Insurance companies are financial institutions that are in the business of risk management. Generally, these companies are either life insurance or property and casualty insurance. The two types have different considerations.
Life Insurance companies are mandated by the government to maintain a certain level of reserve. These companies are thus less leveraged. It is important to note that insurers evaluate assets at market value but liabilities at book value. These life insurance policies have a long term outlook, as benefits are not paid out for many years.
Property and casualty insurance companies have shorter policy duration. Due to the nature of this type of insurance, timing and amount of liabilities are less certain than for life insurance companies. These insurance companies also go through an underwriting cycle.
🚑 Insurance Company
Manulife Financial (MFC-T) Life & Health Insurance
A Canadian multinational insurance company. They announced good earnings and profits, as well as pays a good dividend. They have been growing internationally, with growth particularly in Asia. They pay a dividend of 4.1%
MFC vs. RY MFC shows a nice uptrend, but facing long-term resistance. It's overbought, so enter around $26 during a sell-off. RY's chart is moderately positive with short-term resistance around $110. Not much upside at the current $107. Enter at $102-103.
Industrial-Alliance Life Ins (IAG-T)
A Quebec City based insurance company with a wealth management business. Their operations are more focused on personal insurance. A more regional insurer. The dividend at 3% is considered safe.
Will do well if interest rates go up. A lifeco that offers financial services. Scores in the top 25% of valuation with decent price momentum and volatility. (Analysts’ price target is $60.89)
Sun Life Financial Inc (SLF-T)
One of the largest and oldest life insurance companies in the world. They are diversifying into wealth management and buying real estate. A long-term hold that pays a good dividend at 4%.
SLF vs MFC When he values lifecos, it's on price to book, dividend yield, or price to earnings, rather than price to cash flows. Sun Life trades at a premium. His preferred lifeco is Manulife, because of a discounted valuation plus a better business overall because of its Asian business. Wealth management is also better,…
Great West Lifeco (GWO-T)
A value pick with low volatility. They operate in North America, Europe and Asia through subsidiaries that are regionally focused. A good long-term hold when interest rates rise. However the short term rate outlook has changed and it has affected the stock. The yield is 5%.
Likes it a lot and recommended it a few weeks ago as yields have been bottoming and flattening out. Yields will rise long-term, he predict, which will benefit lifecos like this. GWO broke its downtrend at end-2018, rose, hit a second bottom (a double-bottom) and is now accelerating higher.
Fairfax Financial (FFH-T) Property & Casualty Insurance
A financial holding company has activities in property, casualty and life insurance. They also operate in the investment management and insurance claims management sphere. It is well-run and a good long term hold.
Insurance and hedge businesses lead to some volatility in earnings. The chart doesn't show much, neutral, and doesn't indicate much opportunity. Can't see it going up or down. It's stuck in a range.
Intact Financial (IFC-T)
The largest provider of property and casualty insurance in Canada. They have a strong balance sheet and has grown well. Intact is now well-positioned to make acquisitions.
(A Top Pick Oct 26/18, Up 37%) It was defensive at the time. Markets were falling. Even at these levels, it's trading at 15x and growing at 15%. On a price to growth basis, still a good opportunity in a fragmented market.
St. Paul Travelers Companies Inc. (TRV-N) Property & Casualty Insurance
One of the largest U.S. insurance companies for commercial property casualty insurance and personal insurance. They pay a dividend of 2.12%
First American Corp. (FAF-N)
They are in the home insurance business. This is a play on the US housing market where prices have softened. This has affected the stock performance this year. They have done a good job of consistently raising their dividend which is at 3%.
(A Top Pick Jun 27/18, Up 3%) They are in the home insurance business and more particularly title insurance. In the US housing markets, prices have softened. This has had a negative effect on this name. The title insurance premium charged is based on the price of the home. So this has hampered its stock…
An efficient insurance company that is generating free cash flow. They reduced their share count by half and raised dividends. Low interest rates have been detrimental as premiums are not generating as much income. The yield is at 2.1%
(A Top Pick Dec 05/18, Up 29%) Remains a cheap stock. They're the best in P&E insurance and executes very well. Consumers aren't making claims on car accidents, fearing higher rates. Allstate is firing on all cylinders and trading cheaply. They've bought back half shares and raise their dividend every year.
Kingsway Financial Services (KFS-T)
A property and casualty insurer in the United States. They operate through several segments, each covering insurance underwriting, extended warranty, and leased real estate.
Markel Corporation. (MKL-N)
A holding company for insurance that invest its cash in stocks instead of bonds They are getting into wealth management through insurance but there were some hiccups last year. Still, it is a well run company with a good track record.
A baby BRK-N. This is an insurance company and a terrific investor that allocates the capital. They buy private businesses. Now they are getting into insurance investment vehicles. There is so much money around the world and nowhere to put the it. (Analysts’ price target is $1121.40)
Progressive Corp Ohio (PGR-N)
The largest provider of car insurance in the U.S. They have low cost operations so their profitability and growth are higher than their peers. It’s enjoyed a long-term uptrend.
He owned it for many years until interest rates started to rise. The whole group has done poorly over the last 60 days. More natural catastrophes mean insurance companies have a 'hard market' and can increase fees over that of claims.
Aflac Inc (AFL-N) Life & Health Insurance
The largest provider of supplemental insurance in the United States. They pay a dividend of 1.94%. They have consistently beat earnings and are growing. A low volatile name.
Global leaders in supplemental health insurance. Phenomenal track record of growth. A few ups and downs this year, but up nicely. Classic, long-term growth stock. If it drops, consider adding. If it goes to new highs, trim a bit.
A holding corporation for Metropolitan Life Insurance Company. They are buying back stocks. The US retirement portfolio has been doing well, and they are growing in Asia and Europe.
It’s pretty cheap, trading at 8.1 times. Their earnings in July were double year over year and beat expectations. They are growing globally and it’s a safe name with a low valuation. Couldn’t go wrong with this choice in the long term.
Prudential Financial Inc (PRU-N)
A financial company that has operations in insurance, wealth management and other financial products through their subsidiaries. It has been through a tough couple of years, but it may be changing. It pays a dividend of 4%.
(A Top Pick Nov 08/18, Up 4%) They spun off the asset management business in the UK that was a 3.7B pound deal. Typically, you see what happens with the spin out and sell it if you like it. There is some upside. Their Hong Kong headquarters is growing very strongly. US operations are growing…