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4 Top-Notch Insurance Stocks That Double the S&P 500 in 2017
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Devastating events resulting in huge cat loss, which led to weak underwriting results, have hounded the insurance industry this year. In spite of this, a gradual rise in interest rates, an improving employment scenario and other economic conditions have helped the insurance industry stand its ground with some insurers displaying better-than-expected results. With such challenges thrown at the insurance industry at large, the emerging winners have surely caught the attention of investors having raised a considerable optimism among them.
There are players with a display of brilliant performance when compared with the S&P 500 index, which is a market value-weighted index and one of the common benchmarks for the U.S. stock market. Per Bloomberg, the S&P 500 index topped the milestone of 2,500 for the first time on mid-September, surpassing the 266% rise during the 1949-56 run. The S&P 500 index have gained 14.7% so far, this year.
Below we will discuss the various scenarios that have influenced the insurance industry to a great extent.
Challenges Faced — Weathering the Storms
The insurance industry incurred moderate loss in the first half of 2017 due to hail-driven weather-related events as compared to the second half of the year, which endured the wrath of hurricanes Harvey, Irma and Maria along with the two major Mexican earthquakes. Per the data of Munich Reinsurance company, first half catastrophe losses amounted to $41 billion, while Swiss Re estimated third quarter catastrophe losses of $95 million.
Moreover, the Northern California wildfires are anticipated to affect the insurance industry in the fourth quarter. Therefore, the latter half of the year proved even costlier for the insurance industry, pertaining to the damages and losses suffered that in turn hurt the market as a whole. Notably, per Swiss Re, the total economic losses from natural and man-made disasters in 2017 are projected to be $306 billion.
The insurers’ underwriting results took a major hit, denting their overall performance. Despite the mounting losses affecting the insurers’ overall results, there were a few insurers, which weathered such setbacks and emerged as winners, on the back of their core fundamental strengths.
Interest Rate Hike and Whatnot — Positives Influencing the Industry
The steady increase in interest rates has benefited the insurance industry to a huge degree. The Federal Reserve delivered in its promise to raise the rates thrice in 2017 by announcing the third and the final interest rate hike at its last FOMC meeting held on Dec 13. Notably, the interest rate now ranges between 1.25% and 1.50%, which in turn has boosted the insurance industry’s prospects and helped the companies strengthen their market position.
Therefore, a progressing rate environment will also lessen the pressure on the insurers’ investment income, thus boosting their earnings. This in turn will accelerate the insurance companies’ overall growth in the future.
This apart, there are a few factors having impacted the industry performance so far. Inflation is expected to remain at 1.7%, falling shy of the 2% target, which is considered good for the economy. A reviving housing market is anticipated to enhance insurable exposures and premiums written. Additionally, an improving employment scenario and a positive consumer sentiment buoy optimism.
Insurers exhibiting a decent progress graph, addressed all the aforementioned factors and headwinds in this volatile, dynamic industry and came out on top by demonstrating bottom-line profitability as well as top-line growth.
Stocks More Than Doubling the S&P 500 Index
Despite adversities spurting concerns for the insurers this year, positives like rising interest rate environment and an improving economy have helped the following stocks perform well and yield profits through an underlying strength and business modification.
We have zeroed in on four stocks having more than doubled the S&P 500 index so far against all odds. These stocks have also seen positive estimate revisions supporting a favorable Zacks Rank. (Looking for the Best Stocks for 2018? Be among the first to see our Top Ten Stocks for 2018 portfolio here.)
Chicago, IL-based Kemper Corp. (KMPR - Free Report) provides property and casualty plus life and health insurance to individuals and businesses in the United States. The stock has seen the Zacks Consensus Estimate for current-year earnings being revised 31.8% upward to $1.74 and moved 6.5% up to $2.80 for 2018 over the last 60 days. This is reflected through the company’s Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Kemper Corp. have gained 55.3% year to date, which crushed the S&P 500 index and have also outperformed the industry.
Milwaukee, WI-based MGIC Investment Corp. (MTG - Free Report) provides private mortgage insurance and ancillary services to lenders and government sponsored entities in the United States. The Zacks Consensus Estimate for both current year-earnings and 2018 has been raised 3.4% to $1.21 over the last 60 days. This is evident from the company’s Zacks Rank of 1.
Shares of MGIC Investment have gained 44.4% year to date, which more than doubled the S&P 500 index and have also outperformed the industry.
Duluth, GA-based Primerica, Inc. (PRI - Free Report) distributes financial products to middle income households in the United States and Canada. The stock has seen the Zacks Consensus Estimate for current-year earnings being revised 2.5% upward to $5.36 and moved 2.9% north to $6.07 for 2018 over the last 60 days. This is again understood from the company’s Zacks Rank #2 (Buy).
Year to date, shares of Primerica have gained 48.9% year to date, not only doubling the S&P 500 index but have also outperformed the industry it belongs to.
West Des Moines, IA-based American Equity Investment Life Holding Co. (AEL - Free Report) develops and sells fixed index and fixed rate annuity products in the United States. The stock has seen the Zacks Consensus Estimate for current-year earnings being revised 13.2% upward to $3.00 and 4.1% higher to $2.77 for 2018 over the last 60 days. This is substantiated by the company’s bullish Zacks Rank as same as Kemper and MGIC Investment stocks.
Shares of Primerica have gained 40.5% year to date, which doubled the S&P 500 index and have also outperformed its industry year to date.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Image: Bigstock
4 Top-Notch Insurance Stocks That Double the S&P 500 in 2017
Devastating events resulting in huge cat loss, which led to weak underwriting results, have hounded the insurance industry this year. In spite of this, a gradual rise in interest rates, an improving employment scenario and other economic conditions have helped the insurance industry stand its ground with some insurers displaying better-than-expected results. With such challenges thrown at the insurance industry at large, the emerging winners have surely caught the attention of investors having raised a considerable optimism among them.
There are players with a display of brilliant performance when compared with the S&P 500 index, which is a market value-weighted index and one of the common benchmarks for the U.S. stock market. Per Bloomberg, the S&P 500 index topped the milestone of 2,500 for the first time on mid-September, surpassing the 266% rise during the 1949-56 run. The S&P 500 index have gained 14.7% so far, this year.
Below we will discuss the various scenarios that have influenced the insurance industry to a great extent.
Challenges Faced — Weathering the Storms
The insurance industry incurred moderate loss in the first half of 2017 due to hail-driven weather-related events as compared to the second half of the year, which endured the wrath of hurricanes Harvey, Irma and Maria along with the two major Mexican earthquakes. Per the data of Munich Reinsurance company, first half catastrophe losses amounted to $41 billion, while Swiss Re estimated third quarter catastrophe losses of $95 million.
Moreover, the Northern California wildfires are anticipated to affect the insurance industry in the fourth quarter. Therefore, the latter half of the year proved even costlier for the insurance industry, pertaining to the damages and losses suffered that in turn hurt the market as a whole. Notably, per Swiss Re, the total economic losses from natural and man-made disasters in 2017 are projected to be $306 billion.
The insurers’ underwriting results took a major hit, denting their overall performance. Despite the mounting losses affecting the insurers’ overall results, there were a few insurers, which weathered such setbacks and emerged as winners, on the back of their core fundamental strengths.
Interest Rate Hike and Whatnot — Positives Influencing the Industry
The steady increase in interest rates has benefited the insurance industry to a huge degree. The Federal Reserve delivered in its promise to raise the rates thrice in 2017 by announcing the third and the final interest rate hike at its last FOMC meeting held on Dec 13. Notably, the interest rate now ranges between 1.25% and 1.50%, which in turn has boosted the insurance industry’s prospects and helped the companies strengthen their market position.
Therefore, a progressing rate environment will also lessen the pressure on the insurers’ investment income, thus boosting their earnings. This in turn will accelerate the insurance companies’ overall growth in the future.
This apart, there are a few factors having impacted the industry performance so far. Inflation is expected to remain at 1.7%, falling shy of the 2% target, which is considered good for the economy. A reviving housing market is anticipated to enhance insurable exposures and premiums written. Additionally, an improving employment scenario and a positive consumer sentiment buoy optimism.
Insurers exhibiting a decent progress graph, addressed all the aforementioned factors and headwinds in this volatile, dynamic industry and came out on top by demonstrating bottom-line profitability as well as top-line growth.
Stocks More Than Doubling the S&P 500 Index
Despite adversities spurting concerns for the insurers this year, positives like rising interest rate environment and an improving economy have helped the following stocks perform well and yield profits through an underlying strength and business modification.
We have zeroed in on four stocks having more than doubled the S&P 500 index so far against all odds. These stocks have also seen positive estimate revisions supporting a favorable Zacks Rank. (Looking for the Best Stocks for 2018? Be among the first to see our Top Ten Stocks for 2018 portfolio here.)
Chicago, IL-based Kemper Corp. (KMPR - Free Report) provides property and casualty plus life and health insurance to individuals and businesses in the United States. The stock has seen the Zacks Consensus Estimate for current-year earnings being revised 31.8% upward to $1.74 and moved 6.5% up to $2.80 for 2018 over the last 60 days. This is reflected through the company’s Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Kemper Corp. have gained 55.3% year to date, which crushed the S&P 500 index and have also outperformed the industry.
Milwaukee, WI-based MGIC Investment Corp. (MTG - Free Report) provides private mortgage insurance and ancillary services to lenders and government sponsored entities in the United States. The Zacks Consensus Estimate for both current year-earnings and 2018 has been raised 3.4% to $1.21 over the last 60 days. This is evident from the company’s Zacks Rank of 1.
Shares of MGIC Investment have gained 44.4% year to date, which more than doubled the S&P 500 index and have also outperformed the industry.
Duluth, GA-based Primerica, Inc. (PRI - Free Report) distributes financial products to middle income households in the United States and Canada. The stock has seen the Zacks Consensus Estimate for current-year earnings being revised 2.5% upward to $5.36 and moved 2.9% north to $6.07 for 2018 over the last 60 days. This is again understood from the company’s Zacks Rank #2 (Buy).
Year to date, shares of Primerica have gained 48.9% year to date, not only doubling the S&P 500 index but have also outperformed the industry it belongs to.
West Des Moines, IA-based American Equity Investment Life Holding Co. (AEL - Free Report) develops and sells fixed index and fixed rate annuity products in the United States. The stock has seen the Zacks Consensus Estimate for current-year earnings being revised 13.2% upward to $3.00 and 4.1% higher to $2.77 for 2018 over the last 60 days. This is substantiated by the company’s bullish Zacks Rank as same as Kemper and MGIC Investment stocks.
Shares of Primerica have gained 40.5% year to date, which doubled the S&P 500 index and have also outperformed its industry year to date.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>