3 Best Insurance Stocks of 2023 The Motley Fool

Currently, Hanover Insurance Group Inc’s price-earnings ratio is 9.9. Hanover Insurance Group Inc’s trailing 12-month revenue is $5.0 billion with a 10.2% profit margin. Analysts expect adjusted earnings to reach $7.992 per share for the current fiscal year. Mutual companies are often formed to fill an unfilled or unique need for insurance. They range in size from small local providers to national and international insurers. Some companies offer multiple lines of coverage including property and casualty, life, and health, while others focus on specialized markets.

• Typically, AAII looks at the weighted relative strength over the trailing four quarters.
• Direct Line Insurance Group PLC reported an EPS of -0.022p in its last earnings report, beating expectations of -0.063p.
• Second, everyone needs guidance to sift through this economic mess, which is where Prudential’s investment management arm will likely command significant relevance.
• To operate as a stock corporation, an insurer must have a minimum of capital and surplus on hand before receiving approval from state regulators.

In other words, there’s never been a more crucial time for drivers to get comprehensive auto insurance coverage. And thanks to many years of compelling marketing initiatives, Progressive enjoys a competitive edge in this arena. Venator Management LLC was the most prominent shareholder of the company with over 1.2 million shares, worth $32.496 million.

Three top insurance stocks for 2023

Insurance companies make money by both charging premiums to the insured and investing the insurance premium payments. Every insurer makes a significant portion of its revenue by underwriting, which is basically charging a fee for taking on financial risk. What do insurers do with the often huge sums of cash generated by premium payments? The companies put some aside in reserve to ensure that they’ll have enough to pay all claims anticipated over the near term. Investment income tends to be a lot smaller than underwriting revenue. AAII’s A+ Investor value grade derives from a stock’s value score.

In recent years, the insurance industry have struggled from low interest rates, which narrow the spread between what insurance companies can earn on their invested capital, versus what they pay out in claims. To be fair, Sun Life is on the riskier side of the spectrum, having shed more than 20% YTD in the capital market. However, you’re getting quite a deal in terms of passive income, with the company featuring a forward yield of 4.8%. The other factor to consider is the paradigm shift that the novel coronavirus pandemic imposed on society. Thus, more demand should spill into the best insurance stocks to buy as many Americans get back to normal. We’ve seen this play out in 2022 as the S&P Insurance index outperformed the broad market S&P 500 by 13 percentage points through the first half of the year.

Best Insurance Stock #1: Equitable Holdings Inc. (EQH)

This Best insurance stock showed great performance from the beginning of 2021, having grown 36% from 318$ to 435$ in November. Analysts have set an average price target of $466, and the stock does seem a little overvalued so is likely to keep growing in 2022. Lincoln National reported second quarter 2022 results on August 3rd, for the period ending June 30th, 2022. The company generated $1.34 in net income per share, compared to $3.34 in the second quarter of 2021. After adjustments, the company generated net income of $2.23 per share, which compares unfavorably to the $3.17 per share in the same prior year period. Lincoln’s life insurance sales grew 53% to $193 million, with growth in all its major product lines.

Direct Line price target lowered to 180 GBp from 190 GBp at RBC Capital RBC Capital lowered the firm’s price target on Direct Line Insurance to 180 GBp from 190 GBp and… Erie Indemnity Company’s Stock Transfer Agent is Broadridge Corporate Issuer Solutions, Inc. Broadridge manages and maintains records of Indemnity stock owned by shareholders of record. If you own shares directly with Indemnity, you are considered a shareholder of record and can get information regarding your shares by visiting Broadridge’s website or by contacting the company directly at .

UnitedHealth also has a track record of shareholder-friendly management. It’s increased its dividend every year since 2010 and spends billions on share buybacks. Over the 10-year period through mid-2022, UnitedHealth has delivered 900% total returns for investors, more than triple the S&P 500 production during the same period.

Get https://forex-world.net/ recommendations, portfolio guidance, and more from The Motley Fool’s premium services. Warren Buffett chose the insurance industry as the backbone of his empire.

Insurance Stocks to Buy: Sun Life Financial (SLF)

Not only does the insurance business have the potential to produce excellent long-term returns, but it’s also a business that works in good times and bad. Its sole purpose is to provide insurance coverage for its members and policyholders. A capital stock insurance company is an insurer that gets capital from stockholder contributions, in addition to other reserve or surplus accounts. The stock outperformed the market in 2021 but the price has been volatile and it may be a good idea to wait for a downturn in price to find a better opportunity to buy. In any case, the firm has ambitious plans to become the largest US home-based care provider, and has great potential to do so. On August 9th, 2022, Primerica released its second-quarter fiscal 2022 results.

Investing in stocks of companies that provide necessary products and services is a good investment strategy as they are likely to outperform the market in times of crisis and retain their business. Investors looking for exposure to this industry could see strong returns from these top 5 insurance stocks. Primerica, Inc. provides term life insurance to middle-income households in the United States and Canada. On behalf of third parties, it also offers mutual funds, annuities, managed investments, and other financial products. Primerica insured over 5.7 million lives and had over 2.7 million client investment accounts on December 31, 2021.

One possible way to deal with this dilemma is based on the kind of insurance you are buying. Policies that renew annually, such as auto or homeowner’s insurance, are easy to switch between companies if you become unhappy, so a stock insurance company may make sense for these types of coverage. For longer-term coverage such as life, disability, or long-term care insurance, you may want to select a more service-oriented company, which would most likely be a mutual insurance company. Stockcharts.comRLI RLI Corp, with headquarters in Peoria, Illinois, is a smaller property and casualty insurance company with a market capitalization of $5.9 billion. The company trades with a price-earnings ratio of 10.52 and at 4 times book value. Earnings estimate revision scores take into account the magnitude of a company’s earnings surprise in its last two reported fiscal quarters.

Insurance Stocks to Buy: Aflac (AFL)

Direct Line Insurance Group PLC reported an EPS of -0.022p in its last earnings report, beating expectations of -0.063p. Direct Line Insurance upgraded to Buy from Sell at Citi Citi analyst Alexander Evans double upgraded Direct Line Insurance to Buy from Sell with a price target of… Buying stocks that are going to go up typically means buying stocks that are undervalued in the first place, although momentum investors may argue that point. Successful stock investing involves buying low and selling high, so stock valuation is an important consideration for stock selection. An insurance guaranty association protects policyholders and claimants in the event of an insurance company’s impairment or insolvency. The perfect model would be an insurance company that could meet both needs.

Direct Line Insurance Group PLC released its earnings results on Mar 13, 2023. The company reported -0.022p earnings per share for the quarter, beating the consensus estimate of -0.063p by 0.041p. Insurers might not be the most exciting investments, but there’s a lot to like about Chubb, the global leader in property and casualty insurance. In a mutual company, policyholders are co-owners of the firm and enjoy dividend income based on corporate profits. Learn how stock and mutual insurance companies differ and which type to consider when purchasing a policy. Insurance companies are classified as either stock or mutual depending on the ownership structure of the organization.

Mutual Insurance Companies

Like the value grade, AAII’s A+ Investor quality grade comes from the percentile rank of key metrics. Stock evaluation requires access to huge amounts of data and the knowledge and time to sift through it all, making sense of financial ratios, reading income statements and analyzing recent stock movement. While mutual insurance policyholders have the right to vote on the company’s management, many people don’t, and the average policyholder really doesn’t know what makes sense for the company. Policyholders also have less influence than institutional investors, who can accumulate significant ownership in a company. Worldwide, there are more mutual insurance companies, but in the U.S., stock insurance companies outnumber mutual insurers. An uncertain medical situation, aging populations around the world and high costs of medical care all create conditions for people to choose medical insurance for themselves and their family.

The insurance coverage rate in 2020 was about 45% of worldwide catastrophe losses, higher than the 10-year average of 37%. Climate change continues to create uncertainty, as fires and hurricanes become more intense and frequent with the changes to the environment. A mutual insurance company is a corporation owned exclusively by the policyholders who are “contractual creditors” with a right to vote on the board of directors. Generally, companies are managed and assets are held for the benefit and protection of the policyholders and their beneficiaries. This company operates as a health benefits business through its subsidiaries. It offers managed healthcare benefits plans to individuals, large and small groups as well as Medicare and Medicaid markets.

Put another way, these folks need expert guidance to help navigate the storm. Indeed, the primary data source, the National Highway Traffic Safety Administration, disclosed that car crashes killed 38,824 people around the U.S. in 2020. And projections for 2021 demonstrate that this awful trend of fatalities is continuing. On a YTD basis, PGR stock is up around 8% while on a trailing-year basis, it’s up roughly 16%. Prior to the Covid-19 pandemic, many people’s biggest fundamental problem wasn’t exactly a deadly virus.

There are also some exceptions, such as Blue Cross/Blue Shield and fraternal groups which have yet a different structure. Still, stock and mutual companies are by far the most prevalent ways that insurance companies organize themselves. In the beginning, investors do not always understand the sense behind the stock market trading trend and cannot consider all the nuances, and here robotic apps can help. Gainy automatically analyzes all the data a stakeholder needs to invest and offers the best possible solutions to profit. The Hanover Insurance Group has a strong outlook for 2022 and presented ambitious financial targets for the next five years outlined during a recent investor day. The Board of Directors presented a long-term ROE target of ~14% and an EPS growth target of 12-13%.

A recession-resistant business with excellent return potential

Momentum is based on the price change of a stock over a specified period relative to all other stocks. A mutual company is a private enterprise that is owned by its customers or policyholders. Sometimes pressure from investors can be a good thing, forcing management to justify expenses, make changes, and maintain a competitive position in the market. The Boston Globe newspaper has run illuminating investigations questioning executive compensation and spending practices at Mass Mutual and Liberty Mutual, showing excesses occur at mutual companies.

Mutual companies include five of the largest property and casualty insurers that make up about 25% of the U.S. market. A stock insurance company is a corporation owned by its stockholders or shareholders, and its objective is to make a profit for them. Policyholders do not directly share in the profits or losses of the company. To operate as a stock corporation, an insurer must have a minimum of capital and surplus on hand before receiving approval from state regulators. Other requirements must also be met if the company’s shares are publicly traded.

If you own shares through a bank or in a brokerage account, you are considered a beneficial owner and will need to contact your bank or broker directly for information regarding your shares. Get your free copy of our special report analyzing the tech stocks most likely to outperform the market. Stocks receive better grades for having higher scores for the quality sub-components and worse grades for lower scores for the sub-components.