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 Monday, September 04, 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.

Allstate Corp’s Value Grade

Value Grade:

The Allstate Corporation is a holding company for Allstate Insurance Company. The Company's business is conducted principally through Allstate Insurance Company and other subsidiaries. It is primarily engaged in the property and casualty insurance business in the United States and Canada. The Company?s segments include Allstate Protection, Run-off Property-Liability, Protection Services, Allstate Health and Benefits, and Other. The Allstate Protection segment offers private passenger auto, homeowners, other personal lines, and commercial insurance through agents, contact centers and online. The Run-off Property-Liability segment includes property and casualty insurance coverage. The Protection Services segment includes Allstate Protection Plans, Allstate Dealer Services, Allstate Roadside, Arity and Allstate Identity Protection. The Allstate Health and Benefits segment offers voluntary benefits and individual life and health products, and other health insurance products.

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.

Allstate Corp has a Value Score of 80, which is considered to be undervalued.

When you look at Allstate Corp’s price-to-sales ratio at 0.53 compared to the industry median at 1.00, this company has a lower price relative to revenue compared to its peers. This could make Allstate Corp’s stock more attractive for value investors.

Now, let’s assess Allstate Corp’s EV/EBITDA ratio, also known as enterprise multiple. At 8.1, when compared to the industry median of 6.9, the company may be considered overvalued 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. Allstate Corp’s shareholder yield is higher than its industry median ratio of 2.71%. 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. Allstate Corp’s price-to-book ratio is higher than its industry median ratio of 1.14. This could make Allstate Corp less attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Allstate Corp’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Allstate Corp’s price-to-free-cash-flow ratio is lower than its industry median ratio of 8.68. This could make Allstate Corp more attractive because the lower P/FCF ratio indicates that Allstate Corp 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.

Cincinnati Financial Corporation’s Value Grade

Value Grade:

Cincinnati Financial Corporation is engaged in the business of property casualty insurance, which markets through independent insurance agencies in approximately 46 states. The Company operates through five segments: Commercial lines insurance, Personal lines insurance, Excess and surplus lines insurance, Life insurance, and Investments. The Commercial lines insurance segment includes five commercial business lines, such as commercial casualty, commercial property, commercial auto, workers? compensation, and other commercial lines. The Personal lines insurance segment includes three business lines, including personal auto, homeowner, and other personal lines. The Excess and surplus lines insurance segment includes commercial casualty and commercial property. The Life insurance segment includes term life insurance, worksite products, whole life insurance, and universal life insurance. The Investments segment invests in fixed-maturity investments and equity investments.

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.

Cincinnati Financial Corporation has a Value Score of 68, which is considered to be undervalued.

Cincinnati Financial Corporation’s price-earnings ratio is 12.4 compared to the industry median at 11.8. This means that it has a higher price relative to its earnings compared to its peers. This makes Cincinnati Financial Corporation less attractive for value investors.

Cincinnati Financial Corporation’s price-to-book ratio is lower than its peers. This could make Cincinnati Financial Corporation more attractive for value investors when compared to the industry median at 1.14.

You can read more about Cincinnati Financial Corporation’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.

Conifer Holdings Inc’s Value Grade

Value Grade:

Conifer Holdings, Inc. is an insurance holding company engaged in the sale of property and casualty insurance products. It operates through three classes of insurance businesses: commercial lines, personal lines and wholesale agency business. The commercial insurance offers coverage for both commercial property and commercial liability, including commercial automobiles and workers? compensation. The personal insurance segment offers homeowners insurance and dwelling fire insurance products to individuals in several states. Its specialty homeowners? insurance product is primarily comprised of low-value dwelling insurance tailored for owners of lower valued homes, which offer in Illinois, Indiana and Texas. Wholesale agency business segment offers commercial and personal lines insurance products for its Insurance Company Subsidiaries as well as third-party insurers. Its subsidiaries insurance Red Cedar Insurance Company, White Pine Insurance Company and Sycamore Insurance Agency, Inc.

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.

Conifer Holdings Inc has a Value Score of 61, which is considered to be undervalued.

Conifer Holdings Inc’s price-to-book ratio is lower than its peers. This could make Conifer Holdings Inc fairly attractive for value investors when compared to the industry median at 1.14.

You can read more about Conifer Holdings 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 92, which is considered to be undervalued.

Fairfax Financial Holdings Ltd’s price-earnings ratio is 5.7 compared to the industry median at 11.8. 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.

Root Inc’s Value Grade

Value Grade:

Root, Inc. is a holding company. The Company operates through its subsidiaries, which include Root Insurance Company, Root Property & Casualty Insurance Company and Root Reinsurance Company, Ltd. The Company is a tech-enabled insurance company operating a direct-to-consumer model with its personal insurance customers acquired through mobile applications and its embedded platform. It offers auto and renters insurance products underwritten by Root Insurance Company and Root Property & Casualty Insurance Company. The Company, by collecting and synthesizing sensory behavioral data across various driving variables, including distracted driving, it prices policies based more on causality than correlation. It uses telematics, mobile technology and its digital platform to collect data points that it evaluates in pricing and underwriting certain of its insurance policies, managing claims and customer support. Its primary focus is on the United States auto insurance market.

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.

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

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

You can read more about Root 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.

United Fire Group Inc’s Value Grade

Value Grade:

United Fire Group, Inc. is engaged in the business of writing property and casualty insurance through a network of independent agencies. It operates in the property and casualty insurance segment, which comprises commercial lines insurance, including surety bonds, and assumed reinsurance. Its commercial lines insurance includes other liability, construction defect losses, commercial fire and allied lines, commercial automobile and fidelity and surety. Its other liability is business insurance covering bodily injury and property damage arising from general business operations, accidents on the insured's premises and products manufactured or sold. Its commercial fire and allied lines include fire, allied lines, commercial multiple peril and inland marine. Its commercial automobile insurance covers physical damage to an insured's vehicle and liabilities to third parties. Its assumed reinsurance portfolio is comprised of contracts that provide reinsurance protection to insurance 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.

United Fire Group Inc has a Value Score of 96, which is considered to be undervalued.

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

You can read more about United Fire 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.

White Mountains Insurance Group Ltd’s Value Grade

Value Grade:

White Mountains Insurance Group, Ltd. is a financial service holding company. The Company is engaged in the acquisition of businesses and assets in the insurance, financial services and related sectors, operating these businesses and assets through its subsidiaries and disposing of these businesses and assets. The Company?s segments include HG Global/BAM, Ark and Kudu. The Company conducts its business primarily in four areas: municipal bond insurance, property and casualty insurance and reinsurance, capital solutions for asset and wealth management firms and other operations. Its municipal bond insurance business is conducted through its subsidiary HG Global Ltd. Its property and casualty insurance and reinsurance business is conducted through its subsidiary Ark Insurance Holdings Limited and its subsidiaries. The Company, through its subsidiary, Kudu Investment Management, LLC and its subsidiaries, provides capital solutions for asset and wealth management firms .

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.

White Mountains Insurance Group Ltd has a Value Score of 80, which is considered to be undervalued.

White Mountains Insurance Group Ltd’s price-earnings ratio is 10.0 compared to the industry median at 11.8. This means that it has a lower price relative to its earnings compared to its peers. This makes White Mountains Insurance Group Ltd more attractive for value investors.

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

You can read more about White Mountains Insurance Group 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.

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.

• Allstate Corp stock has a Value Grade of B.
• Cincinnati Financial Corporation stock has a Value Grade of B.
• Conifer Holdings Inc stock has a Value Grade of B.
• Fairfax Financial Holdings Ltd stock has a Value Grade of A.
• Root Inc stock has a Value Grade of A.
• United Fire Group Inc stock has a Value Grade of A.
• White Mountains Insurance Group Ltd stock has a Value Grade of B.

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 Monday, September 04
• 7 Undervalued Insurance - Property & Casualty Stocks for Friday, September 01
• Why James River Group Holdings Ltd’s (JRVR) Stock Is Up 5.56%
• 4 Undervalued Insurance - Property & Casualty Stocks for Thursday, August 31

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