5 Multiline Insurers to Watch as Competition Rises, Pricing Moderates

Industry Overview - The Zacks Multiline Insurance industry includes companies that provide various insurance coverages, allowing customers to pay a single premium for multiple products, which enhances customer retention and reduces concentration risk [3][4] - The industry is experiencing increased demand for protection products, particularly in life insurance, driven by heightened awareness and customized offerings [4] Trends Impacting the Industry - Product diversification is helping industry players mitigate concentration risk and improve revenue generation [1] - Accelerated digitalization and the adoption of embedded insurance are expected to drive growth, with global premiums from embedded insurance projected to exceed $722 billion by 2030 [1][6] - The transition to green energy and the rise of cyber insurance due to increased AI adoption present new growth opportunities [4][6] Mergers and Acquisitions - The solid capital levels of multiline insurers are expected to fuel M&A activities, with a focus on diversifying operations and gaining market share [2][5] - Consolidation is anticipated to rise in 2024, particularly among insurance technology companies [5] Financial Performance - The Multiline Insurance industry has underperformed compared to the Finance sector and the S&P 500, with a collective gain of 11.1% over the past year, while the Finance sector increased by 25.6% and the S&P 500 rose by 24.1% [11] - The industry's Zacks Industry Rank is 128, placing it in the bottom 48% of 251 Zacks industries, reflecting a negative earnings outlook with a 28.1% downward revision in earnings estimates for the current year [8][9] Current Valuation - The industry is currently trading at a trailing 12-month price-to-book (P/B) ratio of 2.38X, compared to the S&P 500's 8.07X and the sector's 3.71X [13] Company Highlights - Radian Group: Focused on mortgage insurance, with a strong capital position and expected growth driven by new business and increasing persistency [17][18] - CNO Financial Group: Offers a range of insurance products with a projected earnings increase of 10.3% for 2026 [20][21] - MetLife: A global financial services company with a focus on growth potential and cost control, expecting a 19% increase in earnings for 2025 [23][24] - American International Group (AIG): Growth driven by strategic de-risking and acquisitions, with a projected earnings increase of 27.7% for 2025 [26][27] - Prudential Financial: Strong asset-based businesses and a competitive edge expected to drive long-term growth, with a projected earnings increase of 13.6% for 2025 [29][30]