Both banking stocks and insurance stocks have done exceptionally well since they literally crashed in 2009. Not only were those sectors hit hardest, they were also suffering from continuously falling interest rates. As interest rates seem to have reached a rock solid bottom, both in the U.S. and recently also in Europe, banking and insurance stocks are showing strength. This article, particularly, looks at insurance stocks. We have identified 4 top insurance stocks, and we are sure they are worth considering in 2018.
The insurance business can be considered a boring sub-sector of the financial industry as it is bound to a predictably measured growth. However, sadly for end users like ourselves, the cost of premiums will only go up. Recent research shows that the average annual health premium cost is approximately 19,000 for a family and 6,600 for an individual in 2017.
Insurance companies are great in seizing the “what if” psychology into their business model. That is meant to charge premiums which are used (at least, to a certain extent) to make investments.
But the combination of increasing premiums and rising rates offers an opportunity not often seen in the insurance busines, hence also an opportunity in insurance stocks especially in 2018.
As can be seen from my recent articles on the bullishness of Broker-Dealer Stocks as well as Banking Stocks as specific subsectors, InvestingHaven sees this momentum in insurance stocks too and capitalizes on the initial move before these stocks speed off before our eyes.
Insurance stock #1: AEGON N.V. (Ticker AEG in NYSE)
Aegon N.V. is a multinational life insurance, pensions and asset management company headquartered in The Hague, Netherlands. It is also listed in NYSE as an ADR stock. The monthly chart of Aegon shown below has an interesting multi decade downtrend since the stock topped in December 1988. For the last 29 years or so, price has been moving in a rock solid downtrend which was finally broken in November 2017. Our first price target for 2018 is between 9-10, and any price beyond it will be an exceptional bonus. The flipside is a break below 5.5, that would negate the upside projection.
Insurance stock #2: ING GROEP N.V. (Ticker ING in NYSE)
ING Group is a Dutch multinational banking and financial services corporation headquartered in Amsterdam. Strictly speaking, the core business of ING is banking but given the important insurance activities it seems justified to be part of our favorite insurance stocks. The monthly chart of ING shows that its price is currently stuck in a small consolidation range at around 18.25. Should the price break above 18.9, the next resistance target would most likely be 28-31 in 2018. Failure below 17.25 will invalidate our upside projection for 2018.
Insurance stock #3: American Equity Investment Life Holding Company (Ticker AEL in NYSE)
AEL engages in the development and sale of fixed index and fixed rate annuity products. The Company issues fixed annuity and life insurance products through its life insurance subsidiaries. The monthly price chart is crystal clear: the stock broke resistance at ~29.65. Our 2018 price projection target is ~44 followed by 58 the year after. If price can hit 44, it is advisable to lock in partial profit (this could be the price reversal point which could be followed by a retest of 29.65 before it goes up again).
Insurance stock #4: CNO Financial Group Inc (Ticker CNO in NYSE)
Consolidated National Security Corporation is a financial services holding company based in Carmel, Indiana. CNO’s insurance subsidiaries provide life insurance, annuity and supplemental health insurance products to more than 4 million customers in the United States. These products are distributed through independent agents, career agents and direct to customer selling through TV ads or direct mail.
The monthly chart of CNO is mind boggling with an unusual period of 15 years of basing which morphes into a pseudo-inverted head and shoulder chart pattern. Price is back and making an earnest attempt to break ~25.9 with an upside target of ~42 by 2018. Failing below 23.8 will render the target of ~42 unachievable in 2018.
Please do take into account that there is a small time lag between the price at the time of writing and the price when it is officially uploaded on website.
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