We recently published a list of the 10 Most Undervalued Insurance Stocks to Buy Now. In this article, we are going to take a look at where The Progressive Corporation (NYSE:PGR) stands against the other undervalued insurance stocks.
The insurance industry has performed better in 2025 than the broader market. The S&P 500 index, which tracks large-cap stocks, has declined over 4.50% so far in 2025. In comparison, two of the leading insurance ETFs, the S&P Insurance ETF and the iShares US Insurance ETF, have surged over 3% and 4.50% year-to-date, respectively.
Insurance Industry in the United States
Despite the losses from wildfires, the analysts see a higher upside for insurance stocks compared to the broader market. There are different reports on the insured losses in Los Angeles. Verisk anticipates insured losses between $28 billion and $35 billion. At the same time, a new report from the UCLA Anderson Forecast indicates that wildfires in L.A. County may have caused total losses ranging between $95 billion and $164 billion, with insured losses estimated at $75 billion.
Earlier in January, Fitch Ratings reported that the losses are likely to “materially exceed” highs from past wildfire events but are unlikely to impact the ratings of property and casualty (P&C) insurers and reinsurers.
“Insured losses should remain within rating sensitivities for affected insurers, given ample capital levels, diversified risk exposure, and insurers’ ability to increase premium rates,” Fitch Ratings said.
Despite the losses, the insurance industry in the U.S. is overall balanced and remains positive. The U.S. has the largest insurance market in the world. The combined value of America’s insurance market is approximately $1.7 trillion, as of 2025. The U.S. has some of the largest insurance companies by assets that influence the global insurance markets.
The P&C insurance sector in the U.S. generated $9.3 billion in underwriting gains during the first quarter of 2024, according to a report by Deloitte. This was a major improvement from an $8.5 billion loss in Q1 2023. The industry also increased its combined ratio to 94.2%, driven by increases in rates in the personal lines sector outweighing the cost of claims.
An auto insurance adjustor discussing details of an accident with a policy holder.
Our Methodology
We used a Finviz screener to shortlist Insurance companies with a forward P/E under 20. Finally, we listed the most undervalued insurance stocks based on the number of hedge fund holders, as of Q4 2024. The stocks are ranked in ascending order of the hedge fund sentiment.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
The Progressive Corporation (NYSE:PGR)
Forward P/E: 19.57
No. of Hedge Fund Holders: 100
The Progressive Corporation (NYSE:PGR) is the second-largest auto insurer in the U.S., providing a range of specialty property-casualty insurance products. PGR is recognized for its consumer and business car and home insurance products. In addition to that, Progressive Health by eHealth provides health insurance options for individuals and families.
The Progressive Corporation (NYSE:PGR) delivered strong results in 2024, with net premiums written growing nearly 21% year-over-year to $74.4 billion. This increase in net premiums written represents approximately $13 billion in premium growth. PGR achieved record policy growth, adding over 5 million policies in 2024. This is more than twice the previous highest annual rate of policy growth in the firm’s history. The company reported a combined ratio of 88.8% in 2024, indicating strong profitability.
The London Company Large Cap Strategy stated the following regarding The Progressive Corporation (NYSE:PGR) in its Q4 2024 investor letter:
“The Progressive Corporation (NYSE:PGR) – PGR was a weaker performer in 4Q after a strong start to the year. Policy growth continued to be strong, but expectations were high and growth decelerated slightly throughout the quarter. That said, retention has remained high, and share, gains continue. PGR’S best-in-class market segmentation gives preferred drivers lower rates, leaving competitors with worse drivers and more erratic pricing strategies. We remain attracted to its best-in-class operations, conservative underwriting, and shareholder-friendly capital allocation philosophy.”
Overall PGR ranks 1st on our list of the Most Undervalued Insurance Stocks to Buy Now. While we acknowledge the potential of PGR 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 PGR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks To Invest In According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
Hedge Fund Resource Center