Insurance providers use their expertise in risk assessment to help protect assets while offering consumers peace of mind through comprehensive coverage options. But concerns about claims severity and tightening regulations have tempered enthusiasm, capping the upside for insurance stocks lately - over the past six months, the industry’s flat return has trailed the S&P 500’s 18.6% gain.
Only some companies are subject to these dynamics, however, and a handful of high-quality businesses can deliver earnings growth in any environment. Taking that into account, here is one resilient insurance stock at the top of our wish list and two we’re steering clear of.
Two Insurance Stocks to Sell:
Hartford (HIG)
Market Cap: $37.18 billion
Recognizable by its iconic stag logo that dates back to 1810, The Hartford (NYSE: HIG) provides property and casualty insurance, group benefits, and investment products to individuals and businesses across the United States.
Why Does HIG Fall Short?
- Large revenue base constrains its growth potential, as seen in its unexciting 6.2% annualized increases in net premiums earned over the last five years fell below our expectations for the insurance sector
- Projected sales decline of 15% for the next 12 months points to a tough demand environment ahead
- Large asset base makes it harder to grow book value per share quickly, and its annual book value per share growth of 5.4% over the last five years was below our standards for the insurance sector
At $132.50 per share, Hartford trades at 2.1x forward P/B. If you’re considering HIG for your portfolio, see our FREE research report to learn more.
Stewart Information Services (STC)
Market Cap: $2.06 billion
Founded in 1893 during America's westward expansion when property records were often disputed, Stewart Information Services (NYSE: STC) provides title insurance and real estate services, helping homebuyers, sellers, and lenders verify property ownership and protect against title defects.
Why Are We Hesitant About STC?
- Net premiums earned expanded by 1.3% annually over the last two years, falling below our expectations for the insurance sector
- Earnings per share fell by 1% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
- 1.6% annual book value per share growth over the last two years was slower than its insurance peers
Stewart Information Services’s stock price of $73.64 implies a valuation ratio of 1.4x forward P/B. Read our free research report to see why you should think twice about including STC in your portfolio.
One Insurance Stock to Buy:
Erie Indemnity (ERIE)
Market Cap: $16.38 billion
Operating under a unique business model dating back to 1925, Erie Indemnity (NASDAQ: ERIE) serves as the attorney-in-fact for Erie Insurance Exchange, managing policy issuance, claims handling, and investment services for this reciprocal insurer.
Why Will ERIE Beat the Market?
- Annual revenue growth of 14.4% over the last two years was superb and indicates its market share increased during this cycle
- Annual book value per share growth of 12.8% over the last five years was superb and indicates its capital strength increased during this cycle
- Industry-leading 27% return on equity demonstrates management’s skill in finding high-return investments
Erie Indemnity is trading at $318.95 per share, or 23x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
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