In this article, we discuss 11 best insurance brokerage stocks to buy now. If you want to see more stocks in this selection, check out 5 Best Insurance Brokerage Stocks To Buy Now.
Insurance brokers are professionals who act as intermediaries between insurance companies and individuals or organizations seeking insurance coverage. They provide advice, assistance, and access to a wide range of insurance products and services from different insurance providers, helping their clients find the coverage that best meets their needs and budget. Research and Markets anticipated that the worldwide insurance industry would expand at a compounded annual growth rate (CAGR) of 10.4% from $5,376.92 billion in 2021 to $5,938.41 billion in 2022. Moreover, the market is projected to reach $8,398.11 billion in 2026 with a compounded annual growth rate of 9.1%.
In recent years, insurance companies have shown great adaptability and strength in overcoming various challenges, including the effects of the pandemic and the economic consequences of the Russia-Ukraine conflict. Deloitte reported that although property and casualty insurance price increases were a contributing factor in the rise of premium revenue and the achievement of a consolidated surplus in the United States exceeding $1 trillion, inflation is also pushing up loss costs at a higher and faster rate in most markets, which is negatively impacting the profitability of underwriting. Meanwhile, the small business insurance market is experiencing significant changes, and the increasing shift to green energy and associated insurance offerings, as well as coverage for emerging intangible assets like cryptocurrency, non-fungible tokens (NFTs), and virtual activities in the metaverse, indicate that there are ample opportunities for expansion in the insurance space.
EY has stated that the effects of inflation will differ across the insurance industry. P&C insurers in the US will be especially impacted by inflation-related rises in claims costs, such as for repairs, replacement parts, and labor. This is due to regulators in the US being resistant to approving rate increases. In the Asia-Pacific region, many insurance products have a short-tail nature, which enables insurers to adjust policy pricing quickly in response to inflation and partially make up for depleted reserves. Life insurance firms are tentatively hopeful since higher interest rates currently contribute to future profitability and appear to outweigh the effects of inflation.
There are multiple growth and expansion opportunities in the insurance market. To benefit from the boom in this industry, some of the best insurance brokerage stocks to invest in include Aon plc (NYSE:AON), Arthur J. Gallagher & Co. (NYSE:AJG), and Marsh & McLennan Companies, Inc. (NYSE:MMC).
Photo by Chris Liverani on Unsplash
Our Methodology
We scanned Insider Monkey’s database of 943 hedge funds and picked the top 11 companies that operate in the insurance brokerage sector with the highest number of hedge fund investors. These are the best insurance brokerage stocks to buy according to hedge funds.
Best Insurance Brokerage Stocks To Buy Now
11. Crawford & Company (NYSE:CRD-A)
Number of Hedge Fund Holders: 5
Crawford & Company (NYSE:CRD-A) offers services for managing claims and outsourcing to carriers, brokers, and corporations across several regions including the United States, the United Kingdom, Europe, Canada, Australia, Asia, and Latin America. The company has four divisions – North America Loss Adjusting, International Operations, Broadspire, and Platform Solutions. On May 4, Crawford & Company (NYSE:CRD-A) reported a Q1 GAAP EPS of $0.22 and a revenue of $313 million, up 12.2% year-over-year.
On March 10, Barrington analyst Kevin Steinke raised the firm’s price target on Crawford & Company (NYSE:CRD-A) to $12 from $10 and maintained an Outperform rating on the shares, noting that Q4 revenue and profitability exceeded expectations. The analyst believes that Crawford & Company (NYSE:CRD-A) has an advantage over its competitors due to its investments in technology, service quality, scale, and expertise in various insurance coverages.
According to Insider Monkey’s fourth quarter database, 5 hedge funds were bullish on Crawford & Company (NYSE:CRD-A), compared to 7 funds in the prior quarter. Scott Wallace’s Wallace Capital Management is the largest stakeholder of the company.
Like Aon plc (NYSE:AON), Arthur J. Gallagher & Co. (NYSE:AJG), and Marsh & McLennan Companies, Inc. (NYSE:MMC), Crawford & Company (NYSE:CRD-A) is one of the best insurance brokerage stocks to invest in.
10. SelectQuote, Inc. (NYSE:SLQT)
Number of Hedge Fund Holders: 8
SelectQuote, Inc. (NYSE:SLQT) sells insurance products and healthcare services in the United States through a technology-enabled, direct-to-consumer distribution platform. The company offers a variety of policies, including senior health policies like Medicare supplement and Medicare Part D, as well as term life, non-commercial auto, and home property and casualty policies. It is one of the best insurance brokerage stocks to invest in.
On February 8, Citi analyst Daniel Grosslight increased the price target of SelectQuote, Inc. (NYSE:SLQT) from 80c to $1.50 and maintained a Neutral rating on the shares following the fiscal Q2 results. The analyst sees some positive signs, noting that the company saw a significant improvement in Senior unit economics during the crucial AEP season.
According to Insider Monkey’s fourth quarter database, 8 hedge funds were long SelectQuote, Inc. (NYSE:SLQT), compared to 11 funds in the prior quarter. Donald L. Hawks’ Brookside Equity Partners is the biggest stakeholder of the company, with 17.6 million shares worth $11.8 million.
Here is what Carillon Tower Advisers has to say about SelectQuote, Inc. (NYSE:SLQT) in its Q2 2021 investor letter:
“SelectQuote is a technology-enabled, direct-to-consumer distributor of complex senior health, life, auto, and home insurance policies. The stock underperformed during the quarter after the company reported results that were in line with expectations, but lowered the next quarter earnings outlook slightly due to investments in an adjacent business.”
9. BRP Group, Inc. (NASDAQ:BRP)
Number of Hedge Fund Holders: 12
BRP Group, Inc. (NASDAQ:BRP) sells and promotes insurance products and services in the United States. The company operates through four segments – Middle Market, Specialty, MainStreet, and Medicare. It is one of the best insurance brokerage stocks to watch. On February 28, BRP Group, Inc. (NASDAQ:BRP) reported a Q4 non-GAAP EPS of $0.12 and a revenue of $246.04 million, outperforming Wall Street estimates by $0.02 and $13.16 million, respectively. Revenue for the period climbed 54.5% on a year-over-year basis.
On April 10, Jefferies analyst Yaron Kinar maintained a Hold rating on BRP Group, Inc. (NASDAQ:BRP) and reduced the price target on the shares from $29 to $28. This comes as part of the firm’s Q1 preview for the P&C Insurance and Insurtech space. Jefferies predicts that Q1 industry catastrophe losses will be around $10 billion, which is in line with or slightly above the seasonal average for Q1.
According to Insider Monkey’s fourth quarter database, 12 hedge funds were long BRP Group, Inc. (NASDAQ:BRP), compared to 14 funds in the prior quarter. Tim David’s Guardian Point Capital is the largest stakeholder of the company, with 575,000 shares worth $14.45 million.
Here is what Madison Small Cap Fund has to say about BRP Group, Inc. (NASDAQ:BRP) in its Q3 2022 investor letter:
“BRP Group (NASDAQ:BRP) operates as one of largest middle market insurance brokers in a highly fragmented domestic market. Historically, insurance brokerage has been very resilient in economic downturns. Their unique acquisition strategy in a highly fragmented industry should lead to above-average growth for many years. We also like BRP’s organic growth characteristics due to their exposure in middle market brokerage. BRP has attractive margins with room for meaningful expansion. The market selloff gave us an opportunity to initiate this new investment at very attractive prices. We estimate BRP’s private market value to be $35.”
8. eHealth, Inc. (NASDAQ:EHTH)
Number of Hedge Fund Holders: 13
eHealth, Inc. (NASDAQ:EHTH) runs a marketplace for health insurance that offers solutions for consumer engagement, education, and health insurance enrollment in the United States. On May 1, eHealth, Inc. (NASDAQ:EHTH) shares rose by 11.7% following the company’s confirmation of its previously announced outlook for 2023. The company anticipates achieving total revenues between $420 million to $440 million for the full year ending December 31, 2023, which is in line with consensus estimate of $424.48 million. It is one of the best insurance brokerage stocks to invest in.
On March 1, Craig-Hallum analyst George Sutton increased the price target on eHealth, Inc. (NASDAQ:EHTH) from $6 to $11 and maintained a Buy rating on the shares after analyzing the company’s Q4 results. The analyst thinks that eHealth, Inc. (NASDAQ:EHTH) will continue to differentiate itself from its competitors, thanks to its leading online and omni-channel platforms, unless there is an aggressive flow of capital back into this sector.
According to Insider Monkey’s fourth quarter database, 13 hedge funds were bullish on eHealth, Inc. (NASDAQ:EHTH), compared to 20 funds in the last quarter. William Leland Edwards’ Palo Alto Investors is the biggest stakeholder of the company, with 2.48 million shares worth $12 million.
Alger Small Cap Focus Fund released its Q3 2020 Investor letter and mentioned eHealth, Inc. (NASDAQ:EHTH). Here is what the fund said:
“eHealth is a leading health insurance marketplace primarily focused on Medicare plans. Its technology and service platform provide consumer engagement, education and enrollment services. The marketplace offers consumers a broad choice of insurance products, including thousands of options for Medicare Advantage, Medicare Supplement and Medicare Part D prescription drug plans eHealth also offers non-Medicare options from a diverse mix of health insurance carriers in the U.S. In July eHealth reported better-than-expected financial results for the second quarter, but its stock still underperformed. eHealth has faced increased investor scrutiny of customer churn and its estimates of the lifetime value of an approved member. During its July report of its second quarter results, the company said it experienced higher-than-expected churn among customers who selected programs during open enrollment periods occurring in the fourth quarter of 2019 and the first quarter of 2020.”
7. CorVel Corporation (NASDAQ:CRVL)
Number of Hedge Fund Holders: 17
CorVel Corporation (NASDAQ:CRVL) offers workers’ compensation, auto, liability, and health solutions to help employers, insurance companies, third party administrators, and government agencies manage medical costs and improve the quality of care associated with healthcare claims. CorVel Corporation (NASDAQ:CRVL) is one of the premier insurance brokerage stocks to invest in. On January 31, the company reported a Q4 GAAP EPS of $0.96 and a revenue of $179 million, up 8.6% year-over-year.
According to Insider Monkey’s fourth quarter database, 17 hedge funds were bullish on CorVel Corporation (NASDAQ:CRVL), with collective stakes worth $127.30 million, compared to 15 funds in the prior quarter worth $126.80 million. Ray Dalio’s Bridgewater Associates is the biggest stakeholder of the company, with 10,771 shares worth $1.56 million.
6. Erie Indemnity Company (NASDAQ:ERIE)
Number of Hedge Fund Holders: 17
Erie Indemnity Company (NASDAQ:ERIE) acts as a managing attorney-in-fact for the subscribers at the Erie Insurance Exchange in the United States, offering various services including sales, underwriting, policy issuance, and renewal services. The company also provides sales-related services such as agent compensation and sales and advertising support, as well as underwriting services including underwriting and policy processing.
On April 27, Erie Indemnity Company (NASDAQ:ERIE) reported a Q1 GAAP EPS of $1.65 and a revenue of $752.46 million, outperforming Wall Street estimates by $0.09 and $47.46 million, respectively.
According to Insider Monkey’s fourth quarter database, 17 hedge funds were bullish on Erie Indemnity Company (NASDAQ:ERIE), with collective stakes worth $67.3 million. Cliff Asness’ AQR Capital Management is the biggest stakeholder of the company, with 77,350 shares worth $19 million.
In addition to Aon plc (NYSE:AON), Arthur J. Gallagher & Co. (NYSE:AJG), and Marsh & McLennan Companies, Inc. (NYSE:MMC), Erie Indemnity Company (NASDAQ:ERIE) is one of the top insurance brokerage stocks to watch.
Click to continue reading and see 5 Best Insurance Brokerage Stocks To Buy Now.
Suggested articles:
- 11 Best Canadian Dividend Stocks For Income Investors
- 12 Undervalued Dividend Aristocrats To Buy
- 15 Countries That Have The Highest Taxes On High Incomes
Disclosure: None. 11 Best Insurance Brokerage Stocks To Buy Now is originally published on Insider Monkey.