In this article, we will take a look at some of the best property & casualty insurance stocks that are currently offering attractive upside potential to investors.
On March 19, Deloitte & Touche LLP released its view on how the United States Insurance Regulation is developing a framework and model for assessing risks. It also covers determining capital requirements to ensure that any gaps in the industry are narrowed. It is important to note that insurers are currently standing at a very important crossroads of climate resilience and innovation.
Deloitte believes there are four main areas where CEOs need to take part, one of which is technology and innovation. The regulators will require the insurance sector to demonstrate proper internal processes and to make consistent improvements in the application of AI.
The consulting agency recommends that insurance companies prepare themselves for stringent reporting requirements. These include comprehensive data requests, disclosure of climate-related risks, and numerical analysis of any discriminatory practices.
As per Deloitte, companies will be well prepared to capitalize on the new opportunities created by the changing market situation if they refocus their strategy, leading towards better compliance. The report also highlights that both the company and the relevant authorities at the state/federal levels have to coordinate to cope with catastrophe risks.
With that background, let’s explore our 7 Best Property & Casualty Insurance Stocks to Buy Right Now.
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Our Methodology
To identify relevant stocks for this article, we screened U.S.-listed property and casualty insurance companies with market capitalizations above $2 billion. Also, we shortlisted only stocks with at least 15% upside potential, according to consensus, as of the April 6 close. Finally, we selected 7 stocks with the highest upside and ranked them in ascending order.
Why are we interested in the stocks that hedge funds pile into? 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 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
7. Assurant Inc. (NYSE:AIZ)
Assurant Inc. (NYSE:AIZ) is one of the 7 best property & casualty insurance stocks to buy right now.
As of the April 6 closing, consensus sentiment for Assurant Inc. (NYSE:AIZ) remained strongly bullish. The stock received coverage from 5 analysts, 4 of whom assigned Buy ratings and 1 gave a Hold call. With no Sell rating, it has a projected median 1-year price target of $250.67, which results in an upside potential of almost 15%.
On April 6, Morgan Stanley reiterated its Equal Weight rating on Assurant Inc. (NYSE:AIZ). The firm, however, reduced the target price on the stock from $248 to $240, which leads to a revised upside potential of more than 10%. The rating follows Morgan Stanley’s broader adjustments across the property and casualty insurance segment, based on the first-quarter earnings preview.
The firm expects persistently soft pricing trends to offset impressive underwriting witnessed across the segment. For personal lines, the firm carries a negative sentiment, whereas for reinsurers, it expects continued stability.
On March 24, Total Wireless, a subsidiary of Verizon Communications Inc., launched Total Wireless Protect+ in collaboration with Assurant Inc. (NYSE:AIZ). The protection plan will be offered through the digital storefront at TotalWireless.com, and includes coverage for device repair, device damage/theft, and malfunction (both mechanical and electronic).
Assurant Inc. (NYSE:AIZ) delivers protection and support services to connected devices, homes, and automobiles. It offers mobile device protection, financial services, insurance products, vehicle protection, and other related services. The company also engages with leading brands for device lifecycle management and property technology solutions.
6. American International Group Inc. (NYSE:AIG)
American International Group Inc. (NYSE:AIG) is one of the 7 best property & casualty insurance stocks to buy right now.
On March 16, McGill and Partners announced a strategic collaboration with American International Group Inc. (NYSE:AIG) that will leverage agentic artificial intelligence capabilities to manage capacity deployment in the subscription market.
The specialty portfolio of McGill and Partners was assessed by AIG to develop underwriting guidelines for the same. The total investment of AIG into the gross premiums written specialty portfolio of McGill and Partners is estimated to be $1.6 billion, which constitutes 25% of AIG’s capacity.
On March 6, Goldman Sachs raised the price target on American International Group Inc. (NYSE:AIG) from $83 to $90. The firm upgraded the stock’s rating from Neutral to Buy, which indicates an adjusted upside potential of almost 18% at the prevailing level.
According to the firm, the insurer is exhibiting top-tier earnings growth alongside a higher return on equity in the coming years. The upward price target revision comes on the back of the smart accretive deals and strong underwriting foundation, which should raise the operating and premium leverage. Despite normal cyclical pressures, this solid financial flexibility makes the current valuation highly attractive.
American International Group Inc. (NYSE:AIG) serves a number of sectors, including marine, energy-related, and aviation. It caters to these sectors by providing them with industrial and commercial property insurance plans as well as mortgage and other relevant solutions. Additionally, it provides personal accident schemes along with home warranty and commercial mortgage insurance.
While we acknowledge the potential of AIG to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than AIG and that has 100x upside potential, check out our report about the cheapest AI stock.
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