We recently published a list of the 10 Most Undervalued Insurance Stocks to Buy Now. In this article, we are going to take a look at where Everest Group, Ltd. (NYSE:EG) stands against the other undervalued insurance stocks.
The insurance industry has performed better in 2025 than the broader market. The S&P 500 index, which tracks large-cap stocks, has declined over 4.50% so far in 2025. In comparison, two of the leading insurance ETFs, the S&P Insurance ETF and the iShares US Insurance ETF, have surged over 3% and 4.50% year-to-date, respectively.
Insurance Industry in the United States
Despite the losses from wildfires, the analysts see a higher upside for insurance stocks compared to the broader market. There are different reports on the insured losses in Los Angeles. Verisk anticipates insured losses between $28 billion and $35 billion. At the same time, a new report from the UCLA Anderson Forecast indicates that wildfires in L.A. County may have caused total losses ranging between $95 billion and $164 billion, with insured losses estimated at $75 billion.
Earlier in January, Fitch Ratings reported that the losses are likely to “materially exceed” highs from past wildfire events but are unlikely to impact the ratings of property and casualty (P&C) insurers and reinsurers.
“Insured losses should remain within rating sensitivities for affected insurers, given ample capital levels, diversified risk exposure, and insurers’ ability to increase premium rates,” Fitch Ratings said.
Despite the losses, the insurance industry in the U.S. is overall balanced and remains positive. The U.S. has the largest insurance market in the world. The combined value of America’s insurance market is approximately $1.7 trillion, as of 2025. The U.S. has some of the largest insurance companies by assets that influence the global insurance markets.
The P&C insurance sector in the U.S. generated $9.3 billion in underwriting gains during the first quarter of 2024, according to a report by Deloitte. This was a major improvement from an $8.5 billion loss in Q1 2023. The industry also increased its combined ratio to 94.2%, driven by increases in rates in the personal lines sector outweighing the cost of claims.
A close-up of a family receiving life insurance coverage documents.
Our Methodology
We used a Finviz screener to shortlist Insurance companies with a forward P/E under 20. Finally, we listed the most undervalued insurance stocks based on the number of hedge fund holders, as of Q4 2024. The stocks are ranked in ascending order of the hedge fund sentiment.
Why are we interested in the stocks that hedge funds pile into? 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Everest Group, Ltd. (NYSE:EG)
Forward P/E: 6.98
No. of Hedge Fund Holders: 47
Everest Group, Ltd. (NYSE:EG) is a global insurance and reinsurance company. It provides a wide range of property and casualty (P&C) insurance solutions. Everest offers comprehensive coverage for both personal and commercial lines, including risks related to property damage, liability, and other specialized needs. The company focuses on delivering tailored solutions, assisting businesses to manage their exposure to risk.
On February 4, Barclays analyst Alex Scott upgraded the price target of EG shares from $461 to $471 per share, reiterating a Buy rating on the stock. Despite mixed results in Q4 2024, the analyst remains optimistic as the company’s long-term profitability remains stable. Everest Group, Ltd. (NYSE:EG) posted a strong operating income of $1.3 billion for FY2024, achieving a 9% operating ROE. Premium growth in Q4 was solid at 12.6%, supported by strong execution with core clients and selective expansion in specialty underwriting areas. The company increased its net investment income to $473 million during the last quarter, driven by higher assets under management and a stable book yield of 4.7%.
Vulcan Value Partners stated the following regarding Everest Group, Ltd. (NYSE:EG) in its Q4 2024 investor letter:
“We purchased one new position during the quarter: Everest Group, Ltd. (NYSE:EG). Everest Group is a global reinsurance and insurance business known for its disciplined cost structure and high-quality underwriting. Insurance is an inherently cyclical business. “Hard markets” occur when premium prices are high relative to insured risks. Hard markets inevitably attract more capital to the industry, causing premium prices to fall relative to insured risks, which results in a “soft market.” Soft markets lead undisciplined underwriters to post underwriting losses, removing capital from the industry, and the cycle repeats. In evaluating insurance companies, we believe that growth in tangible book value per share more closely approximates growth in intrinsic value per share than does growth in earnings per share. Compounding book value per share requires underwriting discipline. Moreover, given the cyclical nature of the business, a disciplined underwriter will have more volatile earnings in the short run than an undisciplined underwriter. Everest Group underwrites aggressively in hard markets and builds underwriting capacity during soft markets. During the most recent hard market, the company has significantly grown book value per share. We applaud Everest Group’s emphasis on growing intrinsic value per share over the long term instead of managing short-term earnings per share. We first purchased Everest Group, then called Everest Re, in our Small Cap portfolio where we held it for over thirteen years. It grew into a large-cap company, and we owned it in our Large-cap portfolio for over ten years. We are pleased to be able to add Everest Group to our Focus portfolio with a margin of safety to our estimate of intrinsic value.”
Overall EG ranks 8th on our list of the Most Undervalued Insurance Stocks to Buy Now. While we acknowledge the potential of EG as an investment, 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 EG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks To Invest In According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
