Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 5 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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5 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 5 undervalued stocks in the Insurance - Property & Casualty industry for Tuesday, October 31, 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.

Horace Mann Educators Corporation’s Value Grade

Value Grade:

Horace Mann Educators Corporation is an insurance holding company. The Company markets and underwrites individual and group insurance and financial solutions for the educational community. Its segments include Property & Casualty, Life & Retirement, Supplemental & Group Benefits and Corporate & Other. The Property & Casualty segment's primary insurance products include private passenger auto insurance and residential home insurance. Its property coverage includes both homeowners and renters policies. The Life & Retirement segment markets tax-qualified fixed, fixed indexed and variable annuities; the Horace Mann Retirement Advantage open architecture platform, and traditional term and whole life insurance products. The Supplemental & Group Benefits offers employer-sponsored products, including accident, critical illness, term life, and long-term disability, as well as worksite direct products, including supplemental heart, supplemental cancer, and supplemental disability.

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.

Horace Mann Educators Corporation has a Value Score of 74, which is considered to be undervalued.

When you look at Horace Mann Educators Corporation’s price-to-sales ratio at 0.91 compared to the industry median at 1.01, this company has a lower price relative to revenue compared to its peers. This could make Horace Mann Educators Corporation’s stock more attractive for value investors.

Now, let’s assess Horace Mann Educators Corporation’s EV/EBITDA ratio, also known as enterprise multiple. At 11.4, 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. Horace Mann Educators Corporation’s shareholder yield is higher than its industry median ratio of 2.79%. 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. Horace Mann Educators Corporation’s price-to-book ratio is higher than its industry median ratio of 1.09. This could make Horace Mann Educators Corporation less attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Horace Mann Educators Corporation’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Horace Mann Educators Corporation’s price-to-free-cash-flow ratio is lower than its industry median ratio of 9.11. This could make Horace Mann Educators Corporation more attractive because the lower P/FCF ratio indicates that Horace Mann Educators Corporation 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.

James River Group Holdings Ltd’s Value Grade

Value Grade:

James River Group Holdings, Ltd. is a Bermuda-based insurance holding company, which owns and operates a group of specialty insurance and reinsurance companies. The Company operates in three specialty property-casualty insurance and reinsurance segments: Excess and Surplus Lines, Specialty Admitted Insurance and Casualty Reinsurance. The Excess and Surplus Lines segment offers commercial excess and surplus lines liability and property insurance in every United States state, the District of Columbia, Puerto Rico and the United States Virgin Islands through James River Insurance Company and its wholly owned subsidiary, James River Casualty Company. The Specialty Admitted Insurance segment approaches the insurance market in two ways: as a fronting company and as a risk- bearing underwriter. The Casualty Reinsurance segment focused on the United States insurance businesses. Its 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 84, which is considered to be undervalued.

James River Group Holdings Ltd’s price-earnings ratio is 15.6 compared to the industry median at 12.0. 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 higher than its peers. This could make James River Group Holdings Ltd less attractive for value investors when compared to the industry median at 1.09.

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.

ProAssurance Corporation’s Value Grade

Value Grade:

ProAssurance Corporation is an insurance holding company. Its segments include Specialty Property and Casualty (Specialty P&C;), Workers' Compensation Insurance, Segregated Portfolio Cell Reinsurance, Lloyd's Syndicates and Corporate. The Specialty P&C; segment include professional liability insurance and medical technology liability insurance. Its professional liability insurance is primarily comprised of medical professional liability products offered to healthcare providers and institutions. It also offers professional liability insurance to attorneys and their firms. The Workers' Compensation Insurance segment includes workers' compensation insurance products, which are provided primarily to employers. This segments product includes guaranteed cost policies, policyholder dividend policies, deductible policies and alternative market solutions. The Segregated Portfolio Cell Reinsurance segment includes the results of SPCs at Inova Re and Eastern Re, its Cayman Islands SPC operations.

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.

ProAssurance Corporation has a Value Score of 61, which is considered to be undervalued.

ProAssurance Corporation’s price-earnings ratio is 99.0 compared to the industry median at 12.0. This means that it has a higher price relative to its earnings compared to its peers. This makes ProAssurance Corporation less attractive for value investors.

ProAssurance Corporation’s price-to-book ratio is higher than its peers. This could make ProAssurance Corporation less attractive for value investors when compared to the industry median at 1.09.

You can read more about ProAssurance 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.

Hanover Insurance Group Inc’s Value Grade

Value Grade:

The Hanover Insurance Group, Inc. is the holding company. The Company provides property and casualty insurance services. The Company operates through three segments: Core Commercial, Specialty, Personal Lines and Other. Core Commercial product suite provides agents and customers with products designed for small and mid-sized businesses. Core Commercial coverages include commercial multiple peril, workers? compensation and other core commercial. Specialty offers a comprehensive suite of products focused predominately on small to mid-sized businesses. This includes various specialized products that are organized into four distinct divisions: Professional and Executive Lines, Specialty Property & Casualty, Marine, and Surety and Other. Personal Lines coverages include Personal automobile, and Homeowners and other personal lines. The Other segment primarily includes Opus, which provides investment advisory services to affiliates.

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.

Hanover Insurance Group Inc has a Value Score of 76, which is considered to be undervalued.

Hanover Insurance Group Inc’s price-to-book ratio is lower than its peers. This could make Hanover Insurance Group Inc more attractive for value investors when compared to the industry median at 1.09.

You can read more about Hanover Insurance 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.

Tokio Marine Holdings Inc (ADR)’s Value Grade

Value Grade:

Tokio Marine Holdings, Inc. is a Japan-based company engaged in the domestic non-life insurance business, domestic life insurance business, overseas insurance business, as well as financial and general business. The Company operates through four business segments. The Domestic Non-life Insurance segment is engaged in no-life insurance underwriting business and asset management business in Japan. The Domestic Life Insurance segment is engaged in life insurance underwriting and asset management services in Japan. The Overseas Insurance segment is engaged in overseas insurance underwriting and asset management services. The Financial and General segment is mainly engaged in the provision of investment advisory services, investment trust outsourcing services, staffing services, as well as real estate management and nursing care 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.

Tokio Marine Holdings Inc (ADR) has a Value Score of 61, which is considered to be undervalued.

Tokio Marine Holdings Inc (ADR)’s price-earnings ratio is 17.3 compared to the industry median at 12.0. This means that it has a higher price relative to its earnings compared to its peers. This makes Tokio Marine Holdings Inc (ADR) less attractive for value investors.

Tokio Marine Holdings Inc (ADR)’s price-to-book ratio is lower than its peers. This could make Tokio Marine Holdings Inc (ADR) more attractive for value investors when compared to the industry median at 1.09.

You can read more about Tokio Marine Holdings Inc (ADR)’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 5 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.

• Horace Mann Educators Corporation stock has a Value Grade of B.
• James River Group Holdings Ltd stock has a Value Grade of A.
• ProAssurance Corporation stock has a Value Grade of B.
• Hanover Insurance Group Inc stock has a Value Grade of B.
• Tokio Marine Holdings Inc (ADR) stock has a Value Grade of B.

Now that you have a bit more background about each of the 5 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.

• 5 Undervalued Insurance - Property & Casualty Stocks for Tuesday, October 31
• 3 Undervalued Insurance - Property & Casualty Stocks for Monday, October 30
• Why Investors Title Company’s (ITIC) Stock Is Up 7.02%
• 4 Undervalued Insurance - Property & Casualty Stocks for Friday, October 27

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