Car Insurance Rates Skyrocketing: 10 Best Stocks to Buy

5. The Travelers Companies, Inc. (NYSE:TRV)

Number of Hedge Fund Investors  in Q1 2024: 40

The Travelers Companies, Inc. (NYSE:TRV) is another mega American insurance provider. Unlike some other auto insurance companies on our list which operate exclusively in the commercial auto insurance market, The Travelers Companies, Inc. (NYSE:TRV) provides commercial and personal lines. This provides it with the key advantage of diversification, particularly since the prevailing sentiment in the insurance industry is that commercial auto insurance suffers from high social inflation because of costly accidents. Additionally, since it has other non auto business divisions too, the firm can suffer from catastrophes like technology disruptions and climate driven homeowner claims. Financially, it can impact The Travelers Companies, Inc. (NYSE:TRV)’s combined ratio to a greater degree than disruptions in the auto industry only.

The Travelers Companies, Inc. (NYSE:TRV)’s management shared details about its auto products during the Q2 2024 earnings call where it shared:

“In domestic automobile, retention of 82% remains strong. Renewal premium change of 15.8% continued to moderate as anticipated. Auto renewal premium change will continue to gradually decline, reflecting the improved profitability on the line. While new business premiums were higher than the prior year quarter in many states, new business premium in aggregate was down slightly relative to the second quarter of last year. This is the result of our continued efforts to manage auto profitability in a few remaining challenge states, as well as the cross-line impact resulting from some of our property actions, particularly in high-risk cat areas.”