3 Insurance Stocks With Bullish Analyst Price Targets

Developing economies and markets globally are transforming the operations of the insurance sector, propelling it toward expansion. Further, digital platforms enhance core processes and improve customer experience, opening wider opportunities for the industry.

Against this backdrop, it could be wise to invest in fundamentally strong insurance stocks The Progressive Corporation (PGR), W. R. Berkley Corporation (WRB), and Unum Group (UNM), with bullish analyst price targets.

During the second quarter of 2024, casualty insurance rates increased 3% globally whereas property lines rates remained flat globally, depicting a positive view of the insurance market. Further, in global comparison, US property insurance rates increased 2% and casualty insurance rates increased 4% as large jury verdicts and increased physical damage costs affect auto liability.

Also, slowi but still robust economic growth, and high interest rates are driving growth for the insurance business. An aggregate 15% improvement in the profitability for the life insurance sector is expected across major and advanced markets and non-life sector also expects stronger results with newly underwritten business.

The life insurance market in the United States is projected to reach a market value of $1.27 trillion in 2024. The gross written premium is expected to grow at a CAGR of 3.7%, resulting in a market volume of $1.47 trillion by 2028, driven by the prevalence of digital platforms and online sales in the life insurance market.

Further, with Artificial Intelligence (AI) and data analytics enhancing process precision, claims efficiency, and risk assessment accuracy, the property and casualty insurance market is expected to grow significantly in the coming years. The new technologies are advancing core processes and improving customer experiences transforming how the market operates.

Moreover, investors’ interest in insurance stocks is evident from iShares U.S. Insurance ETF (IAK) 28.4% returns over the past year.

Given the industry’s robust outlook, investing in quality insurance stocks such as PGR, WRB, and UNM could be wise for future gains.

The Progressive Corporation (PGR)

PGR is an insurance holding company which provides personal and commercial auto, personal residential and commercial property, business related general liability, and other specialty property-casualty insurance products and related services. It operates through three segments: Personal Lines; Commercial Lines; and Property.

On August 2, PGR’s Board of Directors declared a $0.10 per common share dividend, payable on October 11, 2024, to shareholders of record at the close of business on October 3, 2024.

PGR pays an annual dividend of $1.15, which translates to a yield of 0.19% at the current share price. Its four-year average dividend yield is 2.16%. Moreover, the company’s dividend payouts have increased at a CAGR of 8.8% over the past ten years.

For the second quarter that ended June 30, 2024, PGR’s net premiums earned increased 19% year-over-year to $17.21 billion. The company’s net income came in at $1.46 billion, and $2.48 per share, up 322.3% and 335% from the prior year’s quarter, respectively.

Analysts expect PGR’s revenue and EPS for the third quarter (ending September 2024) to grow 20.4% and 25.7% year-over-year to $18.77 billion and $2.65, respectively. Also, the company topped the consensus EPS estimates in each of the four trailing quarters.

Shares of PGR have surged 18.7% over the past six months and 67.7% over the past year to close the last trading session at $214.05. Moreover, Wall Street analysts expect the stock to reach $244.46 in the upcoming 12 months, indicating a potential upside of 14.2%.

PGR’s solid fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.

PGR has an A grade for Sentiment and Momentum. It also has a B grade for Quality and Growth. It is ranked #10 out of 55 stocks in the B-rated Insurance – Property & Casualty industry.

In addition to the POWR Ratings we’ve stated above, we also have PGR ratings for Value and Stability. Get all PGR ratings here.

R. Berkley Corporation (WRB)

WRB, an insurance holding company, functions as a commercial lines writers globally. The company operates in two segments, Insurance; and Reinsurance & Monoline Excess. The company underwrites commercial insurance business, including excess and surplus lines, admitted lines, and specialty personal lines.

On June 12, WRB’s Board of Directors declared a special cash dividend on its common stock of $0.50 per share paid on June 28, 2024 to stockholders of record on June 24, 2024. The Board also increased the regular cash dividend by 9.1% from the present rate. The first regular quarterly dividend at the new rate of $0.12 per share was paid on the same date.

WRB pays an annual dividend of $0.65, which translates to a yield of 0.58% at the current share price. Its four-year average dividend yield is 1.82%. Moreover, the company’s dividend payouts have increased at a CAGR of 11.3% over the past three years. WRB has raised its dividends for 18 consecutive years.

During the second quarter that ended June 30, 2024, WRB’s gross premiums written increased 11.4% year-over-year to $3.72 billion and its total revenues rose 10.6% year-over-year to $3.31 billion. Its operating income grew 34.5% from the year-ago value to $418.11 million.

Furthermore, the company’s net income to common stockholders came in at $371.91 million and $0.92 per share, reflecting growths of 4.4% and 5.7% from the prior year’s quarter, respectively.

Street expects WRB’s revenue for the third quarter (ending September 2024) to increase 10.9% year-over-year to $2.93 billion, while its EPS is expected to grow 5.2% year-over-year to $0.95, respectively. Furthermore, the company surpassed the consensus EPS estimates in all of the trailing four quarters.

WRB’s stock has soared 4% over the past six months and 34.8% over the past year to close the last trading session at $55.10. Further, Wall Street analysts expect the stock to reach $59.22 in the upcoming 12 months, indicating a potential upside of 7.5%.

WRB’s bright prospects are reflected in its POWR Ratings. It has an overall rating of B, equating to a Buy in our proprietary rating system.

The stock has an A grade for Momentum and a B for Stability. WRB is ranked #20 among 55 stocks in the B-rated Insurance – Property & Casualty industry.

Click here to access WRB’s ratings for Quality, Growth, Value, and Sentiment.

Unum Group (UNM)

UNM provides financial protection benefit solutions internationally. The company operates through Unum US; Unum International; Colonial Life; and Closed Block segments. It provides group long-term and short-term disability, group life, and accidental death and dismemberment products.

On July 8, UNM entered into a definitive agreement with Group, a leading insurance services provider, under which Amynta will acquire UNM’s Medical Stop Loss business. Post-acquisition, the business will function as a full-service managing general underwriter under Amynta Risk Solutions.

On June 18, UNM launched Unum Broker Connect for Employee Navigator. It is the culmination of a decade-long partnership resulting in a best-in-class integration and service model for brokers.

Broker Connect for Employee Navigator provides efficiency and value for UNM’s broker partners in various ways including streamlined implementation, automated plan setup, embedded evidence of insurability (EOI), and seamless data exchange.

UNM’s revenue increased 3.9% year-over-year to $3.23 billion during the second quarter that ended June 30, 2024, of which its premium income rose 4.7% year-over-year to $2.63 billion. The company’s adjusted operating income came in at $411.40 million and $2.16 per share for the quarter, reflecting growths of 0.6% and 4.8% from the prior year’s quarter, respectively.

The company updated its full-year 2024 outlook for after-tax adjusted operating income per share from 7% to 9%, which now has been raised to 10% to 15%.

Street expects UNM’s EPS for the third quarter (ending September 2024) to increase 4.4% year-over-year to $2.02 and its revenue for the ongoing quarter is expected to grow 4.5% year-over-year to $3.26 billion. Also, the company has surpassed the consensus revenue and EPS estimates in three of the trailing four quarters, which is impressive.

UNM’s stock has gained 11.2% over the past six months and 4.8% over the past year to close the last trading session at $52.83. Moreover, Wall Street analysts expect the stock to reach $60.25 in the upcoming 12 months, indicating a potential upside of 14.1%.

UNM’s POWR Ratings reflect its robust outlook. The stock has an overall rating of B, which equates to a Buy in our proprietary rating system.

The stock has an A grade for Momentum. It also has a B grade for Stability. Within the B-rated Insurance – Accident & Supplemental industry, UNM has topped among the 8 stocks.

Click here to access additional ratings of UNM for Growth, Value, Sentiment, and Quality.

What To Do Next?

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PGR shares were trading at $215.84 per share on Wednesday afternoon, up $1.79 (+0.84%). Year-to-date, PGR has gained 36.32%, versus a 10.39% rise in the benchmark S&P 500 index during the same period.

Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions.

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