You can’t predict what will happen in life, which is why insurance is so important. Car accidents, natural disasters or even health issues can wreak havoc on your best laid plans.. Even when you’re at your job, both static and variable risks can send you to the hospital, which is the reason people seek the best workers’ compensation insurance.
The insurance industry is also an investment that can help boost your portfolio learn how to buy stock in insurance companies now.
How to Buy Stock in Insurance Companies
Buying stock in insurance companies can be a smart financial choice due to their stability and possible long-term growth. This guide will cover the important steps and factors to consider for successfully investing in these often-overlooked financial entities.
Research Insurance Companies
Start by listing the insurance companies you want to research. Gather information about their performance, financial stability, market presence, and any recent developments. Use financial news sources, industry reports, and stock market analysis websites to collect relevant insights.
Select a Brokerage Account
Pick a brokerage platform for your stock trading. You can select a full-service broker for personalized advice or a discount broker for a more budget-friendly option if you prefer to invest on your own. Make sure the brokerage is trustworthy and gives you access to the necessary stock exchange.
Open and Fund the Account
After choosing a brokerage, you'll need to create an account. Provide your personal and financial details, and fill out the required forms. Once your account is established, add funds by moving money from your bank account or another investment account.
Place Your Order
Once you have added funds to your brokerage account, look up the stock ticker symbol for the insurance company you want to invest in. Determine how many shares you'd like to buy and select your order type (a market order for an immediate purchase, or a limit order to specify your desired price). Finally, place your order through the brokerage platform.
Monitor Your Investment
Once you buy shares, monitor how your investments are doing. Stay informed about the company's news, quarterly earnings, and market trends that could affect stock prices. You might also want to set up alerts via your brokerage platform to keep track of important changes in your stock’s performance.
Best Online Stockbrokers
Below is one of the best brokers for your consideration.
Public Insurance Companies
Prudential Financial (NYSE: PRU)
The largest insurance company in the U.S., Prudential Financial offers myriad products, including life insurance, annuities, mutual funds and retirement-related investment options. PRU stock also features a dividend yield of 4.74%, although capital gains potential is limited due to the underlying company size.
MetLife (NYSE: MET)
Ranked as the second-largest life insurance company in the U.S., MetLife also brings to the table health and accident insurance as well as coverage plans for auto and home. Further, MetLife offers annuity plans, which is relevant as the baby boomer generation retires en masse. Currently, MET stock has a yield of 2.98%.
UnitedHealth Group (NYSE: UNH)
As the largest health insurance company by the number of people covered, UnitedHealth Group offers a mix of business stability and capital gains potential. Over the trailing five years, UNH stock delivered nearly 187% returns. However, UnitedHealth doesn’t offer the greatest passive income, with a dividend yield of only 1.37%.
Centene (NYSE: CNC)
Some people want to make a difference with their investments and if that’s you, Centene may offer a satisfying investment. As a healthcare insurer specializing in managed care for underprivileged households, CNC stock hits the three components of responsible investing: environmental, social and governance.
Mercury (NYSE: MCY)
Contrary to common assumption, auto insurance is not required in every state. But because accidents on the road happen frequently, auto insurers like Mercury enjoy tremendous relevance. Further, investors should consider MCY stock for its generous dividend yield of 4%.
Markel (NYSE: MKL)
For individuals and small businesses seeking insurance coverage for unusual risks – such as snowmobile riding or martial arts studios – many turn to Markel. Generally providing stable returns for investors, the biggest drawback is that MKL stock doesn’t pay a dividend.
Stock Movers
Gainers
| Ticker | Company | ±% | Buy Stock | |||
|---|---|---|---|---|---|---|
| MCY | Mercury General | $50.97 | 2.87% | 546.85K | Buy/Sell | |
| MKL | Markel Group | $1832.64 | 1.64% | 58.71K | Buy/Sell | |
| UNH | UnitedHealth Group | $545.13 | 1.3% | 4.88M | Buy/Sell | |
| CNC | Centene | $64.60 | 1.07% | 5.62M | Buy/Sell | |
| MET | MetLife | $87.00 | 0.41% | 3.52M | Buy/Sell | |
Loser
| Ticker | Company | ±% | Buy Stock | |||
|---|---|---|---|---|---|---|
| PRU | Prudential Financial | $121.76 | -0.47% | 1.57M | Buy/Sell | |
Profit from Life’s Necessary Expenses
With so much that can go wrong in life, any uncovered event could potentially destroy your finances and all that you’ve worked for. This primal fear alone is enough for millions of Americans to fork over their funds for insurance coverage. And by investing in insurance companies, you can profit from what is essentially a necessary evil.
Frequently Asked Questions
Can I invest in insurance companies?
You can invest in insurance companies by buying their stocks or bonds since they are publicly traded. There are also mutual funds and exchange-traded funds (ETFs) that concentrate on the insurance sector for a more diversified investment option.
Are insurance companies good for stock investment?
Insurance companies can be a worthwhile investment for stocks, as they typically offer consistent dividends and tend to be less volatile compared to other sectors, which appeals to long-term investors. However, it’s important for potential investors to assess each company’s financial condition and market circumstances, along with the broader economic factors that may affect the insurance sector.
Is it safe to invest in private insurance companies?
Investing in private insurance companies can be secure if you carefully research the company’s financial health, regulatory compliance, and reputation in the industry. It’s also important to diversify your investments and talk to a financial advisor to evaluate the risks and potential rewards linked to these investments.
Continue reading: BEST INSURANCE STOCKS
About Joshua Enomoto
His distinct writing style of distilling convoluted data into relatable and compelling narratives has earned him recognition among several investment-related publications.