Harry Domash's Winning Investing



Rising Interest Rates: Good for Insurance Stocks

Many economists are predicting continued high inflation, which translates to rising interest rates, for at least the next few months.

Although considered bad for the overall market, insurance stocks are an exception. Why?

Insurance companies are required to invest excess cash in U.S. Government or investment-quality-rated bonds, so that they’ll have funds readily available to pay claims. In fact, insurance company earnings come mostly from the interest generated by those bond holdings, not from the premiums collected for writing policies.

Thus, when interest rates move up, so do insurance company earnings. It’s as simple as that.

So, I’m going to describe a stock screen that you could use to pinpoint value-priced high-dividend-paying insurance company stocks that are in favor with wired-in institutional investors as well as stock analysts.

As usual, I’ll use the free and user-friendly Finviz stock screener to demonstrate the process, but you could one of the many other web-screeners to do the job.

Set Up Screener

Find the screener by selecting the Screener option on the Finviz homepage (finviz.com). You control the Finviz screener using “filters” to search for stocks meeting you selection criteria. Select “All” on the Filters bar to see the available filters.

Start by using the “Country” filter and selecting “USA” to limit you list to U.S.-based stocks. For reasons that will become obvious later, we’ll wait until the end to specify “insurance industry” stocks.


For insurance companies, book value, primarily the value of their bond holdings, is the best valuation measure. So, use the use the price/book filter (labeled P/B) and specify “under 1” to limit your list to relatively value-priced stocks.


Most insurance companies pay significant dividends. Use the “Dividend Yield” filter to specify “Over 3%.” Later, you can adjust that value down if you want to see a longer candidates list.

Investor Sentiment

Use the “Institutional Ownership” filter and specify “Over 50%” to limit your list to stocks in-favor with the wired-in big money players.

Then, rather than analyzing financial statements, specify “Buy or Better” using the “Analyst Recommendations” filter to limit your list to stocks that analysts, who spend their days doing that, are advising buying.

Specify Insurance Categories

Rather than single category for all insurance companies, Finviz lists six different insurance industry categories. Those pertinent to us include: Diversified, Life, Property & Casualty, and Specialty. Thus, you must specify each of those four categories separately to see all of the passing stocks.


My screen turned up three candidates, two in the Property & Casualty field and one Specialty insurer.

•  Heritage Insurance Holdings (HRTG): Property & Casualty, 3.3% dividend yield.  

•  Kingstone Companies (KINS): Property & Casualty, 3.1% yield.

•  Radian Group (RDN): Mortgage Insurance, 3.5% yield.

Consider the stocks listed by this screen, or any screen for that matter, as research candidates, not a buy list. The more you know about your stocks, the better your results.

published 3/29/22

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