Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

4 Insurance Stocks That Have Crushed The S&P 500 Year To Date

By Zacks Investment ResearchStock MarketsApr 09, 2019 12:13AM ET
www.investing.com/analysis/4-insurance-stocks-that-have-crushed-the-sp-500-year-to-date-200405246
4 Insurance Stocks That Have Crushed The S&P 500 Year To Date
By Zacks Investment Research   |  Apr 09, 2019 12:13AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

The S&P 500 has performed well so far this year after a disappointing 2018. The benchmark index has gained 14.9% year to date having lost 6.2% in 2018. The easing of tensions between the United States and China on optimism regarding US-China trade negotiations, decline in weekly jobless claims to a 50-year low and strong manufacturing data likely drove the index on the growth path.

The U.S. labor market continues to gain momentum, signaling a stable economy. However, at its Mar 20, 2019 FOMC meeting, the Fed announced that short-term interest rates will remain unchanged this year, implying that GDP growth might slow down to 2.1%. Nonetheless, factors like low unemployment rate (estimated at 3.7% in 2019) and core inflation rate (expected at 2% through 2021) contribute to a bullish economic outlook.

However, per our Earnings Preview, S&P 500 earnings are expected to decline 4% in the first quarter though revenues are expected to increase 4.6%. Broad-based margin pressure will likely dent earnings. Last year, margins received a major boost from the Tax Cuts and Jobs Act — an overhaul of the tax code after 31 years that lowered the corporate tax burden to 21% from 35% and leading to a $1.5-trillion tax reduction.

The insurance industry seems to have benefited from a not-so-active catastrophe environment. However, January winter storms and an extreme cold weather (Polar Vortex) cost the United States nearly a billion dollars per Aon (NYSE:AON) plc’s catastrophe report on Feb 13, 2019.

The central bank will not raise rates in 2019 against its earlier expectation of two raises due to slowing economic growth and sluggish inflation. The rate currently stands at 2.50% compared with a near- zero level at the time of the financial crisis. A better rate environment should aid investment results.

Pricing firmed up from the fourth quarter of 2017 post major catastrophes like Hurricane Harvey Irma and Maria. Nonetheless, workers compensation and international liability pricing that were soft in 2018 should continue to be so in 2019 per excerpts from Insurance Marketplace Realities 2019 by Willis Towers Watson. Rates are expected to increase in low single-digit to low double-digit across most insurance lines in 2019 per the report. Per analysts at Moody’s Investors Service, the rate increases are anticipated to exceed the loss cost trends in auto lines, roughly match the metric in the property lines and lag slightly in the commercial casualty lines in 2019.

Adoption of technologies like artificial intelligence, robotic process automation, cognitive intelligence or blockchain should help insurers curb operational costs. Also, sturdy capital level supporting consolidations, strategic investments as well as dividend increase and share buybacks should continue to support growth.

4 Insurance Outperformers YTD

Though the insurance industry has risen 6.5% year to date, it has underperformed the Zacks S&P 500 composite. However, there are some insurers, which managed to outperform the broader index.



These stocks have seen estimates for 2019 move north in the last four weeks. Also, these stocks have an impressive Growth Score of A or B. This style score analyzes the growth prospects of a company.

First American Financial Corporation (NYSE:FAF) provides financial services. The Zacks Rank #3 (Hold) stock has a Growth Score of A. The Zacks Consensus Estimate for 2019 has moved up 1.1% in the past 30 days. The stock has gained 19.7% year to date.



Lincoln National Corporation (NYSE:LNC) operates multiple insurance and retirement businesses in the United States. The Zacks Rank #3 stock has a Growth Score of B. The consensus estimate for 2019 has moved up 0.7% in the past 30 days. The stock has gained 23.7% year to date.



Willis Towers Watson Public Limited Company (NASDAQ:WLTW) operates as an advisory, broking, and solutions company worldwide. The Zacks Rank #3 stock has a Growth Score of A. The Zacks Consensus Estimate for 2019 has moved up 0.6% in the past 30 days. The stock has gained 17.5% year to date.



Prudential (LON:PRU) plc (NYSE:PUK) provides a range of retail financial products and services, and asset management services in Asia, the United States, the United Kingdom, Europe, and Africa. The Zacks Rank #3 stock has a Growth Score of A. The Zacks Consensus Estimate for 2019 has moved up 1.5% in the past 30 days. The stock has gained 22.8% year to date.



Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.

This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.

See their latest picks free >>



Willis Towers Watson Public Limited Company (WLTW): Free Stock Analysis Report

Lincoln National Corporation (LNC): Free Stock Analysis Report

Prudential Public Limited Company (PUK): Free Stock Analysis Report

First American Financial Corporation (FAF): Free Stock Analysis Report

Original post

Zacks Investment Research
4 Insurance Stocks That Have Crushed The S&P 500 Year To Date
 

Related Articles

4 Insurance Stocks That Have Crushed The S&P 500 Year To Date

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email