3 Best Insurance Shares Currently | The Motley Fool

Passive income is a great way to make money to support you. One of the best ways to make money is to invest in good companies that offer consistent returns. Dividend payers tend to be high-quality companies with strong financial management, so these stocks can deliver strong results regardless of the economy.

Insurance companies can be expensive because people are always looking to protect themselves, and the law requires businesses and individuals to have insurance. As a result, insurance companies can be an excellent source of income. Here are three insurance policies that you can consider.

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1. Room

Room (CB 0.47%) writes a variety of insurance policies, including auto, homeowners, and commercial insurance, such as workers’ compensation. The insurance company is one of the world’s largest property and casualty companies, which is a testament to its excellent writing skills.

The coverage ratio is one way you can measure the benefits of insurance. This metric is calculated by adding the total amount paid and the amount paid, divided by the total amount collected. A score of at least 100% is required; the lower, the better. From 2002 to 2021, Chubb’s combined percentage has reached 91.7% — a significant drop from 100%.

This translates into good policies that provide solid income, which is returned to investors through dividends. Chubb has increased its dividend for 29 consecutive years and is a member of the Dividend Aristocrat group – companies at The value of the S&P500 who have accumulated earnings for 25 years or more.

The payout ratio is a useful measure of dividends and shows how much money a company earns by paying dividends to its shareholders. Chubb’s payout ratio has reached 30% over the past 10 years and is currently at 17%, a good sign that the company can maintain its share.

The price of shares CB data by YCharts

2. Cincinnati Financial

Opinions of the company Cincinnati Financial (CNF 0.40%) He’s scoring similar points to Chubb, and he’s also done a solid job of managing his draft risk.

What makes Cincinnati Financial so interesting is its long history of growth. For 62 years, the insurer has increased its dividend, placing it in the exclusive Dividend King club, or companies in the S&P 500 that have increased dividends for 50 years or more.

However, it was not always smooth sailing. From 2008 to 2011, Cincinnati Financial has combined a ratio of 104% in the complex area of ‚Äč‚Äčinsurance. The company has maintained its dividend growth during this difficult period, a testament to its sound financial management and commitment to shareholders. Since current CEO Steve Johnston took over in 2011, Cincinnati Financial’s integration ratio has reached 94.6%, beating the average of 99%.

Cincinnati Financial’s dividend yield is a modest 19%, and its strong track record and solid capital management make this company one of the safest stocks you can add today.

3. Old Republic International

Old Republic International (OR 0.35%) is property insurance that also underwrites personal insurance used to sell property to protect the lender or buyer against claims against the title of the property. The company has managed its write-up rate well, with a write-up rate of around 96% over the past 15 years.

The chart shows the Old Republic's average over 15 years.

Image source: Old Republic International.

Old Republic has paid dividends every year for the past 81 years and has raised its dividend for the past 41 years. Its payout ratio of 54% is on the high side compared to the two companies above, but it can still improve as long as it continues to write good policies. The company has a solid yield of 4% and has managed its capital well over the years – making it another solid sector you can rely on.

Courtney Carlsen has no responsibility in any of the matters mentioned. The Motley Fool has no position in any of the listed products. The Motley Fool has a disclosure policy.