Insurance providers use their expertise in risk assessment to help protect assets while offering consumers peace of mind through comprehensive coverage options. But worries about an economic slowdown and potential claims deterioration have kept sentiment in check, and over the past six months, the industry’s 4.8% return has trailed the S&P 500 by 5.1 percentage points.
Despite the lackluster result, a few diamonds in the rough can produce earnings growth no matter what, and we started StockStory to help you find them. Taking that into account, here are two insurance stocks we think can generate sustainable market-beating returns and one we’re swiping left on.
One Insurance Stock to Sell:
Assurant (AIZ)
Market Cap: $12.06 billion
With roots dating back to 1892 when it was founded by a Civil War veteran, Assurant (NYSE: AIZ) provides specialized insurance products and services that protect major consumer purchases like mobile devices, vehicles, homes, and appliances.
Why Does AIZ Give Us Pause?
- Annual sales growth of 5.1% over the last five years lagged behind its insurance peers as its large revenue base made it difficult to generate incremental demand
- Scale presents growth limitations compared to smaller competitors, evidenced by its below-average 4.6% annualized growth in net premiums earned for the last five years
- Scale is a double-edged sword because it limits the firm’s capital growth potential compared to its smaller competitors, as reflected in its below-average annual book value per share increases of 2.7% for the last five years
At $240.85 per share, Assurant trades at 2.1x forward P/B. Read our free research report to see why you should think twice about including AIZ in your portfolio.
Two Insurance Stocks to Buy:
Trupanion (TRUP)
Market Cap: $1.61 billion
Born from a vision to help pet owners avoid economic euthanasia when faced with expensive veterinary bills, Trupanion (NASDAQ: TRUP) provides medical insurance for cats and dogs through data-driven, vertically-integrated products priced specifically for each pet's unique characteristics.
Why Are We Backing TRUP?
- Annual revenue growth of 24.7% over the last five years was superb and indicates its market share increased during this cycle
- Additional sales over the last two years increased its profitability as the 51.1% annual growth in its earnings per share outpaced its revenue
- Annual book value per share growth of 16% over the last five years was superb and indicates its capital strength increased during this cycle
Trupanion’s stock price of $37 implies a valuation ratio of 4.2x forward P/B. Is now a good time to buy? See for yourself in our in-depth research report, it’s free for active Edge members.
Bowhead Specialty (BOW)
Market Cap: $935.6 million
Named after the Arctic bowhead whale known for navigating challenging waters, Bowhead Specialty Holdings (NYSE: BOW) is a specialty insurance company that provides customized coverage for complex and high-risk commercial sectors.
Why Is BOW a Good Business?
- Strong 37.9% annualized net premiums earned expansion over the last two years shows it’s capturing market share this cycle
- Market share will likely rise over the next 12 months as its expected revenue growth of 20.7% is robust
- Annual book value per share growth of 74.5% over the past two years was outstanding, reflecting strong capital accumulation this cycle
Bowhead Specialty is trading at $28.54 per share, or 2.1x forward P/B. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
Check out the high-quality names we’ve flagged in our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today.
