Rising healthcare costs, economic growth, increasing asset values, and transformative AI technology are all driving robust growth in the insurance sector. With evolving industry dynamics, the industry is poised to present robust growth opportunities.

Amid this backdrop, investors could scoop up shares of fundamentally stable insurance stocks, ProAssurance Corporation (PRA), Tiptree Inc. (TIPT), and Donegal Group Inc. (DGICA). These stocks offer safety and ample prospects for growth for investors looking to capitalize on the sector’s future.

The global risk environment is shifting. Economic growth is driving increases in property values, business activities, and overall asset ownership, creating additional opportunities for insurers. A study by Polaris Market Research forecasts the property and casualty insurance market to reach $3.79 trillion by 2032, growing at a CAGR of 8.3%.

At the same time, a rise in healthcare expenses is fueling demand in the health insurance sector. According to a report by Mordor Intelligence, the U.S. health and medical insurance market could reach $2.13 trillion by 2030, growing at a CAGR of more than 6%. This indicates a steady, expanding market.

This growth in the sector is not solely driven by demand but also by transformative technological advancements. The integration of artificial intelligence (AI) within the insurance industry is revolutionizing risk assessment and claims management.

AI models can simulate future scenarios, enhance the accuracy of risk estimation, drive better pricing, and identify false claims more effectively.

Now, let us dive deep into the fundamentals of insurance stocks that offer safety and growth, starting with #3.

Stock #3: ProAssurance Corporation (PRA)

PRA offers property and casualty insurance, and reinsurance products. The company has three segments: Specialty Property and Casualty; Workers’ Compensation Insurance; and Segregated Portfolio Cell Reinsurance. It provides professional liability insurance to healthcare providers and institutions, medical technology liability insurance and more.

Over the past five years PRA’s revenue has grown at a CAGR of 4.6%, while its EBITDA exhibited a CAGR of 13.3%. Moreover, its net income and EPS have grown at a CAGR of 3.6% and 4.6%, respectively.

For the fiscal 2024 third quarter that ended September 30, PRA’s total revenues increased 30.1% year-over-year to $281.48 million. Its income from operations grew 109% from the year-ago value to $89.96 million.

Additionally, net income and net income per common share attributable to PRA came in at $27.15 million and $0.69, compared to a net loss and loss per share of $12.26 million and $0.31 in the previous year’s quarter, respectively.

Analysts expect PRA’s revenue for the fiscal year ending December 2025 to come in at $1.09 billion. Its EPS for the same period is expected to increase 5.7% year-over-year to $0.89. Additionally, the company topped the consensus revenue estimates in all four trailing quarters, which is noteworthy.

PRA’s shares have surged 5.5% over the past three months and 16.7% over the past nine months to close the last trading session at $15.16. Furthermore, the stock has a 60-month beta of 0.30.

PRA’s POWR Ratings reflect its solid fundamentals. The stock has an overall rating of B, translating to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

PRA has an A grade for Momentum and a B for Stability, Growth, and Sentiment. Within the A-rated Insurance – Accident & Supplemental industry, PRA is ranked #2 out of 8 stocks.

In addition to the POWR Rating highlighted above, you can check PRA’s ratings for Quality and Value here.

Stock #2: Tiptree Inc. (TIPT)

TIPT provides specialty insurance products and related services. It offers niche, commercial lines insurance products, including professional liability, general liability, contractual liability protection, property, and more. The company functions through two segments: Insurance and Mortgage.

On December 4, 2024, TIPT’s subsidiary, The Fortegra Group, Inc., a global specialty insurer, received approval to establish Fortegra Insurance Company UK from the Prudential Regulation Authority (PRA). The approval allows the company to expand its business and grow its international presence.

Over the past five years, TIPT’s revenue and EBITDA grew at respective CAGRs of 22.9% and 37%. Additionally, its net income and EPS grew at a CAGR of 23.1% and 20.1%, respectively.

For the fiscal 2024 third quarter that ended September 30, TIPT’s total revenues increased 18.7% year-over-year to $494.36 million. Its adjusted net income and net income per common share rose 55.9% and 625% from the year-ago value to $27.87 million and $0.29, respectively.

As of September 30, 2024, TIPT’s total assets amounted to $5.51 billion, compared to $5.14 billion on December 31, 2023.

Shares of TIPT have surged 2.8% over the past three months and 15.4% over the past nine months, closing the last trading session at $19.55. Also, TIPT has a 24-month beta of 0.71.

TIPT’s sound fundamentals are mirrored in its POWR Ratings. The stock has an overall rating of B, translating to a Buy in our proprietary rating system.

TIPT has an A grade for Growth and Momentum and a B for Stability and Sentiment. Within the Insurance – Life industry, it is ranked #2 out of 26 stocks.

To access TIPT’s Value and Quality ratings, click here.

Stock #1: Donegal Group Inc. (DGICA)

DGICA is an insurance holding company that provides property and casualty insurance to businesses and individuals. It offers private passenger automobile policies, protection against loss from damage to automobiles and homeowners policies. The company has three segments: Investment Function; Personal Lines of Insurance; and Commercial Lines of Insurance.

DGICA’s revenue and EBITDA have expanded at a CAGR of 4.2% and 5.7%, respectively over the past five years. The company’s net income and EPS also grew at a CAGR of 6.7% and 3.4% over the same time period.

For the fiscal 2024 third quarter that ended September 30, DGICA’s total revenues increased 7.6% year-over-year to $251.74 million. Its non-GAAP operating income rose significantly from the year-ago value to $15.27 million.

Moreover, the company’s net income and net income per common share Class B came in at  $26.86 million and $0.74 compared to a net loss and loss per share of $805 million and $0.02, respectively.

The consensus revenue estimate of $990.29 million for the fiscal year that ended December 2024 exhibits a year-over-year rise of 6.8%. Its EPS for the same period is expected to rise significantly from the prior year to $0.95. Furthermore, the company surpassed the consensus revenue estimates in each of the four trailing quarters.

Shares of DGICA have surged 2.6% over the past three months and 15.7% over the past six months to close the last trading session at $14.80. Moreover, DGICA has a 24-month beta of 0.18.

DGICA’s POWR Ratings reflect its robust prospects. The stock has an overall rating of A, equating to a Strong Buy in our proprietary rating system.

DGICA has an A grade for Momentum and Growth and a B for Stability and Sentiment. The stock has topped the 55-stock A-rated Insurance – Property & Casualty industry.

Click here to access DGICA’s ratings for Value and Quality.

What To Do Next?

Get your hands on this special report with 3 low priced companies with tremendous upside potential even in today’s volatile markets:

3 Stocks to DOUBLE This Year >

PRA shares were unchanged in premarket trading Friday. Year-to-date, PRA has declined -4.71%, versus a 0.58% rise in the benchmark S&P 500 index during the same period.

About the Author: Aritra_Gangopadhyay

Aritra is a financial journalist dedicated to breaking down complex financial topics into simple, actionable insights. Holding a Master’s degree in Economics, he uses his analytical expertise to help investors uncover unique opportunities for long-term success. More...

More Resources for the Stocks in this Article