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In this piece, we will take a look at the ten best landlord insurance companies. If you want to skip our introduction to the industry, then head on over to 5 Best Landlord Insurance Companies.
Insurance, like banking, is right at the center of any developed economy. The simple premise of this multi-billion dollar industry involves subscribers pooling their resources together to create a sufficient reserve that can help if some of them face untoward accidents or events. Their resources and premiums are determined through sophisticated mathematical models which use concepts such as probability and stochastic modeling to determine what amount users should be charged and what level of resources the insurance company should keep in reserve to 'ensure' that it can meet all potential claims.
Looking at the numbers, the property insurance market is one of the largest in the world, with its worth not in millions or billions, but in trillions of dollars. This is unsurprising, as the property sector itself deals with some of the lucrative assets that money can get a hold of, and often involves funding from large entities such as governments to ensure that there is sufficient capital to set up and build new construction projects. A research report from Maximize Market Research estimates that the sector was worth a whopping $1.6 trillion in 2021, and it will grow at a compounded annual growth rate (CAGR) of 7.5% to sit at $2.85 trillion by the end of 2029. The CAGR is notable as trillion dollar industries, such as crude oil, rarely have high single digit growth rates because they have matured.
Landlord Insurance Industry: An Analysis
Landlord insurance is one segment of the property insurance market, with some others being firms that provide insurance to homeowners and renters.
Crucially for us though, Maximize Market Research believes that the landlord insurance segment will be the fastest growing out of the different ones mentioned above. Not only was this sector the largest constituent of the property insurance pie in 2021, but it will grow primarily due to the disruptions ushered in by the coronavirus pandemic and other natural disasters as landlords will seek greater security for their properties.
Another report, this time from Research Dive, dives into the home insurance market. This market will grow at a 6.8% CAGR and sit at $407 billion by the end of 2029. More importantly, it also provides us with some facts about the landlord subsegment. According to Research Dive, during the same time period, landlord insurance will grow to $183 billion. A key factor behind this growth will be the growing home prices, as the research firm believes that more people will turn to rent as the primary means for their living arrangement, which in turn will drive up the insurance purchased by landlords.
Finally, Allied Market Research also takes a look at the global property insurance market. It estimates that the industry was worth $15.6 trillion in 2021 and once again, despite this absolutely massive size, it will nevertheless grow at a 9.5% CAGR to sit at $39 trillion by the end of the forecast period. Some factors for this unbelievable growth and scope include market volatility and unpredictability in global financial markets. Additionally, Allied Market Research points out that growth in information technology and connectivity will also drive the growth.
Today's piece will look at the top landlord insurance providers in the industry and the renowned players are Berkshire Hathaway Inc. (NYSE:BRK-B), Allianz SE (ETR:ALV.DE), and State Farm Insurance.
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Our Methodology
We sifted through the countless private and public landlord insurance providers to sift out the best companies. Most of these are larger entities that also offer other insurance. They are ranked through revenue, with hedge fund sentiment from Insider Monkey's Q3 2022 survey also provided.
Best Landlord Insurance Companies
10. W. R. Berkley Corporation (NYSE:WRB)
Revenue for 2021: $9.46 billion
W. R. Berkley Corporation (NYSE:WRB) is an insurance holding company that targets several different sectors with its products. These include premises, automobiles, products, health, and workers' compensation. The firm is headquartered in Greenwich, Connecticut.
W. R. Berkley Corporation (NYSE:WRB) third quarter results saw the firm post 12% revenue growth and 15% earnings per share growth, for a set of results that beat analyst estimates. The firm maintained its growth trend through the results since its net profit has grown at an average of 14% for the past three years and its free cash flow has grown by a whopping 55% during the same time period.
Looking at the stock market, W. R. Berkley Corporation (NYSE:WRB)'s shares have appreciated by 38.8% year to date, at a time when the Standard and Poor 500 index has dropped by 16%. The firm pays a 10 cent dividend for a 0.53% yield and its 2021 revenues stand at $9.46 billion. 37 out of the 920 hedge funds polled by Insider Monkey for this year's third quarter had held a stake in W. R. Berkley Corporation (NYSE:WRB).
W. R. Berkley Corporation (NYSE:WRB)'s largest shareholder is Jean-Marie Eveillard's First Eagle Investment Management which owns 3.8 million shares that are worth $250 million.
Allianz SE (ETR:ALV.DE), Berkshire Hathaway Inc. (NYSE:BRK-B), and State Farm Insurance are met by W. R. Berkley Corporation (NYSE:WRB) in our list of top landlord insurance providers.
9. American Family Insurance
Revenue for 2021: $14 billion
American Family Insurance is a private American firm that is based in Madison, Wisconsin. The firm was set up in 1927, and it has 15 different subsidiaries. American Family Insurance is also a Fortune 500 firm and it has offices all over the United States.
American Family Insurance's landlord insurance segment covers several different areas. These include building and auxiliary structure coverage, liability protection, flood coverage, medical expense coverage, and an additional umbrella coverage policy that builds upon these to provide more services. These let landlords insure themselves from any accidents that might take place on their property, rebuild their properties in case of an accident, and extend the insurance to cover add on features to a building such as garages, swimming pools, fences, and more.
American Family Insurance earned $14 billion in revenue last year.
8. The Hartford Financial Services Group, Inc. (NYSE:HIG)
Revenue for 2021: $22.16 billion
The Hartford Financial Services Group, Inc. (NYSE:HIG) is one of the oldest companies in the world that was set up in 1810, and as the name suggests, is headquartered in Hartford, Connecticut.
The Hartford Financial Services Group, Inc. (NYSE:HIG) spent $350 million on share buybacks during its third fiscal quarter. The firm also maintained strong pricing power during the quarter, with home renewal written price going up by 11.8% during the quarter and auto pricing increasing by 5%.
The Hartford Financial Services Group, Inc. (NYSE:HIG)'s 2021 revenue was $22.16 billion, its shares have appreciated by 9.3% year to date, and the firm pays a 43 cent dividend for a 2.24% yield. Insider Monkey scanned 920 hedge fund portfolios for this year's third quarter to determine that 33 had invested in the company.
Out of these, The Hartford Financial Services Group, Inc. (NYSE:HIG)'s largest shareholder is Ric Dillon's Diamond Hill Capital. It owns 3.4 million shares that are worth $215 million.
7. The Travelers Companies, Inc. (NYSE:TRV)
Revenue for 2021: $34.8 billion
The Travelers Companies, Inc. (NYSE:TRV) is another old financial and insurance services firm. It was set up in 1853 and is headquartered in New York, New York, the United States.
The Travelers Companies, Inc. (NYSE:TRV) posted $2.2 in core earnings per share (EPS) during its third quarter, which beat analyst estimates but was down annually due to a lagging investment environment and hurricane Ian. The firm's third quarter also weighs on its bottom line since the season generally sees more hurricanes that then end up costing The Travelers Companies, Inc. (NYSE:TRV) more as well. However, the third quarter also saw the company post a strong underwriting profit combined ratio of 98.2% implying that it had earned more profit than what it had to pay out.
By the end of Q3 2022, 37 out of the 920 hedge funds polled by Insider Monkey had bought a stake in The Travelers Companies, Inc. (NYSE:TRV).
The Travelers Companies, Inc. (NYSE:TRV)'s largest investor is Jean-Marie Eveillard's First Eagle Investment Management which owns 2.7 million shares that are worth $420 million.
6. United Services Automobile Association (USAA)
Revenue for 2021: $37.47 billion
United Services Automobile Association (USAA) is an American insurance company that is headquartered in San Antonio, Texas. Unlike most of the companies out there, the firm was founded by a group of army officers that were tired of being rejected for insurance coverage due to the risky nature of their profession.
United Services Automobile Association (USAA) offers vehicle, property, life, health, business, and long term care insurance. Out of these segments, the firm's property insurance is its largest segment, and it offers coverage for a further ten different segments. One of these is the landlord insurance subsegment, through which United Services Automobile Association (USAA) lets its customers insure single family and multi family homes and condos. These offer protection against legal expenses, lost rental income, and short term rent. The firm also offers flood insurance and umbrella insurance add ons to its landlord insurance package.
United Services Automobile Association (USAA) is a top landlord insurance provider alongside others such as Berkshire Hathaway Inc. (NYSE:BRK-B), Allianz SE (ETR:ALV.DE), and State Farm Insurance.
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Disclosure: None. 10 Best Landlord Insurance Companies is originally published on Insider Monkey.
