AV., ADM, HSX: Should you add these insurance stocks to your watchlist?

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AV., ADM, HSX: Should you add these insurance stocks to your watchlist?

 AV., ADM, HSX: Should you add these insurance stocks to your watchlist?
Image source: H_Ko, Shutterstock

Highlights

  • The average premiums for home insurance have witnessed a significant fall, according to the Association of British Insurers.
  • In the first quarter of 2022, the prices dropped to their lowest levels since the ABI started collecting this data.

People are now paying more for most things as inflation in the UK has touched the highest levels in 30 years. Food prices and energy bills have soared, leading to a fall in consumer confidence. Millions of Britons are struggling with the cost-of-living crisis. However, there's some relief for those looking to buy home insurance as the average premiums have dropped significantly over the last one year.

According to the Association of British Insurers (ABI), a trade association of UK's insurance companies, the costs of average home insurance have fallen to a record low even though the costs of construction materials and labour have risen. In its latest Household Insurance Premium Tracker, a survey that considers the price paid by consumers for the cover instead of the price they are quoted, ABI said the premiums for home buildings and contents insurance in the first three months of 2022 was the lowest since it started collecting this data.

The costs for home insurance in the UK have dropped significantly over the last year.

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The data showed that the average price consumers paid for house insurance stood at £225, a 7% fall over the first quarter of 2021. The contents insurance was £114 on an average, 11% less than the previous year. For combined buildings and contents insurance, customers paid an average premium of £307, down 2% over the last year.

Let us take a look at some FTSE listed insurance providers and how their stocks have been performing.

Aviva Plc (LON: AV.)

Aviva is a leading insurance provider based out of London and is the UK's largest general insurer. Its core markets are the UK, Ireland, and Canada. The company claims to have over 18.5 million customers across these regions. Aviva was in the news recently after its CEO Amanda Blanc received offensive comments from shareholders at its Annual General Meeting earlier this week over the company's share price performance.

With a current market capitalisation of £15,158.58 million, Aviva's stock price was hovering around GBX 396.10, down by 3.65% at 10:26 am GMT+1 on 12 May 2022. Over the past one year, the share price has lowered by 0.90%, while on a year-to-date basis, it declined by 3.29%.

Admiral Group Plc (LON: ADM)

Admiral Group is an FTSE 100-listed financial services provider and offers several insurance products like home insurance, travel insurance, car insurance, etc. For the year ended 31 December 2022, the company posted a profit before tax of £769 million, and its customers grew by 9% over the previous year. For household insurance in the UK, the company's customer base rose by 14% to 1.32 million, taking its turnover to £219 million.

Admiral's shares were trading 1.41% lower at GBX 2,204.50 at 10:49 am GMT+1 on Wednesday. The company holds a market capitalisation of £6,705.62 million, and its share value has fallen by -24.34% over the past one year.

Hiscox Ltd (LON: HSX)

The Anglo-Bermudan specialist insurance provider is listed on the FTSE 250 index and offers several insurance products in the UK. For the first quarter to 31 March 2022, the company wrote up $1,386.3 million in gross premiums. However, for the London market, the gross premiums declined by 3.1% to $294.5 million.

The company holds a market capitalisation of £3,283.17 million, and its shares have given a return of 10.76% to the investors over the past one year. Hiscox's stocks were trading at GBX 921.60 as of 10:55 am GMT+1 on 12 May 2022.

Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.

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