According to the National Association of Insurance Commissioners, there were 5,929 insurance companies in the United States in 2020, including 2,476 property and casualty insurance companies, 843 life/annuity insurance companies, 995 health insurance companies, 81 fraternal insurance companies, 62 title insurance companies, 245 risk retention groups. and 1,227 others.
Total cash and assets invested for property damage was $2 trillion in 2020, according to S&P Global Market Intelligence. Cash and invested assets of life annuities totaled $4.7 trillion in 2020 and assets of segregated accounts and other investments totaled $3 trillion. Cash and invested assets for the two sectors were $9.7 trillion.
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Sounds like an industry worth pursuing in these trying times, doesn’t it? Let’s see why you might want to buy insurance stocks.
Why buy insurance stocks?
In times of inflation, insurance companies can be good investments because insurance stocks can rise as interest rates rise. (The relationship between interest rates and insurance companies is: the higher the rate, the greater the growth.)
The insurance industry always works in strong economies, during recessions and always has the potential to increase returns over the long term. Additionally, insurance companies can generate cash at low capital cost to turn into other means of generating revenue.
3 insurance shares to buy
Let’s take a look at three insurance stocks to consider adding to your portfolio.
Humana Inc. (NYSE:HUM)
Humana Inc., headquartered in Louisville, Kentucky, is a health and wellness company that offers medical and supplemental benefit plans. The company:
- Contracts with the Centers for Medicare and Medicaid Services to administer the limited-income prescription drug plan program for new transition-eligible.
- Contracts with various states to provide Medicaid, dual eligibility, and long-term support services benefits.
- Provides fully insured commercial medical and specialty health insurance benefits including dental, vision and other extended health benefits
- Offers administrative services products only to individuals and groups of employers.
- Offers military services, such as the TRICARE T2017 East Region contract.
The Company also offers pharmaceutical solutions, provider services and home solution services, such as home health services and other services to its health plan members and third parties.
Humana’s fourth quarter 2021 and full year 2021 results continued to be impacted by the ongoing effects of the COVID-19 pandemic. The company reported fourth quarter 2021 loss per common share of $0.11 on a GAAP basis and adjusted EPS of $1.24. EPS for the full year was $22.67 on a GAAP basis and $20.64 on an adjusted basis, or $23.08.
As of December 31, 2021, the company had cash, cash equivalents and investment securities at $17.37 billion, down $1.75 billion from $19.12 billion in September. 2021. The company paid cash dividends to its shareholders of $91 million in the fourth quarter of 2021 compared to $84 million. compared to the last quarter.
The Progressive Corporation (NYSE: PGR)
The Progressive Corporation, headquartered in Mayfield, Ohio, is an insurance holding company, provides the following:
- Personal auto insurance
- Commercial auto insurance
- Personal residential and commercial property
- General liability
- Other specialized damage insurance products and related services
The Company is divided into three segments, which include insurance underwriting for personal automobiles and recreational vehicles (RVs), personal automobile insurance and special lines products, including insurance for motorcycles, ATVs , RVs, personal watercraft, snowmobiles and related products.
The company also offers auto-related liability and bodily injury insurance and property and general liability insurance for automobiles, pickup trucks, pickup trucks, dump trucks, tractors, trailers and more. The company also covers tow trucks and tow trucks used in towing services and service/petrol station businesses as well as off-fleet and airport taxis and black car services.
The company also underwrites home insurance for homeowners, other owners and renters, as well as personal umbrella insurance and primary and excess flood insurance. The company also provides policy issuance and claims services and acts as an agent for owners’ general liability, workers’ compensation insurance and other products.
Progressive Corp.’s fourth quarter 2021 earnings fell 43% despite a 13% increase in net premiums in the last quarter of 2021. Net income for the full year reached $3.35 billion, down 41% from around 5 .7 billion in 2020 and net premiums increased 14%. Net income fell 44% to $393.3 million in December alone.
However, Progressive has consistently tried cross-selling auto policies and Progressive Home Advantage, contributing to its incredible 3,260% return since 2000. It also posts monthly earnings, one of the few companies to do so. For example, Progressive reported an 83% year-over-year decline in February 2022 due to higher spending and a net realized loss on securities, providing transparent consistency you won’t find anywhere. go elsewhere.
Allstate Corporation (NYSE:ALL)
Allstate Corporation, based in Northbrook, Illinois, offers property and casualty and other insurance products in the United States and Canada. The company offers:
- Auto and home insurance for individuals
- Specialty automotive products
- Other Personal Insurance Products
- Prefab house and self-contained programmed personal property
- Commercial line products
It also offers consumer product protection plans and related technical support for mobile phones, consumer electronics, furniture and appliances, as well as financing and insurance products, roadside assistance, device and mobile data collection services, etc.
The Company also offers life, accident, critical illness, short-term disability and other health insurance products through call centers, agencies, financial specialists, independent agents, brokers and wholesale partners via online and mobile applications.
For the full year 2021, the company’s adjusted net return on equity was 16.9% in 2021, reflecting an increase in net investment income from strong performance-based results. Net investment income of $3.3 billion in 2021 topped $1.7 billion from the prior year due to exceptional performance-based results.
In the fourth quarter, Allstate had total revenue of $13 billion, an increase of 18.7% over the year-ago quarter. Net income attributable to common shareholders increased $790 million in the fourth quarter of 2021, down $1.8 billion from the prior year quarter.
Adjusted net income was $796 million, or $2.75 per diluted share, but lower than the $1.6 billion generated in the year-ago quarter. The loss was due to non-catastrophic losses, partially offset by higher earned premiums.
Get on board with insurance actions
People always need insurance, even during economic downturns. Therefore, it is worth taking a look at several insurance behemoths. However, do your research and make sure these companies will fit in well with your larger portfolio.
Should you invest $1,000 in Allstate right now?
Before you consider Allstate, you’ll want to hear this.
MarketBeat tracks Wall Street’s top-rated, top-performing research analysts daily and the stocks they recommend to their clients. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the market takes off…and Allstate wasn’t on the list.
While Allstate currently has a “Buy” rating among analysts, top-rated analysts believe these five stocks are better buys.
Article by Melissa Brock, MarketBeat