Insurance companies serve as the backbone of risk management, providing essential protection and financial security for individuals and businesses. Furthermore, favorable market conditions have supported premium growth and investment income, a trend that has enabled the industry to return 3.3% over the past six months. Investing here would have been wise - at the same time, the S&P 500 was flat.
Regardless of these results, investors must exercise caution as many insurers are sensitive to catastrophic events and economic cycles. Taking that into account, here are two insurance stocks we think can generate sustainable market-beating returns and one we’re passing on.
One InsuranceStock to Sell:
Aflac (AFL)
Market Cap: $55.41 billion
Known for its iconic duck mascot that has quacked "Aflac!" in commercials since 2000, Aflac (NYSE: AFL) provides supplemental health and life insurance policies that pay cash benefits directly to policyholders for expenses not covered by their primary insurance.
Why Are We Wary of AFL?
- Annual net premiums earned declines of 7.8% for the past four years show its policy sales struggled during this cycle
- Projected sales growth of 1.9% for the next 12 months suggests sluggish demand
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 15% annually
Aflac’s stock price of $101.84 implies a valuation ratio of 2.1x forward P/B. Dive into our free research report to see why there are better opportunities than AFL.
Two Insurance Stocks to Buy:
F&G Annuities & Life (FG)
Market Cap: $4.25 billion
Founded in 1959 and serving approximately 677,000 policyholders who rely on its financial protection products, F&G Annuities & Life (NYSE: FG) provides fixed annuities, life insurance, and pension risk transfer solutions to retail and institutional clients.
Why Do We Love FG?
- Market share has increased this cycle as its 33.9% annual net premiums earned growth over the last two years was exceptional
- Annual book value per share growth of 28.3% over the past two years was outstanding, reflecting strong capital accumulation this cycle
- Capital strength is on track to rise over the next 12 months as its 50.3% projected book value per share growth implies profitability will accelerate from its two-year trend
F&G Annuities & Life is trading at $31.55 per share, or 0.9x forward P/B. Is now the time to initiate a position? Find out in our full research report, it’s free.
Progressive (PGR)
Market Cap: $152.2 billion
Starting as a small auto insurance company in 1937 with a pioneering focus on high-risk drivers, Progressive (NYSE: PGR) is a major auto, property, and commercial insurance provider that offers policies through independent agents, online platforms, and over the phone.
Why Are We Backing PGR?
- Impressive 20.5% annual net premiums earned growth over the last two years indicates it’s winning market share this cycle
- Annual book value per share growth of 32.9% over the past two years was outstanding, reflecting strong capital accumulation this cycle
- Book value per share outlook for the upcoming 12 months is outstanding and shows it’s on track to build significant equity value
At $260.07 per share, Progressive trades at 4.5x forward P/B. Is now the right time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
