In this article, we will take a look at the 10 best insurance stocks for the long term.
The Insurance Outlook in 2025
According to a report by Deloitte, the property and casualty insurance sector in the United States generated $9.3 billion in underwriting gain during the first quarter of 2024, a significant boost from an $8.5 billion loss in the first quarter of 2023. Similarly, the industry also saw a massive improvement to its combined ratio at 94.2%, driven by rate hikes in the personal lines sector, outweighing the cost of claims.
Speaking of the commercial lines segment, insurers in the United States are expected to address growing loss trends across employment practices liability insurance and follow the industry more cautiously. In addition to that, social inflation remains a concern in the United States. At the same time, for the first time in six years, the globe saw insured losses from natural catastrophes worth $100 billion, with no single event exceeding $10 billion in damages. This pushes the need for the reinsurance industry to assess the situation and underwriting mechanisms as more and more geographic regions are considered high-risk zones.
As for 2025, the report is particularly optimistic that the non-life sector will perform really well. The reasons behind this are simple. The surge in claims severity due to higher inflation and supply chain problems is decreasing. This coupled with the increase in premiums due to rate increases and higher investment yields is expected to help the sector grow immensely. Estimates suggest that insurer’s return on equity could increase to 10.7% in 2025 from nearly 10% in 2024.
In addition to that, the non-life sector is also expected to benefit from a thorough cost reduction in claims due to declining inflation rates. At the same time, the report reiterates that emerging risks and transforming customer experience present a solid growth opportunity for non-life insurance carriers in 2025. Estimates suggest that insurers may garner nearly $4.7 billion in global annual premiums from AI-related insurance by 2032, growing at a compound annual growth rate (CAGR) of 80%.
Speaking of the life insurance segment, premiums from the sector are expected to grow at 1.5% through 2025 in well-developed markets with rapid sales coming from emerging markets such as China, India, and Latin America. These emerging markets are expected to boost premiums by 5.7% in 2025. Life insurers are also expected to benefit from better investment yields, boosting profitability throughout the year.
Now that we have touched upon the insurance sector and its performance expectations for the year 2025, let’s take a look at some of the names that have been performing exceptionally well over the years and boast a solid growth opportunity for the long term. That said, let’s study the 10 best insurance stocks for the long term.
Insurance house, car and family health live concept. The insurance agent presents the toys that symbolize the coverage.
Our Methodology
We used Finviz to find companies in the insurance industry. We focused on companies with a market cap of at least $10 billion and revenue growth of more than 7% in the past 10 years. We then examined the hedge fund sentiment surrounding these 25 stocks and picked the 10 most popular ones. Our list is in ascending order of the number of hedge funds as of Q3 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best Insurance Stocks for the Long Term
10. Cincinnati Financial Corporation (NASDAQ:CINF)
Number of Hedge Fund Holders: 21
10-Year Revenue Growth Rate: 9.61%
Cincinnati Financial Corporation (NASDAQ:CINF) is an insurance corporation that ranks 10th on our list of the best insurance stocks for the long term. The company offers insurance solutions to businesses and individuals across home, auto, life, and other personal insurance lines. Cincinnati Financial Corporation (NASDAQ:CINF) is increasingly using technology and big data to improve underwriting, identify and prevent risk, leverage digital marketing to expand, and make operations and communication between the company and customers easier.
For instance, the company is working to find a way to inculcate Equix’s solution to help improve the speed and accuracy at which commercial claims are made. CINF is particularly interested in using the software to improve pre-loss business personal property valuations. Another commercial policyholder submission tool, Broker Buddha, is currently being tested at the company to streamline the process of quoting renewable businesses. Lastly, Cincinnati Financial Corporation (NASDAQ:CINF) is also leveraging Hosta AI to automate indoor property assessments using photos taken by homeowners. The AI is capable of transforming the photos into dimensional measurements.
The level of innovation at Cincinnati Financial Corporation (NASDAQ:CINF) is remarkable and helps position the company as a future leader in the world of insurance, especially now that the world is going for more convenient tech-based insurance solutions.
9. RenaissanceRe Holdings Ltd. (NYSE:RNR)
Number of Hedge Fund Holders: 29
10-Year Revenue Growth Rate: 25.19%
RenaissanceRe Holdings Ltd. (NYSE:RNR) is an insurance company that provides global property and casual reinsurance services. The company is based in Bermuda and has offices in the United Kingdom, the United States, Europe, Australia, and Singapore. In total, RNR has 17 offices, 101 underwriters, and 925 employees that help run the organization and provide customers with the best insurance services. Over the past 10 years, the company has grown its revenue by slightly over 25%, emphasizing its growing position in the industry.
In the third quarter of 2024, the company wrote $2.4 billion in gross premiums, up from $1.62 billion in the third quarter of 2023. Similarly, RenaissanceRe Holdings Ltd. (NYSE:RNR) generated $1.17 billion in net income attributable to common shareholders, a massive increase from $193 million in the third quarter of 2023.
Keeping its solid growth and financial performance in mind, it is no surprise that analysts are bullish on the stock, and their median price target of $286 points to an upside of 11%. Similarly, on January 14, RenaissanceRe Holdings Ltd. (NYSE:RNR) received a buy rating from Elyse Greenspan at Wells Fargo and from KBW’s Meyer Shields on January 10.
8. Arch Capital Group Ltd. (NASDAQ:ACGL)
Number of Hedge Fund Holders: 33
10-Year Revenue Growth Rate: 15.78%
Arch Capital Group Ltd. (NASDAQ:ACGL) ranks 8th on our list of the best insurance stocks to buy for the long term. The company is a leading provider of insurance, reinsurance, and mortgage insurance solutions. In the 12 months ending September 30, 2024, the company wrote $21 billion in gross premiums, of which its reinsurance line made up 53% and its insurance line made up 40% of the premiums written. Gross premiums for its re-insurance line grew the most rapidly, especially in the property and specialty insurance lines, contributing to the overall success of the firm.
The company logged a 256% growth in its net income from 2019 to the 12 months ending September 30, 2024, going from $1.6 billion to $5.7 billion in approximately five years. In addition to that, the company has grown its book value at a compound annual growth rate (CAGR) of 15.8% between 2001 and September 2024, an impressive feat for the overall growth trajectory of the firm. Similarly, Arch Capital Group Ltd. (NASDAQ:ACGL) has grown its revenue by nearly 16% over the past 10 years, explaining why 33 hedge funds were bullish on the stock at the close of Q3 2024.
Arch Capital Group Ltd. (NASDAQ:ACGL) boasts a solid growth opportunity given its sound financial performance and growing reinsurance business, especially across the property, casualty, and specialty insurance lines, segments expected to perform well in 2025.
7. Everest Group, Ltd. (NYSE:EG)
Number of Hedge Fund Holders: 35
10-Year Revenue Growth Rate: 11.00%
Everest Group, Ltd. (NYSE:EG), also known as Everest Re, is one of the biggest reinsurance and insurance companies providing coverage across property, casualty, and specialty insurance lines. In 2023, the company logged $17 billion in total gross written premiums and had $49 billion in total assets. Everest Group, Ltd. (NYSE:EG) offers its services in more than 115 countries across six continents.
In the third quarter of 2024, EG returned 19.4% to shareholders and had net income worth $509 million. The company’s strong financial position can be attributed to its expansion across the globe. In the last quarter of 2024, Everest Group, Ltd. (NYSE:EG) launched its insurance business in Italy in order to expand its operations in Europe. In addition to that, on January 8, the company announced its transition to a new leadership, which is expected to benefit the company in the long run.
On January 10, Michael Zaremski, an analyst at BMO Capital, upgraded his rating on EG from market perform to outperform. The analyst emphasized that the stock will have to take $812 million from its Q4 reserve and expects the new leadership to take some bold decisions, fueling the stock’s position in 2025.
6. Brown & Brown, Inc. (NYSE:BRO)
Number of Hedge Fund Holders: 35
10-Year Revenue Growth Rate: 11.63%
Brown & Brown, Inc. (NYSE:BRO) is an insurance and risk management company that is headquartered in Florida. The company is among the largest insurance brokerage entities in the United States with over 500 locations and growing. The company has an immense focus on growth through mergers and acquisitions. So far, more than 500 agencies have joined BRO. Only recently, on December 23, 2024, the company’s subsidiary, Nexus Underwriting, entered into an agreement to acquire Arma Fusion Limited, a reinsurance company based in Dubai, UAE.
On January 10, analyst firm Jefferies raised its price target on Brown & Brown, Inc. (NYSE:BRO) from $104 to $107. The analyst firm is bullish on property and casualty insurance lines along with insure tech in 2025. The analyst firm also suggests that improving fundamentals and hard market conditions will continue to prevail, should tariffs be placed. BRO is also favorable among analysts on the Street, with their median price target implying an upside of 12% from current levels.
Overall, Brown & Brown, Inc. (NYSE:BRO) is in a strong position with a long-term potential to expand, evident from its recent acquisition and merger deals. 35 hedge funds were bullish on the stock at the close of Q3 2024.
5. Markel Group Inc. (NYSE:MKL)
Number of Hedge Fund Holders: 38
10-Year Revenue Growth Rate: 13.12%
Markel Group Inc. (NYSE:MKL) ranks fifth on our list of the best insurance stocks to buy for the long term. The insurance company was founded in 1930 and is based in Richmond, Virginia. MKL is home to a robust insurance and investment management system that helps businesses enjoy sustainable earnings for the long term. Under its insurance business, the company provides insurance services, reinsurance, program services, and insurance-linked securities management.
Over the past 10 years, the company has grown its revenue by slightly over 13%, a testament to its sustained financial performance and robust growth strategy. In the third quarter of 2024, Markel Group Inc. (NYSE:MKL) saw a 37% increase in operating revenue driven by its investments segment. Its insurance business particularly benefited from its operations in foreign countries and the expansion of its offerings.
Overall, Markel Group Inc. (NYSE:MKL) boasts a sound financial position which is supported by its expansion model and revenue growth rate over the years. At the end of the third quarter of 2024, 38 hedge funds held stakes in MKL.
4. Willis Towers Watson Public Limited Company (NASDAQ:WTW)
Number of Hedge Fund Holders: 42
10-Year Revenue Growth Rate: 10.13%
Willis Towers Watson Public Limited Company (NASDAQ:WTW) is an insurance company that provides commercial insurance, brokerage services, and strategic risk investment services. The company is increasingly relying on data-driven solutions to help people with risk and capital management. Previously, towards the end of October 2024, the company launched a machine-led solution to revolutionize insurance best practices. The new solution allows insurers and re-insurers to improve accuracy and efficiency in property and casualty reserving.
On the financial front, Willis Towers Watson Public Limited Company (NASDAQ:WTW) increased its revenue by 6% to reach $2.3 billion in the third quarter of 2024. The company saw visible success in revenue growth and its transformation program. The company attributes its 6% revenue growth to its investments in technology and talent. With its goals and growth trajectory in mind, WTW expects to see an improvement in its cash flow and sustainable profit growth.
The company’s advancements in technology and financial performance explain why analysts are bullish on the stock. Their median price target of $358.5 implies an upside of 12% from current levels.
3. Arthur J. Gallagher & Co. (NYSE:AJG)
Number of Hedge Fund Holders: 44
10-Year Revenue Growth Rate: 9.72%
Arthur J. Gallagher & Co. (NYSE:AJG) ranks third on our list of the best insurance stocks to buy for the long term. The insurance company is based in the United States and provides insurance brokerage and risk management services. The company serves the aerospace, automotive, construction, energy, entertainment, and healthcare industries, among others. Over the past 10 years, the company has grown its revenue by nearly 10%, emphasizing its stable position in the industry.
2025 has only begun and Arthur J. Gallagher & Co. (NYSE:AJG) has executed key strategic decisions over the past two weeks. On January 6, the company acquired Encore Group, a retail insurance brokerage firm serving commercial clients in Canada. Similarly, on January 10, AJG acquired Wealth Management Partners Pty Ltd, a financial planning firm based in Western Australia. The two major transactions will help AJG expand its offerings and coverage across the globe, promising long-term growth for the firm.
On January 10, Andrew Kligerman, analyst at TD Cowen, raised AJG’s rating from hold to buy, setting a price target of $377, up from $295. The decision was based on the firm’s acquisition of AssuredPartners for $13.4 billion. Investors are positive about the company’s growth potential, given its key strategic decisions in play.
2. Chubb Limited (NYSE:CB)
Number of Hedge Fund Holders: 51
10-Year Revenue Growth Rate: 10.85%
Chubb Limited (NYSE:CB) is an insurance company, incorporated in Switzerland and listed in the United States. The entity has operations in more than 54 countries and territories offering commercial property, personal property, casualty, personal accident, life, and supplemental health insurance. Every year, the company handles over 3 million new claims from across the globe, paying out nearly $17 billion.
On January 10, analyst firm, Keefe Bruyette, raised the firm’s price target on Chubb Limited (NYSE:CB) from $320 to $328, maintaining an outperform rating on the stock. On January 3, analyst firm JPMorgan raised its price target on CB from $294 to $296, maintaining a bullish outlook on the property and casualty sector in 2025. The firm is mostly bullish on personal insurance lines due to positive margins.
The company has displayed consistent financial performance, evident from its sustained growth in revenue over the past 10 years. In the third quarter of 2024, Chubb Limited (NYSE:CB) reported record year-to-date results. The company grew its operating income and EPS was up by 14.3% and 15.6% respectively during the quarter, driven by solid growth in its property and casualty underwriting and investment income segments.
1. The Progressive Corporation (NYSE:PGR)
Number of Hedge Fund Holders: 95
10-Year Revenue Growth Rate: 14.35%
The Progressive Corporation (NYSE:PGR) ranks first on our list of the best insurance stocks for the long term. The auto insurance company has been functional since 1937 and provides fully customized auto, recreational, property, and life insurance. The company allows customers to bundle their insurance packages to save money. PGR has more than 37 million customers, a reflection of its unique position in the market.
On January 9, Robert Cox, CFA at Goldman Sachs, maintained a buy rating on the stock and set a price target of $290. Similarly, on January 3, analyst firm, JPMorgan raised its price target on the PGR from $251 to $256, maintaining an overweight rating on the stock. The analyst suggested the company is in a position to outperform in 2025, given its defensive risk profile and pricing. The analyst maintains an overall bullish sentiment on the property and casualty sector in 2025.
Over the past 10 years, The Progressive Corporation (NYSE:PGR) has grown its revenue by slightly over 14%, reiterating its sound financial performance and stable growth trajectory over the years. Analysts are also bullish on the stock and their median price target implies an upside of 18% from current levels.
While we acknowledge the potential of PGR to grow, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PGR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
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