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RLI or KNSL: Which P&C Insurance Stock is Worth Investing? – Zacks Investment Research

The Zacks Property and Casualty Insurance industry has been doing well, thanks to better pricing, prudent underwriting, increased adoption of technology, increased exposure, and impressive solvency level. St…….

The Zacks Property and Casualty Insurance industry has been doing well, thanks to better pricing, prudent underwriting, increased adoption of technology, increased exposure, and impressive solvency level. Streamlining operations, diversifying business, favorable reserve development and expanding global presence have been tailwinds for the industry players.

The industry has rallied 18.4% in the past year compared with the Zacks S&P 500 composite’s rise of 9% and the Finance sector’s 5.5% growth.

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Against this backdrop, let’s take a look at two leading P&C insurer companies, namely RLI Corp. (RLI Free Report) and Kinsale Capital Group, Inc. (KNSL Free Report) , and find out which stock is more profitable to add to your portfolio for better returns.

RLI, with a market capitalization of $4.9 billion, is an insurance holding company that underwrites property and casualty insurance in the United States and internationally. Kinsale Capital, with a market capitalization of $5.3 billion, is a property and casualty insurance company that focuses exclusively on the excess and surplus lines (E&S) market in the United States. Both the companies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Per the Swiss Re Institute, global non-life premiums are expected to increase 3.7% in 2022 and 3.3% in 2023. It also expects global insurance premiums to exceed $7 trillion by mid-2022. Increasing risk awareness and above-average natural driving improved pricing, are likely to support the premium growth.
Per Willis Towers Watson’s 2022 Insurance Marketplace Realities report, the commercial insurance market is likely to witness a shift toward normalcy in 2022, as the rate increases for commercial lines of insurance are declining to single digits and even flat renewals.

Fitch predicts a double-digit rate hike for property catastrophe insurance in 2022. Fitch also expects 2022 to be the fifth successive year of price rises, even though growth is expected to be slower than 2021.

Price hikes, operational strength, higher retention, strong renewal, the appointment of retail agents and higher new business premiums should help write higher premiums.

The property and casualty insurance industry remains exposed to catastrophe loss stemming from natural disasters and weather-related events, inducing volatility in its underwriting results. Per Swiss Re, natural catastrophes resulted in a total global economic loss of $270 billion and insured loss of $111 billion in 2021. The Colorado State University expects above-normal activity during the 2022 hurricane season and there will be …….

Source: https://www.zacks.com/stock/news/1897106/rli-or-knsl-which-pc-insurance-stock-is-worth-investing

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