Why Insurance Stocks Can Be Some of the Market's Best Long-Term Compounders
Insurance companies are among the largest institutional investors, thanks to this unique feature of their business.
Overview
There are two aspects of an insurance company that investors need to monitor. The first is how well they run their insurance operations. The second is how well they manage the float. The float is why insurance companies can be some of the market's best long-term compounders.
There are material differences between how insurance companies manage the float. At one extreme are companies like Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB) and Cincinnati Financial (NASDAQ: CINF), and at the other are companies like Progressive (NYSE: PGR) and Chubb (NYSE: CB). Here's what you need to know before buying any of these insurance stocks.
Image source: The Motley Fool.
Details
Source
Originally published at www.fool.com.