5 Multiline Insurers to Watch as Exposure Rises, Pricing Moderates

Core Viewpoint - The Zacks Multiline Insurance industry is benefiting from product diversification, improved pricing, prudent underwriting, and accelerated digitalization, which are expected to enhance revenue generation and retention ratios for key players like AIG, Prudential, The Hartford, Radian, and CNO [1][4]. Industry Overview - The Zacks Multiline Insurance industry includes companies that provide bundled insurance coverage for various needs, improving customer retention and offering lower premium payments compared to individual policies [3]. - The industry is characterized by diversified product portfolios, which help lower concentration risk and drive demand for protection products, particularly in life insurance [4]. Trends Shaping the Industry - Increased awareness and demand for protection products are expected to boost sales and premiums, with a focus on customized offerings [4]. - The transition to green energy and the rise of cyber insurance due to increased AI adoption present growth opportunities [4]. - The industry is anticipated to see continued consolidation as companies seek to diversify operations and expand market share, particularly in insurance technology [5]. Technological Adoption - The industry is experiencing significant digitalization, utilizing technologies such as blockchain, AI, and advanced analytics to enhance operations and reduce costs [6]. - Real-time data usage is improving premium calculations and risk management, while also streamlining underwriting and claims processing [6]. Market Performance - The Zacks Multiline Insurance industry ranks 63, placing it in the top 25% of 251 Zacks industries, indicating positive earnings outlooks and potential for outperformance [7][8]. - The industry has collectively gained 25.9% over the past year, outperforming the Finance sector's 22.7% increase but slightly underperforming the S&P 500's 26% rise [9]. Current Valuation - The industry is currently trading at a price-to-book (P/B) ratio of 2.44X, significantly lower than the S&P 500's 8.76X and the Finance sector's 3.71X [11]. - Historical P/B ratios for the industry have ranged from a low of 0.69X to a high of 2.74X over the past five years [12]. Company Highlights - Radian Group: Positioned for growth with a strong mortgage insurance portfolio and a Zacks Rank 2, with a consensus estimate indicating a 3.1% increase in 2024 earnings [17][18]. - CNO Financial Group: A Zacks Rank 2 company with a projected 20.7% increase in 2024 earnings, supported by a strong product portfolio [20][21]. - American International Group (AIG): A Zacks Rank 3 insurer focusing on strategic derisking and acquisitions, with a consensus estimate for a 30.4% increase in 2025 earnings [24][25]. - Prudential Financial: A Zacks Rank 3 company with solid growth prospects driven by asset-based businesses and a projected 14.9% increase in 2024 earnings [27][28]. - Hartford Financial: A Zacks Rank 3 insurer expected to grow due to improved mortgage insurance quality, with a consensus estimate for a 13.5% increase in 2024 earnings [31][32].