5 Insurance Stocks to Watch With Impressive Dividend Yield

Industry Overview - The Zacks Property and Casualty Insurance industry is positioned to benefit from improved pricing, prudent underwriting, increased exposure, and a solid capital position, reflected in its Zacks Industry Rank 35, placing it in the top 14% of over 250 Zacks industries [1] - Despite challenges such as higher catastrophe events impacting underwriting profit, the industry has seen a year-to-date growth of 14.6%, outperforming the S&P 500 composite's growth of 11.5% and the Finance sector's 4.5% rise [3] Economic Losses and Underwriting Performance - Total economic losses in 2023 were reported at $380 billion, with insured losses at $118 million, leading to a total net underwriting loss of $38 billion, the highest in 10 years, primarily due to weather-related losses, high inflation, and reinsurance pricing pressure [2] Premium Growth and Market Trends - Global commercial insurance rates increased by 1% in Q1 2024, with gross premiums expected to rise sixfold to $722 billion by 2030, driven by price hikes and operational strength [4] - Analysts predict a 5.5% growth in premiums for 2024, particularly in the personal auto segment, supported by better investment results and lower claims [5] Capital Management and Mergers - A solid capital level allows insurers to pursue strategic mergers and acquisitions, expand into new business lines, and increase dividends, with expectations of more M&A activity in the reinsurance space in 2024 [7] - The industry is increasingly adopting technology such as blockchain, AI, and advanced analytics to enhance operational efficiency and reduce costs [8] Company Highlights - Allstate Corporation, with a market cap of $43.50 billion, is the third-largest property-casualty insurer in the U.S., showing consistent sales growth and a dividend yield of 2.2% [10][11] - Cincinnati Financial, with a market cap of $18.43 billion, is focused on price increases and growth initiatives, boasting a dividend yield of 2.7% and a 64-year record of annual dividend increases [12][13] - CNA Financial, with a market cap of $11.95 billion, emphasizes better pricing and increased exposure, offering a dividend yield of 4% and a recent special dividend announcement [14][15] - First American Financial, with a market cap of $5.69 billion, is well-positioned to benefit from increased demand for home purchases, with a dividend yield of 3.8% [17][18] - American Financial Group, with a market cap of $10.82 billion, focuses on specialty insurance products and has a dividend yield of 2.2%, maintaining a strong history of dividend increases [20][21]