Check out ROOT stock yesterday. A car insurance company went up 53% after earnings. I’m not saying Lemonade will do the same next week after it reports earnings (on Tuesday), because their situation is quite different, and there is always uncertainty. However it’s a hint about the likely direction of the move, because there is one commonality: inflation going down and rates getting approved.
If you look at some large insurance companies, and what their stock was doing last 6 months, you can see a big uptrend. For example Progressive (PGR), Allstate (ALL), The Travelers Companies (TRV).
The main reason is probably inflation coming down. In the U.S. insurance is very regulated, every increase in insurance rate has to be approved. When inflation was high the rates became inadequate and regulators took many months to approve the rates. Now inflation is much lower and the fillings mostly went through, that’s why all insurance companies have much better profits recently. Another reason is there were very few catastrophic weather events in Q4 (evident from the reports of several insurance companies which already published Q4 results).
I think this is a big factor that I didn’t sufficiently explain in my post.
Check out ROOT stock yesterday. A car insurance company went up 53% after earnings. I’m not saying Lemonade will do the same next week after it reports earnings (on Tuesday), because their situation is quite different, and there is always uncertainty. However it’s a hint about the likely direction of the move, because there is one commonality: inflation going down and rates getting approved.
If you look at some large insurance companies, and what their stock was doing last 6 months, you can see a big uptrend. For example Progressive (PGR), Allstate (ALL), The Travelers Companies (TRV).
The main reason is probably inflation coming down. In the U.S. insurance is very regulated, every increase in insurance rate has to be approved. When inflation was high the rates became inadequate and regulators took many months to approve the rates. Now inflation is much lower and the fillings mostly went through, that’s why all insurance companies have much better profits recently. Another reason is there were very few catastrophic weather events in Q4 (evident from the reports of several insurance companies which already published Q4 results).
I think this is a big factor that I didn’t sufficiently explain in my post.