In this article, we will explore the 7 hot insurance stocks to buy right now.
Insurance Market Insights: Key Trends Shaping the Future
The insurance market plays a crucial role in our economy by providing financial protection to individuals, businesses, and communities against unexpected risks. The market is currently experiencing significant changes driven by evolving consumer expectations, technological advancements, and global economic conditions.
Analysts note that the market is currently favorable in general, with insurers reporting healthy profits and a growth-oriented environment. According to Deloitte’s 2025 global insurance outlook, insurance premiums are projected to grow by 3.3% in 2024, largely fueled by advanced markets, which are expected to contribute 75% of this growth.
Advancements in artificial intelligence (AI) continue to revolutionize how insurers assess risk and manage claims. AI technologies enable better data analysis and faster decision-making processes, which can enhance customer service and operational efficiency.
On October 22, CNBC reported that Near Space Labs, a Brooklyn, New York-based startup, has developed innovative technology to enhance the insurance claims process following natural disasters like hurricanes Helene and Milton. Their invention, called “Swifts,” consists of AI-enabled cameras mounted on weather balloons that fly at altitudes higher than airplanes. This allows them to capture high-resolution images over vast areas quickly, significantly speeding up damage assessments from weeks to just days. CEO Rema Matevosyan highlighted that their technology can gather data equivalent to what 800,000 drones would capture in one flight. The company has already conducted over 1,000 missions and is scaling operations to respond immediately to climate-related disasters, aiming to provide insurance companies with timely information for risk analysis and claims processing.
Another key trend shaping the industry is the rising demand for new and innovative products like cyber insurance. As cyber threats become more prevalent, companies are increasingly seeking coverage against data breaches and ransomware attacks. According to IBM, the average cost of a data breach was approximately $4.88 million in 2024, highlighting the urgent need for robust cyber protection. As a result of these trends, insurers are looking to innovate and develop new products that can address these emerging risks effectively.
Overall, experts believe that the insurance market is positioned for growth as it adapts to changing consumer needs and leverages technology to improve services. According to The Business Research Company, the insurance market was valued at $7.26 trillion in 2023. Looking forward, the market is expected to grow at a compound annual growth rate (CAGR) of 7.2% during 2024-2028 to reach $10.28 trillion by the end of the forecast period.
With advancements in technology and a focus on customer-centric solutions, companies in this sector can enhance their profitability while providing better services to clients.
Now that we’ve discussed some current trends in the insurance industry, let’s look at the 7 hot insurance stocks to buy right now.
A woman in a business suit in an insurance office, analyzing a policy.
Methodology
To compile our list of the 7 hot insurance stocks to buy right now, we began by using the Finviz stock screener to identify insurance stocks that had a year-to-date performance of over 30%. From the remaining pool of more than 15 hot insurance stocks to buy, we focused on the top 7 stocks that are most favored by institutional investors. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s database of 912 elite hedge funds. The 7 hot insurance stocks to buy right now are ranked below in ascending order based on the number of hedge funds holding stakes in them as of Q2 2024.
Why do we care about what hedge funds do? 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).
7 Hot Insurance Stocks To Buy Right Now
7. Jackson Financial Inc. (NYSE:JXN)
Year-to-Date Performance: 93.71%
Number of Hedge Fund Holders: 31
Jackson Financial Inc. (NYSE:JXN) is a US financial services and insurance company that is primarily focused on retirement planning and annuity products. It offers whole life, universal life, and term life insurance products. The company markets and distributes its offerings primarily through its subsidiaries, with the Jackson National Life Insurance Company being its main subsidiary.
On October 21, 2024, Jackson National Life Insurance Company launched Principal Guard, an add-on guaranteed minimum accumulation benefit (GMAB) available for an extra charge within its Elite Access Suite of variable annuities. This new offering allows clients to invest without any downside risk during a selected term.
In the second quarter of 2024, Jackson Financial Inc. (NYSE:JXN) reported strong financial performance, with total annuity assets under management increasing by 9% to $247 billion from $227 billion in Q2 2023 The company achieved record sales of registered index-linked annuities (RILAs), totaling $1.4 billion, up significantly from $541 million in the same quarter of 2023. This growth reflects Jackson’s successful efforts to diversify its retail annuity sales.
Additionally, Jackson Financial Inc. (NYSE:JXN) returned $144 million to shareholders in Q2 2024 through share repurchases and dividends. The company maintained over $500 million in cash and liquid securities by the end of the quarter, surpassing its targeted liquidity buffer.
The demand for RILAs and traditional variable annuities remains strong, with total retail annuity sales growing by 36% year-over-year. Jackson Financial’s (NYSE:JXN) innovative digital platform for RILA products has also contributed to this success, with nearly 75% more visits compared to the previous year. This indicates increased engagement from financial professionals who are relying on Jackson’s industry-leading technology to provide clients with better information and service.
Overall, Jackson Financial’s (NYSE:JXN) solid growth in assets and sales, along with its commitment to innovation and shareholder returns, makes it an attractive stock for investors looking for opportunities in the insurance and retirement planning sectors.
With its strong performance, JXN has emerged as one of the hot stocks to buy in the current market. According to Insider Monkey’s database, 31 hedge funds held stakes in Jackson Financial Inc. (NYSE:JXN) in the second quarter of 2024.
6. Arch Capital Group Ltd. (NASDAQ:ACGL)
Year-to-Date Performance: 41.63%
Number of Hedge Fund Holders: 37
Arch Capital Group Ltd. (NASDAQ:ACGL) is a Bermuda-based insurance company that specializes in providing insurance, reinsurance, and mortgage insurance globally. The company has established itself as a leader in specialty insurance solutions.
Arch operates through its wholly-owned subsidiaries and has recently shown strong financial performance across all its segments. In the second quarter of 2024, Arch Capital Group Ltd. (NASDAQ:ACGL) reported impressive results, driven by contributions from its Property and Casualty (P&C) segments.
The combined underwriting income from the Reinsurance and Insurance segments reached $475 million in Q2 2024, supported by over $5 billion in gross premiums. The Reinsurance segment alone generated $366 million in underwriting income, despite facing increased catastrophic events. This resilience highlights the company’s effective risk management strategies and strong market positioning.
The Insurance segment also performed well, contributing $109 million in underwriting income with a 7% increase in net written premiums compared to the same quarter last year. The Mortgage segment showed significant growth as well, generating $287 million in underwriting income while also increasing new insurance written by 12% year-over-year in the US.
During the second quarter, Arch Capital Group Ltd. (NASDAQ:ACGL) announced that it has completed the acquisition of RMIC Companies and its subsidiaries, which include the run-off mortgage insurance business of Old Republic International Corporation. This acquisition reflects the company’s strategy of pursuing opportunities to deploy capital effectively.
Additionally, on August 1, 2024, Arch Capital Group Ltd. (NASDAQ:ACGL) reported that Arch Insurance North America finalized the acquisition of the US MidCorp and Entertainment insurance businesses from Allianz. This move is expected to strengthen the company’s middle-market offerings and expand its workforce with nearly 500 former Allianz employees.
Arch Capital Group’s (NASDAQ:ACGL) investment portfolio grew to $37.8 billion, generating $364 million in net investment income during the quarter. This growth is attributed to strong cash flows from underwriting operations and higher yields across its investments.
With robust financial results, strategic acquisitions, and a solid market presence, Arch Capital Group (NASDAQ:ACGL) stands out as an attractive investment option.
Over the past 5 years, Arch Capital Group Ltd. (NASDAQ:ACGL) has grown its net income at a compound annual growth rate (CAGR) of 33%, while its levered free cash flow has increased at a CAGR of 24% during the same period.
According to Insider Monkey’s Q2 database of over 900 hedge funds, 37 hedge funds held stakes in ACGL. Baron Funds stated the following regarding Arch Capital Group Ltd. (NASDAQ:ACGL) in its Q2 2024 investor letter:
“Specialty insurer Arch Capital Group Ltd. (NASDAQ:ACGL) contributed to performance after reporting positive financial results that exceeded Street expectations. Operating ROE was 21% in the first quarter, and book value per share rose 40% due to strong underwriting profitability and the establishment of a deferred tax asset at the end of 2023. Favorable conditions persist in the P&C insurance market with strong growth and attractive returns despite signs of increasing competition. We continue to own the stock due to Arch’s capable management team and our expectation of significant growth in earnings and book value.”
5. The Travelers Companies Inc. (NYSE:TRV)
Year-to-Date Performance: 34.44%
Number of Hedge Fund Holders: 38
The Travelers Companies Inc. (NYSE:TRV), or simply Travelers, is an American insurance provider that ranks among the top 5 hot insurance stocks to buy right now. It is one of the largest writers of commercial property casualty insurance and personal insurance in the US. Travelers offers a wide range of coverage options for auto, home, and business insurance, primarily through independent agents and brokers. With over 30,000 employees and 15,000 independent agents across the US, Canada, the UK, and Ireland, the company has a strong market presence.
In the Q3 2024 earnings call, management shared that Travelers has demonstrated its commitment to customer service by efficiently managing claims following hurricanes Helene and Milton. The company activated its national catastrophe center in Hartford, deploying hundreds of claims professionals and mobile offices to assist affected customers. This proactive approach allows The Travelers Companies Inc. (NYSE:TRV) to resolve claims quickly. The company aims to resolve 90% of claims from natural catastrophes within 30 days.
In the third quarter of 2024, The Travelers Companies Inc. (NYSE:TRV) reported impressive financial results with a net income of $1.26 billion, or $5.42 per diluted share, significantly up from $404 million in the same quarter last year. Core income increased to $1.218 billion, driven by higher underwriting gains and net investment income despite some increased catastrophe losses. The company achieved record net written premiums of $11.3 billion, marking an 8% increase from the previous year.
The company’s Business Insurance segment grew by 9% year-over-year, reaching $5.5 billion in net written premiums. The Bond & Specialty Insurance segment also performed well, with a 7% increase to $1.1 billion in premiums, maintaining a high retention rate of 90% in the management liability business. Personal Insurance saw a similar growth trend, with net written premiums rising by 7% to reach a record $4.7 billion, driven by strong renewals in homeowners insurance.
Additionally, The Travelers Companies Inc. (NYSE:TRV) returned $496 million to shareholders this quarter through share repurchases and dividends, reflecting its commitment to returning capital while maintaining growth. This includes $253 million in share buybacks and $243 million in dividends.
With its strong financial performance, effective response strategies, and consistent premium growth across multiple segments, The Travelers Companies Inc. (NYSE:TRV) presents a compelling investment opportunity.
Over the past 5 years, The Travelers Companies Inc. (NYSE:TRV) has recorded a compound annual growth rate of 7% for its top line and 13% for its bottom line.
According to Insider Monkey’s Q2 database of over 900 hedge funds, 38 hedge funds held stakes in The Travelers Companies Inc. (NYSE:TRV). As of June 30, AQR Capital Management holds 1.15 million shares of the company, valued at $233.76 million, making it TRV’s most prominent shareholder.
4. Reinsurance Group of America Incorporated (NYSE:RGA)
Year-to-Date Performance: 30.34%
Number of Hedge Fund Holders: 40
Reinsurance Group of America, Incorporated (NYSE:RGA) is a leading global corporation specializing in life and health reinsurance. The company operates in over 100 countries, focusing on solutions that help clients manage risk and optimize capital. RGA provides reinsurance for various products, including term life, critical illness, disability, and long-term care. The company had $3.7 trillion in life reinsurance in force as of December 31, 2023.
In its Q2 2024 earnings call, the company’s management highlighted strong growth in its Longevity and Pension Risk Transfer (PRT) business. Reinsurance Group of America, Incorporated (NYSE:RGA) completed significant transactions in both the US and the UK, including a notable longevity deal in Japan and its largest US PRT transaction to date. RGA’s asset-intensive business in Asia is also thriving, with successful partnerships leading to the completion of major transactions that enhance clients’ long-term value.
Additionally, Reinsurance Group of America, Incorporated (NYSE:RGA) continues to innovate with new offerings, such as a market-first digital underwriting solution aimed at simplifying the insurance purchasing process for Mainland Chinese visitors in Hong Kong. This initiative reflects RGA’s commitment to providing comprehensive product development alongside capital and underwriting solutions to fuel client growth.
For the second quarter of 2024, RGA reported pre-tax adjusted operating income of $491 million and adjusted earnings per share of $5.48. The company experienced a 17.5% increase in consolidated net premiums, totaling $3.9 billion for the quarter. This growth includes $282 million from a single premium US PRT transaction in the company’s financial solutions business.
On August 27, 2024, Reinsurance Group of America, Incorporated (NYSE:RGA) announced an agreement with American National Insurance Company to reinsure approximately $3.5 billion of life business through a coinsurance arrangement. This deal further solidifies RGA’s position as a trusted partner in the reinsurance market.
Overall, RGA’s strategic focus on innovative solutions, strong financial performance, and expanding global presence make it an attractive investment opportunity.
According to Insider Monkey’s Q2 database of over 900 hedge funds, 40 hedge funds held stakes in Reinsurance Group of America, Incorporated (NYSE:RGA).
3. Equitable Holdings Inc. (NYSE:EQH)
Year-to-Date Performance: 37.20%
Number of Hedge Fund Holders: 44
Equitable Holdings Inc. (NYSE:EQH) is an American financial services and insurance company that ranks among the top 3 on our list of hot insurance stocks to buy right now. The company operates through two main segments: Equitable Financial Life Insurance Company and AllianceBernstein. Equitable Financial offers annuity and life insurance products, while AllianceBernstein focuses on asset management.
In the second quarter of 2024, Equitable Holdings Inc. (NYSE:EQH) showcased strong earnings momentum, driven by organic growth across its Retirement, Asset Management, and Wealth Management sectors. The US retirement market is currently favorable, and the company is well-positioned to take advantage of demographic trends and macroeconomic conditions.
A key highlight was the partnership with BlackRock announced in April 2024. This collaboration introduced the LifePath Paycheck retirement income solution to defined contribution plans, allowing employees to access guaranteed income through target date funds. Plan participants can access the guaranteed income by purchasing annuity contracts issued by Equitable.
This initiative not only addresses the growing retirement savings crisis but also highlights Equitable Holdings Inc.’s (NYSE:EQH) commitment to offering sustainable financial solutions that help individuals grow and protect their wealth. In the second quarter alone, Equitable Holdings Inc. (NYSE:EQH) received inflows exceeding $500 million from the first four clients utilizing the LifePath Paycheck solution, showcasing strong demand and positioning the company for future growth in the in-plan annuity market.
Equitable Holdings Inc.’s (NYSE:EQH) financial results for Q2 2024 were impressive. The company reported non-GAAP operating earnings per share of $1.43, a 23% increase from the same quarter last year. Additionally, the company achieved record Retirement net inflows of $2.3 billion, which included $500 million from the BlackRock LifePath Paycheck initiative. AllianceBernstein also contributed with $1.3 billion in active net inflows. The total assets under management and administration reached a record $986 billion, enhancing both fee-based and spread-based earnings. For the quarter, Equitable Holdings Inc. (NYSE:EQH) reported a net income of $428 million, equating to $1.23 per share.
The company expects to generate between $1.4 billion and $1.5 billion in cash for 2024, representing an increase of 8% to 15% compared to 2023. Equitable Holdings Inc. (NYSE:EQH) aims to grow this cash generation to $2 billion annually by 2027.
This strong cash flow supports consistent capital returns to shareholders, with a payout ratio of 67% over the past 6 quarters, within its target range of 60% to 70%. During this period, Equitable Holdings Inc. (NYSE:EQH) has reduced its outstanding shares by 12%, further enhancing shareholder value.
Equitable Holdings Inc. (NYSE:EQH) demonstrates a solid business model with robust growth strategies in place. The combination of strong financial performance, innovative product offerings like LifePath Paycheck, and effective cash management makes it an attractive investment opportunity.
According to Insider Monkey’s database, Equitable Holdings Inc. (NYSE:EQH) has gained significant interest from institutional investors, with the number of hedge fund holders increasing to 44 in Q2 2024, up from 32 in the previous quarter.
2. The Allstate Corporation (NYSE:ALL)
Year-to-Date Performance: 34.05%
Number of Hedge Fund Holders: 61
The Allstate Corporation (NYSE:ALL) is an American insurance company that offers a wide variety of insurance products, including auto, home, renters, business, and life insurance. Known for its comprehensive protection plans, Allstate provides coverage for cars, homes, electronic devices, and even identity theft. The company’s insurance and protection products are available through a broad distribution network, which includes Allstate agents, independent agents, and major retailers.
A significant milestone for the company was the acquisition of National General in January 2021 for $4 billion. This move greatly expanded its independent agent channel and added various businesses to its portfolio, including personal auto insurance and group health services. Since the acquisition, The Allstate Corporation (NYSE:ALL) has seen substantial growth in the number of customers the corporation protects through independent agents, adding nearly 1.7 million policies and achieving a compound annual growth rate (CAGR) of 8% in policies over the past four years. This expansion has contributed to over $5.1 billion in premiums written in the first half of 2024.
In the second quarter of 2024, Allstate (NYSE:ALL) reported revenues of $15.7 billion, reflecting a 12% increase from the previous year. This growth was driven by higher insurance premiums and increased investment income. The company handled almost 2 million customer claims during this period, demonstrating its commitment to supporting customers after events like storms and accidents.
The company’s Property-Liability profit improvement plan has also shown positive results, with an underlying combined ratio of 85.3. This indicates effective management of expenses relative to earned premiums. The net income applicable to common shareholders reached $301 million, translating to adjusted net income of $1.61 per diluted share.
Premiums written rose by 13.1% compared to the same quarter last year. This growth was fueled by a 10% increase in premiums for the Allstate brand and a 29.1% rise for National General.
The growth in premiums and policies suggests robust market demand and effective operational strategies. As The Allstate Corporation (NYSE:ALL) continues to adapt and grow its business, it presents a compelling case for investors looking for stability and growth in the insurance sector.
ALL ranks second on our list of hot insurance stocks to buy right now. As of the second quarter of 2024, The Allstate Corporation (NYSE:ALL) was held by 61 hedge funds, according to Insider Monkey’s database. Ariel Investments stated the following regarding The Allstate Corporation (NYSE:ALL) in its “Ariel Global Fund” second-quarter 2024 investor letter:
“We added property and casualty insurer, The Allstate Corporation (NYSE:ALL). A challenging macro-environment, inflation and lower reserve development led to significant underwriting losses across key markets, presenting us with an attractive entry point. Looking ahead, we expect the strong pricing environment, coupled with lower inflationary pressure and future premium growth to yield upside for shares. Additionally, management is committed to improving its adjusted expense ratio and recently made upgrades to its claims handling processes to minimize loss development and lower claim severities.”
1. The Progressive Corporation (NYSE:PGR)
Year-to-Date Performance: 52.97%
Number of Hedge Fund Holders: 89
The Progressive Corporation (NYSE:PGR) is a prominent American insurance provider, well-known for its diverse offerings, including auto, home, and commercial insurance. As the second-largest personal auto insurer in the US, the company has established a strong market presence. It is also a leading seller of commercial auto, motorcycle, and boat insurance.
The company is focused on enhancing its commercial auto and business owners’ policy (BOP) products. In the second quarter of 2024, The Progressive Corporation (NYSE:PGR) introduced a new commercial auto product model in two additional states and plans to expand this to 14 states by the end of the year. The company’s BOP product is currently available in 46 states. During the second quarter, Progressive also rolled out its newest BOP product model in 4 states, increasing its total to 22 states. Furthermore, the company initiated a pilot program for a multi-product quoting system that allows agents to quote both commercial auto and BOP products seamlessly.
Progressive (NYSE:PGR) reported impressive financial results for Q2 2024. The company achieved a 22% increase in net premiums written compared to the same period in the previous year, alongside a combined ratio of 91.9, indicating strong profitability despite challenges from severe weather events. Additionally, policies in force grew by 9% year-over-year.
The personal auto segment saw significant growth in Q2 2024, adding 1.1 million policies since Q1 2024 and totaling 2 million new policies in the first half of the year. This growth underscores Progressive’s (NYSE:PGR) ability to attract new customers.
The Personal Lines segment also exhibited robust performance with net premiums written reaching $14.6 billion in Q2 2024, a 26% increase year-over-year. This surge was fueled by a substantial rise in new business applications, resulting in nearly 28 million policies in force by the end of Q2.
Over the past five years, The Progressive Corporation (NYSE:PGR) has demonstrated solid financial health with a compound annual growth rate (CAGR) of 20% in net income and an 11% CAGR in levered free cash flow. These metrics reflect not only profitability but also a strong demand for its insurance products.
Given its strategic initiatives to enhance product offerings and its impressive financial performance, The Progressive Corporation (NYSE:PGR) presents itself as a compelling investment opportunity. The consistent growth in net premiums and policies indicates robust market demand and effective management strategies.
According to Insider Monkey’s Q2 database, 89 hedge funds held stakes in PGR. Middle Coast Investing stated the following regarding The Progressive Corporation (NYSE:PGR) in its Q3 2024 investor letter:
“Progressive Insurance (NYSE:PGR) is the best example of both a macro and micro transition. Used car repair cost inflation (macro) hurt its profitability. It was early in raising prices to deal with that, and has been growing new policies in force much faster than competitors. As it has overcome the cost inflation issue, its profits have soared, and should continue to grow. The stock price has doubled in the last 14 months.”
Overall, PGR ranks first among the 7 hot insurance stocks to buy right now. While we acknowledge the potential of insurance companies, 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.
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