Homeowner’s Insurance Rates Skyrocketing: 10 Best Stocks To Buy

4. American International Group, Inc. (NYSE:AIG)

Number of Hedge Fund Investors  in Q1 2024: 54

American International Group, Inc. (NYSE:AIG) is the well known diversified insurance company headquartered in New York City. It is a global insurance company, and apart from offering homeowners insurance in America, it also offers similar products in lucrative regions such as Singapore. American International Group, Inc. (NYSE:AIG)’s homeowners insurance benefits from its scale, and allows it to offer features such as high deductibles that can reach as much as $10,000. Its stock is up 8.8% year to date, in a tough time for the insurance industry that has seen small and large firms suffer from high catastrophe outlays. This was also the case during American International Group, Inc. (NYSE:AIG)’s second quarter, which forced the firm to post a net loss of $3.98 billion driven not only by a loss recognition from its life insurance business but also due to catastrophe losses of $325 million. While this figure is just a fraction of its total loss, it marked a 25% annual jump and highlighted the risks of an internationally diversified business model since American International Group, Inc. (NYSE:AIG) suffered from storms in America and floods in the Middle East.

Clearbridge Investments mentioned American International Group, Inc. (NYSE:AIG) in its Q1 2024 earnings call. Here is what the firm said:

“One example of our internal return engine is our continued large position in American International Group (AIG), which we have owned for roughly 10 years. We originally bought AIG at a greater than 30% discount to our initial estimate of business value. This entry point assumed minimal improvements in the business but allowed us to absorb some inevitable downdrafts along the way that we took advantage of to build our position. The key, however, is that during this period AIG management dramatically improved their business. The company has compounded intrinsic business value per share at a double-digit rate by reducing risks as management overhauled their underwriting process, strengthened their balance sheet, cut expenses and operational complexity and structurally improved returns on equity. A major source of added lift came from intelligent capital allocation: shares outstanding have been more than cut in half during this period, as management bought back roughly 5% of the company annually below intrinsic business value.”