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The Zacks Analyst Blog Highlights: RenaissanceRe, MGIC Investment, Hallmark Financial Services and Trupanion
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For Immediate Release
Chicago, IL – January 2, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: RenaissanceRe Holdings (RNR - Free Report) , MGIC Investment Corp. (MTG - Free Report) , Hallmark Financial Services, Inc. (HALL - Free Report) and Trupanion, Inc. (TRUP - Free Report) .
Here are highlights from Thursday’s Analyst Blog:
4 Insurance Stocks for Your Investment Portfolio in 2020
The insurance sector has had an impressive 2019, following a decline in 2018. Insurance price gains across most of its business lines, introduction of new products and services, ongoing consolidation and robust capital position drove the insurance industry in 2019. This was, however, partially offset by low interest rates and losses from catastrophes.
The insurance sector is considered a defensive sector for investors in times of economic uncertainty. The year 2019, was marked by global economic volatility induced primarily by U.S-China trade war.
The Zacks Insurance industry in the past year rose by 22.1% in contrast to the decline of 6.5% in 2018. The S&P 500 index rallied 26.7% in 2019.
Growth Drivers for 2020
The industry has witnessed persistent increase in premium pricing over past several quarters and the momentum is likely to continue in the days ahead, which in turn will drive the top line. Insurance rates for commercial, property, personal, financial and professional lines of business have been rising over the past quarters.
A report by Marsh stated that “U.S. pricing has been trending up and continues to firm. The general trend was toward a firming of prices across the majority of coverage lines. There has been a steady upward trend in pricing in the US since the third quarter of 2017.”
Strength of the U.S. economy as evident from low unemployment and strong consumer confidence will keep the federal interest rates on hold for now. Insurance companies will be better off investing their surplus funds in 2020, then they had been in 2019 when the federal interest rates were slashed thrice.
A strong economy will also favor businesses to scale up and grow. This, in turn, will fuel demand for commercial insurance, which protects business owners and their employees. It includes protection from damage to property or injury to employees, or more commonly referred to public liability and employers' liability in insurance parlance.
Further, life insurance companies have made changes to their products to make them more resilient to headwinds arising from low interest rates. This has been done by limiting or removing products that offered guaranteed returns of the shelves and shifting toward protection products of unit-linked savings products, which pass the investment risks onto policyholders.
Moreover insurers are adopting analytics, technology, AI, in order to gain operating efficiency and reduce cost. This shift to technology should continue in 2020 as well.
While sturdy capital level will support consolidations, strategic investments and dividend increase and share buybacks will continue to drive growth. In the backdrop of favorable operating dynamics for the industry, we believe there are a number of stocks that investors can take a look at.
Our Picks
RenaissanceRe Holdingshas been witnessing steady premium growth over the last few quarters driven by Casualty and Specialty plus Property segments. The company has been acquiring companies to reinforce business. It effectively deploys capital backed by operational excellence and solid cash flows. It has been undertaking divestitures to streamline operations.
MGIC Investment Corp.is the largest private mortgage insurer in the United States. It remains well poised to deliver improved earnings, backed by declining delinquency, lower claims payments and an improving housing market. Given the strong purchase market and potential share gain from FHA, it anticipates strong writing in 2020. Insurance in force remains solid.
A decline in loss and claims payments will strengthen balance sheet and improve financial profile. Outstanding credit quality, increasing persistency and low expense ratio remain tailwinds. Solid net premium earned indicates growth average insurance in force.
The company carries a Zacks Rank #2. It’s Zacks Consensus Estimate for 2020 earnings has witnessed a 3.4% upward revision over the past 90 days.
Hallmark Financial Services, Inc.is a specialty insurance company headquartered in Dallas, which has transformed from regional auto insurance writer to a diversified specialty insurance company. Management efforts to revamp the company’s claims process, in a bid to make it more efficient and faster, coupled with insurance rate increases in most of its business lines will aid the company.
The company carries a Zacks Rank #2. It’s Zacks Consensus Estimate for 2020 earnings has witnessed a 1.3% upward revision over the past 90 days..
Trupanion, Inc.is a provider of a medical insurance plan for pet owners and veterinarians.
The stock sports a Zacks Rank #1. It has witnessed the Zacks Consensus Estimate for 2020 earnings go up to 2 cents per share from a loss of 2 cents per share, over the past 60 days.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers “Most Likely for Early Price Pops.”
Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.6% per year. So be sure to give these hand-picked 7 your immediate attention.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: RenaissanceRe, MGIC Investment, Hallmark Financial Services and Trupanion
For Immediate Release
Chicago, IL – January 2, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: RenaissanceRe Holdings (RNR - Free Report) , MGIC Investment Corp. (MTG - Free Report) , Hallmark Financial Services, Inc. (HALL - Free Report) and Trupanion, Inc. (TRUP - Free Report) .
Here are highlights from Thursday’s Analyst Blog:
4 Insurance Stocks for Your Investment Portfolio in 2020
The insurance sector has had an impressive 2019, following a decline in 2018. Insurance price gains across most of its business lines, introduction of new products and services, ongoing consolidation and robust capital position drove the insurance industry in 2019. This was, however, partially offset by low interest rates and losses from catastrophes.
The insurance sector is considered a defensive sector for investors in times of economic uncertainty. The year 2019, was marked by global economic volatility induced primarily by U.S-China trade war.
The Zacks Insurance industry in the past year rose by 22.1% in contrast to the decline of 6.5% in 2018. The S&P 500 index rallied 26.7% in 2019.
Growth Drivers for 2020
The industry has witnessed persistent increase in premium pricing over past several quarters and the momentum is likely to continue in the days ahead, which in turn will drive the top line. Insurance rates for commercial, property, personal, financial and professional lines of business have been rising over the past quarters.
A report by Marsh stated that “U.S. pricing has been trending up and continues to firm. The general trend was toward a firming of prices across the majority of coverage lines. There has been a steady upward trend in pricing in the US since the third quarter of 2017.”
Strength of the U.S. economy as evident from low unemployment and strong consumer confidence will keep the federal interest rates on hold for now. Insurance companies will be better off investing their surplus funds in 2020, then they had been in 2019 when the federal interest rates were slashed thrice.
A strong economy will also favor businesses to scale up and grow. This, in turn, will fuel demand for commercial insurance, which protects business owners and their employees. It includes protection from damage to property or injury to employees, or more commonly referred to public liability and employers' liability in insurance parlance.
Further, life insurance companies have made changes to their products to make them more resilient to headwinds arising from low interest rates. This has been done by limiting or removing products that offered guaranteed returns of the shelves and shifting toward protection products of unit-linked savings products, which pass the investment risks onto policyholders.
Moreover insurers are adopting analytics, technology, AI, in order to gain operating efficiency and reduce cost. This shift to technology should continue in 2020 as well.
While sturdy capital level will support consolidations, strategic investments and dividend increase and share buybacks will continue to drive growth.
In the backdrop of favorable operating dynamics for the industry, we believe there are a number of stocks that investors can take a look at.
Our Picks
RenaissanceRe Holdingshas been witnessing steady premium growth over the last few quarters driven by Casualty and Specialty plus Property segments. The company has been acquiring companies to reinforce business. It effectively deploys capital backed by operational excellence and solid cash flows. It has been undertaking divestitures to streamline operations.
The company carries a Zacks Rank #2 (Buy). It’s Zacks Consensus Estimate for 2020 earnings has witnessed a 0.7% upward revision over the past 60 days.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
MGIC Investment Corp.is the largest private mortgage insurer in the United States. It remains well poised to deliver improved earnings, backed by declining delinquency, lower claims payments and an improving housing market. Given the strong purchase market and potential share gain from FHA, it anticipates strong writing in 2020. Insurance in force remains solid.
A decline in loss and claims payments will strengthen balance sheet and improve financial profile. Outstanding credit quality, increasing persistency and low expense ratio remain tailwinds. Solid net premium earned indicates growth average insurance in force.
The company carries a Zacks Rank #2. It’s Zacks Consensus Estimate for 2020 earnings has witnessed a 3.4% upward revision over the past 90 days.
Hallmark Financial Services, Inc.is a specialty insurance company headquartered in Dallas, which has transformed from regional auto insurance writer to a diversified specialty insurance company. Management efforts to revamp the company’s claims process, in a bid to make it more efficient and faster, coupled with insurance rate increases in most of its business lines will aid the company.
The company carries a Zacks Rank #2. It’s Zacks Consensus Estimate for 2020 earnings has witnessed a 1.3% upward revision over the past 90 days..
Trupanion, Inc.is a provider of a medical insurance plan for pet owners and veterinarians.
The stock sports a Zacks Rank #1. It has witnessed the Zacks Consensus Estimate for 2020 earnings go up to 2 cents per share from a loss of 2 cents per share, over the past 60 days.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers “Most Likely for Early Price Pops.”
Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.6% per year. So be sure to give these hand-picked 7 your immediate attention.
See 7 handpicked stocks now >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.