Absent any large weather events or other disasters, pricing power is likely to remain under pressure.
To give a specific example, Progressive's combined ratio increased to 86.8% in July, up 1.5 percentage points from a year ago. A combined ratio is a measure of profitability, comparing an insurance company's costs (operating costs and claims) to the premiums it collects. A number below 100% indicates a company is making a profit. So the 1.5 percentage-point increase indicates that Progressive's profitability is weakening.
Chubb's second-quarter results show that its combined ratio remained flat year over year at 81.9%. However, if property and casualty pricing is getting more competitive, buying back stock could help protect earnings from any potential business weakness in the future. So it probably isn't shocking that two insurers bought back huge amounts of stock in the first half of 2026.
Notably, Prudential's buyback was much smaller. Prudential primarily sells life insurance, and its business continues to perform very well, buoyed by an asset management business benefiting from a strong stock market. You could argue that it simply doesn't have the same need to buy back shares as a property and casualty insurer like Chubb and Progressive.
Chubb and Progressive are likely protecting earnings growth
Buying back shares is a way to return cash to shareholders without creating an ongoing obligation, unlike a dividend increase. So Chubb and Progressive are acting in a shareholder-friendly manner. However, the large stock buybacks will also help support earnings as the property and casualty sector gets more competitive, so there's more to the story here. And life insurance-focused Prudential's smaller buyback could be the example that shows what's really going on in the property and casualty insurance space.
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Insurers Are Buying Back More Stock as Pricing Softens

It has been about a month since the last earnings report for Hanover Insurance Group (THG). Shares have lost about 1.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Hanover Insurance due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
THG Q2 Earnings Beat on Personal Lines Gains, Revenues Miss
The Hanover Insurance Group reported second-quarter 2026 operating earnings of $5.31 per share, up 22.1% year over year. The figure beat the Zacks Consensus Estimate of $3.88 by 36.9%.
Total revenues increased 4.6% year over year to $1.72 billion but missed the consensus mark of $1.73 billion by 0.4%. Results benefited from stronger Personal Lines underwriting, lower catastrophe losses and higher net investment income. The consolidated combined ratio improved to 91.2%.
THG Underwriting Results Improve
The consolidated loss and loss adjustment expense ratio improved 1.7 percentage points year over year to 60.2%. Catastrophe losses totaled $91.8 million, contributing 5.7 points to the combined ratio, compared with a catastrophe ratio of 7% in the prior-year quarter.
The combined ratio excluding catastrophes remained unchanged at 85.5%. The current accident year loss and LAE ratio excluding catastrophes improved 30 basis points to 55.8%, while favorable prior-year reserve development contributed 1.3 points. Net premiums earned increased to $1.60 billion from $1.55 billion.
The Hanover's Core Commercial Growth Accelerates
Core Commercial net premiums written rose 7.2% year over year to $574.8 million. Growth accelerated from the first quarter, supported by increases of 6% in small commercial and 9.4% in the middle market. Renewal price increases averaged 7.8%, including rate increases of 7%.
Segment profitability weakened despite the faster premium growth. Operating income before taxes declined to $77.5 million from $83.9 million, while the combined ratio increased to 95.7% from 93%. The current accident year combined ratio excluding catastrophes deteriorated 1.8 points to 91.2%, reflecting higher liability loss selections and a difficult comparison with unusually low property losses a year earlier.
THG Specialty Underwriting Margins Narrow
Specialty net premiums written increased 4.4% to $384.4 million, reflecting improved growth momentum from the first quarter. Renewal pricing rose 3.6%, including average rate increases of 2.1%.
Operating income before taxes declined to $68.4 million from $71.2 million. The combined ratio increased to 88.3% from 86.5%, as the current accident year loss and LAE ratio, excluding catastrophes, rose 2.6 points to 51.6%. Lower catastrophe losses provided some support, falling to $10 million from $14.6 million.
The Hanover's Personal Lines Results Strengthen
Personal Lines net premiums written increased 2.6% year over year to $697.6 million. Growth reflected higher new business and continued renewal pricing, with renewal price increases averaging 8.7% and rate increases averaging 4.8%. Policies in force were essentially unchanged sequentially.
Operating income before taxes surged to $104.9 million from $57.4 million. The combined ratio improved 6.6 points to 88.9%, aided by lower catastrophe losses and better underlying loss experience. The current accident year combined ratio, excluding catastrophes, improved to 81.9% from 84.8%, as earned pricing exceeded loss trends and property claim frequency remained favorable.
THG Investment Income and Capital Position Advance
Net investment income increased 13.4% year over year to $119.6 million, driven by operating cash flows and higher earned yields. The portfolio’s pretax earned yield increased to 4.28% from 4.11%, while the fixed-maturity yield improved to 4.45% from 4.24%.
The Hanover ended June with $11.2 billion in cash and invested assets. Book value per share increased 3.5% from March 31, 2026, to $105.40. During the quarter, THG repurchased about 0.3 million shares for approximately $55 million. Through July 24, repurchases totaled roughly 0.8 million shares for $149 million, leaving about $660 million under the company’s authorization.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in fresh estimates.
The consensus estimate has shifted 7.98% due to these changes.
VGM Scores
Currently, Hanover Insurance has a average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Hanover Insurance has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Hanover Insurance belongs to the Zacks Insurance - Property and Casualty industry. Another stock from the same industry, Progressive (PGR), has gained 1.2% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026.
Progressive reported revenues of $23.01 billion in the last reported quarter, representing a year-over-year change of +6.4%. EPS of $4.85 for the same period compares with $4.88 a year ago.
Progressive is expected to post earnings of $3.98 per share for the current quarter, representing a year-over-year change of -1.7%. Over the last 30 days, the Zacks Consensus Estimate has changed +9.3%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Progressive. Also, the stock has a VGM Score of B.
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Hanover Insurance (THG) Down 1.7% Since Last Earnings Report: Can It Rebound?

Shares of Berkshire Hathaway Inc. BRK.B are trading above its industry. The stock is currently trading at a price-to-book multiple of 1.44, a tad higher than its industry average of 1.43 but below the five-year median of 1.48. It has a Value Score of D.
A premium valuation reflects a strong balance sheet, substantial insurance float, diversified earnings and proven capital allocation. Its high-quality businesses and resilience across economic cycles attract a quality premium.
Berkshire Hathaway is a conglomerate with more than 90 subsidiaries engaged in diverse business activities. This provides it with stability in various economic cycles.
Yet, Berkshire Hathaway is relatively cheap compared with The Progressive Corporation PGR and Chubb Limited CB, which are trading at a price-to-book value of 3.76X and 1.64X, respectively.
BRK.B vs Industry, Sector, S&P 500
Shares of Berkshire Hathaway have gained 5.1% in the past three months, underperforming the industry’s 6.7% increase and the Finance sector’s rise of 7.5%. The stock has, however, outperformed the Zacks S&P 500 composite’s rise of 1.1% in the same time frame.
BRK.B vs Industry, Sector, S&P 500 in 3-Months
BRK.B’s peer Chubb Limited has gained 6.1% in the past three months, while another peer, Progressive Corporation, has gained 12.1% in the same time frame.
The Case for BRK.B Stock
Berkshire Hathaway’s insurance operations remain the backbone of its business, contributing nearly a quarter of total revenues and supporting long-term value creation. Disciplined underwriting, broad market reach and consistent profitability strengthen the segment, while its sizable insurance float provides low-cost capital for investments across Berkshire’s portfolio.
The company continues to reposition its equity holdings to improve income stability, diversification and growth potential. Berkshire recently acquired roughly 48.1 million Alphabet shares, signaling greater openness to large technology companies and their long-term growth prospects. It has also increased investments in Japanese trading houses, housing-related businesses and airlines while trimming its exposure to payment companies.
Berkshire’s operating subsidiaries provide additional earnings stability. Berkshire Hathaway Energy generates predictable cash flows from regulated utility operations and continues to expand its renewable-energy capacity, positioning it to benefit from electrification, decarbonization and the shift toward cleaner energy.
BNSF Railway remains another valuable asset. Its extensive freight network and exposure to essential transportation demand provide a durable competitive advantage. However, softer freight volumes and lower fuel-surcharge revenues could weigh on near-term performance.
The Manufacturing, Service and Retail businesses further diversify earnings. Although these operations are more sensitive to economic conditions, they offer meaningful upside when stronger demand lifts revenues and margins.
Berkshire’s financial strength remains exceptional. As of June 30, 2026, its insurance and other businesses held $359.2 billion in cash, cash equivalents and U.S. Treasury bills, net of unsettled purchase payables. Insurance float reached $177.5 billion, providing substantial capacity to fund investments and compound shareholder value.
Yet, insurance results remain exposed to catastrophe losses and rising claim frequency and severity. Lower short-term rates are reducing insurance investment income, while BNSF and BHE require substantial capital spending.
Return on equity (ROE) in the trailing 12 months was 6.6%, underperforming the industry average of 7.4%. Return on equity, a key profitability measure, reflects how effectively a company utilizes its shareholders’ funds.
The same holds true for return on invested capital (ROIC). ROIC, reflecting efficiency in utilizing funds to generate income, was 5.4% in the trailing 12 months, lower than the industry average of 5.7%.
Optimistic Analyst Sentiment on BRK.B
The Zacks Consensus Estimate for 2026 revenues indicates a 5.6% year-over-year increase, while the same for earnings implies a 5.1% year-over-year increase. The consensus estimate for 2027 revenues and EPS indicates a 4.5% and 1.9% year-over-year increase, respectively.
The expected long-term earnings growth is pegged at 12%, better than the industry average of 7.9%.
The consensus estimate for 2026 and 2027 earnings has moved 3.8% and 2% north, respectively, in the past 30 days.
Image Source: Zacks Investment Research
The consensus estimate for Chubb’s 2026 earnings has moved north, but that for 2027 has moved south in the past 30 days.
Estimates for Progressive’s 2026 earnings have moved north but those for 2027 have moved south in the same time frame.
Parting Thoughts on BRK.B Shares
Berkshire Hathaway has anchored investor portfolios for decades, delivering consistent shareholder value under Warren Buffett’s nearly six decades of leadership. Investor attention now turns to its next chapter, with Greg Abel serving as CEO and Buffett continuing as executive chairman.
Favorable analyst sentiment and healthy growth prospects support confidence in the company’s outlook. However, a stretched valuation, recent share-price performance and weak returns on capital warrant caution. Investors may therefore prefer to remain on the sidelines with this Zacks Rank #3 (Hold) stock for now.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Berkshire Lags Industry, Trades at a Premium: How to Play the Stock

A month has gone by since the last earnings report for First American Financial (FAF). Shares have added about 4.4% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is First American Financial due for a pullback? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for First American Financial Corporation before we dive into how investors and analysts have reacted as of late.
FAF Q2 Earnings Top Estimates on Title Strength, Investment Income
First American Financial Corporation reported second-quarter 2026 operating earnings of $2.08 per share, which beat the Zacks Consensus Estimate by 15.6% and rose 35.9% year over year. Operating revenues climbed 15% to $2.1 billion, driven by growth in direct premiums, escrow fees, and Information and other revenues. The top line surpassed the consensus estimate by 4.4%.
The quarterly results benefited from robust commercial title business, higher average revenue per order, solid investment income growth and continued strength in information and subservicing businesses. Elevated operating expenses partly offset these gains.
What’s Behind the Headlines for FAF?
Direct premiums and escrow fees reached $794.1 million, marking a 14.8% increase from the prior-year level. The figure exceeded the Zacks Consensus Estimate and our model estimate by 2.3%. Investment income totaled $183.7 million in the second quarter, up 14.7% year over year, supported by higher interest income from the investment portfolio. The title segment increased 12% in investment income, partially offset by losses at the corporate level. The figure was above our estimate and the Zacks Consensus Estimate of $182.3 million.
Expenses increased 11.4% to $1.83 billion, primarily due to higher personnel costs, production expenses, premiums retained by agents and a rise in interest expense. The figure was above our estimate of $1.80 billion.
FAF’s Segmental Results
Title Insurance and Services: Total revenues rose 16.9% year over year to $2 billion, which beat the Zacks Consensus Estimate by 6.2%. This was driven by 15% growth in direct premiums and escrow fees, agent premiums and steady net investment income. Investment income increased 11% to $164 million, supported by higher interest income from the company's investment portfolio.
Adjusted pretax margin expanded 310 bps to 15.7%. Title open orders increased 0.7% to 188,200, while closed orders declined 0.7% to 137,300. Average revenue per direct title order increased to $4,572, reflecting a 31% increase in commercial average revenue per order, partially offset by a mix shift toward lower-premium refinance transactions.
Home Warranty: Total revenues rose 3.3% to $113.8 million, exceeding our model estimate of $111 million. Pretax income climbed 8.5% year over year to $24.2 million. The claim loss rate improved to 40%, due to lower claim frequency, partly offset by higher claim severity. Pretax margin expanded 110 basis points to 21.3%.
Corporate: The Corporate segment reported a net pretax loss of $56.2 million, narrowing from a $43.8 million loss in the year-ago quarter.
FAF’s Financial Update
First American exited the second quarter of 2026 with cash and cash equivalents of $2.6 billion, up 89.6% from the 2025-end level. Notes and contracts payable were $1.5 billion, remaining flat from the 2025-end level. Stockholders’ equity was $5.6 billion at the end of the second quarter of 2026, up 2.2% from the 2025-end level. The debt-to-capital ratio was 31.4.
Capital Deployment
The board of directors paid a dividend of 55 per cent per share in the second quarter. FAF repurchased 0.3 million shares for $20 million in the reported quarter at an average price of $61.99 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in fresh estimates.
The consensus estimate has shifted 6.84% due to these changes.
VGM Scores
Currently, First American Financial has a average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock has a score of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise First American Financial has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
First American Financial belongs to the Zacks Insurance - Property and Casualty industry. Another stock from the same industry, Progressive (PGR), has gained 6.4% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026.
Progressive reported revenues of $23.01 billion in the last reported quarter, representing a year-over-year change of +6.4%. EPS of $4.85 for the same period compares with $4.88 a year ago.
Progressive is expected to post earnings of $3.77 per share for the current quarter, representing a year-over-year change of -6.9%. Over the last 30 days, the Zacks Consensus Estimate has changed +3.7%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Progressive. Also, the stock has a VGM Score of B.
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