The 3 hottest insurance stocks on the ASX right now

As much as we hate to admit it, insurance products are a necessity in life, and these three S&P/ASX 200 companies are on the rise for this very reason.

Steadfast Group Ltd (ASX: SDF)

Shares in general insurance broker Steadfast Group Ltd were up 1.1% to an April 10 close of $2.55 after a volatile 12-months of trade from its $2.63 price at this time last year to a $3.01 high in December 2017.

Steadfast produced some solid half-year results in February 2018 with underlying revenue up 7.8% to $269.6 million, underlying NPAT up 8.4% to $32.5 million and underlying EBITDA up 9.1% to $72.8 million.

Steadfast has had a good run of new brokers joining its network lately with its business, industrial, professional and motor product lines all recording increases and 376 brokers now operating across Australia, New Zealand and Singapore.

Steadfast’s balance sheet looks primed for growth, with a total gearing ratio of 18.8% – well within its board-mandated maximum of 30% and net assets at $1.02 billion at December 31, 2017.

One to watch as the Whitbread Group acquisition comes into play.

Insurance Australia Group Ltd (ASX: IAG)

Shares in personal and commercial insurance player Insurance Australia Group Ltd hit the S&P/ASX 200 gains list on April 10, rising 1.5% to $7.67, up 25.9% from its $6.09 share price at this time last year.

Insurance Australia Group held an investor day today in Sydney, with its presentation revealing its value proposition for delivering strong shareholder returns would be driven by improved efficiencies, a customer and data-led strategy, and plans to consolidate technology platforms to improve organisational capability.

IAG announced solid earnings across its motor and home product lines when it reported its first-half results in February, with NPAT rising 23.5% on the previous corresponding period.

It will be interesting to see if Insurance Australia is able to maintain positive momentum in its commercial product lines and if an overall focus on simplification and agility bodes well for its fundamentals.

QBE Insurance Group Ltd (ASX: QBE)

Shares in international general insurance company QBE Insurance were on the S&P/ASX 200 gains list on April 10, up 0.7% to $9.56.

QBE is trading about 11% below its 200-day moving average on its downward trend, and today announced senior management changes, with the appointment of a new group chief financial officer, chief risk officer, head of culture and talent and chief information officer.

QBE said the management changes will reshape the company’s strategic focus to create a “stronger and simpler” company.

QBE hit a 52-week share price low in late March when it slid to $9.52, with investor sentiment no doubt still low after the release of disappointing FY17 results back in February, when QBE posted a statutory net loss of US$1.25 billion.

Can management changes start to turn things around for QBE?

A 2018 free from “catastrophes” would be a good start, but any small gain in price is a win for patient QBE shareholders at present as the company maintains its balance sheet “remains strong”.  2018 will hopefully deliver on some traction in its overseas markets to improve overall outcomes.

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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Insurance Australia Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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