Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 7 stocks made the list for top value stocks in the Insurance - Property & Casualty industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Latest Insurance - Property & Casualty Stock News

Before choosing which top Insurance - Property & Casualty stock to buy, be sure to conduct proper due diligence: analyze various financial metrics and look at historical data, public statements and news coverage.

The sub-industry of property and casualty insurance has a promising fundamental outlook. Despite some inflation in claim costs brought on by pandemics and some uncertainty regarding the size of claims resulting from the conflict in Ukraine, industry profitability is expected to increase in 2022 due to an anticipated decrease in the number of significant global catastrophe claims that have plagued most insurers in recent years. However, it's likely that these losses will force the insurance industry to release adequate extra underwriting capacity, leading to firmer rates across many lines of coverage. The state of the global and domestic economies overall, as well as how well they recover from the recession brought on by COVID19, will determine how much demand there is for specific types of insurance products, particularly those in the commercial lines sector. The sector has $989 billion in surplus (or capital) from policyholders as of September 30, 2021 (the most recent date known), which helped to fund its $701 billion written premium base. Less than a 1:1 ratio was being used by the sector to leverage its capital. The industry has "excess" capital of close to $600 billion by assuming a historical (and somewhat theoretical) benchmark 2:1 leverage of capital. Insurers will be able to take advantage of higher rates and a rise in coverage demand during an economic recovery thanks to this "extra" capital (or underwriting capacity). The S&P Property & Casualty Insurance Index increased by 8.6% year-to-date until March 18, 2022, while the S&P 1500 Index fell by 6.2%. The S&P Property & Casualty Insurance Index increased by 16% in 2021, while the S&P 1500 Index increased by 26.7%.

Why Focus on Undervalued Insurance - Property & Casualty Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

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7 Undervalued Insurance - Property & Casualty Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 7 undervalued stocks in the Insurance - Property & Casualty industry for Wednesday, May 17, 2023. Let’s take a closer look at their individual scores to see how they measure up against each other and the Insurance - Property & Casualty industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

Enact Holdings Inc’s Value Grade

Value Grade:

Enact Holdings, Inc. is a private mortgage insurance company. The Company is engaged in the business of writing and assuming residential mortgage guaranty insurance. The Company operates its business through its primary insurance subsidiary, Enact Mortgage Insurance Corporation, (EMICO). The insurance protects lenders and investors against certain losses resulting from nonpayment of loans secured by mortgages, deeds of trust, or other instruments constituting a lien on residential real estate. The Company offers private mortgage insurance products predominantly insuring prime-based, individually underwritten residential mortgage loans. Its primary mortgage insurance enables borrowers to buy homes with a down payment. Its primary mortgage insurance also facilitates the sale of these low-down payment mortgage loans in the secondary mortgage market, which are sold to government-sponsored enterprises. It also performs fee-based contract underwriting services for mortgage lenders.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Enact Holdings Inc has a Value Score of 75, which is considered to be undervalued.

When you look at Enact Holdings Inc’s price-to-sales ratio at 3.48 compared to the industry median at 0.93, this company has a higher price relative to revenue compared to its peers. This could make Enact Holdings Inc’s stock less attractive for value investors.

Enact Holdings Inc’s price-earnings ratio is 5.40 compared to the industry median at 13.94. This means it has a lower share price relative to earnings compared to its peers. This could make Enact Holdings Inc more attractive for value investors.

Now, let’s assess Enact Holdings Inc’s EV/EBITDA ratio, also known as enterprise multiple. At 3.9, when compared to the industry median of 7.4, the company may be considered undervalued in relation to its peers. Value investors could use the enterprise multiple to identify stocks that are considered overvalued or undervalued relative to their industry.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. Enact Holdings Inc’s shareholder yield is higher than its industry median ratio of 2.46%. Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. Enact Holdings Inc’s price-to-book ratio is lower than its industry median ratio of 1.14. This could make Enact Holdings Inc more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Enact Holdings Inc’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Enact Holdings Inc’s price-to-free-cash-flow ratio is higher than its industry median ratio of 9.71. This could make Enact Holdings Inc less attractive because the higher P/FCF ratio indicates that Enact Holdings Inc is undervalued. The P/FCF ratio metric can also be viewed over a long-term time frame to see if the company's cash flow to share price value is generally improving or worsening.

American International Group Inc’s Value Grade

Value Grade:

American International Group, Inc. is a global insurance company. The Company provides a range of property and casualty insurance, life insurance, retirement solutions, and other financial services to customers in over 70 countries and jurisdictions. Its diverse offerings include products and services that help businesses and individuals protect their assets, manage risks and provide for retirement security. It operates through three segments: General Insurance, Life and Retirement, and Other Operations. Its General Insurance segment consists of two segments: North America and International. Its Life and Retirement segment consists of four segments: Individual Retirement, Group Retirement, Life Insurance and Institutional Markets. Its North America and International segments consist of two product categories: Commercial Lines, which consists of Liability, Financial Lines, Property and Global Specialty, and Personal Insurance, which consists of Personal Lines, and Accident and Health.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

American International Group Inc has a Value Score of 93, which is considered to be undervalued.

American International Group Inc’s price-earnings ratio is 6.8 compared to the industry median at 13.9. This means that it has a lower price relative to its earnings compared to its peers. This makes American International Group Inc more attractive for value investors.

American International Group Inc’s price-to-book ratio is higher than its peers. This could make American International Group Inc less attractive for value investors when compared to the industry median at 1.14.

You can read more about American International Group Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Donegal Group Inc’s Value Grade

Value Grade:

Donegal Group Inc. (DGI) is an insurance holding company. The Company?s subsidiaries include Atlantic States Insurance Company (Atlantic States), Southern Insurance Company of Virginia (Southern), The Peninsula Insurance Company and Peninsula Indemnity Company (Peninsula), and Michigan Insurance Company. The Company, through its subsidiaries offers personal and commercial lines of property and casualty insurance to businesses and individuals in 24 Mid-Atlantic, Midwestern, New England, Southern and Southwestern regions through approximately 2,300 independent insurance agencies. It operates through three segments: investment function, commercial lines of insurance and personal lines of insurance. The commercial lines products of its insurance subsidiaries consist primarily of commercial automobile, commercial multi-peril, and workers? compensation policies. The personal lines products of insurance subsidiaries consist primarily of homeowners and private passenger automobile policies.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Donegal Group Inc has a Value Score of 87, which is considered to be undervalued.

Donegal Group Inc’s price-to-book ratio is higher than its peers. This could make Donegal Group Inc less attractive for value investors when compared to the industry median at 1.14.

You can read more about Donegal Group Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Fairfax Financial Holdings Ltd’s Value Grade

Value Grade:

Fairfax Financial Holdings Limited is a Canada-based holding company. The Company through its subsidiaries, is primarily engaged in property and casualty insurance and reinsurance, and the associated investment management. The Company has four segments: Property and Casualty Insurance and Reinsurance, Life insurance and Run-off, Non-insurance companies, and Corporate and Other. Property and Casualty Insurance and Reinsurance segment is comprised of North American insurers, global insurers and reinsurers, and international insurers and reinsurers. Life insurance and Run-off segment is comprised of Eurolife’s life insurance operations and U.S. Run-off, which includes TIG Insurance Company. Non-insurance companies segment is comprised of restaurants and retail, Fairfax India, Thomas Cook India, and other. Corporate and Other includes the parent entity (Fairfax Financial Holdings Limited), its subsidiary intermediate holding companies and Hamblin Watsa, an investment management company.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Fairfax Financial Holdings Ltd has a Value Score of 85, which is considered to be undervalued.

Fairfax Financial Holdings Ltd’s price-earnings ratio is 9.1 compared to the industry median at 13.9. This means that it has a lower price relative to its earnings compared to its peers. This makes Fairfax Financial Holdings Ltd more attractive for value investors.

Fairfax Financial Holdings Ltd’s price-to-book ratio is higher than its peers. This could make Fairfax Financial Holdings Ltd less attractive for value investors when compared to the industry median at 1.14.

You can read more about Fairfax Financial Holdings Ltd’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

International General Insuranc Hldgs Ltd’s Value Grade

Value Grade:

International General Insurance Holdings Ltd is a Jordan-based commercial insurance and reinsurance company. It has a worldwide portfolio of energy, property, general aviation, construction and engineering, ports and terminals, marine cargo, marine trades, contingency, political violence, financial institutions, general third-party liability, legal expenses, reinsurance treaty business, among others. Its segments include Specialty Long-tail, Specialty Short-tail and Reinsurance. Its Specialty Long-tail segment includes casualty business, financial institutions line of business, marine liability line of business, and inherent defects insurance line of business. Its Specialty Short-tail segment includes energy, property, construction and engineering, political violence, ports and terminals, marine cargo, contingency and general aviation lines of business. Reinsurance segment includes inward reinsurance treaty business.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

International General Insuranc Hldgs Ltd has a Value Score of 92, which is considered to be undervalued.

International General Insuranc Hldgs Ltd’s price-earnings ratio is 4.6 compared to the industry median at 13.9. This means that it has a lower price relative to its earnings compared to its peers. This makes International General Insuranc Hldgs Ltd more attractive for value investors.

International General Insuranc Hldgs Ltd’s price-to-book ratio is higher than its peers. This could make International General Insuranc Hldgs Ltd less attractive for value investors when compared to the industry median at 1.14.

You can read more about International General Insuranc Hldgs Ltd’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

James River Group Holdings Ltd’s Value Grade

Value Grade:

James River Group Holdings, Ltd. owns and operates a group of specialty insurance and reinsurance companies. It operates in four segments: Excess and Surplus Lines, Specialty Admitted Insurance, Casualty Reinsurance and Corporate and Other. Excess and Surplus Lines segment offers commercial excess and surplus lines liability and property insurance. Specialty Admitted Insurance segment approaches the insurance market in two ways: as a risk bearing underwriter, and as a fronting company. Its risk bearing underwriting is focused on niche classes within the insurance markets, such as workers’ compensation coverage for residential contractors, light manufacturing operations, transportation workers and healthcare worker. Casualty Reinsurance segment primarily provides proportional and working layer casualty reinsurance to third parties (primarily through reinsurance intermediaries). Corporate and Other segment consists of the management and treasury activities of its holding companies.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

James River Group Holdings Ltd has a Value Score of 63, which is considered to be undervalued.

James River Group Holdings Ltd’s price-earnings ratio is 39.9 compared to the industry median at 13.9. This means that it has a higher price relative to its earnings compared to its peers. This makes James River Group Holdings Ltd less attractive for value investors.

James River Group Holdings Ltd’s price-to-book ratio is lower than its peers. This could make James River Group Holdings Ltd more attractive for value investors when compared to the industry median at 1.14.

You can read more about James River Group Holdings Ltd’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Loews Corp’s Value Grade

Value Grade:

Loews Corporation is a holding company. The Company?s segments consist of individual operating subsidiaries, including CNA Financial Corporation (CNA), Boardwalk Pipeline Partners, LP and Loews Hotels Holding Corporation (Loews Hotels) and the Corporate segment. The CNA segment provides insurance products, such as commercial property and casualty coverage, including surety, and its services also include risk management, information services, warranty and claims administration. The CNA segment's commercial property and casualty insurance operations include Specialty, Commercial and International lines of business. The Boardwalk Pipelines segment is engaged in the business of transportation and storage of natural gas and natural gas liquids and hydrocarbons. Boardwalk Pipelines owns and operates approximately 13,515 miles of interconnected natural gas pipelines directly serving customers in 13 states. Loews Hotels segment is engaged in operating a chain of hotels.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Loews Corp has a Value Score of 84, which is considered to be undervalued.

Loews Corp’s price-earnings ratio is 13.1 compared to the industry median at 13.9. This means that it has a lower price relative to its earnings compared to its peers. This makes Loews Corp more attractive for value investors.

Loews Corp’s price-to-book ratio is higher than its peers. This could make Loews Corp less attractive for value investors when compared to the industry median at 1.14.

You can read more about Loews Corp’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Insurance - Property & Casualty Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Insurance - Property & Casualty stocks as well as other industrys.

Choosing Which of the 7 Best Insurance - Property & Casualty Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• Enact Holdings Inc stock has a Value Grade of B.
• American International Group Inc stock has a Value Grade of A.
• Donegal Group Inc stock has a Value Grade of A.
• Fairfax Financial Holdings Ltd stock has a Value Grade of A.
• International General Insuranc Hldgs Ltd stock has a Value Grade of A.
• James River Group Holdings Ltd stock has a Value Grade of B.
• Loews Corp stock has a Value Grade of A.

Now that you have a bit more background about each of the 7 undervalued stocks in the Insurance - Property & Casualty industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Insurance - Property & Casualty Stocks

Want to learn more about Insurance - Property & Casualty stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 7 Undervalued Insurance - Property & Casualty Stocks for Wednesday, May 17
• 3 Undervalued Insurance - Property & Casualty Stocks for Tuesday, May 16
• Why Palomar Holdings Inc’s (PLMR) Stock Is Up 5.24%
• 3 Undervalued Insurance - Property & Casualty Stocks for Monday, May 15

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