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5 Stocks to Watch From the Prospering Multiline Insurance Industry

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Product diversification has been helping Zacks Multiline Insurance industry players lower concentration risk, ensure uninterrupted revenue generation and improve retention ratio. Better pricing, prudent underwriting, increased exposure, faster economic recovery on the receding impact of the pandemic and increased vaccinations should benefit MetLife Inc. (MET - Free Report) , American International Group Inc. (AIG - Free Report) , Principal Financial Group (PFG - Free Report) , Everest Group, Ltd. (EG - Free Report) and Assurant (AIZ - Free Report) . Accelerated digitalization will help in the smooth functioning of the industry. The increasing acceptance of embedded insurance is also expected to drive the industry. Per a report in Financial Services, premiums from embedded insurance are projected to exceed $722 billion globally by 2030.

The solid capital level of multiline insurers will fuel merger and acquisition (M&A) activities. However, rate cuts by the Federal Reserve are a concern as insurers are direct beneficiaries of an improved rate environment. A lower rate will weigh on net investment income. Insurers’ focus on personalized offerings to enhance customer experience, leveraging digitalization, is the key. Given moderating pricing and increased competition, pricing competition will likely improve in 2025, per an Insurance Business report.

About the Industry

The Zacks Multiline Insurance industry comprises companies that provide single insurance coverage, bundling automobile, homeowner, long-term care, and life and health insurance to individuals and businesses. The insured pays a single premium and is covered for many things through a single contract. These companies cover commercial and personal properties, automobiles, marine, livestock, aviation, personal accident, life, including permanent and term insurance, supplemental accident and health insurance, workers’ compensation, annuity products, private mortgage insurance, et al. The players also provide risk management services. Since the companies offer single insurance coverage for multiple products, customer retention improves. The insured stands to benefit from lower premium payments compared to paying individual premiums for insuring varied products.

3 Trends Shaping the Future of the Multiline Insurance Industry

Diversified portfolio lowers concentration risk:  Given the nature of the business, multiline insurers’ product and service portfolios are diversified. This lowers concentration risk. Increased awareness, driving higher demand for protection products, should benefit sales and premiums of life insurance operations. An increase in exposure, with customized products and services, should support premium growth. However, moderating pricing keeps us cautious. Per Deloitte Insights, the transition to green energy and related insurance products, as well as exposure to intangible assets, offers growth opportunities. The increased adoption of artificial intelligence could increase potential cyber threats, thus fueling demand for cyber insurance. Pet insurance is also on the rise. While the life insurance business could be hurt by a low interest rate environment, prudent underwriting at the non-life insurance business will limit the downside. Yet, unpredictable catastrophes could weigh on the underwriting profitability of non-life insurers. Swiss Re estimates near mid-single-digit premium growth in 2025.

Merger and acquisitions:  Consolidation in the multi-line insurance industry is expected to continue as players look to diversify their operations into new business lines and geographies. Buying businesses along the same lines is driven by the players’ need to gain a fair market share and grow in their niche areas. Consolidations that slowed down earlier due to inflation are expected to rise in 2025, driven by a higher number of technology-driven deals, per a report from Willis Towers Watson’s Quarterly Deal Performance Monitor.  Insurance technology companies are expected to top the list per media reports. The industry is undergoing accelerated digitalization.

Increased adoption of technology: Digitalization has increased by leaps and bounds. The industry is witnessing greater use of technology like blockchain, AI, advanced analytics, telematics, cloud computing and robotic process automation to expedite business operations and save costs.  Many life insurers have started selling policies online that appeal to the tech-savvy population. At the same time, the use of real-time data is making premium calculation easier and reducing risk. Insurers remain focused on ramping up data and analytics capabilities as well as realizing the benefit of the technological infrastructure per Deloitte Insights. Per the Deloitte FSI Predictions article, non-life insurers have the capacity to generate nearly $4.7 billion in annual global premiums from AI-related insurance, translating to a compounded annual growth rate of around 80%.

Zacks Industry Rank Indicates Bright Prospects

The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bright prospects in the near term. The Zacks Multiline Insurance industry, housed within the broader Zacks Finance sector, currently carries a Zacks Industry Rank #68, which places it in the top 28% of 251 Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.

The industry’s positioning in the top 50% of the Zacks-ranked industries is the result of a positive earnings outlook for the constituent companies in aggregate. The bright outlook reflects that the industry’s earnings estimates have been revised upward by analysts for the current year. 

Before we present a few multiline insurance stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.

Industry Vs Sector and S&P 500

The Multiline Insurance industry has underperformed the sector but outperformed the Zacks S&P 500 composite year to date. The stocks in this industry have collectively gained 5% year to date compared with the Finance sector’s increase of 5.1%. The Zacks S&P 500 composite has declined 0.6% in the same time frame.               

Year-to-date Price Performance


 

Current Valuation

On the basis of its trailing 12-month price-to-book (P/B), which is commonly used for valuing insurance stocks, the industry is currently trading at 2.29X compared with the S&P 500’s 7.80X and the sector’s 4.11X.

Over the past five years, the industry has traded as high as 2.78X, as low as 0.79X and at the median of 2.05X.

Price-to-Book (P/B) Ratio (TTM)

Price-to-Book (P/B) Ratio (TTM)

 

5 Multiline Insurance Stocks to Keep An Eye On

We are presenting five Zacks Rank #3 (Hold) stocks from the Multiline Insurance industry.  
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

MetLife: This New York-based insurance-based global financial services company provides protection and investment products to a range of individual and institutional customers. This insurer’s focus on businesses with growth potential and strategies to control costs and increase efficiency bodes well for growth. 

The Zacks Consensus Estimate for 2025 and 2026 earnings indicates a year-over-year increase of 12.3% and 13%, respectively. Its expected long-term earnings growth rate is pegged at 13.8%. 

Price and Consensus: MET


American International Group: Headquartered in New York, AIG provides insurance products for commercial, institutional and individual customers in North America and internationally. Strategic business de-risking, acquisitions, cost-control efforts and accelerated capital deployment will drive this insurer’s growth. 

The Zacks Consensus Estimate for 2025 and 2026 earnings indicates a year-over-year increase of 26.1% and 24%, respectively.  The expected long-term earnings growth rate is pegged at 14.8%. The consensus estimate for 2025 and 2026 earnings has moved 1.3% and 0.4% north, respectively, in the past 30 days.

Price and Consensus: AIG

 

 

Principal Financial Group: Des Moines, IA-based Principal Financial is a leader in global investment management. Principal Financial continues to benefit from its strength and leadership in retirement and long-term savings, group benefits and protection in the United States, retirement and long-term savings in Latin America and Asia, plus global asset management. These help it deliver solid operating earnings. It continues to leverage a favorable market position in the retirement industry and remains optimistic about the momentum across retirement platforms.   

The Zacks Consensus Estimate for 2025 and 2026 earnings indicates a year-over-year increase of 16.5% and 10.9%, respectively.  The expected long-term earnings growth rate is pegged at 11.8%.

Price and Consensus: PFG

Everest Group: Based in Warren, NJ, Everest Group underwrites property and casualty reinsurance for insurance and reinsurance companies in the U.S. and international markets. Everest is poised for growth on product diversification, international insurance expansion and a rise in fixed maturity investments. EG is poised to leverage opportunities stemming from the continued disruption and evolution of the reinsurance market. This insurer is set to benefit from its capital adequacy, financial flexibility, long-term operating performance and traditional risk management capabilities.

The Zacks Consensus Estimate for 2025 and 2026 earnings indicates a year-over-year increase of 54.4% and 33.1%, respectively. The expected long-term earnings growth rate is pegged at 28.2%, better than the industry average. It has a VGM Score of B.

Price and Consensus: EG

 

 

Assurant: Headquartered in New York, Assurant is a global provider of risk management solutions in the housing and lifestyle markets. Its long-term strategy of focusing on higher-growth fee-based and capital-light businesses bodes well. Stronger performance in Homeowners, driven by increased lender-placed net earned premiums, is expected to boost results within Global Housing. At the same time, ongoing growth in Connected Living and Global Automotive is set to support continued momentum in Global Lifestyle. The insurer continues to prioritize the expansion of the Connected Living platform through the introduction of innovative products and services and the formation of new strategic partnerships. For 2025, it expects adjusted EBITDA, excluding reportable catastrophes, to increase modestly.

The Zacks Consensus Estimate for 2026 earnings indicates a year-over-year increase of 17.6%. The consensus estimate for 2025 and 2026 earnings has moved 2.2% and 0.7% north, respectively, in the past seven days. 

Price and Consensus: AIZ





 


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