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Premium Returns in the Insurance Sector

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You have to tip your hat to advertisers responsible for insurance commercials.  Of all the sleek, exciting clients you could campaign for, building positive brand awareness for an insurance company is a tall order.  With unending daytime TV pitches and constant news chatter about ‘Obamacare,’ the security offered by insurance feels closer to the security at a prison: there to keep you in(rolled).

Though reluctant, we’d be remiss not to draw your attention again to this industry.  Specifically, the multi-line sector of the Zacks Industry Rank list has gained 21 positions this past week as earnings reports outpace consensus estimates.

A sprawling sector comprised of 24 companies, it now holds a rank of #26 out of 260 ranked industries.  This is a boost of +21 positions over just one week. With positive earnings revisions outpacing negative 74 to 9, these businesses are now averaging positive Earnings per Share (EPS) surprises of +20%.

Two of the insurance companies making gains recently have been upgraded in the last week to a Zacks Rank #1 (Strong Buy) from a “Buy” rating or “Hold” rating.  This could signal positive future performance for these stocks in response to future positive earnings estimate revisions.  Paying attention to industry trends is elemental in identifying your investment choices.

It didn’t take 15 minutes, but these companies both earned 15% or more on their insurance offerings... without even calling Geico.

Kemper Corporation (KMPR - Free Report)

KMPR was upgraded to a Zacks Rank #1 (Strong Buy) last week from #3 (Neutral).  Its next expected earnings report is on February 6, 2014.

Kemper Corporation is a financial services provider. It specializes in property and casualty insurance, life and health insurance products for individuals, families, and small businesses.

Based out of Chicago, IL, Kemper offers a dividend of 2.5% and its most recent earnings surprise was 56%.  This is based in large part on the performance of property and casualty products along with higher net investment income.  In addition, a share buyback also bumped revenues.

Old Republic International Corp (ORI - Free Report)

ORI is a Zacks Rank #1 (Strong Buy).  It moved up from a Zacks Rank #2 (Buy) last week.  This company reports quarterly earnings on January 23, 2014.

Old Republic International Corporation is also Chicago-based and is an insurance holding company whose subsidiaries market, underwrite and provide risk management services for a wide variety of coverages in the property and liability, mortgage guaranty, title and life and health insurance fields.

Increases in premiums combined with reduced payout expenses and streamlined underwriting are contributing to Old Republic’s performance.  ORI pays a dividend of 4.29% and its most recent earnings surprise was a whopping 218%.

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