Insurance firms play a critical role in the financial system, offering everything from property coverage to life insurance and specialized risk solutions. Still, investors are uneasy as insurers face challenges from catastrophic events and potential regulatory changes. These doubts have caused the industry to lag recently as insurance stocks have collectively shed 4.9% over the past six months. This drop is a stark contrast from the S&P 500’s 9% gain.
Despite the lackluster result, a few diamonds in the rough can produce earnings growth no matter what, and we started StockStory to help you find them. On that note, here are two insurance stocks boasting durable advantages and one we’re steering clear of.
One Insurance Stock to Sell:
MGIC Investment (MTG)
Market Cap: $5.39 billion
Founded in 1957 when the modern mortgage insurance industry was in its infancy, MGIC Investment (NYSE: MTG) provides private mortgage insurance that protects lenders when homebuyers default on their loans, enabling borrowers to purchase homes with smaller down payments.
Why Do We Think Twice About MTG?
- Net premiums earned contracted by 1.2% annually over the last five years, showing unfavorable market dynamics this cycle
- Estimated sales decline of 1.3% for the next 12 months implies a challenging demand environment
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 9.4% annually
At $26.06 per share, MGIC Investment trades at 1x forward P/B. Check out our free in-depth research report to learn more about why MTG doesn’t pass our bar.
Two Insurance Stocks to Watch:
Primerica (PRI)
Market Cap: $8.70 billion
With a sales force of over 140,000 licensed representatives operating on an independent contractor model, Primerica (NYSE: PRI) provides term life insurance, investment products, and other financial services to middle-income households in the United States and Canada.
Why Is PRI on Our Radar?
- Annual revenue growth of 9% over the last two years beat the sector average and underscores the unique value of its offerings
- Pre-tax profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
- Stellar return on equity showcases management’s ability to surface highly profitable business ventures
Primerica’s stock price of $281.78 implies a valuation ratio of 3.2x forward P/B. Is now the right time to buy? Find out in our full research report, it’s free.
RenaissanceRe (RNR)
Market Cap: $12.71 billion
Born in Bermuda after the devastating Hurricane Andrew created a crisis in the catastrophe insurance market, RenaissanceRe (NYSE: RNR) provides property, casualty, and specialty reinsurance and insurance solutions to customers worldwide, primarily through intermediaries.
Why Does RNR Stand Out?
- Strong 17.4% annualized net premiums earned expansion over the last five years shows it’s capturing market share this cycle
- Pre-tax profit margin expanded by 27.8 percentage points over the last five years as it scaled and became more efficient
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 270% exceeded its revenue gains over the last five years
RenaissanceRe is trading at $299.17 per share, or 1.1x forward P/B. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
Stocks We Like Even More
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
