- Progressive Corp and Allstate Corp shares surge 24%
- Humana and AIA Group lose over 20%
- Berkshire Hathaway stock continues to be to highly valued for the eighth consecutive quarter
The aggregate market capitalization (MCap) of the top 25 global insurers grew 8.3% to $3.02 trillion on a quarter-on-quarter (QoQ) basis during the first quarter (Q1) ended on 31 March 2024. Most of the stocks recorded a sharp growth in Q1, benefiting from the positive quarterly results, according to GlobalData, a leading data analytics and research company.
Murthy Grandhi, Company Profiles Analyst at GlobalData, comments: “Insurers adjusted premiums in specific segments, notably property and casualty (P&C) line, to counteract escalating claims expenses attributed to inflation, persistent geopolitical tensions in the Middle East, and natural calamities. These adjustments have allowed the global insurance industry to effectively address challenges and achieve positive results in the first quarter of 2024.”
Progressive Corp
Progressive Corp shares registered a remarkable 29.9% growth in market value during the first quarter of 2024, driven by the exceptional 2023 performance due to robust demand for insurance policies. The company’s compelling portfolio, strong leadership position, and success in both vehicle and property sectors were the key contributors. Additionally, its healthy policies in force, high retention rates, and solid capital position significantly created demand for Progressive Corp stock.
Allstate Corp
Allstate Corp recorded an 11.1% year-over-year increase in total revenue for the fiscal year ending 31 December 2023, reaching $57.1 billion, which surpassed analyst projections. This notable performance was attributed to its recent merger with National General, enhancing its offerings in voluntary benefits and health businesses. Consequently, the company’s market valuation also rose by 24.2%, reaching $45.5 billion by the end of Q1 2024.
Grandhi continues: “Berkshire Hathaway witnessed a 17% increase in MCap attributed to its positive performance for the fiscal year ended 31 December 2023. The company achieved a total revenue of $364.5 billion and a net profit of $97.1 billion during this period. Additionally, its cash and cash equivalents reached $33.7 billion, reflecting a 4.3% rise from the $32.3 billion reported as of 31 December 2022. This has propelled the stock’s upward trajectory, affirming Berkshire Hathaway’s status as a coveted asset for the eighth consecutive quarter.”
Humana experienced a 25.8% decrease in market value, largely attributed to a modest 3.7% increase in payment rates for patients enrolled in Medicare Advantage (MA) plans by the US Centers for Medicare and Medicaid Services for 2025. However, the rate increase was adjusted based on the health status of plan enrollees. Despite the initial impression of an increase, industry analysts anticipate actual base payment rates for MA plans to decrease approximately by 0.16% in 2025. This downward adjustment is a result of the expected rise in medical service utilization and the escalating healthcare costs.
One of the top insurers to lose market value during Q1 2024 was AIA Group, which saw its market value eroding by 23.7%. This was primarily due to actions against it by the Insurance Authority and the Independent Commission Against Corruption addressing issues of non-compliance and corruption. This was specifically related to the unlicensed sale of insurance policies to visitors from mainland China via the broker channel.
Grandhi concludes: “The insurance sector is poised for substantial changes in 2024, propelled by fluctuating reinsurance expenses and the escalating threat of cyber risks, fueled by rapid technological progress such as generative artificial intelligence. Industries worldwide are growing reliant on IT, IoT, operational technology, and digital services such as cloud computing, all integral components of numerous risk owners’ supply chains. Nevertheless, unforeseen challenges such as natural disasters, regulatory shifts, and continuing stand-off in and around Red Sea may keep insurers on their toes. Insurers capable of adapting, diversifying, and effectively managing risks stand to capitalize on potential growth opportunities amidst these evolving dynamics.”
