Soaring Premiums, Soaring Profits: 3 Top Insurance Stocks to Own Now


  • Auto and home insurance premiums are soaring, boosting the top and bottom lines of many insurers. Here are three top insurance stocks to buy now. 
  • Allstate (ALL): S&P estimates that ALL’s Q1 bottom line soared over 400% year-over-year. 
  • Progressive (PGR): PGR’s net income jumped 421% YOY in Q1. 
  • Mercury General (MCY): MCY is small but growing quickly. 
insurance stocks to buy. - Soaring Premiums, Soaring Profits: 3 Top Insurance Stocks to Own Now

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As every American who owns a car and/or a house knows, insurance premiums have been going through the roof this year. Although it’s true the costs of repairing these assets have surged, it appears that insurers’ recent rate hikes are meaningfully increasing their profits. As evidence of the latter point, consider that many of the insurance stocks to buy have jumped tremendously this year. For example, Allstate (NYSE:ALL) has climbed 21% year-to-date. Meanwhile, Progressive (NYSE:PGR) has gained 29%, and The Travelers Companies (NYSE:TRV) has risen 11.5%.

In recent weeks, the sector has actually lost a bit of ground amid the stock market’s weakness. But since most auto and home insurers appear to have a great deal of pricing power at this point, I expect the shares’ rally to resume within the next month or two. For those who want to exploit the likely coming surge, here are three top insurance stocks to buy.

Allstate (ALL)

Allstate Insurance office
Source: Jonathan Weiss /

S&P estimates that Allstate’s earnings per share will soar a huge 407.6% last quarter versus the same period a year earlier. Of course, the latter estimate indicates that the insurer’s profits are indeed rising a great deal as a result of its premium hikes.

Analysts, on average, predict that the company generated EPS of $3.94 in Q1, versus a loss per share of $1.30 in Q1 of 2023. For the full year, their mean estimate calls for EPS of $13.18, versus just 95 cents in 2023. That’s one of the biggest one-year EPS increases that I’ve ever seen.

The shares have a rather low forward price-earnings ratio of 13 times, and the shares also have a significant dividend yield of 2.16%. Of the 22 analysts who have issued notes on the shares in the past 90 days, eight have a “strong buy” rating and seven have a “buy” rating on the shares.

Progressive (PGR)

A white car with the Progressive logo written across the doors in big blue letters
Source: Shutterstock

Progressive’s net income soared 421% last quarter versus the same period a year earlier to $893.6 million. Its net premiums earned climbed 19% year-over-year to $5.63 billion.

Bank of America includes PGR on its list of its favorite U.S. stocks. And, Morgan Stanley recently upgraded the name to “overweight” citing the insurer’s ability to increase its market share. The bank believes that Progressive’s share of the auto market can climb above 18% by the end of 2028, up from about 15.4% last year.

Investor’s Business Daily gives PGR stock a Composite Rating of 97 out of 99. It also gives the shares an Accumulation/Distribution grade of A, indicating that institutional investors have been buying large amounts of the shares over the past 13 weeks.

Given all of these points, PGR is definitely one of the best insurance stocks to buy.

Mercury General (MCY)

miniature home next to pen, pad of paper, calculator and coins on a desk
Source: MIND AND I /

Mercury General (NYSE:MCY) is primarily involved in providing property and casualty insurance, along with umbrella insurance policies.

When it comes to insurers, Mercury is certainly on the smaller side, with a market capitalization of only $2.94 billion. However, MCY stock has certainly participated in the insurance-stock party in 2024, as its shares have rallied 42% year-to-date.

Moreover, MCY reported strong Q4 results, as its net premiums written soared 23.6% during the quarter versus the same period a year earlier to $1.13 billion. Meanwhile, its net income came in at $198.16 million versus a loss of $6.77 million in Q4 of 2022.

Like PGR, Investor’s Business Daily gives MCY a very high Composite Rating of 97 out of 99, along with a Relative Strength score of 95 out of 99. The latter metric shows that the shares have performed very well over the last year.

The shares have a low forward price-earnings ratio of 15.35 times and provide a significant dividend yield of 2.4%.

On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines

Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been SMCI, INTC, and MGM. You can reach him on Stocktwits at @larryramer.

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