4 Accident & Health Insurers to Watch Amid Rising Medical Costs

Industry Overview - The Zacks Accident and Health Insurance industry is projected to benefit from increased underwriting exposure, driven by prudent underwriting standards among key players like Aflac, Unum Group, Globe Life, and Trupanion [1] - The industry is expected to grow from approximately $300 billion in 2024 to about $420 billion by 2033, reflecting a compound annual growth rate (CAGR) of 3.8% [3] Current Trends - Pricing pressure is anticipated to continue due to inflation, rising medical costs, and demographic changes, with healthcare spending expected to increase by 5.4% annually through 2028 [4] - Claims frequency is improving due to better safety measures and working conditions, which is expected to enhance the industry's performance [5] - The adoption of technology, including AI and data analytics, is accelerating, potentially reducing workers' compensation claim expenses by about 45% [6] Financial Performance - The Accident and Health Insurance industry has underperformed compared to the Finance sector and the S&P 500, with a year-to-date gain of 5.1% versus 14.2% and 18.2% respectively [9] - The industry is currently trading at a trailing 12-month price-to-book (P/B) ratio of 1.72X, significantly lower than the Zacks S&P 500 composite's 8.47X and the sector's 4.18X [11] Company Highlights - Aflac: Focuses on voluntary supplemental health and life insurance, with a projected long-term earnings growth rate of 4.6% and a trailing four-quarter earnings surprise of 9.38% [15][16] - Unum Group: Expected premium growth of 3-6% for 2025, with a long-term earnings growth rate of 6%, outperforming the industry average [19][21] - Globe Life: Positive revenue trends driven by premium growth in life and health insurance segments, with a projected 3.1% year-over-year increase in earnings for 2026 [23][25] - Trupanion: Positioned for growth in the pet insurance market, with a consensus estimate suggesting a 9.4% increase in earnings for 2026 and a trailing four-quarter earnings surprise of 235.42% [27][28]