The reason Warren Buffett loves the insurance industry can be summed up in one word: float. It is the money that customers pay in premiums that have not yet been paid in the form of claims. And that’s sauce for the insurance company. They can invest it and the interest it generates as they see fit. Thus, by combining this free float with other axes of growth, you have a real chance of long-term success.
This is the case with our selection of Dividend Growth Stock in the sector.
The company has an asset management arm as well as insurance operations, and both continue to experience increasing growth. On the one hand, the company’s insurance operations, which cover both consumers and businesses, have started to flourish in the post-pandemic world. New lines of underwriting like disability insurance have seen an explosion of interest in the post-pandemic year. Meanwhile, as one of the largest pension plan sponsors, our pick is poised to take advantage of the growing interest in annuities in pension plans.
The combination of these factors offers many avenues for continuing its nine-year streak of dividend growth.
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