We recently compiled a list of the 7 Hot Insurance Stocks To Buy Right Now. In this article, we are going to take a look at where Equitable Holdings Inc. (NYSE:EQH) stands against the other hot insurance stocks to buy.
Insurance Market Insights: Key Trends Shaping the Future
The insurance market plays a crucial role in our economy by providing financial protection to individuals, businesses, and communities against unexpected risks. The market is currently experiencing significant changes driven by evolving consumer expectations, technological advancements, and global economic conditions.
Analysts note that the market is currently favorable in general, with insurers reporting healthy profits and a growth-oriented environment. According to Deloitte’s 2025 global insurance outlook, insurance premiums are projected to grow by 3.3% in 2024, largely fueled by advanced markets, which are expected to contribute 75% of this growth.
Advancements in artificial intelligence (AI) continue to revolutionize how insurers assess risk and manage claims. AI technologies enable better data analysis and faster decision-making processes, which can enhance customer service and operational efficiency.
On October 22, CNBC reported that Near Space Labs, a Brooklyn, New York-based startup, has developed innovative technology to enhance the insurance claims process following natural disasters like hurricanes Helene and Milton. Their invention, called “Swifts,” consists of AI-enabled cameras mounted on weather balloons that fly at altitudes higher than airplanes. This allows them to capture high-resolution images over vast areas quickly, significantly speeding up damage assessments from weeks to just days. CEO Rema Matevosyan highlighted that their technology can gather data equivalent to what 800,000 drones would capture in one flight. The company has already conducted over 1,000 missions and is scaling operations to respond immediately to climate-related disasters, aiming to provide insurance companies with timely information for risk analysis and claims processing.
Another key trend shaping the industry is the rising demand for new and innovative products like cyber insurance. As cyber threats become more prevalent, companies are increasingly seeking coverage against data breaches and ransomware attacks. According to IBM, the average cost of a data breach was approximately $4.88 million in 2024, highlighting the urgent need for robust cyber protection. As a result of these trends, insurers are looking to innovate and develop new products that can address these emerging risks effectively.
Overall, experts believe that the insurance market is positioned for growth as it adapts to changing consumer needs and leverages technology to improve services. According to The Business Research Company, the insurance market was valued at $7.26 trillion in 2023. Looking forward, the market is expected to grow at a compound annual growth rate (CAGR) of 7.2% during 2024-2028 to reach $10.28 trillion by the end of the forecast period.
With advancements in technology and a focus on customer-centric solutions, companies in this sector can enhance their profitability while providing better services to clients.
Our Methodology
To compile our list of the 7 hot insurance stocks to buy right now, we began by using the Finviz stock screener to identify insurance stocks that had a year-to-date performance of over 30%. From the remaining pool of more than 15 hot insurance stocks to buy, we focused on the top 7 stocks that are most favored by institutional investors. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s database of 912 elite hedge funds. The 7 hot insurance stocks to buy right now are ranked in ascending order based on the number of hedge funds holding stakes in them as of Q2 2024.
Why do we care about what hedge funds do? 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A financial adviser in a suit talking with a senior client about their life insurance policy.
Equitable Holdings Inc. (NYSE:EQH)
Year-to-Date Performance: 37.20%
Number of Hedge Fund Holders: 44
Equitable Holdings Inc. (NYSE:EQH) is an American financial services and insurance company that ranks among the top 3 on our list of hot insurance stocks to buy right now. The company operates through two main segments: Equitable Financial Life Insurance Company and AllianceBernstein. Equitable Financial offers annuity and life insurance products, while AllianceBernstein focuses on asset management.
In the second quarter of 2024, Equitable Holdings Inc. (NYSE:EQH) showcased strong earnings momentum, driven by organic growth across its Retirement, Asset Management, and Wealth Management sectors. The US retirement market is currently favorable, and the company is well-positioned to take advantage of demographic trends and macroeconomic conditions.
A key highlight was the partnership with BlackRock announced in April 2024. This collaboration introduced the LifePath Paycheck retirement income solution to defined contribution plans, allowing employees to access guaranteed income through target date funds. Plan participants can access the guaranteed income by purchasing annuity contracts issued by Equitable.
This initiative not only addresses the growing retirement savings crisis but also highlights Equitable Holdings Inc.’s (NYSE:EQH) commitment to offering sustainable financial solutions that help individuals grow and protect their wealth. In the second quarter alone, Equitable Holdings Inc. (NYSE:EQH) received inflows exceeding $500 million from the first four clients utilizing the LifePath Paycheck solution, showcasing strong demand and positioning the company for future growth in the in-plan annuity market.
Equitable Holdings Inc.’s (NYSE:EQH) financial results for Q2 2024 were impressive. The company reported non-GAAP operating earnings per share of $1.43, a 23% increase from the same quarter last year. Additionally, the company achieved record Retirement net inflows of $2.3 billion, which included $500 million from the BlackRock LifePath Paycheck initiative. AllianceBernstein also contributed with $1.3 billion in active net inflows. The total assets under management and administration reached a record $986 billion, enhancing both fee-based and spread-based earnings. For the quarter, Equitable Holdings Inc. (NYSE:EQH) reported a net income of $428 million, equating to $1.23 per share.
The company expects to generate between $1.4 billion and $1.5 billion in cash for 2024, representing an increase of 8% to 15% compared to 2023. Equitable Holdings Inc. (NYSE:EQH) aims to grow this cash generation to $2 billion annually by 2027.
This strong cash flow supports consistent capital returns to shareholders, with a payout ratio of 67% over the past 6 quarters, within its target range of 60% to 70%. During this period, Equitable Holdings Inc. (NYSE:EQH) has reduced its outstanding shares by 12%, further enhancing shareholder value.
Equitable Holdings Inc. (NYSE:EQH) demonstrates a solid business model with robust growth strategies in place. The combination of strong financial performance, innovative product offerings like LifePath Paycheck, and effective cash management makes it an attractive investment opportunity.
According to Insider Monkey’s database, Equitable Holdings Inc. (NYSE:EQH) has gained significant interest from institutional investors, with the number of hedge fund holders increasing to 44 in Q2 2024, up from 32 in the previous quarter.
Overall EQH ranks 3rd on our list of the hot insurance stocks to buy. While we acknowledge the potential of EQH 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 EQH but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.