Insurance Underwriting Stock Will Benefit From Favorable Industry Trends, Says Bullish Analyst

Unum Group UNM shares remained volatile in early trading on Thursday.

In the insurance industry, underwriting stocks represent "the greatest growth, least reliance on variable investment income and also greatest amount of moats," according to Piper Sandler.

The Unum Analyst: John Barnidge initiated coverage of Unum with an Overweight rating and price target of $57.

The Unum Thesis: The pandemic triggered a secular shift favoring underwriting and growth trends, which drives the company's core business, "where it is winning with its integration with HR platforms," Barnidge said in the initiation note.

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The pandemic brought in work flexibility, the need to retain talent, dynamic pricing, and higher premiums from inflation, the analyst stated.

"HR platform integration helps UNM win on the field," with its benefits products, he added.

"Rates are higher while risk transfers are broadening when UNM’s free cashflow conversion is increasing," Barnidge further wrote.

UNM Price Action: Shares of Unum had risen by 0.49% to $51.48 at the time of publication on Thursday.

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