Five Insurance Stocks to Consider Amid Higher Interest Rates

In Travelers Companies Inc (NYSE:TRV), there were 36 funds holding shares at the end of 2017, down by two funds over the quarter, but up from 32 funds at the end of 2016 and 24 funds at the end of 2015. Travelers Companies Inc (NYSE:TRV)’s stock has gained 21% since the end of 2015 and currently has a dividend yield of 2.11%. In January, Travelers Companies Inc (NYSE:TRV) reported its fourth-quarter results, which included a core income of $2.28 per share, down from $3.20 a year earlier, but higher than expectations of $1.51. The company also registered a 6% increase in net written premiums to $6.424 billion and $601 million in pre-tax net investment income, down by 4% on the year due to lower returns in fixed income. In addition, in the fourth quarter, Travelers Companies Inc (NYSE:TRV) registered a combined ratio of 95.5%, up by 5.5 percentage points over the year due to higher catastrophe losses. The combined ratio measures the profitability of an insurance company, with a figure below 100% indicating that the company is paying less in claims and incurs expenses that it is collecting in premiums.

Aon PLC (NYSE:AON) saw the number of bullish investors increase by three during the fourth quarter and by two during 2017 to 37 funds that collectively amassed over 8% of the company’s outstanding stock at the end of the year. Moreover, at the end of 2015, there were 28 funds holding shares of Aon PLC (NYSE:AON). Aon PLC (NYSE:AON) is not exactly an insurance company since it offers insurance and reinsurance brokerage services and risk, retirement and health solutions.  Last year Aon PLC (NYSE:AON) has been making some changes to its portfolio. In May, it sold its benefits administration and human resources outsourcing division to Blackstone Group for $4.8 billion. In September, it acquired real estate investment management firm Townsend Group from Colony NorthStar for $475 million and in November it purchased dutch insurance broker Unirobe Meeùs Groep from Aegon for $365 million. Recently, Aon PLC (NYSE:AON) has raised its dividend to $0.40 from $0.36, which gives its stock a yield of 1.03%..

Even though the number of investors long Allstate Corp (NYSE:ALL) declined by five to 37 during the fourth quarter, it jumped from 31 funds and 28 funds that held shares at the end of 2016 and 2015, respectively. In March, Uber partnered with four insurance providers including Allstate Corp (NYSE:ALL), which will be servicing the company in Illinois, Wisconsin and New Jersey. In February, Allstate Corp (NYSE:ALL) reported its results for the fourth quarter, with EPS of $2.09 beating the consensus estimate by $0.56 and revenue from property and casualty insurance premiums of $8.20 billion higher than the expected $8.09 billion. Allstate Corp (NYSE:ALL) also reported a consolidated revenue of 9.84 billion, up by 6% on the year, which reflects growth in premiums and net investment income. In addition, Allstate Corp (NYSE:ALL) registered a combined ratio of 91% in the fourth quarter, slightly higher than 89.7% a year earlier.

At the end of 2017, there were 38 funds in our database long Athene Holding Ltd (NYSE:ATH), versus 39 funds a quarter earlier and 31 funds at the end of the previous year. Athene Holding Ltd (NYSE:ATH), which is backed by private equity firm Apollo Global Management, went public in December 2016, becoming the largest financial IPO that year. Athene Holding Ltd (NYSE:ATH) provides retirement savings products with almost $100 billion in assets. Last year, Athene Holding Ltd (NYSE:ATH) saw its net income jump by 89% to $1.45 billion due to higher operating income driven by higher investment income. The company also saw its new deposits grow by 31% to $11.50 billion.

Last but not least, Progressive Corp (NYSE:PGR) is the second most-popular insurance stock after American International Group. Heading into 2018, 41 funds amassed shares of the company, versus 42 funds a quarter earlier, 38 funds at the end of 2016 and just 23 funds at the end of 2015. Progressive Corp (NYSE:PGR) is another one of the four insurers that Uber partnered with last month and it is covering Florida, Texas, Colorado and Arizona. Also in March, Progressive Corp (NYSE:PGR) reported its results for February, which included EPS of $0.22, down from $0.23 a year earlier, while net premiums written and net premiums earned increased by 23% and 19% on the year to $2.70 billion and $2.20 billion, respectively. The company also registered a combined ratio of 87.8%, down by 2.6 points over the year and reported a 14% increase in the number of personal auto policies in force to 12.10 million and a 29% increase in property policies to 1.61 million.

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