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 Unum Group (NYSE:UNM) 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.
A financial analyst presenting a chart of insurance solutions to a boardroom.
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).
Unum Group (NYSE:UNM)
Forward P/E: 8.88
No. of Hedge Fund Holders: 43
Unum Group (NYSE:UNM) is an American insurance company that offers financial protection benefits in the U.S. and the U.K. It is a provider of workplace benefits and services with products including disability, life, accident, critical illness, dental and vision, and other related services.
On March 5, Raymond James analyst Wilma Burdis lifted the rating on UNM shares from Market Perform to Strong Buy, keeping the price target at $108. The analyst sees potential in Unum’s group insurance businesses. Moreover, the company is continuing to de-risk its long-term care (LTC) insurance block, which will give more stability to the firm. Burdis pointed out Unum Group’s (NYSE:UNM) attractive long-term targets, which include 4-7% core annual premium growth and an 8-10% CAGR in earnings per share.
Unum missed the analysts’ earnings estimates in Q4 2024, but posted a 10% earnings growth for the full year, exceeding initial expectations of 7% to 9%. The company reported strong sales in the U.S., posting a 20% growth in Q4, making it the largest sales quarter of the year. Unum has announced another stock repurchase of $1 billion following the completion of a $1 billion stock repurchase in 2024. Moreover, the company expects to generate between $1.3 billion and $1.6 billion of FCF in 2025, reflecting continuous progress and strong financial flexibility.
Overall UNM ranks 10th on our list of the Most Undervalued Insurance Stocks to Buy Now. While we acknowledge the potential of UNM 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 UNM 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.