In this article, we discuss 12 best insurance dividend stocks to buy now. You can skip our detailed analysis of the insurance sector and its outlook, and go directly to read 5 Best Insurance Dividend Stocks To Buy Now.
The insurance industry in the US can be divided into several categories, including life insurance, health insurance, property and casualty insurance, and reinsurance. In 2022, the global annual insurance premiums exceeded $7 trillion and the sector is likely to experience a CAGR of 8.5% through 2028. Over the last few years, the insurance sector has shown resilience and adaptability in the face of various social and geopolitical events. However, other several ongoing factors currently contribute to the expanding protection gap, including natural catastrophes, cyber risks, and a net-zero economy. According to a report by Ernst & Young, the protection gap totaled over $1.4 trillion in 2021 and is expected to widen in the coming years as well.
The recent data breaches and cyber attacks have increased the importance of cyber insurance among individuals and institutions. According to a report by McKinsey & Company, cyber economic losses reached $945 billion in 2020, over 100 times the total premium market, which stood at $9 billion in 2021. The report also mentioned that two-thirds of companies in a survey by McAfee reported some kind of cyber incident in 2019. Due to these reasons, US insurance companies are deploying digital technologies for customer satisfaction. In this regard, artificial intelligence (AI) and machine learning are massively preferred by US insurers, which first came to prominence during the pandemic of 2020 when major organizations adopted work-from-home policies. Bloomberg cited data by Allied Market Research, which revealed that AI in the insurance market is expected to grow at a CAGR of 32.5% by 2031, reaching $45.7 billion globally.
The growing role of AI in the insurance market is also covered in one of our articles, titled 10 Hot Insurance Stocks To Buy Now. This report also highlighted a positive outlook for the sector this year as many individuals around the world started paying attention to their retirement and health-related plans. The returns of the insurance industry also showed a steady performance of the sector over the past 12 months. The S&P Insurance Select Industry Index fell by 5.37% in the past year, compared with a 9.61% decline in the S&P 500. Some of the popular insurance stocks include Chubb Limited (NYSE:CB), The Allstate Corporation (NYSE:ALL), and Travelers Companies, Inc. (NYSE:TRV).
Best Insurance Dividend Stocks
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Our Methodology:
For this list, we selected several dividend stocks from the insurance sector that specialize in various different categories, including property and casualty insurance, life insurance, and reinsurance. These companies have raised their dividends for at least 10 years. We then selected 12 of these stocks with the highest number of hedge fund investors. We gauged hedge fund sentiment using Insider Monkey's database of 943 hedge funds.
The Hanover Insurance Group, Inc. (NYSE:THG) is an American insurance company that provides auto, home, and business insurance to its consumers. 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) reported 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, which makes it one of the best dividend stocks on our list.
The Hanover Insurance Group, Inc. (NYSE:THG) offers a quarterly dividend of $0.81 per share and has a dividend yield of 2.54%, as of April 5. The company maintains 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 Companies, Inc. (NYSE:TRV).
At the end of December 2022, 16 hedge funds tracked by Insider Monkey reported having stakes in The Hanover Insurance Group, Inc. (NYSE:THG), up from 14 a quarter earlier. These stakes have a collective value of over $68.2 million. Among these hedge funds, Markel Gayner Asset Management was the company's leading stakeholder in Q4.
Assurant, Inc. (NYSE:AIZ) is a New York-based insurance company that mainly provides risk management services and products to consumers. For FY22, the company returned $718 million to shareholders in dividends and share repurchases. Its revenue for Q4 2022 came in at $2.65 billion, which showed a 3.1% growth from the same period last year.
Assurant, Inc. (NYSE:AIZ), one of the best dividend stocks, pays a quarterly dividend of $0.70 per share and has a dividend yield of 2.38%, as of April 5. The company has been raising its dividends consistently for the past 18 years.
Keefe Bruyette covered Assurant, Inc. (NYSE:AIZ) in its March investors' note and mentioned 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 reported owning stakes in Assurant, Inc. (NYSE:AIZ), worth over $265 million. Lyrical Asset Management was the company’s leading stakeholder in Q4.
RLI Corp. (NYSE:RLI) specializes in property and casualty insurance, headquartered in Illinois, US. The company is one of the best dividend stocks on our list as it has raised its payouts 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) remained committed to its shareholder return in the fourth quarter of 2022. During this period, the company paid roughly $330 million to shareholders in dividends.
As of the close of Q4 2022, 19 hedge funds tracked by Insider Monkey were long RLI Corp. (NYSE:RLI), owning stakes worth over $251.3 million collectively. With nearly 1.2 million shares, Markel Gayner Asset Management was the company's leading stakeholder in Q4.
American Financial Group, Inc. (NYSE:AFG) is an Ohio-based financial services company that has insurance and investment businesses. In the fourth quarter of 2022, the company posted revenue of $1.62 billion, which was up 11.7% from the same period last year. For the full year, it returned over $1.23 billion to shareholders, including $1.02 billion in special dividends.
On April 3, American Financial Group, Inc. (NYSE:AFG) declared 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, which makes 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, 24 hedge funds in Insider Monkey's database owned stakes in American Financial Group, Inc. (NYSE:AFG), the same as in the previous quarter. The total value of these stakes is over $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 deed. The company remained committed to its shareholder obligation in the most recent quarter as it paid $243.7 million to shareholders, including $67.2 million in dividends. It is among the best dividend stocks on our list.
On February 23, Old Republic International Corporation (NYSE:ORI) declared a 6.5% hike in its quarterly dividend to $0.245 per share. This marked the company's 43rd consecutive year of dividend growth. 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 Corporation (NYSE:ORI), compared with 25 in the previous quarter. The collective value of stakes 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 real estate and mortgage industries. In February, Stephens upgraded the stock to Overweight and also raised its price target on the stock to $72. The firm 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 holds an 11-year streak of consistent dividend growth. The stock has a dividend yield of 3.77%, as of April 5.
As of the close of Q4 2022, 28 hedge funds tracked by Insider Monkey held stakes in First American Financial Corporation (NYSE:FAF), with a total value of over $1.04 billion. Among these hedge funds, Ariel Investments was the company's leading stakeholder in Q4.
Brown & Brown, Inc. (NYSE:BRO) ranked sixth on our list of the best dividend stocks. The company is a leading insurance brokerage and also provides risk management solutions to its consumers. 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 raising its dividends for the past 29 years.
In addition to Brown & Brown, Inc. (NYSE:BRO), Chubb Limited (NYSE:CB), The Allstate Corporation (NYSE:ALL), and Travelers Companies, Inc. (NYSE:TRV) are other best dividend stocks from the insurance sector.
Of the 943 hedge funds in Insider Monkey's database, 29 funds owned stakes in 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.
