# Insurance Company Stocks



## newfoundlander61 (Feb 6, 2011)

I have been considering adding one insurance company stock to my portfolio so capital appreciation and dividend income. All have differences in their overall business so which on would you folks pick. MFC as an example never seems to do a whole lot on the appreciation side but maybe its just the way they run their business and what investors think about them. See poll for your pick. Many investors hold more than one stock in a specific sector or industry so maybe owning 2 would not be out the question. At some point these should increase once or if interest rates rise but the timeline for that is hard to predict. Thanks for sharing your votes and any opinions.


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## MrBlackhill (Jun 10, 2020)

I can't wait to hear the opinion of investors who know more about this industry.

I don't know much, all I see is that IFC has the greatest ROI for the investor, greatest margins, greatest RoE, highly uncorrelated to the market, but high debt and highest price multiples, while many other names sit on a huge pile of cash with little debt, negative enterprise value.

This table compares some data for all of the insurance companies.






Largest Canadian (TSX) Insurance Stocks by Market Cap - Simply Wall St


Discover Canadian Large Cap Insurance Stocks that are on the TSX.




simplywall.st





You may also consider other names like TSU which is a spin off from BAM.

Maybe I'd just mix my odds and buy TSU, IFC and SLF.

I won't vote yet as I need more DD, but that would be my gut feeling.


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## Beaver101 (Nov 14, 2011)

^ POW=Power Corp is not an insurance company per se but do own GWO (GreatWestLife) as with several other investment companies (eg IG and MacKenzie). If you own a financial-based ETF, chances are you already own a piece from your list.


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## MK7GTI (Mar 4, 2019)

I've had GreatWestLife for a couple years now. It's one of the 10-12 dividend paying stocks I will probably never sell.


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## Tostig (Nov 18, 2020)

I own SLF and GWO. These two were the group health plans when my wife and I were working.

After reading all the various reasons why they would reject my claims, it dawned on me how they make money.

That's when I formulated a strategy to invest in companies that piss off their customers: insurance, telecommunications and banks.


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## agent99 (Sep 11, 2013)

At one time we owned MFC, but we lost our shirt on that when markets crashed in 08/09 and it has never really recovered. Also had poor experience with Home & Auto insurance administered through them. Not going there - once bitten, twice shy. 
GWO was similarly affected by markets, but has recovered to pre 08 highs. I had no insurers, so added it after the 2020 covid crash and it has done quite well. (as noted, it is owned by POW)
We have owned POW for a long time. Only partly into insurance. Performance in past has been slow and steady, but nothing to write home about. Good dividend, but not much growth. Almost like fixed income! More recently, there appears to have been a change in management philosophy and they have moved into new fields. Analysts all say it is undervalued, but doesn't have the mojo to attract investors looking for growth. We will continue to hold POW - sometimes slow and steady wins the game.


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## Jimmy (May 19, 2017)

I think this group is good for the recovery. They benefit from rising interest rates which increases the discount factor and decrease the PV of their liabilities. I have Fairfax which had the best revenue growth of the ones I looked at but has very wonky management. They were all in the P/B range of .7 so there is some upside until they get back to their pre covid prices.

After that they are really a steady 4-5% dividend payer if you just want that.


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## AltaRed (Jun 8, 2009)

I have held MFC (half position) and IAG for some time. A few years ago, I almost swapped out MFC for IFC but didn't at the last minute on the basis MFC had to break out 'eventually'. Poor decision as IFC is rather pricey now. It is also more exposed to increasing climate related disasters than the other insurance companies.

MFC is now in the 'shortlist for sale' group for when I need to crystallize holdings to fund my lifestyle. The beauty of VPW withdrawal justifies cutting holdings loose eventually.


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## sags (May 15, 2010)

Economical Insurance is getting ready to IPO this fall. They are waiting for final approval from the Finance Minister.

They are strictly a property insurance company and have built up a $2 billion surplus operating as a policy holder owned mutual company.

I would think, that after going public the goal of the company would shift from offering a good product at reasonable price to policyholder owners to increasing profit as a public company with shareholders.

They have really scrubbed their business model for the IPO, eliminating cost deficiencies and creating a new online division called Sonnet. Their plan for the IPO is to create opportunities to acquire capital to expand their operations with acquisitions and mergers.

I don't recommend or not , but food for thought for those wanting to get in on the ground floor.


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## Spudd (Oct 11, 2011)

MFC is currently on TD's "Action List" which is basically their top picks for highest returns. They're not perfect stock pickers but just thought I'd throw that data point in there.


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## MrBlackhill (Jun 10, 2020)

Spudd said:


> MFC is currently on TD's "Action List" which is basically their top picks for highest returns. They're not perfect stock pickers but just thought I'd throw that data point in there.


I agree that from a valuation point of view, based on their multiples and growth, they seem like the most undervalued. They are also amongst the highest dividend yield at the moment and they keep increasing it. Will they bounce back in strength? I guess they should.

TD and Barclay's are bullish on this one.

But I understand that a lot of investors are sour on this one after a 14 years of drawdown (from a total return point of view, otherwise the capital is still ongoing -40% drawdown).


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## Gator13 (Jan 5, 2020)

We have MFC, SLF, GWO & POW. All are long term holds.


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## Tostig (Nov 18, 2020)

Interesting. Five voters may be very early but nobody has claimed to have purchased IFC yet even though it was an active topic just a few weeks ago.


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## Synergy (Mar 18, 2013)

Tostig said:


> Interesting. Five voters may be very early but nobody has claimed to have purchased IFC yet even though it was an active topic just a few weeks ago.


Everyone requires insurance to drive a car, motorcycle, etc. Anyone with half a brain would maintain insurance on their home or business. Insurance premiums will rise overtime with inflation and companies like Intact will gobble up their competition along the way. They grow well organically and through mergers and acquisitions. Good steady company. A great way to provide some diversity in your CDN financial holdings....


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## Ponderling (Mar 1, 2013)

We have IFC, POW, MFC ( swapped from SLF about 8 months ago) Have owned GWO in past, as well as TRV in the US market.


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## londoncalling (Sep 17, 2011)

I have my personal insurance through SLF. I recently purchased MFC. Have held POW for years POW has given me steady yield but little growth. Better than fixed income but obviously with more risk.


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## gardner (Feb 13, 2014)

I've been holding MFC, SLF and GWO in approximately equal proportions since 2012 or so. I have been satisfied for the most part with all of their performance, but I think SLF is the top performer for me. These form the insurance segment of my dividend portfolio.


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