The insurance industry is one that has provided solid returns to its investors over the years. It is one of the main segments of activity of Berkshire Hathaway, led by Warren Buffett, who over the years managed to build a strong insurance business that incorporates companies like General Re, GEICO, Netherlands-based NRG, and others. Aside from Mr. Buffett, investors that are more focused on equity are also betting on various public insurance companies. At Insider Monkey we track over 700 investment firms, including a bunch of funds managed by great investors who managed to build billions in fortune through picking great companies to invest in. Therefore, in this article we will take a look at five insurance companies that billionaires are keen on, among which are: American International Group Inc (NYSE:AIG), MGIC Investment Corp. (NYSE:MTG), and Prudential Financial Inc (NYSE:PRU).
American International Group Inc (NYSE:AIG) is on the first spot, with 15 billionaires disclosing long equity positions, with an aggregate value of $2.19 billion. Aside from that, AIG is one of the top most popular stocks among all the funds that we track, with 116 funds reporting the company in their equity portfolios, while the aggregate value of their stakes amounts to over $11.65 billion. Among the investors of American International Group Inc (NYSE:AIG) are billionaires Leon Cooperman of Omega Advisors, which owns 4.01 million shares as of the end of 2014, and Dan Loeb of Third Point, which initiated a new position during the last quarter with 3.50 million shares.
AIG is one of the largest insurance companies in the US with a market cap of $76 billion. The stock has gained 12% over the last 52 weeks and doubled in the last three years. Earlier last year, Bruce Berkowitz, the manager of mutual fund Fairholme, said that he prefers American International Group because it is cheap in relation to its intrinsic value and he prefers to invest more money in American International Group Inc (NYSE:AIG) rather than in six other stocks. At the end of 2014, Fairholme disclosed holding 51.28 million shares of American International Group Inc (NYSE:AIG), the position being the largest in its equity portfolio.
MGIC Investment Corp. (NYSE:MTG) comes next on our list. As of the end of 2014, this $3 billion private mortgage insurer can be found in the equity portfolios of 57 funds from our database, including 12 firms led by billionaires. Overall, the funds that we track hold around $1.77 billion worth of MGIC Investment Corp’s stock, up from the previous quarter when 48 funds held $1.52 billion worth of shares. Billionaire John Paulson’s Paulson & Co. is one of the top shareholders of MGIC Investment Corp. (NYSE:MTG) Investment Corp and owns 14.40 million shares of the company, down by 14% over the quarter. Among other investors betting on the company are Marc Lasry’s Avenue Management, John Griffin’s Blue Ridge Capital, and Howard Marks’ Oaktree Capital.
MGIC Investment Corp. (NYSE:MTG) has recently reported its financial results for the fourth quarter and full-year 2014, showing a net profit of $0.64 per diluted share in 2014, which is the company’s first profitable year since 2006, as CEO Curt S. Culver stated during the earnings call. For the fourth quarter the company’s EPS went up to $0.74, from a breakeven quarter a year ago.
Prudential Financial Inc (NYSE:PRU) has also been one of the favorite insurance stocks among billionaire investors, with Ken Griffin’s Citadel Investment Group, Steve Cohen’s Point72 Asset Management, and Israel Englander’s Millennium Management being among the company’s shareholders. During the fourth quarter Steve Cohen’s fund surged its position in Prudential Financial Inc (NYSE:PRU) by almost a tenfold to 469,100 shares, while Citadel and Millennium reduced their holdings to 2.07 million shares and 258,900 shares respectively. Overall, 46 funds disclosed holding around $1.40 billion worth of Prudential Financial Inc (NYSE:PRU)’s stock, including eight billionaires, whose aggregate position amounts to $510.29 million.
Both Radian Group Inc (NYSE:RDN) and Assured Guaranty Ltd. (NYSE:AGO) share the last two spots on our list with seven billionaires revealing holding shares of the company. However, in Radian Group Inc (NYSE:RDN), billionaires own around $477.99 million worth of stock, while in Assured Guaranty Ltd. (NYSE:AGO), their aggregate stake amounts to $239.58 million. However, an overview of the entire data shows that Assured Guaranty is more popular among the funds that we track, with 51 of them reporting long positions, versus 41 for Radian Group Inc (NYSE:RDN). Paulson & Co holds around 11.04 million shares of Radian Group Inc (NYSE:RDN), followed by Jim Simons’ Renaissance Technologies and George Soros’ Soros Fund Management with 1.72 million shares and 1.18 million shares respectively. In Assured Guaranty, Millennium Management, Citadel, and Point72 Asset Management are among the billionaire funds invested in the company.
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