The Zacks Analyst Blog Highlights: Primerica, Amerisafe, Employers Holdings And Unum Group

For Immediate Release

Chicago, IL – November 24, 2017 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Primerica, Inc. (NYSE:PRI) , Amerisafe, Inc. (NASDAQ:AMSF) , Employers Holdings, Inc. (NYSE:EIG) and Unum Group (NYSE:UNM) .

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Here are highlights from Wednesday’s Analyst Blog:

4 Solid Insurance Stocks to Hit High Spots in Q4 Bull Market

Despite the volatile operating environment, with the occurrence of natural calamities, regulatory changes, Federal Reserve’s decision as to when hike the interest rate again, there have been quite a few insurance companies which have delivered better-than-expected results in the third quarter of 2017.

Even though the aforementioned challenges are anticipated to impact the upcoming quarter, we remain optimistic about the operational performance of such insurance companies in the near term.

We will discuss some driving factors that should help insurance companies to perform better in the impending quarter, raising optimism among investors.

Rising Interest Rates — A Much Awaited Boon to Insurers

If we focus on the life insurance industry, we can identify its connection with interest rates, given the high sensitivity of the players’ business models to interest rates. Therefore, life insurance industry’s heavy dependence on investment income will benefit most companies from the rising interest rate environment. Thus, rising interest rates as well as increase in bond yields will provide a required relief to insurers to maintain margins.

Although the Federal Reserve has left the interest rates unchanged (following the Federal Open Market Committee’s meeting on Sep 20, 2017) ranging between 1% and 1.25%, the life insurers are still looking forward to another interest rate hike this year, indicated by policymakers at the meeting. Interestingly, the Fed committee also expects to raise interest rates thrice in 2018. Hence, the overall industry pins hope on the investment income growth in the immediate term. This in turn might also help strengthen its market position.

A progressing rate environment will lessen the burden on life insurers’ investment income, boosting their earnings. This will additionally, accelerate the insurance companies’ overall rise in the future.

Other Aspects Likely to Boost Future Performance

Continued growth in premiums and a better control over underwriting expenses are anticipated to lend a substantial boost to life insurers’ income in the quarter ahead. The individual life insurance premiums, which witnessed modest growth over a considerable period of time, will likely continue the trend with rising demand, driven by an improving job market and the aging population (for retirement savings).

Interestingly, life insurers are increasingly moving toward redesigned and re-priced products with potential to enhance their liability profiles and profitability in the upcoming quarter.

Moreover, stronger corporate bonds and improving real estate market might help curtail the credit-related investment losses. Also, bettering economy and higher inflation induced bonds look to yield good returns to investors. Life insurers are expected to gain from this favorable trend if it continues in the long run. In fact, a flourishing economy indicates more disposable income with people opting for more insurance coverage.

Further, the demand for life insurance is estimated to improve and fortify on the back of customers’ need for greater safety in a volatile financial environment. Per a recent report by the worldwide insurance association, Life Insurance Management Research Association (LIMRA), minimum 34% of Americans are likely to buy life insurance in 2017. This will in fact encourage demand for life insurance with the industry reaping benefits from such an upside.

Key Picks

Despite challenging market conditions and evolving customer demands, insurers might gain from improved interest rates and an improving economy that are capable of yielding profits through underlying strength and business modification.

We zeroed in on four insurers that hold promise to deliver favorable results, banking on a solid price performance and a favorable Zacks Rank backed by positive estimate revisions.

Duluth, GA-based Primerica, Inc. distributes financial products to middle income households in the United States and Canada. The stock has seen the Zacks Consensus Estimate for current-year earnings per share being revised 2.7% upward to $5.36 and 3.1% to $6.07 for 2018 over the last 60 days. This is reflected through the company’s Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of Primerica have rallied 21.6% quarter to date, outperforming the industry’s rise of 10.3% and substantially lying ahead of the S&P 500 index’s 3.5% gain.

DeRidder, LA-based Amerisafe, Inc. offers workers compensation insurance in the United States. The Zacks Consensus Estimate for earnings per share moved up 3.9% to $3.22 for 2017 and 1.3% to $3.07 for 2018 over the last 60 days. This is reflected through the company’s same bullish Zacks Rank of 2.

Shares of Amerisafe have increased 12.3% quarter to date compared with the industry’s increase 5.1% and substantially outperforming the S&P 500 index’s gain of 3.5%.

Reno, NV-based Employers Holdings, Inc. operates in the commercial property and casualty insurance industry primarily in the United States. The stock has seen the Zacks Consensus Estimate for current-year earnings per share being moved 2.6% upward to $2.39 and 2.1% to $2.40 for 2018 over the last 60 days. The Zacks #2 Ranked player reflects this improvement.

Shares of Employer Holdings have climbed 8.6% quarter to date, coming in above the industry’s gain of 5.1% and substantially outperforming the S&P 500 index’s gain of 3.5%.

Chattanooga, TN-based Unum Group provides group and individual disability insurance products and services, primarily in the United States and the United Kingdom. The Zacks Consensus Estimate for earnings per share moved up 1.7% to $4.24 for 2017 and 1.1% to $4.46 for 2018 over the last 60 days. The #2 Ranked stock represents this rise.

Shares of Unum Group have grown 5.4% quarter to date compared with the industry’s 5.1% increase and significantly outperforming the S&P 500 index’s 3.5% gain.

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