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5 Accident & Health Insurers to Watch Despite Cost Pressure
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The Zacks Accident and Health Insurance industry is expected to benefit from an increase in underwriting exposure. Aflac Incorporated (AFL - Free Report) , Unum Group (UNM - Free Report) , Globe Life (GL - Free Report) , Trupanion (TRUP - Free Report) and Employers Holdings, Inc. (EIG - Free Report) are likely to gain from increasing demand for group insurance and prudent underwriting standards. However, higher inflation and rising medical costs could offset the positives. The industry has been witnessing soft pricing over the past several quarters, and this is not expected to change anytime soon. The increasing adoption of technology in operations will help the industry function smoothly. The industry is witnessing a rise in demand for embedded insurance and supplemental health products.
Per a CBIZ report, the industry has maintained its profitability streak, reflecting solid reserves, prudent claims management, stable loss trends and fewer claims.
About the Industry
The Zacks Accident and Health (A&H) insurance industry comprises companies providing workers’ compensation insurance, mainly to employers operating in hazardous industries. Insurers provide group, individual and voluntary supplemental products, including employer-funded workers’ compensation that protects employees without reducing their pay. Claims are covered by insurers or state funds. Such coverage supports employee morale and productivity while reducing employers’ claim costs. Growing awareness of these benefits strengthens the industry’s outlook. Per Business Research Insight, the A&H Insurance market, worth about $323.24 billion in 2026, is projected to expand to about $452.53 billion by 2035—reflecting a CAGR of about 3.8%.
5 Trends Shaping the Future of the Accident & Health Insurance Industry
Pricing Pressure to Continue: Pricing pressure continues to weigh on the U.S. Accident & Health insurance industry. Rising medical expenses, elevated claims frequency and increased healthcare utilization are compelling insurers to raise premiums to preserve underwriting margins. However, intense competition, particularly in employer-sponsored and voluntary benefits markets, limits insurers from doing the same. SpendEdge projects workers’ compensation pricing to increase at a 3%-5% CAGR between 2022 and 2026, while CBIZ forecasts a more modest 2% rise.
Persistent Medical Inflation: Medical inflation remains a major challenge for Accident & Health insurers. Aon projects global medical costs to rise by approximately 9.8% in 2026, outpacing general inflation in many markets. Higher hospital wages, diagnostic expenses, provider fees, healthcare utilization, and costly medicines are driving this increase. The resulting pressure extends beyond claims costs, forcing insurers to balance profitability with adequate benefits and affordable premiums—without weakening coverage or limiting customers’ access to essential healthcare.
Growing Demand for Supplemental Health Insurance: Demand for supplemental health insurance is gaining traction as consumers seek greater financial protection against rising medical expenses. Per LIMRA, workplace supplemental health insurance new annualized premiums rose 7% year over year to more than $2.1 billion in the first half of 2026. Hospital indemnity premiums increased 14%, followed by critical illness (up 6%) and accident insurance premiums (up 2%), creating growth opportunities for insurers.
Mixed Claims Frequency Trends: The Accident & Health insurance industry is witnessing mixed claims trends. Improved workplace safety and effective risk management have reduced accident-related claims, while rising healthcare utilization and costly medical claims remain concerns. Per the National Council on Compensation Insurance, lost-time workers’ compensation claim frequency declined 2% in 2025, compared with a 5% drop in 2024. However, increasing medical claim severity is offsetting the benefits of lower claim frequency, highlighting the need for prudent underwriting and effective claims management to sustain profitability.
Increasing Adoption of Technology:The insurance industry is increasingly adopting AI, data analytics, automation, cloud computing and blockchain to improve operational efficiency and competitiveness. Telemedicine is gaining traction, helping insurers contain costs, while machine learning and predictive analytics enhance risk assessment. Policies are also increasingly incorporating telehealth services. Per CBIZ, AI could reduce workers’ compensation claim expenses by approximately 45%. However, higher technology investments may pressure expense ratios.
Zacks Industry Rank Indicates Bleak Prospects
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all member stocks, indicates dull near-term prospects. The Zacks Accident and Health Insurance industry, housed within the broader Zacks Finance sector, currently carries a Zacks Industry Rank #196, which places it in the bottom 21% of the 247 Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
The industry’s position in the bottom 50% of the Zacks-ranked industries is a result of a negative earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually losing confidence in this group’s earnings growth potential. Current year estimates have declined 3.9% in a year.
Before we present a few stocks one can have in their portfolio, given their business advancement endeavors, it’s worth taking a look at the industry’s performance and current valuation.
Industry Versus Sector and S&P 500
The Accident and Health Insurance industry has outperformed its sector and the Zacks S&P 500 composite year to date. The stocks in this industry have collectively gained 12.2% year to date compared with the Finance sector’s increase of 3.6% and the Zacks S&P 500 composite’s rise of 3.6% over the same period.
YTD Price Performance
Current Valuation
On the basis of a trailing 12-month price-to-book (P/B), commonly used for valuing insurance stocks, the industry is currently trading at 1.75X compared with the Zacks S&P 500 composite’s 7.09X and the sector’s 4.5X.
Over the past five years, the industry has traded as high as 2.14X, as low as 1X and at the median of 1.76X.
Aflac: This Columbus, GA-based company offers voluntary supplemental health and life insurance products and operates through Aflac Japan and Aflac U.S. The top line benefits from strategic growth investments, robust persistency rates and enhanced productivity. Aflac introduces products and upgrades existing ones to address the changing needs of its customers, as well as integrates digital solutions into its offerings to align with the ongoing trend of digitization. This, in turn, should support its profit margins. The Argus buyout will provide it with a platform to build the company’s network of dental and vision products and further strengthen its U.S. segment.
AFL delivered a trailing four-quarter earnings surprise of 6.56% on average. The Zacks Consensus Estimate for 2026 implies a year-over-year decrease of 6%. The consensus estimate for 2027 earnings implies a 9.4% year-over-year increase and has moved north 5 cents in the past 30 days. The expected long-term earnings growth rate is pegged at 9%.
Price and Consensus: AFL
Unum Group: Chattanooga, TN-based Unum Group provides long-term care insurance, life insurance, employer- and employee-paid group benefits and related services. This insurer is poised to grow on the operational excellence of Unum U.S. and Colonial Life. Encouraging sales trends, strong persistency in group lines and growth of new product lines like dental and vision, coupled with favorable risk results, should benefit Unum U.S. and Colonial Life, the two largest operating segments. The company has an impressive dividend track record, having increased dividends 17 times in the last 16 years and yielding better than the industry average. It estimates a 10-15% increase in dividends going forward.
For 2026, UNM expects adjusted operating income per share to be between $8.30 and $8.50.
The Zacks Consensus Estimate for 2026 and 2027 implies a year-over-year increase of 6.3% and 9.1%, respectively. The consensus estimate for 2027 earnings has moved 2 cents north in the past 30 days. The expected long-term earnings growth rate is pegged at 11.9%.
Price and Consensus: UNM
Globe Life: Based in McKinney, TX, Globe Life is an insurance holding company providing individual life and supplemental health insurance to lower-middle to middle-income households throughout the United States. This insurer has been witnessing a positive trend in revenues, driven by premium growth in its Life Insurance and Health Insurance segments and net investment income. The strong performance of the American Income and Liberty National divisions should drive the top line in the future. Liberty National is likely to continue to benefit from improved productivity and agent count. GL’s expansion initiatives to capture heavily populated and less penetrated areas should drive growth in the future. Net life sales, as well as net health sales, are expected to grow in the mid-teens for Liberty National.
The Zacks Consensus Estimate for 2026 and 2027 earnings indicates a 6.6% and 5.8% year-over-year increase, respectively. The consensus estimate for 2026 and 2027 earnings has moved down 1.5% and 0.8%, respectively, in the past 30 days.
Price and Consensus: GL
Trupanion: Headquartered in Seattle, WA, Trupanion is a provider of insurance for cats and dogs in the United States, Canada, Continental Europe and Australia. It operates in a total addressable market worth more than $40 billion, which is a large but underpenetrated market.
This pet insurer is well-poised to grow, courtesy of its heightened focus on pets’ health and well-being in an underpenetrated pet insurance market, product launches, extended operating boundaries and a solid capital position. This pet insurer continues to invest in areas where it believes it can achieve high internal rates of return. Improving pricing should add to its upside.
The Zacks Consensus Estimate for 2026 and 2027 suggests a 40% and a 10.9% increase, respectively, on a year-over-year basis. TRUP delivered a trailing four-quarter earnings surprise of 53.03%, on average. It has a Growth Score of A. The consensus estimates for 2026 and 2027 earnings witnessed no movement in the past 30 days. The expected long-term earnings growth rate is pegged at 26.5%.
Price and Consensus: TRUP
Employers Holdings: Based in Henderson, NV, Employers Holdings is the 19th largest provider of workers' compensation insurance to small businesses in the low-to-medium hazard industries. EIG should continue to benefit from a solid presence in attractive markets and prudent underwriting. Its multiple distribution channels provide competitive advantages.
The consensus estimate for 2026 earnings suggests a 145.2% increase, but that for 2027 suggests a 0.7% decrease on a year-over-year basis. The consensus estimate for 2026 earnings has moved 5 cents north but that for 2027 earnings has moved 6 cents south in the past 30 days. Employers Holdings delivered a trailing four-quarter earnings surprise of 21.28%, on average.
View the Zacks #1 Rank List
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5 Accident & Health Insurers to Watch Despite Cost Pressure
The Zacks Accident and Health Insurance industry is expected to benefit from an increase in underwriting exposure. Aflac Incorporated (AFL - Free Report) , Unum Group (UNM - Free Report) , Globe Life (GL - Free Report) , Trupanion (TRUP - Free Report) and Employers Holdings, Inc. (EIG - Free Report) are likely to gain from increasing demand for group insurance and prudent underwriting standards. However, higher inflation and rising medical costs could offset the positives. The industry has been witnessing soft pricing over the past several quarters, and this is not expected to change anytime soon. The increasing adoption of technology in operations will help the industry function smoothly. The industry is witnessing a rise in demand for embedded insurance and supplemental health products.
Per a CBIZ report, the industry has maintained its profitability streak, reflecting solid reserves, prudent claims management, stable loss trends and fewer claims.
About the Industry
The Zacks Accident and Health (A&H) insurance industry comprises companies providing workers’ compensation insurance, mainly to employers operating in hazardous industries. Insurers provide group, individual and voluntary supplemental products, including employer-funded workers’ compensation that protects employees without reducing their pay. Claims are covered by insurers or state funds. Such coverage supports employee morale and productivity while reducing employers’ claim costs. Growing awareness of these benefits strengthens the industry’s outlook. Per Business Research Insight, the A&H Insurance market, worth about $323.24 billion in 2026, is projected to expand to about $452.53 billion by 2035—reflecting a CAGR of about 3.8%.
5 Trends Shaping the Future of the Accident & Health Insurance Industry
Pricing Pressure to Continue: Pricing pressure continues to weigh on the U.S. Accident & Health insurance industry. Rising medical expenses, elevated claims frequency and increased healthcare utilization are compelling insurers to raise premiums to preserve underwriting margins. However, intense competition, particularly in employer-sponsored and voluntary benefits markets, limits insurers from doing the same. SpendEdge projects workers’ compensation pricing to increase at a 3%-5% CAGR between 2022 and 2026, while CBIZ forecasts a more modest 2% rise.
Persistent Medical Inflation: Medical inflation remains a major challenge for Accident & Health insurers. Aon projects global medical costs to rise by approximately 9.8% in 2026, outpacing general inflation in many markets. Higher hospital wages, diagnostic expenses, provider fees, healthcare utilization, and costly medicines are driving this increase. The resulting pressure extends beyond claims costs, forcing insurers to balance profitability with adequate benefits and affordable premiums—without weakening coverage or limiting customers’ access to essential healthcare.
Growing Demand for Supplemental Health Insurance: Demand for supplemental health insurance is gaining traction as consumers seek greater financial protection against rising medical expenses. Per LIMRA, workplace supplemental health insurance new annualized premiums rose 7% year over year to more than $2.1 billion in the first half of 2026. Hospital indemnity premiums increased 14%, followed by critical illness (up 6%) and accident insurance premiums (up 2%), creating growth opportunities for insurers.
Mixed Claims Frequency Trends: The Accident & Health insurance industry is witnessing mixed claims trends. Improved workplace safety and effective risk management have reduced accident-related claims, while rising healthcare utilization and costly medical claims remain concerns. Per the National Council on Compensation Insurance, lost-time workers’ compensation claim frequency declined 2% in 2025, compared with a 5% drop in 2024. However, increasing medical claim severity is offsetting the benefits of lower claim frequency, highlighting the need for prudent underwriting and effective claims management to sustain profitability.
Increasing Adoption of Technology:The insurance industry is increasingly adopting AI, data analytics, automation, cloud computing and blockchain to improve operational efficiency and competitiveness. Telemedicine is gaining traction, helping insurers contain costs, while machine learning and predictive analytics enhance risk assessment. Policies are also increasingly incorporating telehealth services. Per CBIZ, AI could reduce workers’ compensation claim expenses by approximately 45%. However, higher technology investments may pressure expense ratios.
Zacks Industry Rank Indicates Bleak Prospects
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all member stocks, indicates dull near-term prospects. The Zacks Accident and Health Insurance industry, housed within the broader Zacks Finance sector, currently carries a Zacks Industry Rank #196, which places it in the bottom 21% of the 247 Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
The industry’s position in the bottom 50% of the Zacks-ranked industries is a result of a negative earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually losing confidence in this group’s earnings growth potential. Current year estimates have declined 3.9% in a year.
Before we present a few stocks one can have in their portfolio, given their business advancement endeavors, it’s worth taking a look at the industry’s performance and current valuation.
Industry Versus Sector and S&P 500
The Accident and Health Insurance industry has outperformed its sector and the Zacks S&P 500 composite year to date. The stocks in this industry have collectively gained 12.2% year to date compared with the Finance sector’s increase of 3.6% and the Zacks S&P 500 composite’s rise of 3.6% over the same period.
YTD Price Performance
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Current Valuation
On the basis of a trailing 12-month price-to-book (P/B), commonly used for valuing insurance stocks, the industry is currently trading at 1.75X compared with the Zacks S&P 500 composite’s 7.09X and the sector’s 4.5X.
Over the past five years, the industry has traded as high as 2.14X, as low as 1X and at the median of 1.76X.
Price-to-Book (P/B) Ratio (TTM)
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Price-to-Book (P/B) Ratio (TTM)
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5 Accident & Health Insurance Stocks in Focus
We are presenting five Zacks Rank #3 (Hold) stocks from the Zacks Accident and Health Insurance industry. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Aflac: This Columbus, GA-based company offers voluntary supplemental health and life insurance products and operates through Aflac Japan and Aflac U.S. The top line benefits from strategic growth investments, robust persistency rates and enhanced productivity. Aflac introduces products and upgrades existing ones to address the changing needs of its customers, as well as integrates digital solutions into its offerings to align with the ongoing trend of digitization. This, in turn, should support its profit margins. The Argus buyout will provide it with a platform to build the company’s network of dental and vision products and further strengthen its U.S. segment.
AFL delivered a trailing four-quarter earnings surprise of 6.56% on average. The Zacks Consensus Estimate for 2026 implies a year-over-year decrease of 6%. The consensus estimate for 2027 earnings implies a 9.4% year-over-year increase and has moved north 5 cents in the past 30 days. The expected long-term earnings growth rate is pegged at 9%.
Price and Consensus: AFL
Unum Group: Chattanooga, TN-based Unum Group provides long-term care insurance, life insurance, employer- and employee-paid group benefits and related services. This insurer is poised to grow on the operational excellence of Unum U.S. and Colonial Life. Encouraging sales trends, strong persistency in group lines and growth of new product lines like dental and vision, coupled with favorable risk results, should benefit Unum U.S. and Colonial Life, the two largest operating segments. The company has an impressive dividend track record, having increased dividends 17 times in the last 16 years and yielding better than the industry average. It estimates a 10-15% increase in dividends going forward.
For 2026, UNM expects adjusted operating income per share to be between $8.30 and $8.50.
The Zacks Consensus Estimate for 2026 and 2027 implies a year-over-year increase of 6.3% and 9.1%, respectively. The consensus estimate for 2027 earnings has moved 2 cents north in the past 30 days. The expected long-term earnings growth rate is pegged at 11.9%.
Price and Consensus: UNM
Globe Life: Based in McKinney, TX, Globe Life is an insurance holding company providing individual life and supplemental health insurance to lower-middle to middle-income households throughout the United States. This insurer has been witnessing a positive trend in revenues, driven by premium growth in its Life Insurance and Health Insurance segments and net investment income.
The strong performance of the American Income and Liberty National divisions should drive the top line in the future. Liberty National is likely to continue to benefit from improved productivity and agent count. GL’s expansion initiatives to capture heavily populated and less penetrated areas should drive growth in the future. Net life sales, as well as net health sales, are expected to grow in the mid-teens for Liberty National.
The Zacks Consensus Estimate for 2026 and 2027 earnings indicates a 6.6% and 5.8% year-over-year increase, respectively. The consensus estimate for 2026 and 2027 earnings has moved down 1.5% and 0.8%, respectively, in the past 30 days.
Price and Consensus: GL
Trupanion: Headquartered in Seattle, WA, Trupanion is a provider of insurance for cats and dogs in the United States, Canada, Continental Europe and Australia. It operates in a total addressable market worth more than $40 billion, which is a large but underpenetrated market.
This pet insurer is well-poised to grow, courtesy of its heightened focus on pets’ health and well-being in an underpenetrated pet insurance market, product launches, extended operating boundaries and a solid capital position. This pet insurer continues to invest in areas where it believes it can achieve high internal rates of return. Improving pricing should add to its upside.
The Zacks Consensus Estimate for 2026 and 2027 suggests a 40% and a 10.9% increase, respectively, on a year-over-year basis. TRUP delivered a trailing four-quarter earnings surprise of 53.03%, on average. It has a Growth Score of A. The consensus estimates for 2026 and 2027 earnings witnessed no movement in the past 30 days. The expected long-term earnings growth rate is pegged at 26.5%.
Price and Consensus: TRUP
Employers Holdings: Based in Henderson, NV, Employers Holdings is the 19th largest provider of workers' compensation insurance to small businesses in the low-to-medium hazard industries. EIG should continue to benefit from a solid presence in attractive markets and prudent underwriting. Its multiple distribution channels provide competitive advantages.
The consensus estimate for 2026 earnings suggests a 145.2% increase, but that for 2027 suggests a 0.7% decrease on a year-over-year basis. The consensus estimate for 2026 earnings has moved 5 cents north but that for 2027 earnings has moved 6 cents south in the past 30 days. Employers Holdings delivered a trailing four-quarter earnings surprise of 21.28%, on average.
Price and Consensus: EIG