In this article, we will take a look at the 10 Most Undervalued Insurance Stocks to Buy Now.
The insurance industry has performed better in 2025 than the broader market. The S&P 500 index, which tracks large-cap stocks, has declined over 4.50% so far in 2025. In comparison, two of the leading insurance ETFs, the S&P Insurance ETF and the iShares US Insurance ETF, have surged over 3% and 4.50% year-to-date, respectively.
Insurance Industry in the United States
Despite the losses from wildfires, the analysts see a higher upside for insurance stocks compared to the broader market. There are different reports on the insured losses in Los Angeles. Verisk anticipates insured losses between $28 billion and $35 billion. At the same time, a new report from the UCLA Anderson Forecast indicates that wildfires in L.A. County may have caused total losses ranging between $95 billion and $164 billion, with insured losses estimated at $75 billion.
Earlier in January, Fitch Ratings reported that the losses are likely to “materially exceed” highs from past wildfire events but are unlikely to impact the ratings of property and casualty (P&C) insurers and reinsurers.
“Insured losses should remain within rating sensitivities for affected insurers, given ample capital levels, diversified risk exposure, and insurers’ ability to increase premium rates,” Fitch Ratings said.
Despite the losses, the insurance industry in the U.S. is overall balanced and remains positive. The U.S. has the largest insurance market in the world. The combined value of America’s insurance market is approximately $1.7 trillion, as of 2025. The U.S. has some of the largest insurance companies by assets that influence the global insurance markets.
The P&C insurance sector in the U.S. generated $9.3 billion in underwriting gains during the first quarter of 2024, according to a report by Deloitte. This was a major improvement from an $8.5 billion loss in Q1 2023. The industry also increased its combined ratio to 94.2%, driven by increases in rates in the personal lines sector outweighing the cost of claims.
With that said, let’s take a look at the 10 Most Undervalued Insurance Stocks to Buy Now.
Insurance house, car and family health live concept. The insurance agent presents the toys that symbolize the coverage.
Our Methodology
We used a Finviz screener to shortlist Insurance companies with a forward P/E under 20. Finally, we listed the most undervalued insurance stocks based on the number of hedge fund holders, as of Q4 2024. The stocks are ranked in ascending order of the hedge fund sentiment.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10 Most Undervalued Insurance Stocks to Buy Now
10. Unum Group (NYSE:UNM)
Forward P/E: 8.88
No. of Hedge Fund Holders: 43
Unum Group (NYSE:UNM) is an American insurance company that offers financial protection benefits in the U.S. and the U.K. It is a provider of workplace benefits and services with products including disability, life, accident, critical illness, dental and vision, and other related services.
On March 5, Raymond James analyst Wilma Burdis lifted the rating on UNM shares from Market Perform to Strong Buy, keeping the price target at $108. The analyst sees potential in Unum’s group insurance businesses. Moreover, the company is continuing to de-risk its long-term care (LTC) insurance block, which will give more stability to the firm. Burdis pointed out Unum Group’s (NYSE:UNM) attractive long-term targets, which include 4-7% core annual premium growth and an 8-10% CAGR in earnings per share.
Unum missed the analysts’ earnings estimates in Q4 2024, but posted a 10% earnings growth for the full year, exceeding initial expectations of 7% to 9%. The company reported strong sales in the U.S., posting a 20% growth in Q4, making it the largest sales quarter of the year. Unum has announced another stock repurchase of $1 billion following the completion of a $1 billion stock repurchase in 2024. Moreover, the company expects to generate between $1.3 billion and $1.6 billion of FCF in 2025, reflecting continuous progress and strong financial flexibility.
9. W. R. Berkley Corporation (NYSE:WRB)
Forward P/E: 14.16
No. of Hedge Fund Holders: 47
W. R. Berkley Corporation (NYSE:WRB) is a leading global insurance holding company. It is well-known for its diverse range of property and casualty insurance products. The company is recognized for its strong underwriting discipline and long-term financial performance. With a focus on innovation and strategic growth, W. R. Berkley offers a comprehensive portfolio of services to both commercial and individual clients.
On March 10, Keefe, Bruyette & Woods analyst Meyer Shields retained a price target of $61 per share on WRB shares, maintaining a Market Perform rating on the shares. Shields noted that the company’s GAAP loss and LAE reserves were overstated by nearly $60 million in 2024. The analyst cited that the overstatement suggests potential reserve releases, which will balance out the need for strengthening reserves from older accident years’ casualty reserves.
In Q4 2024, W. R. Berkley Corporation (NYSE:WRB) reported an ROE of 30.9% and operating income of $453 million, representing a 15.5% increase year-over-year. The company returned over $835.6 million in total capital through special and regular dividends as well as share repurchases. Shields expects WRB to post net reserve releases of $12.4 million in 2025 and $13 million in 2026. This projection has led to a rise in estimated EPS for the company, with the 2025 earnings forecast increasing from $4.35 to $4.40, and the 2026 earnings estimate rising from $4.75 to $4.80.
8. Everest Group, Ltd. (NYSE:EG)
Forward P/E: 6.98
No. of Hedge Fund Holders: 47
Everest Group, Ltd. (NYSE:EG) is a global insurance and reinsurance company. It provides a wide range of property and casualty (P&C) insurance solutions. Everest offers comprehensive coverage for both personal and commercial lines, including risks related to property damage, liability, and other specialized needs. The company focuses on delivering tailored solutions, assisting businesses to manage their exposure to risk.
On February 4, Barclays analyst Alex Scott upgraded the price target of EG shares from $461 to $471 per share, reiterating a Buy rating on the stock. Despite mixed results in Q4 2024, the analyst remains optimistic as the company’s long-term profitability remains stable. Everest Group, Ltd. (NYSE:EG) posted a strong operating income of $1.3 billion for FY2024, achieving a 9% operating ROE. Premium growth in Q4 was solid at 12.6%, supported by strong execution with core clients and selective expansion in specialty underwriting areas. The company increased its net investment income to $473 million during the last quarter, driven by higher assets under management and a stable book yield of 4.7%.
Vulcan Value Partners stated the following regarding Everest Group, Ltd. (NYSE:EG) in its Q4 2024 investor letter:
“We purchased one new position during the quarter: Everest Group, Ltd. (NYSE:EG). Everest Group is a global reinsurance and insurance business known for its disciplined cost structure and high-quality underwriting. Insurance is an inherently cyclical business. “Hard markets” occur when premium prices are high relative to insured risks. Hard markets inevitably attract more capital to the industry, causing premium prices to fall relative to insured risks, which results in a “soft market.” Soft markets lead undisciplined underwriters to post underwriting losses, removing capital from the industry, and the cycle repeats. In evaluating insurance companies, we believe that growth in tangible book value per share more closely approximates growth in intrinsic value per share than does growth in earnings per share. Compounding book value per share requires underwriting discipline. Moreover, given the cyclical nature of the business, a disciplined underwriter will have more volatile earnings in the short run than an undisciplined underwriter. Everest Group underwrites aggressively in hard markets and builds underwriting capacity during soft markets. During the most recent hard market, the company has significantly grown book value per share. We applaud Everest Group’s emphasis on growing intrinsic value per share over the long term instead of managing short-term earnings per share. We first purchased Everest Group, then called Everest Re, in our Small Cap portfolio where we held it for over thirteen years. It grew into a large-cap company, and we owned it in our Large-cap portfolio for over ten years. We are pleased to be able to add Everest Group to our Focus portfolio with a margin of safety to our estimate of intrinsic value.”
7. Willis Towers Watson Public Limited Company (NASDAQ:WTW)
Forward P/E: 18.94
No. of Hedge Fund Holders: 48
Willis Towers Watson Public Limited Company (NASDAQ:WTW) is a London-based insurance company that offers commercial insurance, brokerage services, and strategic risk investment solutions. The recently launched AI-powered assistant, Expert, adds to WTW’s competitive advantage. The AI assistant is designed to help midsize U.S. businesses in managing HR, compensation, and benefits tasks. The tool helps with research, regulatory guidance, writing, and secure document searches.
Willis Towers Watson Public Limited Company (NASDAQ:WTW) is focused on data-driven solutions to assist risk and capital management. In October 2024, the company launched a machine-led solution designed to transform insurance practices. This solution supports insurers and reinsurers to enhance accuracy and efficiency in P&C reserving.
The company recently announced that it has expanded its partnership with the Karlsruhe Institute of Technology (KIT) in partnership with NASA. This collaboration aims to improve hail risk assessment across Europe, focusing on their spatial and temporal distribution.
WTW continues to transform its operations, ending FY2024 with an operating cash flow of $1.5 billion and FCF of $1.4 billion. The company posted a 5% organic revenue growth, with an adjusted operating margin of 36.1%, showing strong financial performance. In addition, WTW’s Transformation program achieved $473 million in cumulative savings, enhancing operational efficiency.
6. American International Group, Inc. (NYSE:AIG)
Forward P/E: 12.84
No. of Hedge Fund Holders: 48
American International Group, Inc. (NYSE:AIG) is a global insurance and financial services company providing property and casualty insurance, life insurance, retirement solutions, and other financial products. The company manages risk through underwriting, reinsurance, and claims management while leveraging technology and analytics to optimize operations. AIG offers insurance-related services to individuals, businesses, and companies across North America, Europe, and Asia. The company has also implemented its first generative AI solution to support business growth through automated data extraction for underwriting.
On February 14, Keefe, Bruyette & Woods analyst Meyer Shields increased the price target of AIG shares from $87 to $90, keeping an Outperform rating on the stock. The analyst is bullish on AIG because of its sustained underwriting margin progress which is expected to generate solid results for the company in 2025.
American International Group, Inc. (NYSE:AIG) posted solid results in the fourth quarter of 2024. AIG achieved net premiums written of $6.1 billion, up by 7% from a year ago, driven by 8% growth in Global Commercial Lines. The company achieved a notable combined ratio of 92.5% in 2024 while the accident combined ratio was around 88.6% throughout the year. General Insurance posted net premiums written of $23.9 billion, a 6% increase year-over-year, marking the third consecutive year of a sub-92 % combined ratio. For 2025, the company is well-positioned to achieve its target of 10% plus core ROE.
5. The Travelers Companies, Inc. (NYSE:TRV)
Forward P/E: 13.39
No. of Hedge Fund Holders: 52
The Travelers Companies, Inc. (NYSE:TRV) is one of the largest insurance providers in the U.S. It provides a wide range of property and casualty insurance products. TRV specializes in offering coverage for personal, business, and specialty needs. The company offers various products including home, auto, and life insurance, as well as commercial lines for businesses.
On February 19, Keefe, Bruyette & Woods analyst Meyer Shields upgraded the rating of TRV shares from Market Perform to Outperform, raising the price target from $268 to $275. The analyst raised the rating on TRV following its Q4 results. The Travelers Companies Inc. (NYSE:TRV) reported a record core income of $2.1 billion in Q4 2024, a 30% increase year-over-year, and a full-year core income of $5 billion, up 64% compared to 2023. The earnings per share for the full year was $21.58, up 64% from a year ago.
Shields has slightly lowered the EPS estimate for 2025 from $22.20 to $21.75 per share. This adjustment was made due to the impact of California wildfire losses earlier this year. However, the analyst has increased its 2026 EPS estimate from $24.35 to $24.60 per share.
4. Chubb Limited (NYSE:CB)
Forward P/E: 13.40
No. of Hedge Fund Holders: 53
Chubb Limited (NYSE:CB) is a leading insurance company that offers a diverse range of insurance and reinsurance products to people, corporations, and other entities worldwide. It provides commercial insurance products and service offerings, such as risk management programs, loss control, and engineering and complex claims management.
On March 5, HSBC analyst Vikram Gandhi upgraded CB’s rating from Hold to Buy, raising the price target from $298 to $323. The upgrade follows Chubb’s strategic expansion in reinsurance in 2024, as well as its efforts to enhance certain sectors of its North American commercial insurance portfolio. The analyst noted that CB’s strong emphasis on the mid-market and SME segments in North America positions it well to grow its business in the region.
The London Company Large Cap Strategy stated the following regarding Chubb Limited (NYSE:CB) in its Q3 2024 investor letter:
“Chubb Limited (NYSE:CB) – CB engages in the provision of commercial and personal property and casualty insurance, personal accident and health (A&H), reinsurance, and life insurance. While the company is headquartered outside the U.S., roughly 2/3 of its profits are generated in the U.S. with Asian markets representing another 20% of earnings. CB has a portfolio of top-performing, multibillion-dollar businesses that have substantial scale and yet potential for growth. CB has a culture of superior underwriting discipline, and management has a strong track record of expense control. CB also has a well-balanced mix of business by customer and product, with extensive distribution channels. We are attracted to CB’s globally diversified business model, superior underwriting and expense management, consistent and best-in-class profitability, upside potential from growth in Asia, and the potential to benefit from higher interest rates in its investment portfolio.”
3. MetLife, Inc. (NYSE:MET)
Forward P/E: 8.45
No. of Hedge Fund Holders: 54
MetLife, Inc. (NYSE:MET) is the largest U.S. life insurer and has a huge retirement solutions business. It has a strong presence in more than 40 markets worldwide, with leading positions in the US, Japan, Latin America, Asia, Europe, the Middle East, and Africa. MetLife provides various products including health insurance products, including accident and health insurance, disability insurance, and critical illness insurance.
On February 28, Morgan Stanley analyst Nigel Dally increased the price target of MET shares from $101 to $109, maintaining an Overweight rating on the shares. The analyst highlights the strong momentum in the industry, stating that life insurers are in a better operating environment. Dally has raised the price target of MET because of the industry’s attractive view.
MetLife, Inc. (NYSE:MET) recently announced its five-year growth strategy, New Frontier. The growth strategy focuses on expansion in high-growth international markets by leveraging its strong position in Latin America and Asia. The company will also explore opportunities in emerging regions through new distribution methods and product and channel diversification. The life insurer is aiming for double-digit growth in adjusted EPS and a 15-17% growth in adjusted ROE. In addition, the company aims to minimize its expenses and turn over $25 billion in FCF.
2. The Allstate Corporation (NYSE:ALL)
Forward P/E: 11.49
No. of Hedge Fund Holders: 71
The Allstate Corporation (NYSE:ALL) is an American insurance provider that offers a range of property and casualty, health, and protection products. Its products include auto, home, life, and supplemental insurance. The company also offers consumer protection plans, roadside assistance, and analytics solutions. These are distributed through agents, online platforms, and various partnerships. ALL is primarily engaged in the property and casualty insurance business in the U.S. and Canada.
On February 28, Piper Sandler analyst Paul Newsome reiterated an Overweight rating on ALL shares and kept the price target at $248 per share. The analyst is optimistic about Allstate’s outlook as Newsome anticipates that the company will overcome its ongoing challenges and achieve positive auto policy-in-force (PIF) growth in 2025. The Allstate Corporation (NYSE:ALL) has been under scrutiny due to concerns over the decline in auto insurance PIF within its auto segment. The change in Allstate’s situation is expected due to the current market conditions and the management’s proactive strategies.
Newsome expects the underwriting environment to remain favorable for Allstate throughout 2025, which could further enhance the company’s valuation. The conducive underwriting climate as well as management’s efforts should possibly mitigate risks in auto PIF this year.
Diamond Hill Large Cap Concentrated Strategy stated the following regarding The Allstate Corporation (NYSE:ALL) in its Q2 2024 investor letter:
“Among our bottom Q2 contributors were Abbott Laboratories, ConocoPhillips, and The Allstate Corporation (NYSE:ALL). Allstate, one of the US’s largest auto and homeowners’ insurance providers has seen the pace of premium price increases decelerate, weighing on investor sentiment around the stock. However, the company’s underlying fundamentals are intact, margin expansion should continue through the year, and the outlook remains constructive.”
1. The Progressive Corporation (NYSE:PGR)
Forward P/E: 19.57
No. of Hedge Fund Holders: 100
The Progressive Corporation (NYSE:PGR) is the second-largest auto insurer in the U.S., providing a range of specialty property-casualty insurance products. PGR is recognized for its consumer and business car and home insurance products. In addition to that, Progressive Health by eHealth provides health insurance options for individuals and families.
The Progressive Corporation (NYSE:PGR) delivered strong results in 2024, with net premiums written growing nearly 21% year-over-year to $74.4 billion. This increase in net premiums written represents approximately $13 billion in premium growth. PGR achieved record policy growth, adding over 5 million policies in 2024. This is more than twice the previous highest annual rate of policy growth in the firm’s history. The company reported a combined ratio of 88.8% in 2024, indicating strong profitability.
The London Company Large Cap Strategy stated the following regarding The Progressive Corporation (NYSE:PGR) in its Q4 2024 investor letter:
“The Progressive Corporation (NYSE:PGR) – PGR was a weaker performer in 4Q after a strong start to the year. Policy growth continued to be strong, but expectations were high and growth decelerated slightly throughout the quarter. That said, retention has remained high, and share, gains continue. PGR’S best-in-class market segmentation gives preferred drivers lower rates, leaving competitors with worse drivers and more erratic pricing strategies. We remain attracted to its best-in-class operations, conservative underwriting, and shareholder-friendly capital allocation philosophy.”
While we acknowledge the potential of PGR to grow, our conviction lies in the belief that 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 30 Best Stocks To Invest In According to Billionaires.
Disclosure. None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and investors. Please subscribe to our daily free newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
