3 Stocks to Watch From the Thriving Accident & Health Insurance Industry

Industry Overview - The Zacks Accident and Health Insurance industry is expected to benefit from increased underwriting exposure, with companies like Aflac Incorporated, Unum Group, and Trupanion likely to be driven by prudent underwriting standards [1] - The global worker's compensation insurance market is projected to grow significantly between 2024 and 2032, driven by rising awareness of the benefits of coverage [2] Trends Impacting the Industry - Pricing pressure is anticipated to continue due to inflation and rising medical costs, with a projected 5.3% CAGR in workers' compensation insurance pricing from 2022 to 2026 [3] - Claims frequency is expected to improve as safety measures and working conditions enhance, potentially leading to lower claims costs and increased productivity [4] - The adoption of technology, including artificial intelligence, is accelerating in the industry, which could reduce workers' compensation claim expenses by approximately 45% [5] Industry Performance - The Zacks Accident and Health Insurance industry currently holds a Zacks Industry Rank of 103, placing it in the top 41% of 251 Zacks industries, indicating positive near-term prospects [6] - The industry's earnings estimate for the current year has increased by 8% over the past year, reflecting growing analyst confidence in earnings growth potential [7] - The industry has outperformed the Finance sector and the Zacks S&P 500 composite, with a year-to-date gain of 33.6% compared to 15.8% and 21% respectively [8] Current Valuation - The industry is trading at a trailing 12-month price-to-book (P/B) ratio of 1.93X, lower than the Zacks S&P 500 composite's 3.83X and the sector's 8.77X [9] Company Highlights - Aflac: This company offers voluntary supplemental health and life insurance products, with a focus on digital solutions and strategic growth investments. It has a Zacks Rank of 2 and has seen a year-to-date stock gain of 36.8% [11][12] - Unum Group: This insurer provides long-term care and group benefits, with expected sales growth of 5-10% in 2024. It has a Zacks Rank of 3 and a year-to-date stock gain of 30.2% [13][14] - Trupanion: Focused on pet insurance, this company operates in a large but underpenetrated market, with a Zacks Rank of 3 and a year-to-date stock gain of 35% [16][17]