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On Oct 17, Zacks Investment Research upgraded FBL Financial Group Inc. (FFG - Snapshot Report) by a notch to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

FBL Financial has been experiencing rising earnings estimates on the back of improved market trends following its robust second-quarter 2013 results. Moreover, strong underwriting results and incremental return of capital are deemed impressive.

Additionally, this multi-line insurer delivered positive earnings surprises in 3 of the last 4 quarters with an average beat of 13.7%. FBL Financial also outperformed the year-to-date S&P 500, which posted an increase of 23.6% against the robust return of 35.8% clocked by the company.

On Aug 1, FBL Financial reported second-quarter 2013 operating earnings per share of 98 cents, which outpaced both the Zacks Consensus Estimate of 81 cents and the year-ago quarter number of 72 cents.

A healthy year-over-year growth in life insurance premiums, interest-sensitive product charges along with net investment income and realized capital gains drove the top line 6.4%. Moreover, flattish growth in benefits and expenses boosted margins, bottom line and book value per share.

FBL Financial’s focus on enhancing its operating leverage through a diversified product portfolio is showing results. Moreover, the company’s creditworthiness, prudent risk management and effective capital deployment, as reflected by the recent appreciation in regular dividends and payout of special dividend, score well with the ratings agencies and investors.

Based on FBL Financial’s fundamental strength and prudent capital management, the Zacks Consensus Estimate for 2013 edged up 1.1% to $3.64 per share in the last 60 days. Moreover, the estimate for 2014 rose 4.2% to $3.76 over the same period. Furthermore, no downward revision in estimates was witnessed for both the years.

Other Stocks to Consider

Apart from FBL Financial, other outperforming insurers in the industry include Prudential Financial Inc. (PRU - Analyst Report), Everest Re (RE - Analyst Report) and Markel Corp. (MKL - Snapshot Report). All these stocks carry a Zacks Rank #1 (Strong Buy).

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