Best insurance stocks to buy for 2022
Insurance stocks can show stable performance throughout market cycles. Many investors are currently looking for the best insurance stocks to buy. Even when the economy is in the tank, customers who need their health insurance will continue to pay their premium. In most states, auto insurance is mandatory. Also, many insurance stocks pay a dividend.
There are many different types (or lines) of insurance and investors should know the difference. Some insurance actions focus on a single line of insurance, while others focus on multiple lines. If you’re new to insurance stocks and need a refresher, here’s a quick rundown of each insurance line.
- P&C insurance companies write policies that cover property damage and liability. The two most common types of P&C insurance are auto insurance and home insurance. It covers damage to covered property and may also cover damage to other property or persons caused by the insured. Besides auto and home insurance, renters and pet insurance are also common types of property and casualty insurance.
- Life insurance pays out a predetermined beneficiary upon the death of an insured. Term life insurance is a simple and inexpensive way to meet your life insurance needs. There are also very complex and expensive forms of life insurance.
- Health insurance helps pay for health costs. When someone is injured or becomes ill, a visit to the doctor can be expensive or sometimes unaffordable. Health insurance is so common that most employers offer it to employees and help pay the premiums.
With the stock market down this year and rumors of a recession, insurance stocks may be an option for investors looking to protect their downside. Here are some insurance stocks to think about.
Two Best Insurance Stocks to Buy and Interest Rates
When customers pay their premiums, insurance companies keep those premiums until they need to pay claims. In the meantime, the insurance company may charge interest on the money it holds. Most of the time, the insurance company invests the premiums in safe, interest-bearing investments.
With rising interest rates, insurance stocks could benefit. If you’re interested in insurance stocks, you might want to consider them.
US International Group No. 2 (NYSE: AIG)
AIG is a global insurer present in more than 70 countries. It underwrites several lines of insurance ranging from multi-risk insurance to life insurance. In addition to its insurance business, AIG offers financial services to its customers. At around 5x, AIG stock has one of the lowest P/E ratios among insurance stocks.
#1 The Hartford Financial Services Group (NYSE: HIG)
HIG is better known as Hartford. It offers one of the most comprehensive insurance products among insurance values. He drafts commercial, personal, P&C and collective benefits. Additionally, the company offers mutual funds to investors. Hartford stock pays a dividend yield of over 2%.
Three best health insurance stocks to buy
Due to the exorbitant cost of health care, health insurance can be very expensive. For the same reason, it is also very necessary. The cost of health insurance premiums can be offset by employers or government subsidies. Either way, these offsets help health insurance premiums open the door for these insurance actions.
UnitedHealth Group No. 3 (NYSE: UNG)
UNG is the largest health insurance company in the world, by far. UnitedHealth covers so many different locations that it is the preferred health insurance provider for many large multinational employers. UnitedHealth Group shares pay a dividend yield of more than 1%.
Anthem #2 (NYSE ANTM)
ANTM is another health insurance stock to buy. The company offers its popular Blue Cross/Blue Shield plans in several US states. It also offers plans that cover all states in the United States. For eligible customers, Anthem sells Medicare and Medicaid health insurance plans. The stock has a P/E ratio of nearly 20x.
Humana No. 1 (NYSE: HUM)
HUM is a leader in Medicare and Medicaid benefits. Its Medicare and Medicaid businesses write plans for individuals and groups. Humana is also a leader in group health insurance for small businesses in the United States. Humana is a fast-growing insurance stock, but pays a small dividend of less than 1%.
Two Best P&C Stocks
Most states in the United States require car owners to insure themselves to pay for damages to themselves and others in the event of a car accident. Additionally, lenders have an interest in the homes they have a mortgage on. These lenders require home insurance to protect these homes.
Progressive #2 (NYSE:PGR)
In addition to PGR’s hilarious commercials, the company is the largest auto insurer in the United States. In addition, the house insurer company. As a leader in both, it offers its customers a reduced premium for bundling auto and home insurance. Progressive has grown rapidly over the past few years. As a result, the stock has one of the highest P/E ratios among insurance stocks at 33x.
#1 Allstate (NYSE: ALL)
ALL has one of the largest insurance stock market capitalizations at over $36 billion. The stock also pays one of the highest dividend yields of the bunch, at over 2.5%. Allstate carries insurance that covers autos and homes like other property and casualty insurance stocks. It also has a financial services arm that underwrites life, accident and health insurance.
Two Best Life Insurance Stocks to Buy
Compared to other insurance stocks, life insurance companies have the most time to invest premiums before having to pay claims. This happens because claims are paid on the death of the insured person. Other lines of insurance pay claims on fender benders, trips to the doctor, or damage to a home. These claims occur much more frequently than for life insurance.
#2 MetLife (NYSE: MET)
MET is one of the largest life insurers in the United States. The company also has a wealth management arm that helps clients plan for retirement and save. MetLife stock pays a healthy dividend yield of almost 3%.
No. 1 Prudential Financial (NYSE: PRU)
PRU is a financial services and investment manager. Within its retirement planning arm, it underwrites life insurance and annuities. In addition, Prudential also provides mutual funds and investment management. The stock’s dividend yield of 4.5% compares favorably to that of other insurance stocks.
BJ Cook is a lifelong stock market nerd. He has held several positions in the world of equity research and earned the right to use the CFA designation in 2014. When he’s not writing for Investment U, you can find him seeking new ideas of investment. Outside of the investing community, BJ is a die-hard Cubs fan.