5 Stocks to Watch From Prospering Accident & Health Insurance Industry
π The Zacks Accident and Health Insurance industry is expected to benefit from increased underwriting exposure and demand for group insurance.
β οΈ Higher inflation, rising medical costs, and soft pricing over recent quarters could offset some of the industry's positive trends.
π° The A&H Insurance market, valued at approximately $300 billion in 2024, is projected to expand to about $420 billion by 2033.
π Pricing pressure is expected to continue due to inflation, rising medical costs, and demographic changes like an aging population.
π€ The adoption of technology, including AI and telemedicine, is helping insurers gain a competitive edge and reduce claim expenses.
π The Zacks Accident and Health Insurance industry currently holds a Rank #102, placing it in the top 42% of all Zacks industries.
π The industry has outperformed its broader Finance sector year-to-date with a collective gain of 5.5%, despite underperforming the S&P 500.
π΅ On a trailing 12-month basis, the industry trades at a price-to-book ratio of 1.68X, significantly lower than the S&P 500 composite's 8.08X.
π’ Aflac Incorporated (AFL) offers voluntary supplemental health and life insurance products with strategic growth investments in Japan and the U.S.
π Aflac delivered a trailing four-quarter earnings surprise of 7.86% on average, with an expected long-term earnings growth rate pegged at 8.1%.
π₯ Unum Group (UNM) provides long-term care and life insurance, boasting a dividend track record of increases for 17 times in the last 16 years.
π For 2026, Unum Group expects adjusted operating income per share between $8.60 and $8.90 with premium growth of 4-7%.
πΎ Trupanion (TRUP) operates in a large but underpenetrated pet insurance market worth $34.1 billion across multiple countries.
π Trupanion delivered a trailing four-quarter earnings surprise of 250% on average and has a Growth Score of A.
π Globe Life (GL) provides individual life and supplemental health insurance, with strong performance expected from its American Income and Liberty National divisions.
π‘ Employers Holdings (EIG) is the 19th largest provider of workers' compensation insurance to small businesses in low-to-medium hazard industries.
π The consensus estimate for Employers Holdings suggests a massive 139.8% year-over-year earnings increase for 2026, followed by a 5.6% increase in 2027.
- The Zacks Accident and Health Insurance industry is expected to benefit from an increase in underwriting exposure, driven by increasing demand for group insurance and prudent underwriting standards.
- Per a CBIZ report, the industry has maintained its profitability streak, reflecting solid reserves, prudent claims management, stable loss trends, and fewer claims.
- The A&H Insurance market is projected to expand from about $300 billion in 2024 to about $420 billion by 2033, indicating strong long-term growth potential.
- Aflac delivered a trailing four-quarter earnings surprise of 7.86% on average and has an expected long-term earnings growth rate pegged at 8.1%.
- Unum Group estimates a 10-15% increase in dividends going forward, having increased dividends 17 times in the last 16 years, with a long-term earnings growth rate of 11.3%.
- Globe Life's strong performance in its American Income and Liberty National divisions is expected to drive top-line growth, with net life and health sales projected to grow in the mid-teens for Liberty National.
- Trupanion operates in a total addressable market worth $34.1 billion which is underpenetrated, and delivered a trailing four-quarter earnings surprise of 250% on average.
- Employers Holdings has a consensus estimate for 2026 earnings suggesting a 139.8% year-over-year increase, with the estimate moving nearly 2.3% north in the past 30 days.
- The Zacks Accident and Health Insurance industry currently carries a Zacks Industry Rank #102, placing it in the top 42% of 243 Zacks industries.
- The Zacks Consensus Estimate for Aflac's 2026 earnings implies a year-over-year decrease of 4.9%, indicating near-term earnings contraction.
- Aflac's consensus estimate has moved south in the past 30 days, suggesting weakening analyst confidence or deteriorating expectations.
- The industry is currently trading at a trailing 12-month price-to-book ratio of 1.68X, which is significantly lower than the Zacks S&P 500 composite's 8.08X and the sector's 4.28X, indicating potential undervaluation or market skepticism.
- The industry has underperformed the Zacks S&P 500 composite year to date, rising only 5.5% compared to the broader index's gain of 9.1%.
- Sustained favorable loss development and beneficial loss frequency are expected to put downward pressure on pricing, which might curb top-line growth for Aflac.
- Higher spending on technological advancements, including AI and automation, will result in escalated expense ratios for the industry, potentially impacting profitability.