5 Stocks to Watch From the Prospering Multiline Insurance Industry

Product diversification has been helping Zacks Multiline Insurance industry players lower concentration risk, ensure uninterrupted revenue generation and improve retention ratio. Better pricing, prudent underwriting, increased exposure and faster economic recovery should benefit MetLife MET, American International Group Inc. AIG, Prudential Financial Inc. PRU, Principal Financial Group PFG and Everest Group, Ltd. EG. Accelerated digitalization will help in the smooth functioning of the industry. The increasing acceptance of embedded insurance is also expected to drive the industry. Per a report in Financial Services, premiums from embedded insurance are projected to exceed $722 billion globally by 2030.

The solid capital level of multiline insurers will fuel merger and acquisition (M&A) activities. However, rate cuts by the Federal Reserve are a concern as insurers are direct beneficiaries of an improved rate environment. The Fed recently cut the interest rate by 25 basis points after a cut in September 2025. A lower rate will weigh on net investment income. Insurers’ focus on personalized offerings to enhance customer experience, leveraging digitalization, is the key. Given moderating pricing and increased competition, pricing competition will likely improve in 2025, per an Insurance Business report.

About the Industry

The Zacks Multiline Insurance industry comprises companies that provide single insurance coverage, bundling automobile, homeowner, long-term care, and life and health insurance to individuals and businesses. The insured pays a single premium and is covered for many things through a single contract. These companies cover commercial and personal properties, automobiles, marine, livestock, aviation, personal accident, life, including permanent and term insurance, supplemental accident and health insurance, workers’ compensation, annuity products, private mortgage insurance, et al. The players also provide risk management services. Since the companies offer single insurance coverage for multiple products, customer retention improves. The insured stands to benefit from lower premium payments compared to paying individual premiums for insuring varied products.

3 Trends Shaping the Future of the Multiline Insurance Industry

Diversified portfolio lowers concentration risk:  Given the nature of their business, multiline insurers’ product and service portfolios are diversified. This lowers concentration risk. Increased awareness, driving higher demand for protection products, should benefit sales and premiums of life insurance operations. An increase in exposure, with customized products and services, should support premium growth. However, moderating pricing keeps us cautious. Per Deloitte Insights, the transition to green energy and related insurance products, as well as exposure to intangible assets, offers growth opportunities. The increased adoption of artificial intelligence could increase potential cyber threats, thus fueling demand for cyber insurance. Pet insurance is also on the rise. While the life insurance business could be hurt by a low-interest-rate environment, prudent underwriting in the non-life insurance business will limit the downside. Yet, unpredictable catastrophes could weigh on the underwriting profitability of non-life insurers. Swiss Re estimates near mid-single-digit premium growth in 2025.

Merger and acquisitions:  Consolidation in the multi-line insurance industry is expected to continue as players look to diversify their operations into new business lines and geographies. Buying businesses along the same lines is driven by the players’ need to gain a fair market share and grow in their niche areas. Consolidations that slowed down earlier due to inflation are expected to rise in 2025, driven by a higher number of technology-driven deals, per a report from Willis Towers Watson’s Quarterly Deal Performance Monitor. Insurance technology companies are expected to top the list, per media reports. The industry is undergoing accelerated digitalization.

Increased adoption of technology: Digitalization has improved by leaps and bounds. The industry is witnessing greater use of technology like blockchain, AI, advanced analytics, telematics, cloud computing and robotic process automation to expedite business operations and save costs. Many life insurers have started selling policies online that appeal to the tech-savvy population. At the same time, the use of real-time data is making premium calculation easier and reducing risk. Insurers remain focused on ramping up data and analytics capabilities as well as realizing the benefit of the technological infrastructure per Deloitte Insights. Per a Deloitte FSI Predictions article, non-life insurers have the capacity to generate nearly $4.7 billion in annual global premiums from AI-related insurance, translating to a compound annual growth rate of around 80%.


 

Zacks Industry Rank Indicates Bright Prospects

The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bright prospects in the near term. The Zacks Multiline Insurance industry, housed within the broader Zacks Finance sector, currently carries a Zacks Industry Rank #87, which places it in the top 36% of 243 Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.

The industry’s positioning in the top 50% of the Zacks-ranked industries is the result of a positive earnings outlook for the constituent companies in aggregate. The bright outlook reflects that the industry’s earnings estimates have been revised upward by analysts for the current year. 

Before we present a few multiline insurance stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.


 

Industry vs. Sector and S&P 500

The Multiline Insurance industry has underperformed the sector and the Zacks S&P 500 composite year to date. The stocks in this industry have collectively gained 4.2% year to date compared with the Finance sector’s increase of 12.8% and the Zacks S&P 500 composite’s rise of 17.9% in the same time frame.            

Year-to-date Price Performance

 

Current Valuation

On the basis of its trailing 12-month price-to-book (P/B), which is commonly used for valuing insurance stocks, the industry is currently trading at 2.53X compared with the S&P 500’s 7.49X and the sector’s 4.23X.

Over the past five years, the industry has traded as high as 2.74X, as low as 0.93X and at the median of 2.24X.

Price-to-Book (P/B) Ratio (TTM)

Price-to-Book (P/B) Ratio (TTM)

 

5 Multiline Insurance Stocks to Keep An Eye On

We are presenting five Zacks Rank #3 (Hold) stocks from the Multiline Insurance industry.  

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

MetLife: This New York-based insurance-based global financial services company provides protection and investment products to a range of individual and institutional customers. This insurer’s focus on businesses with growth potential and strategies to control costs and increase efficiency bodes well for growth. 

The Zacks Consensus Estimate for 2025 and 2026 earnings indicates a year-over-year increase of 7.2% and 16.4%, respectively. Its expected long-term earnings growth rate is pegged at 12.8%. The consensus estimate for 2025 and 2026 earnings has moved 4 cents and 2 cents north, respectively, in the past 30 days.

Price and Consensus: MET

American International Group: Headquartered in New York, AIG provides insurance products for commercial, institutional and individual customers in North America and internationally. Strategic business de-risking, acquisitions, cost-control efforts and accelerated capital deployment will drive this insurer’s growth. 

The Zacks Consensus Estimate for 2025 and 2026 earnings indicates a year-over-year increase of 30.9% and 19.1%, respectively.  The expected long-term earnings growth rate is pegged at 15.7%. The consensus estimate for 2025 earnings has moved 2.2% north but the same for 2026 has witnessed no movement in the past 30 days. 

Price and Consensus: AIG

Prudential: Newark, NJ-based Prudential is a financial services leader. It continues to benefit from its solid asset-based businesses, improved margins in the Group Insurance business and international operations. A high-performing asset management business and deeper reach in the pension risk transfer market are catalysts for long-term growth. Prudential’s strategic initiatives have strengthened its existing capabilities and positioned it well for effective capital deployment. It is on track to become a higher-growth, less market-sensitive business. Its vast distribution network, compelling product portfolio and superior brand image will give it a competitive edge. Prudential continues to expect 5% to 8% core adjusted operating EPS growth on average through 2027. 

The Zacks Consensus Estimate for 2025 and 2026 earnings indicates a year-over-year increase of 11.4% and 5.7%, respectively. Its expected long-term earnings growth rate is pegged at 8.5%.  The consensus estimate for 2025 and 2026 earnings has moved 2.2% and 0.5% north, respectively, in the past 30 days. 

Price and Consensus: PRU

Principal Financial Group: Des Moines, IA-based Principal Financial is a leader in global investment management. Principal Financial continues to benefit from its strength and leadership in retirement and long-term savings, group benefits and protection in the United States, retirement and long-term savings in Latin America and Asia, plus global asset management. These help it deliver solid operating earnings. It continues to leverage a favorable market position in the retirement industry and remains optimistic about the momentum across retirement platforms.   

The Zacks Consensus Estimate for 2025 and 2026 earnings indicates a year-over-year increase of 18.8% and 12.4%, respectively.  The expected long-term earnings growth rate is pegged at 13.9%, better than the industry average. Though the consensus estimate for 2025 has moved 0.4% south, the same for 2026 earnings has moved 1.1% north in the past 30 days.

Price and Consensus: PFG

Everest Group: Based in Warren, NJ, Everest Group underwrites property and casualty reinsurance for insurance and reinsurance companies in the United States and international markets. Everest is poised for growth on product diversification, international insurance expansion and a rise in fixed maturity investments. EG is poised to leverage opportunities stemming from the continued disruption and evolution of the reinsurance market. This insurer is set to benefit from its capital adequacy, financial flexibility, long-term operating performance and traditional risk management capabilities.

The Zacks Consensus Estimate for 2025 and 2026 earnings indicates a year-over-year increase of 64.2% and 19.8%, respectively. The expected long-term earnings growth rate is pegged at 24.4%, better than the industry average. It has a VGM Score of A. The consensus estimate for 2025 earnings has moved 7% north, while the same for 2026 earnings has moved 0.9% south in the past 30 days. 

Price and Consensus: EG

 

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This article originally published on Zacks Investment Research (zacks.com).

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