Category Archives: Insurance Watch List

Insurance Watch List: April 2017

Performance Review

Below is the performance of the Insurance Watch List dated April 17, 2016:

symbol name 1-yr % chg
OB OneBeacon Insurance Group, Ltd. 29.29%
AFSI AmTrust Financial Services, Inc. -36.81%
UVE Universal Insurance Holdings Inc. 36.12%
ZFSVF Zurich Insurance Group AG 21.72%
AXS AXIS Capital Holdings Limited 19.59%
SAFT Safety Insurance Group Inc. 26.33%
AIG American International Group, Inc. 7.77%
FFG FBL Financial Group Inc. 8.70%
AV Aviva plc -6.93%
AFG American Financial Group Inc. 38.31%

The best performing insurance stock was American Financial Group (AFG) with a gain of +38.31%.  The worst performing stock was AmTrust Financial Services (AFSI) with a decline of –36.81%.  The average change for the entire watch list was +14.14%.  This is contrasted by the iShares US Insurance ETF (IAK) change of +17.59% in the same period of time.

Below we see that the analysts had their challenges.   However, the estimates for AIG in the last year were right on target.  This suggests that it would be worth watching closely what the analysts have to say about AIG going forward.

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Insurance Watch List: 2017

The following are the insurance stocks to watch for the coming year:

Insurance Watch List: February 2017

Performance Review

This is a review of the nearly 1-year performance of the Insurance Watch List from February 21, 2016.

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On the whole, the analyst estimates for insurance stocks were on target.  Although AmTrust Financial Services (AFSI) did not come close to the estimated gain projected on February 2016, at least the price of the stock did not register a loss in the period of time covered.

Insurance Watch List: October 2016

Performance Review

Below is the Insurance Watch List from October 2015 and the subsequent performance. The stocks are listed in the order that they were on the watch list.

symbol name 2015 2016 % chg
GLRE Greenlight Capital Re, Ltd. 21.96 20.34 -7.38%
WEDXF The Westaim Corporation 2.11 2.00 -5.21%
AWH Allied World Assurance 36.36 43.82 20.52%
RDN Radian Group Inc. 14.47 13.74 -5.04%
KFS Kingsway Financial Services Inc. 4.30 5.65 31.40%
AMIC American Independence Corp. 10.10 24.72 144.75%
DGICA Donegal Group Inc. 14.15 15.90 12.37%
OB OneBeacon Insurance Group, Ltd. 14.39 14.81 2.92%
L Loews Corporation 36.46 41.14 12.84%
RE Everest Re Group Ltd. 177.97 194.46 9.27%
BRK-A Berkshire Hathaway Inc. 204596.00 216370.00 5.75%
CNA CNA Financial Corporation 36.56 35.59 -2.65%
AON Aon plc 93.31 110.69 18.63%
BRO Brown & Brown Inc. 32.27 37.44 16.02%
AJG Arthur J Gallagher & Co. 43.73 50.24 14.89%
MMC Marsh & McLennan Companies, Inc. 55.74 65.99 18.39%

The entire watch list had an average gain of +17.97%, this is contrasted by the performance of the iShares U.S. Insurance ETF (IAK) gain of +1.74%.  A massive gain was achieved by small cap insurer American Independence (AMIC) with an increase of +144.75% after an August 31, 2016 cash offer from Independence Holding Company (IHC).  The worst performing stock was Greenlight Captial Re (GLRE) with a decline of –7.38%.

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Watch List Review

On January 22, 2016, we posted an Insurance Watch List that highlighted 36 insurance companies.  Of the 36 companies we highlighted two that we thought stood out, CNA Financial (CNA) and Endurance Holdings (ENH).  Of the two companies we said the following:

“The fact that CNA Financial has fallen below the ascending conservative downside target of $36.13 indicates that the expected range to the downside is $28.57.”

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On a closing basis, CNA declined to the $28.21 level before rebounding to the current price at $35.70.  Assuming and investment into CNA at $28.57 or below, the gain in the stock price has been +25%.  All things being equal, CNA has upside resistance at the ascending $36.13 level, or $43.65.

Regarding Endurance Holdings (ENH), we said the following:

“The fundamentals say the stock is a buy and the technicals indicate that waiting is necessary.  If your goal is income at a reasonable price then accumulation of ENH is acceptable at current levels and lower.”

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Endurance Holdings fell short of achieving our target of $55.69.  However, as the stock was still considered worth acquiring based on the January 22, 2016 posting, it merited consideration as a reasonable holding as ENH is now at $91.95 with a pending $93 all cash acquisition price by SOMPO Holdings out of Japan.

While we managed to select two companies that have managed to achieve exceptional targets, it is worth noting that among all the companies on the January 2016 watch list, 13 companies (or 36% of the entire list) had equal or better performance than the minimum +25% achieved by CNA .  Those companies are listed below:

symbol name % chg
HTH Hilltop Holdings Inc. 56.18%
ENH Endurance Specialty Holdings Ltd. 52.97%
KFS Kingsway Financial Services Inc. 51.87%
STC Stewart Information Services 40.17%
RGA Reinsurance Group of America Inc. 37.50%
AJG Arthur J Gallagher & Co. 34.18%
RDN Radian Group Inc. 33.79%
AON Aon plc 28.33%
BRO Brown & Brown Inc. 28.20%
MTG MGIC Investment Corp. 27.78%
HMN Horace Mann Educators Corp. 27.44%
MMC Marsh & McLennan Companies, Inc. 26.75%
ANAT American National Insurance Co. 26.45%


Because we always like to err on the side of caution, we have to assume that this is a high level of coincidence on our part, of which we hope to replicate if our analysis is generally accurate.

Insurance Watch List: May 2016

Performance Review

Below is the performance of the stocks listed on our watch list dated May 2015:

symbol Name 2015 2016 % chg
GLRE Greenlight Capital Re, Ltd. 30.24 20.40 -32.54%
PNX The Phoenix Companies Inc. 33.30 36.93 10.90%
CRD-B Crawford & Company 8.25 8.23 -0.24%
ACE ACE Limited 107.63 137.79 28.02%
RNR RenaissanceRe Holdings Ltd. 103.09 114.93 11.49%
BRO Brown & Brown Inc. 31.85 35.74 12.21%
      Average 4.97%

Ace Limited gains are estimates based on the stock price change since the acquisition of Chubb Limited (CB).  Ace Limited changed its name to Chubb and assumed the same stock symbol.

Market Outlook

On our watch list summary dated May 1, 2015, we said the following:

“Is the U.S. insurance sector running out of gas?  By the looks of the chart below, all indications are that the glorious run from the 2009 low may be over.  The iShares US Insurance ETF (IAK) seems to be running out of steam just as it approaches the previous high set in 2007.  A breakout to the upside is possible but not before taking a break to the downside.”

Since May 2015, the iShares US Insurance ETF (IAK) has traded in a range with some downside action and very little upside movement.

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American insurers are making a nice recovery higher from the lows set in mid-February 2016.  However, looming ahead is the double top indicated at points A and B on the chart.  Failure to exceed these points could result in a decline below the February 2016 low.  Alternatively, a breakout to the upside could be especially profitable for investors. 

What is an investor to do under these circumstances?  It is worth noting that last year we said there was considerable risk of decline in the insurance sector, however, we also bought a couple of American insurance stocks.  both of those stock did exceptionally well relative to IAK, garnering gains of more that +20% each, relative to the IAK gain of +5%.

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