The reason why Warren Buffett loves the insurance industry comes down to one word: float. It’s the money that customers pay in premiums that hasn’t been paid out yet in the form of claims. And it’s all gravy for the insurance company. They can invest it and the interest it generates as they see fit. So, when combining this float with other growth avenues, you have a real chance at long-term success.
That’s the case for our Dividend Growth Stock pick in the sector.
The firm has an asset management arm as well as insurance operations, and both continue to see rising growth. For one thing, the firm’s insurance operations, which cover both consumers and businesses, have started to boom in the post-pandemic world. New underwriting lines like disability insurance have seen an explosion of interest in the post pandemic year. Meanwhile, as one of the largest retirement plan sponsors, our pick is poised to benefit from rising interest in annuities in retirement plans.
The combination of these factors provides plenty of runway for continuing its streak of nine years’ worth of dividend growth.
You can check out the Best Dividend Growth Stocks Model Portfolio here to explore all the stocks.
