Accident and Health Insurance Companies Hedge Funds Love

Accident and health insurance is a big business. People may skimp on life insurance but they rarely go too long without health insurance or accident insurance of some kind – it is just too expensive for treatment otherwise and it can be difficult to find treatment without some kind of insurance. The thing is that investment in this industry is tricky. In as much as people will generally get accident or health insurance at some point, it is also the first thing they drop when times get tough.

To get an idea which companies are worth the risk of investment, looking to hedge fund managers is a good idea – they have teams of analysts at their disposal and they reveal their positions four times a year, plus more often if they add or sell off a large enough portion of a company.

Bill Miller

Here is a list of accident and health insurance companies hedge funds are buying.

Aflac, Inc. (AFL): Of the 300+ hedge funds we track, 21 had positions in AFL at the end of the third quarter, compared to 26 at the end of the second quarter. Total hedge fund investment in the company also fell, going from $711.62 million at the end of June to $365.99 at the end of September. In spite of the big change of heart, Bill Miller’s Legg Mason Capital Management, Phill Gross and Robert Atchinson’s Adage Capital Management and John W. Rogers’ Ariel Investments each had positions in AFL worth over $50 million at the end of the third quarter.

Unum Group (UNM): The total number of hedge funds invested in UNM did not change in the third quarter – there were 16 funds invested in the company at the end of the second quarter and at the end of the third quarter - but total volume of that investment declined somewhat, going from $593.69 million at the end of June to $449.61 million at the end of September. UNM’s largest hedge fund investor wasn’t fazed though. Ralph V. Whitworth’s Relational Investors upped its position by +14% in the third quarter to close September with a holding worth more than $361.01 million.

Assurant, Inc. (AIZ): The total number of hedge funds invested in AIZ decreased from 16 at the end of the second quarter to 12 at the end of the third quarter, but the total volume of that investment increased, moving from $286.72 million at the end of June to $385.60 million at the end of September. Top hedge funds invested in AIZ at the end of the third quarter include Ric Dillon’s Diamond Hill Capital, Ralph V. Whitworth’s Relational Investors and Ken Griffin’s Citadel Investment Group.

CNO Financial Group, Inc. (CNO): The total number of hedge funds invested in CNO decreased from 17 at the end of the second quarter to 12 at the end of the third quarter, but the total volume of that investment increased, moving from $295.81 million at the end of June to $422.01 million at the end of September. John Paulson’s Paulson & Co owned several sizable positions in CNO at the end of the third quarter. His largest is a new position in the company worth roughly $147.73 million at the end of September.

Stancorp Financial Group, Inc. (SFG): The total number of hedge funds invested in SFG did not change in the third quarter – there were 6 funds invested in the company at the end of the second quarter and at the end of the third quarter – but total volume of that investment declined somewhat, going from $54.77 million at the end of June to $34.28 million at the end of September. Chuck Royce’s Royce & Associates and Cliff Asness’ AQR Capital Management are fans of SFG.

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