3 Insurance Stocks Prepped For A Turnaround In 2021

The insurance market covers several areas like auto, home and property. Insurance stocks can be good for value and income investors as they typically come with dividends. Insurance stocks offer large addressable markets and come with a built in subscription model that brings in revenue from customers each month, quarter or year. 

Here are three insurance stocks that could rebound in 2021 after an underperforming 2020. 

Progressive Corp: One of the largest automotive insurance companies is the Progressive Corp PGR.

Shares of Progressive are down 12% year-to-date after ending 2020 mostly flat. Progressive is up 185% over the last five years and up over 335% over the last 10 years. Given the company’s strong returns in the last decade, Progressive could be ripe for a turnaround in 2021. The company also has a dividend yield of over 5% for its shareholders.

Progressive reported December revenue of $2.8 billion, down 16% year-over-year. Quarterly revenue of $9.5 billion was down 1% year-over-year. Policy figures were up for Progressive with personal policies up 10% year-over-year and property business policies up 13% year-over-year.

Related Link: Best Car Insurance 

Root Inc: In October, Root Inc ROOT held its IPO pricing shares at $27, above the original pricing range of $22 to $25. The company has seen shares fall down to $21 since the IPO.

The company is attempting to disrupt the personal insurance market using a mobile-first approach. The company uses artificial intelligence to create the best-priced policies for users, and operates in 36 states with plans to be in all 50 states in 2021. Revenue has been fast growing for Root and the company could be ready for a recovery in 2021 after the post-2020 IPO fall.

Allstate Corp: Large insurance company Allstate Corp ALL could also be prepped for a turnaround in 2021. The company is working on building on higher-growth business models to boost revenue and earnings per share.

Allstate had fourth-quarter revenue of $12 billion, up 4.8% year-over-year. Full-year revenue was $44.8 billion. This came as some insurance companies saw declines in revenue for the full year. Earnings per share of $14.73 were up 41% for the full fiscal year.

The company ended the last fiscal year with 175.9 million policies, up 20.5% year-over-year.

Allstate is growing the expanded addressable market for its protection plus plans with new accounts like furniture, appliances and international.

See also: Best Homeowners Insurance

Shares of Allstate are down 14% over the last year. The company’s shares are up 69% and 241%, respectively, over the last five years and 10 years. Shares could be ripe for a rebound with the growth seen in 2020 and the growth of additional business models.

(Photo by Scott Graham on Unsplash)