4) Look at Web Traffic to Pick Insurance Stocks
Investors trying to pick stocks in the insurance sector should consider growing Web traffic trends.
UBS recently wrote a report on the increasing Web traffic among insurance companies that operate online.
"Consumer shopping activity remained robust with monthly unique visitors to our index of insurer and insurance aggregators' Web sites up 20% year-over-year last month verses 18% in December and 32% in November," writes the firm."The January rise in insurance Web site activity was led by Progressive (PGR) (+32% y/y) and Esurance (+98% y/y in its fourth month of ownership by ALL). After five months of growth that far outpaced the index, State Farm's web visit growth of 19% in Jan was in line with the index's 20% rise." Esurance is a seller of car insurance and is one of the leading auto insurance issuers online. UBS notes that Esurance saw Web growth accelerate to 76% in the fourth quarter of last year and 80% so far in the current quarter, because of a new ad campaign. "Increased advertising spending suggests that the strong growth in Esurance Web traffic will continue," it writes. By contrast, Allstate (ALL - Get Report), the largest publicly-traded domestic home and auto insurer, which owns Esurance, has seen Web growth shrink up to 2% year over year over the past two months as newly issued applications decreased. Allstate's fourth quarter profit more than doubled to $724 million, according to its earnings report on Feb. 1. It operating profit beat expectations, coming in at $1.48 a share. The stock is rated a strong buy by 13 analysts and a hold by 10 analysts out of 27 analysts covering the company,