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The Zacks Property and Casualty Insurance industry has performed well so far this year after a disappointing 2020. The industry has rallied 16% year to date, having lost 4% last year. Reopening of economy, increased vaccinations, and an encouraging economic growth outlook instill confidence in the industry. The industry’s earnings estimate for 2021 has gone up 2.9% in a year’s time.
Better pricing, prudent underwriting, increased exposure, streamlined operations. wider global presence and a solid capital position should help the Property and Casualty Insurance industry keep the momentum alive.
Though the industry is already into the hurricane season, which is estimated to be about 140% of average season, per Colorado State University (CSU), we believe improving pricing and favorable reserve development will help the industry withstand the blow. Frequent occurrences of natural disasters accelerate policy renewal rate.
As per Marsh, global commercial insurance prices in the first quarter of 2021 increased 18%, marking the 14th straight quarter of price increase. Per the report, property rates increased 15%, casualty pricing rose 6%, U.S. financial and professional lines pricing increased 40% while cyber insurance pricing rose 35%. Per Willis Towers Watson’s 2021 Insurance Marketplace Realities report, except for one, 29 lines should witness price rise.
Despite a very active catastrophe environment last year, the fifth-costliest year on record per Swiss Re Institute, private U.S. property/casualty insurers’ underwriting gain increased 37.8% and combined ratio improved 20 basis points to 98.7 on a year-over-year basis, per American Property Casualty Insurance Association and Verisk. Industry surplus moved up 7.4% to $910.2 billion at 2020 end.
Solid surplus level and a low-rate environment (helping in borrowing funds at low coupon rate) should aid insurers pursue strategic mergers and acquisitions to gain market share, grow in niche areas, and diversify operations into new business lines and geography.
Increased use of technology like blockchain, artificial intelligence, advanced analytics, telematics, cloud computing and robotic process automation should continue to expedite business operations and save cost. The industry has also witnessed the emergence of insurtech — technology-led insurers.
Though the Zacks Property and Casualty Insurance industry’s increase lags the Zacks S&P 500 composite’s rally of 16.8% and the Zacks Finance sector’s rise of 17.3%, with the help of the Zacks Stock Screener, we have zeroed on three stocks that have outperformed the industry, the benchmark index as well as the Finance sector year to date.
Image Source: Zacks Investment Research
All these stocks carry a favorable Growth Score and Value Score of A or B. While Growth Score analyses the growth prospects of a company, Value Score helps find undervalued stocks. Value stocks have a long history of showing superior returns. All these stocks currently carry Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Northbrook, IL-based The Allstate Corporation (ALL - Free Report) is the third-largest property-casualty insurer and the largest publicly-held personal lines carrier in the United States. It also provides a range of life insurance and investment products. The stock has gained 16.2% year to date.
Allstate is poised to grow on the back of its solid property and liability segment. The Zacks Consensus Estimate The for 2021 earnings suggests 6.5% increase on 7.6% higher revenues.
Estimates for its 2021 bottom line have climbed 16.2% over the past 60 days. The expected long-term earnings growth rate is 7.5%. The company has a solid track record of surpassing estimates in each of the last four reported quarters.
Image Source: Zacks Investment Research
Tampa, FL based HCI Group, Inc. (HCI - Free Report) engages in the property and casualty insurance, reinsurance, real estate, and information technology businesses. Shares have rallied 75.6% year to date.
Its well performing Homeowners Choice and TypTap coupled with conservative reserving practice should drive growth. The Zacks Consensus Estimate for 2021 revenues indicates growth of 21.5%. The company has a decent track record of surpassing estimates in three of the last four reported quarters.
Image Source: Zacks Investment Research
Los Angeles, CA-based Mercury General Corporation (MCY - Free Report) engages in writing personal automobile insurance in the United States. Shares have gained 19% year to date.
The Zacks Consensus Estimate for 2021 revenues indicates growth of 2.1%. The company has a decent track of surpassing estimates in three of the last four reported quarters.
Image Source: Zacks Investment Research
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
Image: Bigstock
3 P&C Insurers That Have Outperformed S&P 500 YTD
The Zacks Property and Casualty Insurance industry has performed well so far this year after a disappointing 2020. The industry has rallied 16% year to date, having lost 4% last year. Reopening of economy, increased vaccinations, and an encouraging economic growth outlook instill confidence in the industry. The industry’s earnings estimate for 2021 has gone up 2.9% in a year’s time.
Better pricing, prudent underwriting, increased exposure, streamlined operations. wider global presence and a solid capital position should help the Property and Casualty Insurance industry keep the momentum alive.
Though the industry is already into the hurricane season, which is estimated to be about 140% of average season, per Colorado State University (CSU), we believe improving pricing and favorable reserve development will help the industry withstand the blow. Frequent occurrences of natural disasters accelerate policy renewal rate.
As per Marsh, global commercial insurance prices in the first quarter of 2021 increased 18%, marking the 14th straight quarter of price increase. Per the report, property rates increased 15%, casualty pricing rose 6%, U.S. financial and professional lines pricing increased 40% while cyber insurance pricing rose 35%. Per Willis Towers Watson’s 2021 Insurance Marketplace Realities report, except for one, 29 lines should witness price rise.
Despite a very active catastrophe environment last year, the fifth-costliest year on record per Swiss Re Institute, private U.S. property/casualty insurers’ underwriting gain increased 37.8% and combined ratio improved 20 basis points to 98.7 on a year-over-year basis, per American Property Casualty Insurance Association and Verisk. Industry surplus moved up 7.4% to $910.2 billion at 2020 end.
Solid surplus level and a low-rate environment (helping in borrowing funds at low coupon rate) should aid insurers pursue strategic mergers and acquisitions to gain market share, grow in niche areas, and diversify operations into new business lines and geography.
Increased use of technology like blockchain, artificial intelligence, advanced analytics, telematics, cloud computing and robotic process automation should continue to expedite business operations and save cost. The industry has also witnessed the emergence of insurtech — technology-led insurers.
Though the Zacks Property and Casualty Insurance industry’s increase lags the Zacks S&P 500 composite’s rally of 16.8% and the Zacks Finance sector’s rise of 17.3%, with the help of the Zacks Stock Screener, we have zeroed on three stocks that have outperformed the industry, the benchmark index as well as the Finance sector year to date.
All these stocks carry a favorable Growth Score and Value Score of A or B. While Growth Score analyses the growth prospects of a company, Value Score helps find undervalued stocks. Value stocks have a long history of showing superior returns. All these stocks currently carry Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Northbrook, IL-based The Allstate Corporation (ALL - Free Report) is the third-largest property-casualty insurer and the largest publicly-held personal lines carrier in the United States. It also provides a range of life insurance and investment products. The stock has gained 16.2% year to date.
Allstate is poised to grow on the back of its solid property and liability segment. The Zacks Consensus Estimate The for 2021 earnings suggests 6.5% increase on 7.6% higher revenues.
Estimates for its 2021 bottom line have climbed 16.2% over the past 60 days. The expected long-term earnings growth rate is 7.5%. The company has a solid track record of surpassing estimates in each of the last four reported quarters.
Tampa, FL based HCI Group, Inc. (HCI - Free Report) engages in the property and casualty insurance, reinsurance, real estate, and information technology businesses. Shares have rallied 75.6% year to date.
Its well performing Homeowners Choice and TypTap coupled with conservative reserving practice should drive growth. The Zacks Consensus Estimate for 2021 revenues indicates growth of 21.5%. The company has a decent track record of surpassing estimates in three of the last four reported quarters.
Los Angeles, CA-based Mercury General Corporation (MCY - Free Report) engages in writing personal automobile insurance in the United States. Shares have gained 19% year to date.
The Zacks Consensus Estimate for 2021 revenues indicates growth of 2.1%. The company has a decent track of surpassing estimates in three of the last four reported quarters.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>