The big names in this industry are well-established and have a history of healthy dividends. But not all insurance categories are recession-proof and all must answer to government regulation.
Insurance stocks are stocks from insurance companies. A variety of subcategories exist in this industry including:
Car
Health
Home
Life
Pet
Travel
Many insurance stocks offer exposure to multiple subcategories by offering a variety of different insurance policies, like Allstate. Other companies specialize in only one type of insurance and offer a more targeted investment opportunity, like Trupanion — a pet insurance company.
Why invest in insurance stocks?
Since the products they offer can be considered a type of staple, insurance companies tend to perform well — both in times of economic strength and in times of economic hardship. Plus, well-established insurance stocks have a history of strong and steady dividends — an added bonus for investors seeking a steady return.
Many insurance stocks are considered recession-resistant. That’s because even in periods of economic downturn, people need to maintain their insurance coverage. The staying power of the industry can’t be understated; insurance has been around for hundreds of years and provides a service we’ll continue to need for the foreseeable future.
Regardless of geographic location or socioeconomic status, people rely on insurance policies to protect them from risk. Ongoing demand helps bolster this industry’s ability to weather periods of recession.
Risks of investing in insurance
Insurance stocks are far from invulnerable, and the same economic conditions that safeguard some categories of insurance may put others at significant risk.
Take health insurance companies as an example. When unemployment rates rise, fewer people are employed and able to pay into employer-sponsored health insurance plans. This impacts the provider’s bottom line and has the potential to detract from the value of its stock.
Insurance providers are also subject to government regulation, which means that new legislation has the potential to impact the market in a powerful way.
Insurance stocks
There are plenty of pure-play insurance stocks available, but with numerous types of insurance on the market, you’ll need to learn more about the individual offerings of each company before you invest.
Select a company to learn more about what they do and how their stock performs, including market capitalization, the price-to-earnings (P/E) ratio, price/earnings-to-growth (PEG) ratio and dividend yield. While this list includes a selection of the most well-known and popular stocks, it doesn't include every stock available.
Company summary
The Allstate Corporation, through its subsidiaries, provides property and casualty, and other insurance products in the United States and Canada. The company operates through Allstate Protection, Service Businesses, Allstate Life, and Allstate Benefits segments. The Allstate Protection segment offers private passenger auto and homeowners insurance; specialty auto products, including motorcycle, trailer, motor home, and off-road vehicle insurance; other personal lines products, such as renter, condominium, landlord, boat, umbrella, and manufactured home and stand-alone scheduled personal property; liability insurance products; and commercial lines products under the Allstate, Esurance, and Encompass brand names. The Service Businesses segment provides consumer product protection plans; finance and insurance products, including vehicle service contracts, guaranteed asset protection waivers, road hazard tire and wheel, and paint less dent repair protection; roadside assistance; device and mobile data collection services; and analytic solutions using automotive telematics information and identity protection. This segment offers its products under various brands including Allstate Protection Plans, Allstate Dealer Services, Allstate Roadside Services, Arity, and Allstate Identity Protection. The Allstate Life Segment offers traditional, interest-sensitive, and variable life insurance products, as well as non-proprietary retirement product solutions offered by third-party providers. Its Allstate Benefits segment provides life, accident, critical illness, short-term disability, and other health insurance products. The company sells its products through direct contact centers, agencies, financial specialists, brokers, wholesale partners, and affinity groups, as well as through online and mobile applications. The Allstate Corporation was founded in 1931 and is based in Northbrook, Illinois.
Assurant, Inc., together with its subsidiaries, provides lifestyle and housing solutions that support, protect, and connect consumer purchases in North America, Latin America, Europe, and the Asia Pacific. The company operates through three segments: Global Lifestyle, Global Housing, and Global Preneed. The Global Lifestyle segment provides mobile device protection products and services, and extended service contracts for consumer electronics and appliances, as well as assistance services; vehicle protection and related services; and credit and other insurance services. The Global Housing segment offers lender-placed homeowners insurance, manufactured housing, and flood insurance; and renters insurance and related products, as well as voluntary manufactured housing insurance, homeowners insurance, and other specialty products. The Global Preneed segment provides pre-funded funeral insurance, final need insurance, and related services. The company was formerly known as Fortis, Inc. and changed its name to Assurant, Inc. in February 2004. Assurant, Inc. was founded in 1892 and is headquartered in New York, New York.
The Hartford Financial Services Group, Inc. provides insurance and financial services to individual and business customers in the United States and internationally. Its Commercial Lines segment offers workers' compensation, property, automobile, liability, umbrella, bond, marine, livestock, and reinsurance products; and customized insurance products and risk management services, including professional liability, bond, surety, and specialty casualty coverages through regional offices, branches, sales and policyholder service centers, independent retail agents and brokers, wholesale agents, and reinsurance brokers. The company's Personal Lines segment provides automobile, homeowners, and personal umbrella coverages through direct-to-consumer channel and independent agents. Its Property & Casualty Other Operations segment offers coverage for asbestos and environmental exposures. The company's Group Benefits segment provides group life, and accident and disability coverages, as well as other group coverages to members of employer and affinity groups, and associations through direct insurance policies; reinsurance to other insurance companies; employer paid and voluntary product coverages; disability underwriting, administration, and claims processing to self-funded employer plans; and a single-company leave management solution. This segment distributes its group insurance products and services through brokers, consultants, third-party administrators, trade associations, and private exchanges. Its Hartford Funds segment offers investment products for retail and retirement accounts; exchange-traded products through broker-dealer organizations, independent financial advisers, defined contribution plans, financial consultants, bank trust groups, and registered investment advisers; and investment-management and administrative services, such as product design, implementation, and oversight. The company was founded in 1810 and is headquartered in Hartford, Connecticut.
Lincoln National Corporation, through its subsidiaries, operates multiple insurance and retirement businesses in the United States. It operates through four segments: Annuities, Retirement Plan Services, Life Insurance, and Group Protection. The Annuities segment offers variable, fixed, and indexed variable annuities. The Retirement Plan Services segment provides employers with retirement plan products and services primarily in the defined contribution retirement plan marketplace. This segment offers individual and group variable annuities, group fixed annuities, and mutual fund-based programs; and a range of plan services, including plan recordkeeping, compliance testing, participant education, and trust and custodial services. The Life Insurance segment provides life insurance products, including term insurance, such as single and survivorship versions of universal life insurance; variable universal life insurance; indexed universal life insurance products; and critical illness and long-term care riders. The Group Protection segment offers group non-medical insurance products comprising short and long-term disability, statutory disability and paid family medical leave administration and absence management services, term life, dental, vision and accident, and critical illness benefits and services to the employer marketplace through various forms of employee-paid and employer-paid plans. The company distributes its products through consultants, brokers, planners, agents, financial advisors, third-party administrators, and other intermediaries. Lincoln National Corporation was founded in 1905 and is headquartered in Radnor, Pennsylvania.
Markel Corporation, a diverse financial holding company, markets and underwrites specialty insurance products in the United States, the United Kingdom, Canada, and internationally. Its Insurance segment offers general and professional liability, personal lines, marine and energy, specialty programs, and workers' compensation insurance products; and property coverages that consist principally of fire, allied lines, and other specialized property coverages, including catastrophe-exposed property risks, such as earthquake and wind. This segment also offers credit and surety products, and collateral protection insurance. The company's Reinsurance segment offers general liability, professional liability, workers' compensation, medical malpractice, and environmental impairment liability; property treaty products for catastrophe, per risk, and retrocessional exposures; and specialty treaty reinsurance products comprising structured and whole turnover credit, political risk, mortgage and contract, and commercial surety reinsurance programs. Its Markel Ventures segment provides equipment used in baking systems and food processing; portable dredges; over-the-road car haulers and equipment; and laminated oak and composite wood flooring, as well as ornamental plants and residential homes. This segment also provides healthcare, consulting, and others types of services to businesses and consumers, including management and technology consulting, behavioral healthcare, and retail intelligence. The company's Other segment operates as an insurance and investment fund manager offering a range of investment products, including insurance-linked securities, catastrophe bonds, insurance swaps, and weather derivatives; and program services. Markel Corporation was founded in 1930 and is headquartered in Glen Allen, Virginia.
MetLife, Inc. engages in the insurance, annuities, employee benefits, and asset management businesses worldwide. It operates through five segments: U.S.; Asia; Latin America; Europe, the Middle East and Africa; and MetLife Holdings. The company offers life, dental, group short-and long-term disability, individual disability, accidental death and dismemberment, vision, and accident and health coverages, as well as prepaid legal plans; administrative services-only arrangements to employers; and stable value products, including general and separate account guaranteed interest contracts, and private floating rate funding agreements. It also provides pension risk transfers, institutional income annuities, tort settlements, and capital markets investment products; and other products and services, such as life insurance products and funding agreements for funding postretirement benefits, as well as company, bank, or trust-owned life insurance used to finance nonqualified benefit programs for executives. In addition, the company offers automobile, homeowners', and personal excess liability insurance products. Further, it provides fixed annuities and pension products; medical and credit insurance products; variable, universal, term, endowment, and whole life insurance products; variable, and fixed and indexed-linked annuities; and protection against long-term health care services. The company serves individuals, corporations and their employees, and other institutions and their members through independent agents, property and casualty specialists, sales forces, sales teams and relationship managers, and sponsoring organizations and affinity groups, as well as through career and independent agencies, bancassurance, direct marketing and e-commerce, brokers, and other third-party distribution channels. MetLife, Inc. was founded in 1863 and is headquartered in New York, New York.
Principal Financial Group, Inc. provides retirement, asset management, and insurance products and services to businesses, individuals, and institutional clients worldwide. The company operates through Retirement and Income Solutions, Principal Global Investors, Principal International, and U.S. Insurance Solutions segments. The Retirement and Income Solutions segment provides a portfolio of asset accumulation products and services for retirement savings and income. It offers products and services for defined contribution plans, including 401(k) and 403(b) plans, defined benefit pension plans, nonqualified executive benefit plans, employee stock ownership plans, and pension risk transfer services; individual retirement accounts and payroll deduction plans; investment only products; and mutual funds, individual annuities, and bank products. The Principal Global Investors segment provides equity, fixed income, real estate, and other alternative investments, as well as asset allocation, stable value management, and other structured investment strategies. The Principal International segment offers pension accumulation and income annuity products, mutual funds, asset management, and life insurance accumulation products, as well as voluntary savings plans in Brazil, Chile, Mexico, China, Hong Kong Special Administrative Region, India, and Southeast Asia. The U.S. Insurance Solutions segment provides specialty benefits, such as group dental and vision insurance, group life insurance, and group and individual disability insurance, as well as administers group dental, disability, and vision benefits; and individual life insurance products comprising universal, variable universal, indexed universal, and term life insurance products in the United States. It also offers insurance solutions for small and medium-sized businesses and their owners, as well as executives. Principal Financial Group, Inc. was founded in 1879 and is based in Des Moines, Iowa.
Historical performance
Stock information
Market capitalization: $14121019392
P/E ratio: 11.658
PEG ratio: 1.5
Dividend yield: 0.0431%
Company summary
The Progressive Corporation, through its subsidiaries, provides personal and commercial auto insurance, residential property insurance, and other specialty property-casualty insurance and related services primarily in the United States. Its Personal Lines segment writes insurance for personal autos, and recreational and other vehicles. This segment's products include personal auto insurance; and special lines products, including insurance for motorcycles, ATVs, RVs, watercrafts, and snowmobiles. The company's Commercial Lines segment provides auto-related primary liability and physical damage insurance, and business-related general liability and property insurance for autos, vans, pick-up trucks, and dump trucks used by small businesses; tractors, trailers, and straight trucks primarily used by regional general freight and expeditor-type businesses, and non-fleet long-haul operators; dump trucks, log trucks, and garbage trucks used by dirt, sand and gravel, logging, and coal-type businesses; tow trucks and wreckers used in towing services and gas/service station businesses; and non-fleet taxis, black-car services, and airport taxis. Its Property segment provides residential property insurance for homes, condos, manufactured homes, and renters, as well as offers personal umbrella insurance, and primary and excess flood insurance. The company also offers policy issuance and claims adjusting services; home, condominium, renters, and other insurance; and business owner's policies, general liability, professional liability, and workers' compensation insurance. In addition, it offers reinsurance services. The Progressive Corporation sells its products and services through independent insurance agencies, as well as directly on Internet through mobile devices, and over the phone. The Progressive Corporation was founded in 1937 and is headquartered in Mayfield, Ohio.
Prudential Financial, Inc., through its subsidiaries, provides insurance, investment management, and other financial products and services. It operates through eight segments: PGIM, Retirement, Group Insurance, Individual Annuities, Individual Life, Assurance IQ, International Businesses, and Closed Block. The company offers asset management public and private fixed income, public equity and real estate, commercial mortgage origination and servicing, and mutual funds and other retail services to institutional, private, and sub-advisory clients, as well as to insurance company separate accounts, government sponsored entities, and the general account. It provides a range of retirement investment, and income products and services to retirement plan sponsors in the public, private, and not-for-profit sectors; and group life, long-term and short-term group disability, and group corporate-, bank-, and trust-owned life insurance in the United States, primarily to institutional clients for use in connection with employee plans and affinity groups. The company develops and distributes individual variable and fixed annuity products, principally to the mass affluent and affluent markets; and individual variable, term, and universal life insurance products to the mass middle, mass affluent, and affluent markets in the United States. It also offers individual life insurance, retirement, and related products to the mass affluent and affluent markets in Japan, Korea, and other foreign countries, as well as middle income and mass affluent markets. In addition, the company provides third-party life, health, Medicare, and property and casualty products to retail shoppers through its digital and independent agent channels. It offers its products and services to individual and institutional customers through its proprietary and third-party distribution networks. The company was founded in 1875 and is headquartered in Newark, New Jersey.
Trupanion, Inc., together with its subsidiaries, provides medical insurance for cats and dogs on monthly subscription basis in the United States, Canada, and Puerto Rico. The company operates through Subscription Business and Other Business segments. It serves pet owners and veterinarians through third-party referrals and online member acquisition channels. The company was formerly known as Vetinsurance International, Inc. changed its name to Trupanion, Inc. in 2013. Trupanion, Inc. was founded in 2000 and is headquartered in Seattle, Washington.
UnitedHealth Group Incorporated operates as a diversified health care company in the United States. It operates through four segments: UnitedHealthcare, OptumHealth, OptumInsight, and OptumRx. The UnitedHealthcare segment offers consumer-oriented health benefit plans and services for national employers, public sector employers, mid-sized employers, small businesses, and individuals; health and well-being services to individuals age 50 and older, addressing their needs for preventive and acute health care services, as well as services dealing with chronic disease and other specialized issues for older individuals; Medicaid plans, Children's Health Insurance Program, and health care programs; medical and dental benefits; and health care delivery. The OptumHealth segment provides access to networks of care provider specialists, health management services, care delivery, consumer engagement, and financial services. This segment serves individuals through programs offered by employers, payers, government entities, and directly with the care delivery systems. The OptumInsight segment offers software and information products, advisory consulting arrangements, and services outsourcing contracts to hospital systems, physicians, health plans, governments, life sciences companies, and other organizations. The OptumRx segment provides pharmacy care services and programs, including retail network contracting, home delivery, specialty and compounding pharmacy, and purchasing and clinical, as well as develops programs in areas, such as step therapy, formulary management, drug adherence, and disease/drug therapy management. UnitedHealth Group Incorporated has partnership with the University of California, San Francisco to expand the mental health workforce in California. UnitedHealth Group Incorporated was incorporated in 1977 and is based in Minnetonka, Minnesota.
A variety of options exist for investors interested in insurance ETFs, from property insurance ETFs like the Invesco KBW Property & Casualty Insurance ETF to broader insurance ETFs that capture health, life and property insurance companies, like the SPDR S&P Insurance ETF.
Before you can invest in insurance stocks, you need a brokerage account. Explore your options by features and fees to find the account that best meets your needs.
Disclaimer: The value of any investment can go up or down depending on news, trends and market conditions. We are not investment advisers, so do your own due diligence to understand the risks before you invest.
Bottom line
Insurance policies play an important role in our daily lives, and many people rely on insurance coverage to protect them from risk. Generally speaking, the industry is well-positioned to weather the highs and lows of a shifting economy, but each insurance category faces unique challenges.
Frequently asked questions
Yes. Some that do include Assurant, Hartford Financial Services and Lincoln National.
Shannon Terrell is a writer for Finder who studied communications and English literature at the University of Toronto. On any given day, you can find her researching everything from equine financing and business loans to student debt refinancing and how to start a trust. She loves hot coffee, the smell of fresh books and discovering new ways to save her pennies.
Private-equity companies have about $1.6 trillion of uninvested capital to put into merger and acquisition activity. This bodes well for 2021’s IPO market.
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