5 Multiline Insurers to Watch Amid Rising Insurance Demand

Core Insights - The Zacks Multiline Insurance industry is benefiting from product diversification, which lowers concentration risk and enhances revenue generation and retention ratios. Companies like MetLife, AIG, Prudential, The Hartford, and Old Republic are expected to gain from improved pricing, prudent underwriting, and economic recovery [1] - The industry is experiencing a solid capital level that is likely to fuel merger and acquisition activities, with an improving rate environment expected to drive higher investment income for insurers [1] 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 [2] - The diversified portfolios of multiline insurers help lower concentration risk, with increased demand for protection products expected to boost sales and premiums, particularly in life insurance [3] Trends Impacting the Industry - Continued consolidation is anticipated as companies seek to diversify operations and gain market share, with a resurgence in M&A activities expected in 2024 [4] - The adoption of advanced technologies such as AI, blockchain, and cloud computing is transforming operations, enhancing efficiency, and enabling online policy sales [5] Industry Performance - The Zacks Multiline Insurance industry ranks 87, placing it in the top 35% of 249 Zacks industries, indicating a positive earnings outlook [6][7] - Over the past year, the industry has outperformed the Finance sector with a gain of 5.3%, while underperforming the S&P 500, which rose by 7% [8] Current Valuation - The industry is currently trading at a trailing 12-month price-to-book (P/B) ratio of 2.48X, lower than the S&P 500's 6.14X and the sector's 3.06X [10] Notable Companies - Old Republic International (ORI): Zacks Rank 2, with a projected earnings increase of 3.8% for 2024 and 4.4% for 2025, supported by a strong capital position [11] - American International Group (AIG): Zacks Rank 3, expected earnings growth of 4.4% in 2024 and 16% in 2025, driven by strategic derisking and acquisitions [13] - MetLife (MET): Zacks Rank 3, with anticipated earnings growth of 17.6% for 2024 and 13.7% for 2025, focusing on cost control and efficiency [14] - Prudential Financial (PRU): Zacks Rank 3, expected earnings growth of 15.4% in 2024 and 8.3% in 2025, with a strong asset management business [15] - The Hartford Financial Services Group (HIG): Zacks Rank 3, projected earnings growth of 11.9% for 2024 and 14.3% for 2025, benefiting from improved mortgage insurance quality [16]