In this article, we discuss the 12 best insurance dividend stocks to buy right now. You can skip our detailed analysis of the insurance sector and its outlook and go straight to reading 5 Best Insurance Dividend Stocks to Buy Now
The insurance industry in the United States can be divided into several categories, including life insurance, health insurance, property and casualty insurance, and reinsurance. In 2022, global annual insurance premiums will exceed $7 trillion and the sector is expected to experience a CAGR of 8.5% through 2028. Over the past few years, the insurance sector has shown resilience and adaptability in the face of various social and geopolitical events. However, several other ongoing factors currently contribute to the widening protection gap, including natural disasters, cyber risks and a net-zero economy. According to a report by Ernst & Young, the protection gap totaled more than $1.4 trillion in 2021 and is expected to widen in the coming years.
Recent data breaches and cyber attacks have increased the importance of cyber insurance among individuals and organizations. According to a report by McKinsey & Company, cyber economic losses will reach $945 billion in 2020, more than 100 times the total premium market, which will reach $9 billion in 2021. The report also noted that two-thirds of companies in a McAfee survey reported. One of a kind cyber incident in 2019. For this reason, US insurance companies are using digital technology for customer satisfaction. In this regard, artificial intelligence (AI) and machine learning are widely favored by US insurers, which first gained prominence during the 2020 pandemic when major companies adopted work-from-home policies. Bloomberg cited data from Allied Market Research, which revealed that AI in the insurance market will grow at a CAGR of 32.5% by 2031, reaching $45.7 billion globally.
The growing role of AI in the insurance market is covered in one of our articles, 10 Hot Insurance Stocks to Buy Now. The report also highlights a positive outlook for the sector this year as many individuals around the world start focusing on their retirement and health-related plans. Insurance industry returns have also shown a steady performance of the sector over the past 12 months. The S&P Insurance Select Industry Index has fallen 5.37% over the past year, compared with a 9.61% decline in the S&P 500. Some popular insurance stocks include Chubb Limited (NYSE:CB), The Allstate Corporation (NYSE:ALL), and Travelers Company, Inc. (NYSE:TRV).
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Our method:
For this list, we selected several dividend stocks from the insurance sector that specialize in various segments including property and casualty insurance, life insurance and reinsurance. These companies have increased their dividends for at least 10 years. We then selected the highest number of 12 hedge fund investors among these stocks We measured hedge fund sentiment using InsiderMonkey’s database of 943 hedge funds.
Best insurance dividend stocks to buy now
12. Hanover Insurance Group, Inc. (NYSE:THG)
Number of Hedge Fund Holders: 16
Dividend yield as of April 5: 2.54%
Hanover Insurance Group, Inc. (NYSE:THG) is an American insurance company that provides auto, home, and business insurance to its customers. In April Piper Sandler raised its price target on the stock to $159 and maintained a neutral rating on the shares, presenting a positive outlook on the property-casualty insurance sector.
In the fourth quarter of 2022, The Hanover Insurance Group, Inc. (NYSE:THG) posted revenue of $1.33 billion, up 9.14% from the same period last year. During the quarter, the company returned nearly $29 million to shareholders in dividends, making it one of the best dividend stocks on our list.
Hanover Insurance Group, Inc. (NYSE:THG) offered a quarterly dividend of $0.81 per share and a dividend yield of 2.54%, as of April 5. The company has maintained a 15-year streak of consistent dividend growth. Other popular insurance dividend stocks include Chubb Limited (NYSE:CB), The Allstate Corporation (NYSE:ALL), and Travelers Company, Inc. (NYSE:TRV).
At the end of December 2022, 16 hedge funds tracked by InsiderMonkey held The Hanover Insurance Group, Inc. (NYSE:THG) reported a stake, up from 14 a quarter ago. The aggregate value of these shares is over $68.2 million. Among these hedge funds, Markel Gainer Asset Management was the company’s leading stakeholder in Q4.
11. Asurant, Inc. (NYSE:AIZ)
Number of Hedge Fund Holders: 18
Dividend yield as of April 5: 2.38%
Assurant, Inc. (NYSE:AIZ) is a New York-based insurance company that primarily provides risk management services and products to consumers. For FY22, the company returned $718 million to shareholders in dividends and share buybacks. Its revenue for Q4 2022 came in at $2.65 billion, showing a 3.1% increase from the same period last year.
Assurant, Inc. (NYSE:AIZ), one of the best dividend stocks, paid a quarterly dividend of $0.70 per share and had a dividend yield of 2.38%, as of April 5. The company has been consistently raising its dividend for the past 18 years.
Keefe Bruyette in his March investor note on Assurant, Inc. (NYSE:AIZ) covered and noted that it will outperform in the next few months. Given this, the firm upgraded the stock to Outperform and maintained a $152 price target.
At the end of Q4 2022, 18 hedge funds tracked by Insider Monkey held Assurant, Inc. (NYSE:AIZ) reported ownership shares valued at more than $265 million. Lyrical Asset Management was the company’s leading stakeholder in Q4.
10. RLI Corporation (NYSE:RLI)
Number of Hedge Fund Holders: 19
Dividend yield as of April 5: 0.80%
RLI Corporation (NYSE:RLI) is a property and casualty insurance specialist headquartered in Illinois, USA. The company is one of the best dividend stocks on our list because it has increased its payout for 47 years in a row. It currently pays a quarterly dividend of $0.26 per share for a dividend yield of 0.80% as of April 5.
RLI Corp. (NYSE:RLI) committed to a return to its shareholders in the fourth quarter of 2022. During this period, the company paid out roughly $330 million to shareholders in dividends.
As of the end of Q4 2022, 19 hedge funds tracked by Insider Monkey were long RLI Corp. (NYSE:RLI), collectively owns more than $251.3 million worth of shares. Markle Gainer Asset Management was the company’s leading stakeholder in Q4, with about 1.2 million shares.
9. American Financial Group, Inc. (NYSE:AFG)
Number of Hedge Fund Holders: 24
Dividend yield as of April 5: 2.08%
American Financial Group, Inc. (NYSE:AFG) is an Ohio-based financial services company with insurance and investment businesses. In the fourth quarter of 2022, the company reported revenue of $1.62 billion, up 11.7% from the same period last year. For the full year, it returned $1.23 billion to shareholders, including $1.02 billion in special dividends.
On April 3, American Financial Group, Inc. (NYSE:AFG) announced a quarterly dividend of $0.63 per share, which was in line with its previous dividend. The company’s current dividend growth streak stands at 17 years, making it one of the best dividend stocks on our list. The stock’s dividend yield on April 5 came in at 2.08%.
At the end of Q4 2022, American Financial Group, Inc. owned 24 hedge fund insiders in Monkey’s database. (NYSE:AFG), the same as the previous quarter. The stake is worth more than $294.6 million.
8. Old Republic International Corporation (NYSE:ORI)
Number of Hedge Fund Holders: 24
Dividend yield as of April 5: 3.99%
Old Republic International Corporation (NYSE:ORI) is an American insurance company that deals in property insurance and title and deeds. The company remained committed to its shareholder obligations in the most recent quarter as it paid out $243.7 million to shareholders, including $67.2 million in dividends. This is one of the best dividend stocks on our list.
On February 23rd, Old Republic International Corporation (NYSE:ORI) announced a 6.5% increase in its quarterly dividend to $0.245 per share. This marks the company’s 43rd consecutive year of dividend increases. The stock has a dividend yield of 3.99% as of April 5.
At the end of Q4 2022, 24 hedge funds tracked by Insider Monkey were long Old Republic International Corp. (NYSE:ORI), compared to 25 in the previous quarter. The aggregate value of bets owned by these hedge funds is over $148.7 million.
7. First American Financial Corporation (NYSE:FAF)
Number of Hedge Fund Holders: 28
Dividend yield as of April 5: 3.77%
First American Financial Corporation (NYSE:FAF) is a California-based company that provides insurance and settlement services to the real estate and mortgage industries. In February, Stephens upgraded the stock to Overweight and raised his price target on the stock to $72. The organization appreciated the company’s business model.
First American Financial Corporation (NYSE:FAF), one of the best dividend stocks, currently pays a quarterly dividend of $0.52 per share. The company has an 11-year streak of consecutive dividend growth. The stock has a dividend yield of 3.77% as of April 5.
As of the end of Q4 2022, 28 hedge funds tracked by Insider Monkey held stakes in First American Financial Corporation (NYSE:FAF), with a total value of more than $1.04 billion. Among these hedge funds, Ariel Investments was the company’s leading stakeholder in Q4.
6. Brown and Brown, Inc. (NYSE:BRO)
Number of Hedge Fund Holders: 29
Dividend yield as of April 5: 0.80%
Brown & Brown, Inc. (NYSE:BRO) ranks sixth on our list of best dividend stocks. The company is a leading insurance brokerage and also provides risk management solutions to its customers. It currently pays a quarterly dividend of $0.115 per share and has a dividend yield of 0.80%, as of April 5. The company has been increasing its dividend for the past 29 years.
In addition to Brown & Brown, Inc. (NYSE:BRO), Chubb Limited (NYSE:CB), The Allstate Corporation (NYSE:ALL), and Travelers Company, Inc. (NYSE:TRV) is the insurance sector’s other best dividend stock.
Among the 943 hedge funds in Insider Monkey’s database, 29 funds owned Brown & Brown, Inc. (NYSE:BRO) in Q4 2022, up from 27 in the previous quarter. The collective value of these stakes is over $1.43 billion.
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Disclosure. None of them. 12 Best insurance dividend stocks to buy now Originally published on Insider Monkey.