11 Best Insurance Companies to Invest in 2017

The U.S. health insurance industry is one of the largest in the world and that’s why we look at the 11 best insurance companies to invest in 2017. The U.S. life and health insurance industry recorded a growth of over 73% y/y in the first-quarter of 2017. The U.S. life segment is highly competitive and fragmented after a series of mergers and acquisitions that the industry witnessed. The demand for healthcare insurance is poised to increase with a growing aging U.S. population. The U.S. health insurance flourished under “Obamacare” with more than 80% of Americans being covered by some kind of public or private health insurance.

The Obamacare (Patient Protection and Affordable Care Act and The Health Care and Education Reconciliation Act of 2010) enacted significant reforms to various aspects of the U.S. health insurance industry. However, much of this is going to change under the American Health Care Act (AHCA) also referred to as “Trumpcare”. It is expected that the bill if passed could lead to 23 million people losing healthcare coverage by 2026.

You might also want to check out our list on the 10 Largest Health Insurance Companies in America for further insurance reading.

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The bill is expected to reduce government spending but will increase costs for older, sicker people and people in the low-income bracket. The insurance markets in many states stand a chance of disruption too. It will get difficult for people in poor health to buy total coverage in some states, after the amendment. All these regulatory changes are deemed to impact the overall industry in a big way. It will, therefore, be difficult for investors to pick the best insurance companies to invest in 2017 amongst such uncertainties.

Over the next few pages, we have analyzed those best insurance companies for investing based on hedge fund sentiment. We have selected the largest insurance companies based on their market capitalization values and their subscriber base. The companies are then ranked based on their popularity amongst the hedge fund community i.e. the most number of hedge funds buying an insurance stock ranks #1 on our list. Hedge funds have the resources to spend on research, experts, and in some cases inside information to determine the best insurance companies to invest in 2017.

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Below is our list of the best insurance companies to invest in 2017 according to hedge funds.

11. Triple-S Management Corporation (NYSE:GTS)

– Number of Hedge Funds With Long Positions (as of March 31): 12
– Aggregate Value of Hedge Funds’ Holdings (as of March 31): $74.90 million

With 12 hedge funds holding long positions in the stock, Triple-S Management Corporation (NYSE:GTS) ranks 11^th on our list of 11 best insurance companies to invest in 2017. Triple-S Management is a Puerto Rico-based American health insurance provider offering a broad portfolio of managed care and related products in the Commercial, Medicaid and Medicare markets. With nearly six decades in the insurance business, the company has gained a substantial 25% market share in Puerto Rico providing insurance services to approximately 1.2 million citizens. Lakewood Capital is the most notable hedge fund investor in GTS.

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10. Magellan Health Inc. (NASDAQ:MGLN)

– Number of Hedge Funds With Long Positions (as of March 31): 18
– Aggregate Value of Hedge Funds’ Holdings (as of March 31): $286.5 million

Magellan Health Inc. (NASDAQ:MGLN) is an Arizona-based healthcare insurance provider that started its operations in 1969. It predominantly operated in the managed behavioral healthcare business till 2005, after which it expanded into integrated healthcare management. Magellan engages in the healthcare management business and operates through three segments – Healthcare, Pharmacy Management and Corporate. The company is also focusing on managing the fastest growing, most complex areas of health. As per or database, 18 hedge funds were long Magellan Health Inc. (NASDAQ:MGLN) at the end of the first quarter.

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9. Molina Healthcare, Inc. (NYSE:MOH)

– Number of Hedge Funds With Long Positions (as of March 31): 21
– Aggregate Value of Hedge Funds’ Holdings (as of March 31): $323.8 million

Formed with a focus on providing quality healthcare to people receiving government assistance, Molina Healthcare, Inc. (NYSE:MOH) was started in 1980 by a physician, David Molina. The company operates through three segments: Health Plans, Molina Medicaid Solutions and Other. The Health Plans segment is the largest accounting for 97% of 2016 revenues and serving over 4.2 million members. It has an extensive network coverage area stretching out to 12 U.S. states and Puerto Rico. At the end of the first quarter, 21 hedge funds from our system held shares worth $323 million in Molina Healthcare, Inc. (NYSE:MOH).

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8. WellCare Health Plans, Inc. (NYSE:WCG)

– Number of Hedge Funds With Long Positions (as of March 31): 29
– Aggregate Value of Hedge Funds’ Holdings (as of March 31): $660 million

WellCare Health Plans, Inc. (NYSE:WCG) is a Florida-based health insurer that was founded in 1985. With over three decades in business, the company has today managed to have a subscriber base of over 4 million people and 6,000 employees. The company’s primary focus is on public healthcare plans such as Medicaid and Medicare. WellCare is also growing inorganically through acquisitions and has bought out a number of smaller Medicare & Medicaid providers to expand its geographical coverage since late 2012. At the end of the first quarter, 29 hedge funds from our records had a total investment of $660 million in WellCare Health Plans, Inc. (NYSE:WCG).

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7. Centene Corp (NYSE:CNC)

– Number of Hedge Funds With Long Positions (as of March 31): 41
– Aggregate Value of Hedge Funds’ Holdings (as of March 31): $1.06 billion

With 33 years of experience, Centene Corp (NYSE:CNC) employs over 13,000 people and 11.4 million subscribers today. Centene Corp is a diversified, multi-national healthcare enterprise. Its operations can be broadly classified two segments: Managed Care segment and the Specialty Services segment. The company focuses on providing services to government-sponsored health care programs. In 2016, the company merged with Health Net Inc. at a total transaction value of $6 billion. With 41 hedge fund holding a long position in the stock at the end of the first quarter, Centene Corp (NYSE:CNC) ranks seventh on our list of the 11 best insurance companies to invest in 2017.

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6. Aetna Inc. (NYSE:AET)

– Number of Hedge Funds With Long Positions (as of March 31): 60
– Aggregate Value of Hedge Funds’ Holdings (as of March 31): $4.3 billion

Headquartered in Hartford, Connecticut, Aetna Inc. (NYSE:AET) is a leading diversified health care benefits companies founded in 1853. The company offers health care, dental, pharmacy, group life, disability, and long-term care insurance plans to a subscriber base of 46.7 million people. Aetna Inc. has a growing presence in Government programs, Commercial ASC and private health insurance. The company derives its revenues primarily from insurance premiums, administrative service fees, net investment income and other revenue. As per our records, 60 hedge funds had Aetna Inc. in their portfolios at the end of the first quarter.

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5. Cigna Corporation (NYSE:CI)

– Number of Hedge Funds With Long Positions (as of March 31): 61
– Aggregate Value of Hedge Funds’ Holdings (as of March 31): $3.76 billion

Cigna Corporation (NYSE:CI) is a global health services organization that was formed in 1982, by the merger of the Connecticut General Life Insurance Company (CG) and INA Corporation. The company offers health, life and accident insurance products primarily in Asia, Europe and the United States. Cigna Corporation is known for providing affordable and personalized products to customers through employer-based, government sponsored and individual coverage arrangements. At the end of the first quarter, 61 hedge funds held $3.76 billion worth of shares in Cigna Corporation (NYSE:CI).

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4. Anthem Inc. (NYSE:ANTM)

– Number of Hedge Funds With Long Positions (as of March 31): 61
– Aggregate Value of Hedge Funds’ Holdings (as of March 31): $4.45 billion

Anthem Inc. (NYSE:ANTM), the next one on our list of best insurance companies to invest in 2017 is the largest for-profit managed health care company in the Blue Cross and Blue Shield Association. This US health insurer was founded in 1944. It offers a large number of health care managed plans for employers, individuals, Medicaid and Medicare markets today. In late 2004, Anthem and WellPoint merged, with the combined company taking the WellPoint name, which was changed in 2014. At the end of the first quarter, 61 hedge funds from our records held shares worth $4.44 billion in Anthem Inc. (NYSE:ANTM).

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3. American International Group, Inc. (NYSE:AIG)

– Number of Hedge Funds With Long Positions (as of March 31): 61
– Aggregate Value of Hedge Funds’ Holdings (as of March 31): $6 billion

We are continuing our list of best insurance companies to invest in 2017 with the American International Group, Inc. (NYSE:AIG) that is a leading global insurance organization founded in 1919. The company engages in providing a wide range of property casualty insurance, life insurance, retirement products, and other financial services. Today, American International Group, Inc. caters to the needs of commercial and individual customers in more than 80 countries. The company is focusing on becoming a leaner and more efficient insurance enterprise. With 61 hedge funds having a total investment of $6 billion, American International Group, Inc. (NYSE:AIG) ranks third on our list of the 11 best insurance companies to invest in 2017.

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2. Humana Inc. (NYSE:HUM)

– Number of Hedge Funds With Long Positions (as of March 31): 64
– Aggregate Value of Hedge Funds’ Holdings (as of March 31): $4.92 billion

Humana Inc. (NYSE:HUM) is a US managed health care corporation that was founded in 1964 and is headquartered in Louisville, Kentucky. The Company’s segments include Retail, Group, Healthcare Services and Other Businesses. In 2015, Aetna announced a deal to merge with Humana Inc. However, the two companies called off the potential merger after a court ruling blocked the deal earlier this year. Humana Inc.’s business can be broadly classified into three reportable segments: Retail, Group, and Healthcare Services. As the end of December 2016, the company had over 14 million members in medical benefit plans and 7 million subscribers in the specialty products. Humana Inc. ranks second on our list with 64 hedge funds having a long position in the stock at the end of the first quarter, 2017.

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1. UnitedHealth Group Inc. (NYSE:UNH)

– Number of Hedge Funds With Long Positions (as of March 31): 71
– Aggregate Value of Hedge Funds’ Holdings (as of March 31): $4.16 billion

UnitedHealth Group Inc. (NYSE:UNH) ranks #1 on our list of the 11 best insurance companies to invest in 2017 with 71 funds holding shares worth $4.16 billion at the end of the first quarter. UnitedHealth is the largest US health insurer based out of Minnesota. UnitedHealthcare provides health care benefits to various customers and markets through major product families including traditional, consumer engagement, clinical and pharmacy products. The company serves about 70 million individuals throughout the U.S. and offers products and services through two operating businesses – UnitedHealthcare and Optum.

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