Top 5 Insurance Stocks To Watch For 2014

Red Cross workers survey the flood damage at a home in Evans, Co.

NEW YORK (CNNMoney) Fundraising efforts for victims of the Colorado floods have fallen far short of the billions of dollars in estimated damage.

Last month's historic flood damaged nearly 20,000 homes -- roughly 1,500 of which are completely destroyed -- and displaced more than 10,000 residents. The total economic toll is estimated to be more than $2 billion, according to Eqecat, which conducts loss estimates for the insurance industry.

Yet, major aid organizations have raised less than $7 million for Colorado flood relief thus far.

The Red Cross had raised only $3 million as of last Thursday. Meanwhile, the Salvation Army has raised about $1 million through online and phone donations, while a relief fund set up by a local United Way chapter for efforts specifically in Boulder and Broomfield counties has raised just $2.1 million.

Best Gas Utility Companies To Own In Right Now: Employers Holdings Inc (EIG)

Employers Holdings, Inc. (EHI), incorporated on March 9, 2005, is a holding company. The Company is a provider of workers compensation insurance focused on select small businesses in low to medium hazard industries. It employs a disciplined, conservative underwriting approach designed to individually select specific types of businesses, predominantly those in the lowest four of the seven workers' compensation insurance industry defined hazard groups, that it believe will have fewer and less costly claims relative to other businesses in the same hazard groups. Workers' compensation is provided for under a statutory system wherein employers are required to provide coverage for their employees' medical, disability, vocational rehabilitation, and/or death benefit costs for work-related injuries or illnesses. It operates as a single reportable segment and conduct operations in 31 states and the District of Columbia, with a concentration in California, where over one-half of its business is generated.

Workers' compensation provides insurance coverage for the statutorily prescribed benefits that employers are required to provide to their employees who may be injured or suffer illness in the course of employment. The level of benefits varies by state, the nature and severity of the injury or disease, and the wages of the injured worker. Each state has a statutory, regulatory, and adjudicatory system that sets the amount of wage replacement to be paid, determines the level of medical care required to be provided, establishes the degree of permanent impairment, and specifies the options in selecting healthcare providers. These state laws generally require two types of benefits for injured employees: medical benefits, including expenses related to the diagnosis and treatment of an injury, disease, or both, as well as any required rehabilitation and (indemnity payments, which consists of temporary wage replacement, permanent disability payments, and death benefits to surviving family members.

Disciplined Underwriting

The Company focuses on disciplined underwriting and continues to pursue profitable growth opportunities across market cycles. It carefully monitor market trends to assess new business opportunities that it expects will meet its pricing and risk standards. It prices its policies based on the specific risks associated with each potential insured rather than solely on the industry class in which a potential insured is classified. Its disciplined underwriting approach is a critical element of its culture and its believe that it has allowed them to offer competitive prices, diversify its risks, and out-perform the industry.

It executes its underwriting processes through automated systems and experienced underwriters with specific knowledge of local markets. It has developed automated underwriting templates for specific classes of business that produce faster quotes when certain underwriting criteria are met. Its underwriting guidelines consider many factors, such as type of business, nature of operations, and risk exposures, and are designed to minimize or prevent underwriting of certain undesirable classes of business.

Loss Control

Its loss control professionals provide consultation to policyholders to assist them in preventing losses and containing costs once claims occur. They also assist its underwriting personnel in evaluating potential and current policyholders and are an important part of its underwriting discipline.

Premium Audit

It conducts premium audits on substantially all of its policyholders annually upon the policy expiration. Premium audits allow them to comply with applicable state and reporting bureau requirements and to verify that policyholders have accurately reported their payroll and employee job classifications. It also selectively perform interim audits on certain classes of business or if unusual claims are filed or concerns are raised regarding projected annual payrolls, whi! ch could ! result in substantial variances at final audit.

Claims and Medical Case Management

The role of its claims department is to actively and efficiently investigate, evaluate, and pay claims, and to aid injured workers in returning to work in accordance with applicable laws and regulations. It has implemented rigorous claims guidelines and control procedures in its claims units and have claims operations throughout the markets it serves. It also provides medical case management services for those claims that it determines will benefit from such involvement. utilize medical provider networks affiliated with Anthem Blue Cross of California (Anthem) and Coventry Health Care, Inc. and make every appropriate effort to direct injured workers into these networks for medical treatments.

In addition to its medical networks, it work closely with local vendors, including attorneys, medical professionals, and investigators, to bring local to its reported claims. It pays special attention to reducing costs and have established discounting arrangements with the aforementioned service providers. It uses preferred provider organizations, bill review services, and utilization management to closely monitor medical costs. It actively pursues fraud and subrogation recoveries to mitigate claims costs. Subrogation rights are based upon state and federal laws, as well as the insurance policies it issues. Its fraud and subrogation efforts are handled through dedicated units.

The Company competes with The Hartford Financial Services Group, Inc., Travelers Insurance Group Holdings, Inc., Zurich Insurance Group Ltd., and Berkshire Hathaway Homestate Companies.

Advisors' Opinion:

• [By Roberto Pedone]

  Employers Holdings (EIG) is a provider of worker's compensation insurance focused on select small businesses engaged in low to medium hazard industries. This stock closed up 2.9% at $28.48 in Thursday's trading session.

  Thursday's Volume: 252,000
  
  Three-Month Average Volume: 119,789
  
  Volume % Change: 75%

  From a technical perspective, EIG jumped notably higher here right above its 50-day moving average of $26.48 with above-average volume. This stock has been uptrending strong for the last five months, with shares soaring higher from its low of $21.03 to its recent high of $29.12. During that move, shares of EIG have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of EIG within range of triggering a near-term breakout trade. That trade will hit if EIG manages to take out its 52-week high at $29.18 with high volume.

  Traders should now look for long-biased trades in EIG as long as it's trending above Thursday's low of $27.65 or above its 50-day at $26.48 and then once it sustains a move or close above its 52-week high at $29.18 with volume that's near or above 119,789 shares. If that breakout hits soon, then EIG will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $33 to $35.

Top 5 Insurance Stocks To Watch For 2014: Aon Corporation(AON)

Aon Corporation provides risk management services, insurance and reinsurance brokerage, and human resource consulting and outsourcing services primarily in the United States, the Americas, the United Kingdom, Europe, the Middle East, Africa, and the Asia Pacific. The company?s Risk Solutions segment offers retail brokerage products and services, including affinity products, general underwriting management services, placement services, and captive management services; and advisory services to technology, financial services, agribusiness, aviation, construction, health care, and energy industries, as well as facilitates various risk management solutions for property liability, general liability, professional liability, directors' and officers' liability, workers' compensation, and various healthcare products. This segment also provides risk consulting services comprising captive management; eSolutions products that enable clients to manage risks, policies, claims, and safet y concerns through an integrated technology platform; reinsurance brokerage services, such as actuarial, enterprise risk management, catastrophe management, and rating agency advisory services; property and casualty reinsurance; and specialty lines, which include professional liability, medical malpractice, accident, life, and health, as well as capital management transaction and advisory services. Its HR Solutions segment offers human capital services in the areas of health and benefits, retirement, compensation, and strategic human capital; and benefits administration and human resource business process outsourcing services. The company was founded in 1919 and is headquartered in Chicago, Illinois.

Advisors' Opinion:

• [By GURUFOCUS]

  For the YTD, Aon (AON), the world's largest insurance broker and a leading benefits management firm, was among the Fund's largest contributors as the company's lower tax rate and increasing cash flow helped drive a 35% return. Higher interest rates will increase fiduciary income and help close the gap in the underfunded pension. Although nascent, Aon's healthcare exchange for corporate employees is gaining critical mass, most recently adding Walgreen Co in the third quarter. We applaud Greg Case and his team for their customer- focused, shareholder-oriented leadership.

• [By Eric Volkman]

  Manchester United (NYSE: MANU  ) footballers will soon be wearing Aon's (NYSE: AON  ) name on their jerseys, after the two companies completed a long-term expansion to their sponsorship deal. Starting from July 1, the club's training facility is to be renamed the Aon Training Complex, and its distinctive jerseys will carry the Aon logo.

Top 5 Insurance Stocks To Watch For 2014: Tryg A/S (TRYG)

Tryg A/S, formerly TrygVesta A/S, is a Denmark-based insurance company. It is the parent company within the Tryg Group, which supplies insurance services in the Nordic countries. The Company is organized in four business areas, namely Private, Commercial, Industry and Sweden. Private sells insurance products to private individuals in Denmark and Norway. Commercial sells insurance products to small and medium-sized companies in Denmark and Norway. Industry sells insurance products to industrial customers under the Tryg brand in Denmark and Norway and the Moderna brand in Sweden. Sweden sells insurance products to private individuals in Sweden under the Moderna brand name. As of December 31, 2012, the Company had one wholly owned subsidiary, Tryg Forsikring A/S. On May 1, 2013, it sold its Finnish branch. Advisors' Opinion:

• [By Sofia Horta e Costa]

  Commodity producers slid as the release fueled concern about the slowdown in the world�� second-biggest economy. Burberry Group Plc (BRBY) gained 4.8 percent after the company�� spring-summer collection helped increase retail sales in its fiscal first quarter by more than analysts had estimated. Tryg A/S (TRYG) added 3.3 percent after posting better-than-forecast pretax profit as cost cuts offset increased weather-related claims.

Top 5 Insurance Stocks To Watch For 2014: Marsh & McLennan Companies Inc. (MMC)

Marsh & McLennan Companies, Inc., a professional services company, provides advice and solutions in the areas of risk, strategy, and human capital. It operates in two segments, Risk and Insurance Services, and Consulting. The Risk and Insurance Services segment provides risk management and insurance broking, reinsurance broking, and insurance program management services for businesses, public entities, insurance companies, associations, professional services organizations, and private clients. The Consulting segment offers advice and services to the managements of organizations in the area of human resource consulting, comprising retirement and investments, health and benefits, outsourcing and talent; and strategy and risk management consulting, such as management, economic, and brand consulting. The company also provides investment consulting services for endowments and foundations in the United States; health and benefit recordkeeping, and employee enrollment technology; human resource knowledge, data, and solutions for professionals in various industries; and Medicaid policy consulting services. It principally serves customers in the United States, the United Kingdom, the Asia Pacific, and Continental Europe. Marsh & McLennan Companies, Inc. was founded in 1871 and is headquartered in New York, New York.

Advisors' Opinion:

• [By Christina Rexrode]

  Marsh & McLennan Cos Inc. (MMC) and MetLife Inc. (MET) have been rising since those companies reported earnings earlier this week.

• [By CRWE]

  Marsh & McLennan Companies, Inc. (NYSE:MMC) held its annual meeting of shareholders, at which the Company announced that its Board of Directors has voted to increase the Company�� quarterly cash dividend by 5 percent to $.23 per share on outstanding common stock.

• [By Ben Levisohn]

  Progressive (PGR) was downgraded from Strong Buy to Market Perform at Raymond James, while Marsh & McLennan (MMC) was cut to Outperform from Strong Buy.

• [By Dan Caplinger]

  The real test for Obamacare
  In any event, the biggest challenge that Obamacare faces is getting its Health Insurance Marketplace up and running by Oct. 1. Although private exchanges from Marsh & McLennan (NYSE: MMC  ) subsidiary Mercer as well as Towers Watson (NYSE: TW  ) have done a good job of getting Aetna, UnitedHealth, and other popular insurers to participate in their programs, the reception that public exchanges have gotten has been far less favorable. Without a smooth launch in less than three months, Obamacare could find itself facing much greater criticism than it is today.