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10 Cheap Insurance Stocks to Buy Now

In this article, we discuss 10 cheap insurance stocks to buy now. If you want to read about some more insurance stocks, go directly to 5 Cheap Insurance Stocks to Buy Now.

The insurance sector has been one of the few sectors of the stock market that has generally been predictable and stable. This has changed over the past few years as tech-enabled disruption reshapes conventional economics. According to a report by professional services firm PwC, some of the other reasons for the changes in the sector include changes to risk profiles because of the climate crisis, distribution needs becoming omni-channel, and customers who expect products tailored just for them. 

Some of the top insurance stocks to monitor in this context include Humana Inc. (NYSE:HUM), Cigna Corporation (NYSE:CI), and MetLife, Inc. (NYSE:MET). These firms are working on areas such as digitization, data and integration, brand and distribution, innovative products, strategic partnerships, and effective structuring to stay ahead of the competition. As the industry involves, per PwC, a focus on discipline is helping private equity, asset managers, and other new entrants to capitalize on the disruption. 

Consulting firm EY contends that ecosystems, open insurance, workforce transformation, and sustainability are set to define near-term prospects for the insurance industry. However, labor shortages and changes in the delivery of care and cybersecurity threats are likely to force health insurance towards embracing new approaches to risk management. Some of these new approaches include the digitization of core processes, migrations to the cloud, and the embrace of flexible sourcing models.

Research firm Deloitte has identified rising inflation, interest rates, loss costs, the threats of recession, climate change, and geopolitical upheaval as some of the headwinds for the insurance sector in the coming months. The firm claims that the transformation in the life insurance industry is key to sustainable growth for the sector, as insurance firms double down on their pandemic-spurred digital enhancements, introduce new products, services, and distribution options, and seek out previously underserved customer niches.

Our Methodology

The companies that operate in the insurance sector and are trading at a discount compared to peers were selected for the list. All stocks are priced under $50 as of October 20. In order to provide readers with some context for their investment choices, the business fundamentals and analyst ratings for the stocks are also discussed. Data from around 900 elite hedge funds tracked by Insider Monkey in the second quarter of 2022 was used to identify the number of hedge funds that hold stakes in each firm.

Cheap Insurance Stocks to Buy Now

10. FG Financial Group, Inc. (NASDAQ:FGF)

Number of Hedge Fund Holders: 1  

Share Price as of October 20: $1.57   

FG Financial Group, Inc. (NASDAQ:FGF) operates as a reinsurance and investment management holding company in the United States. It is one of the best insurance stocks to invest in. On September 13, FG Financial Group noted that it plans to grow through the formation of a new merchant banking division. The firm announced in a statement that it will work with Fundamental Global along with other strategic investors. This announcement was revealed only a few weeks after the firm reported an increase in its reinsurance premiums.

At the end of the second quarter of 2022, 1 hedge fund in the database of Insider Monkey held a position worth $76,000 in FG Financial Group, Inc. (NASDAQ:FGF), compared to 2 in the preceding quarter worth $168,000. 

Just like Humana Inc. (NYSE:HUM), Cigna Corporation (NYSE:CI), and MetLife, Inc. (NYSE:MET), FG Financial Group, Inc. (NASDAQ:FGF) is one of the best insurance stocks to buy now. 

9. Waterdrop Inc. (NYSE:WDH)

Number of Hedge Fund Holders: 1    

Share Price as of October 20: $1.29    

Waterdrop Inc. (NYSE:WDH) provides online insurance brokerage services to match and connect users with related insurance products underwritten by insurance companies in China. It is one of the top insurance stocks to invest in. On August 22, Waterdrop stated that it has become a member of the world’s largest corporate sustainability initiative, United Nations Global Compact. The company said it will actively respond to relevant initiatives of the United Nations Global Compact and will promote the sustainable development of healthcare in this partnership.

On September 16, Morgan Stanley analyst Jenny Jiang upgraded Waterdrop (NYSE:WDH) stock to Overweight from Equal Weight with a price target of $2.10, up from $2, noting that the company’s revenue continued to recover sequentially, and earnings have been positive for the past three quarters. 

At the end of the second quarter of 2022, 1 hedge fund in the database of Insider Monkey held a position worth $95,000 in Waterdrop Inc. (NYSE:WDH), compared to 4 in the previous quarter worth $165,000.

8. Aegon N.V. (NYSE:AEG)

Number of Hedge Fund Holders: 7

Share Price as of October 20: $4.13        

Aegon N.V. (NYSE:AEG) provides insurance, pensions, and asset management services in the Americas, the Netherlands, and the United Kingdom. It is one of the premier insurance stocks to invest in. On October 1, Aegon NV revealed that it has successfully completed divestment of its 50% stake in a joint venture with Liberbank to Unicaja Banco. The sale follows a change of control in Liberbank after its merger with Unicaja Banco. Aegon N.V. (NYSE:AEG) Spain plans to upstream the net proceeds of the transaction to Aegon Group. 

On September 13, Societe Generale analyst Nick Holmes upgraded Aegon (NYSE:AEG) stock to Buy from Hold with an unchanged price target of EUR 5.25, noting that the company holds a strong case for additional buybacks in 2023.

At the end of the second quarter of 2022, 7 hedge funds in the database of Insider Monkey held stakes worth $16.9 million in Aegon N.V. (NYSE:AEG), compared to 7 the preceding quarter worth $34.4 million.

7. Sun Life Financial Inc. (NYSE:SLF)

Number of Hedge Fund Holders: 12  

Share Price as of October 20: $40.85   

Sun Life Financial Inc. (NYSE:SLF) is a financial services company that provides insurance, wealth, and asset management solutions to individuals and corporate clients worldwide. It is one of the elite insurance stocks to invest in. On September 26, Sun Life Financial announced that it plans to redeem all outstanding $400 million of series 2017-1 subordinated unsecured 2.75% fixed/floating debentures. The redemption will be funded with existing cash and liquid assets. The debentures are redeemable at SLF’S option on or after November 23.   

On October 12, Barclays analyst John Aiken maintained an Overweight rating on Sun Life Financial (NYSE:SLF) stock and lowered the price target C$63 from C$67, noting that the continued decline in equity valuations driven by lower asset levels within the wealth operations and seed losses will likely dampen earnings growth in the quarter. 

At the end of the second quarter of 2022, 12 hedge funds in the database of Insider Monkey held stakes worth $103 million in Sun Life Financial Inc. (NYSE:SLF), compared to 10 in the previous quarter worth $88 million.

6. American Equity Investment Life Holding Company (NYSE:AEL)

Number of Hedge Fund Holders: 14    

Share Price as of October 20: $40.53    

American Equity Investment Life Holding Company (NYSE:AEL) provides life insurance products in the United States. It is one of the prominent insurance stocks to invest in. On August 8, the firm posted earnings for the second quarter of 2022, reporting earnings per share of $0.98, beating market estimates by $0.27. The revenue over the period was $121 million. 

On October 7, Piper Sandler analyst John Barnidge maintained an Overweight rating on American Equity Investment Life Holding Company (NYSE:AEL) stock and raised the price target to $47 from $46, noting that firm rates kept moving noticeably higher despite the market’s ongoing volatility in Q3.

At the end of the second quarter of 2022, 14 hedge funds in the database of Insider Monkey held stakes worth $103 million in American Equity Investment Life Holding Company (NYSE:AEL), compared to 17 in the previous quarter worth $155.7 million.

Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Pzena Investment Management is a leading shareholder in American Equity Investment Life Holding Company (NYSE:AEL), with 1.7 million shares worth more than $63 million. 

Along with Humana Inc. (NYSE:HUM), Cigna Corporation (NYSE:CI), and MetLife, Inc. (NYSE:MET), American Equity Investment Life Holding Company (NYSE:AEL) is one of the best insurance stocks to buy now according to hedge funds. 

In its Q2 2022 investor letter, First Pacific Adivsors, an asset management firm, highlighted a few stocks and American Equity Investment Life Holding Company (NYSE:AEL) was one of them. Here is what the fund said:

“American Equity Investment Life Holding Company (NYSE:AEL), a leading writer of fixed index annuities, has continued to transition to its American Equity Investment (AEL) 2.0 business model. The plan’s main goals are to diversify the company’s assets into a broader array of investments, including private debt through strategic partnerships, and to increase its use of reinsurance to free up capital. We think this is an interesting, but somewhat aggressive plan. Thus far, the results have been impressive, but we continue to monitor the credit quality of their assets as they move toward achieving their target of having 40% of their portfolio invested in private assets, up from 15.4%.”

Click to continue reading and see 5 Cheap Insurance Stocks to Buy Now.

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Disclosure. None. 10 Cheap Insurance Stocks to Buy Now is originally published on Insider Monkey.

AI, Tariffs, Nuclear Power: One Undervalued Stock Connects ALL the Dots (Before It Explodes!)

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Wall Street is pouring hundreds of billions into artificial intelligence—training smarter chatbots, automating industries, and building the digital future. But there’s one urgent question few are asking:

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The “Toll Booth” Operator of the AI Energy Boom

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The Hedge Fund Secret That’s Starting to Leak Out

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A New Dawn is Coming to U.S. Stocks

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Should I put my money in Artificial Intelligence?

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Click to continue reading…