By Carlos Pallordet

Sept 1 - (The Insurer) - Beazley and Axa were the biggest fallers among European carriers during August with shares in the big four reinsurers also closing in the red, while U.S. P&C stocks outperformed Wall Street.

Global equity markets posted moderate gains in August, supported by strong earnings and U.S. fiscal stimulus. However, signs of a slowing economy, persistent inflationary pressures and geopolitical uncertainty tempered investor enthusiasm.

In the U.S., the S&P 500 delivered its fourth consecutive monthly gain with an increase of 1.9%. New record highs were driven largely by strong performance in the technology and consumer discretionary sectors, as well as the fiscal boost from the recently passed “One Big Beautiful Bill”, with expanded infrastructure spending and extended tax cuts beginning to feed through.

Greater trade-policy clarity, via the extension of the tariff pause with China and a new trade framework with the EU, also supported the rally.

However, economic data showed signs of weakening. July nonfarm payrolls rose by just 73,000 – well below expectations – and prior months were revised significantly lower, while consumer spending slowed.

European equity markets posted more modest gains. The Stoxx Europe 600 rose 0.7%, supported by the U.S.–EU trade framework that eliminated duties on strategic sectors and set a 15% baseline tariff.

Performance across the region was uneven. Germany’s DAX and France’s CAC 40 fell 0.7% and 0.9%, respectively, weighed down by weak earnings and elevated valuations. The UK’s FTSE 100 gained 0.6%, while the FTSE 250 slid 1.6%.

Shares of Europe-listed P&C (re)insurers underperformed the broader market in August, with the sector-specific Stoxx 600 Insurance index eking out a gain of just 0.3%.

Of the 21 listed European (re)insurers tracked by The Insurer, nine ended the month in negative territory, with four posting declines of more than 5%.

London-listed Beazley was the most significant faller with its shares trading down 12.4% during the month. The sell-off came after the specialty insurer reported a near one-third drop in half-year profit and reduced its written premium growth guidance for the year.

Axa was the next biggest faller with a loss of 6.8% in August. Shares in the French insurer slumped by 7.8% on August 1 following its half-year results announcement, despite the company reporting a 7% increase in gross written premiums and 6% rise in underlying earnings. The share price recovered during the following days, reaching a new all-time high on August 15 but slipped again in the second half of the month.

The big four reinsurers were also among the month's most significant fallers in Europe.

Hannover Re declined 6.8% in August, after dropping 0.3% in July, as investors reacted to what KBW analyst Darius Satkauskas described as a “messy quarter”, with the reinsurer delivering a strong underlying combined ratio but a miss on its Solvency II ratio.

German peer Munich Re fell 5.4%, with its shares trading down after the group lowered its full-year insurance revenue target by around 2.0 billion euros.

Shares in Scor retreated by 2.4% in August, although it remains the biggest riser among continental reinsurers on a year-to-date basis with a gain of 18.4%.

Meanwhile, Swiss Re slid 0.9% in the month, following a gain of 6.6% in July.

At the other end of the spectrum, UK insurer Admiral recorded the largest monthly gain with an increase of 6.1%, supported by record H1 profit as motor performance improved.

This was followed by Zurich and Storebrand, both up by 5%, with the former reporting a 5% increase in gross written premiums and an improved combined ratio for the first half.

Allianz was also among the risers last month, adding 4.0% after disclosing a 2.2 percentage point improvement in its combined ratio to 91.2% for the second quarter.

THE PICTURE IN THE US

Across the Atlantic, most P&C insurance stocks advanced, rebounding from their weak performance in June and July.

The S&P 500 Insurance index rose by 4.1% reversing a loss of 5.8% in July and 3.2% in June. In comparison, the broader S&P 500 added 1.9% following gains of 2.2% in July and 5.0% in June.

Out of 46 carriers tracked by The Insurer, 33 advanced in August, with 17 rising more than 5%.

Lemonade led the U.S. cohort, jumping 40.4% for the month after reporting a 12 percentage point improvement in its second-quarter gross loss ratio to 67% and raising its full-year revenue projection.

Peer Hippo posted the second-largest gain, with shares up 30.8% after it disclosed a 46 point improvement in its second-quarter net loss ratio to 47%.

Tampa-based HCI Group recorded the third-largest gain, rising 19.0% as it improved its second-quarter gross loss ratio to 21.3% from 29.7% a year earlier.

Rounding out the next three spots were Fidelis Insurance Holdings, which went public in mid-2023, and Aspen and Ategrity Specialty, which listed in May and June of this year.

Shares in Fidelis, which reported an 11 point increase in its second-quarter combined ratio driven by Russia-Ukraine-related aviation litigation, bounced back 15.7% in August.

Meanwhile, shares in Aspen initially dipped after it reported its Q2 earnings but later surged on news of its acquisition by Sompo Holdings, ending the month up 15.5%.

Also reporting its first quarter as a public company, Ategrity posted 32% growth in gross written premiums and an improved combined ratio of 88.9%, pushing the stock up 13.3% for the month.

Among other major risers in August, CNA Financial and Mercury General added 11.8% and 11.7%, respectively.

On the other end of the scale, newly listed Slide Insurance Holdings and Accelerant Holdings were the largest fallers of the month, with shares dropping 28.8% and 27.2% respectively, despite both reporting solid quarterly results.

Insurtech Root was also among the major fallers of the month, with its shares sliding 23.8% despite swinging to profit in the second quarter.

BROKERS’ PERFORMANCE

Among intermediaries, Brown & Brown rose 6.1% in August, followed by Arthur J Gallagher with a 5.4% gain.

Meanwhile, shares in WTW, Marsh McLennan and Aon rose 3.5%, 3.3% and 3.2%, respectively.

In contrast, Baldwin Insurance Group, which had led the gains in H1, retreated by 14.0%. Ryan Specialty also closed the month in the red, with shares down 7.6%.