The Hanover Insurance Group Inc. had the highest price-to-estimated 2023 earnings per share multiple among life and property and casualty underwriters listed on major US exchanges, according to an S&P Global Market Intelligence analysis.
The Massachusetts-based insurer traded at 113.1x its estimated 2023 EPS as of Dec. 29, far above the 41 other underwriters within the analysis. Hanover's 2023 consensus estimated normalized EPS is $1.07 and would reflect a decrease of roughly 81% from the insurer's actual 2022 normalized EPS.
The Progressive Corp. was the second-most richly valued underwriter at the end of the fourth quarter at a multiple of 28.9x. Based on consensus analyst estimates, Progressive's 2023 estimated EPS will be $5.51, an increase of 46% over its 2022 actual.
Kinsale Capital Group Inc. was third, with its stock trading at 27.8x its estimated EPS, followed by Illinois-based RLI Corp. with a multiple of 27.5x.
Overall, US property and casualty insurers' median price to estimate 2023 EPS multiple was 13.2x. Sell-side analysts expect the industry EPS to grow 24.4% year over year in 2023.
Aflac remains most expensive life insurer
Aflac Inc. was the most expensive US life insurer for the second consecutive quarter end, with a multiple of 13.1x as of Dec. 29, 2023. The life insurer's consensus 2023 EPS is expected to rise to $6.29 compared to its actual normalized EPS of $5.33 in 2022.
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Georgia-based Primerica Inc. remained behind Aflac as second-most expensive life insurer, with a multiple of 12.8x. Analysts expect its 2023 EPS to increase 40.4% when compared to its 2022 actuals.
The other public life insurers trading at more than 10x their estimated 2023 EPS were Principal Financial Group Inc. at 12.3x, Globe Life Inc. at 11.5x, and CNO Financial Group Inc. at 10.0x.
Brighthouse Financial Inc. was the least expensive life insurer, trading at 3.4x its estimated 2023 EPS.
