2 Top Insurance Stocks To Own for the Insurance Revolution

Driverless cars are coming to the auto market and coming faster than many people realize.self-driving-cars
One of the biggest industries to be disrupted from driverless cars? The auto insurance market. Call it a blind spot, but many auto insurers might be asleep at the wheel when it comes to driverless cars. They’ve made a lot of money through the years collecting auto insurance premium but the gravy train will soon be over.
Right now, coverage for auto accidents are central for the insurance industry. Driverless cars, which have fewer accidents, will inherently put a strain on auto insurance revenues.
That means companies like Allstate (NYSE: ALL), which is the second largest auto insurer the U.S., could be very vulnerable going forward.
However, not all insurance companies are created equal. There are certain parts of the steady insurance market that remain very appealing for investors. One of the most interesting parts of the market remains the property and casualty space. The key is being choosy with the names you invest in.
Today, let’s take a look at the safer parts of the insurance market. What better way to do that than with dividend stocks?  Here’s the top two insurance stocks to own today:

Top Insurance Stocks: Cincinnati Financial (NASDAQ: CINF)

Cincinnati Financial pays a 2.6% dividend yield and has raised its dividend for an impressive 55 years. It’s one of the top 25 property and casualty insurers in the U.S. It operates in a rather mature industry with little turnover and virtually no new entrants.
Cincinnati Financial also has a strong policy renewal rate of upwards of 90%, giving the company an impressive base of recurring revenues. The other beauty of this insurer is that it operates in the property and casualty market, and it keeps a large part of its premiums invested in equities, well more than the average insurer. While this creates more volatility, it should help the insurer outperform its peers over the longer term in premium returns.

Top Insurance Stocks: Progressive (NYSE: PGR)

Now Progressive is indeed one of the top 10 insurance companies in the U.S., known for its commercials feature Flo. But despite still being heavily exposed to the auto market, it’s getting out in front of the driverless trend.
Progressive has a large customer base of younger drivers that are more apt to use new technology. New technology that Progressive is out in front of implementing, including its tracking device, dubbed Snapshot.
Snapshot uses customer’s driving behaviors to offer discounts for safe driving. Progressive is hoping to ultimately use this type of technology to help with tracking vehicles, avoiding blind spot collisions and auto braking. As well, Progressive also recently bought a homeowners’ insurance business to help diversify away from autos. Lest we forget that Progressive pays a 2.7% dividend yield
In the end, the ultimate impact of driverless cars remains to be seen. However, there are ways to protect your portfolio today. What better way than with a little insurance for your portfolio?

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