These Insurance Companies Might Have You Covered – But Do You Have Their Sector Covered?

ByDylan Callaghan Published On:

Key takeaways

Strong Dividends and Stability: Canadian insurance stocks, like Sun Life, Intact Financial, and Power Corporation, are known for their reliable dividends and stable cash flows, making them ideal for income-focused investors.

Growth Beyond Canada: These companies are increasingly looking to international markets for expansion, such as Sun Life’s push into Asia and Intact Financial’s RSA acquisition, highlighting opportunities for global growth.

Resilience Amid Market Challenges: Despite risks like climate-related claims or regulatory pressures, the insurance sector remains resilient due to mandatory coverage needs, diversified business models, and effective risk management strategies.

3 stocks I like better than the ones on this list.

Investing is all about putting cash in what you know. Canadian insurance stocks are great for this since insurance is a simple, everyday idea. Plus, market conditions now are perfect for these stocks, and they’ve realized outstanding returns over the last few years.

I’m going to go over 3 insurance companies that I believe are some of the strongest options in the country at this point.

I’ve attempted to pick individual insurers from different insurance segments, so that there is something for everyone on this list. Of note, these stocks are in no particular order.

As always, if you’re looking for more research, top stock picks, market commentary and more, join our weekly newsletter, absolutely free by clicking here.

The top Canadian insurance stocks to buy today

Global life insurance and asset manager

Sun Life Financial (TSX:SLF)

Sun Life Financial is one of Canada’s largest life insurance companies, offering a mix of individual and group life insurance, health insurance, and wealth management solutions. The company operates in multiple global markets, including Canada, the U.S., and Asia, positioning itself as a key player in the growing international insurance and asset management industry. Sun Life is well-known for its focus on innovation and digital tools, making it easier for clients to manage their insurance and investment products.

P/E: 14.7

5 Yr Revenue Growth: -6.9%

5 Yr Earnings Growth: 3.0%

5 Yr Dividend Growth: 8.4%

Yield: 4.2%

  • Strong diversification across insurance and wealth management.
  • Growing presence in high-growth Asian markets like the Philippines and Vietnam.
  • Significant focus on digital transformation, enhancing client experience.
  • Stable dividend history with a current yield of ~4%.
  • Steady earnings growth, supported by a mix of recurring insurance premiums and asset management fees.
  • High exposure to health insurance, benefiting from aging populations in key markets.
  • Asian Market Expansion: Sun Life is making strategic investments in Asia, where insurance demand is rapidly increasing. Investors should monitor growth rates in these markets.
  • Digital Innovation: The company is enhancing its digital offerings, such as AI-driven tools for clients, which could improve profitability and client retention.
  • Health Insurance Demand: Aging populations globally are driving demand for health-related coverage, a core area for Sun Life.
  • Interest Rate Movements: Higher interest rates typically benefit life insurers like Sun Life, as they improve returns on fixed-income investments.
  • Economic Slowdowns: A weak economy could reduce insurance premium inflows and asset management revenues.
  • Regulatory Challenges: Tightening regulations in key markets could impact Sun Life’s ability to expand or increase costs.
  • Currency Fluctuations: Given its international presence, fluctuations in foreign exchange rates could hurt profitability.
  • Competitive Pressure in Asia: The insurance market in Asia is highly competitive, with domestic and global players fighting for market share.

Related

3 of My Top Picks for 2025, Absolutely Free:

Canada’s largest property and casualty insurer

Intact Financial (TSX:IFC)

Intact Financial focuses on providing home, auto, and commercial insurance products across Canada, the U.S., and parts of Europe. The company has a strong reputation for risk management and disciplined underwriting, which has allowed it to dominate the Canadian property and casualty (P&C) insurance market. Recent acquisitions, such as RSA Insurance, have expanded its footprint and diversified its offerings, especially in the commercial insurance space.

P/E: 23.2

5 Yr Revenue Growth: 15.9%

5 Yr Earnings Growth: 19.5%

5 Yr Dividend Growth: 9.7%

Yield: 1.7%

  • Market leader in Canada’s P&C insurance sector.
  • Strong underwriting discipline ensures long-term profitability.
  • Successful acquisition strategy, including the recent RSA deal.
  • Resilient revenue streams driven by mandatory insurance products like auto and home.
  • Ability to manage catastrophic losses through effective reinsurance policies.
  • Increasing presence in international markets, providing growth opportunities.
  • Acquisition Integration: Watch how Intact integrates RSA’s operations and extracts synergies from the deal. Successful execution will strengthen its international position.
  • Climate Change Impact: P&C insurers face increased claims from extreme weather events, pushing innovation in risk modeling.
  • Pricing Power: Intact has shown an ability to raise premiums in response to inflationary pressures, a key factor for profitability.
  • Digital Transformation: Investments in AI and automation for claims processing could improve efficiency and reduce costs.
  • Weather-Related Losses: Rising claims from floods, fires, and other disasters could impact profitability.
  • Regulatory Changes: Tighter rules around pricing or coverage requirements could limit flexibility in certain markets.
  • Acquisition Risks: Poor integration of RSA Insurance could lead to inefficiencies or unexpected costs.
  • Market Saturation in Canada: With its dominant position in Canada, future growth will rely heavily on international expansion, which carries additional risks.

Diversified financial services holding company

Power Corporation (TSX:POW)

Power Corporation owns a significant stake in Great-West Lifeco, one of Canada’s leading life insurance companies, as well as other financial services companies like IG Wealth Management and Mackenzie Investments. Unlike pure-play insurance companies, Power Corporation is a diversified holding company, blending insurance, wealth management, and asset management businesses under one roof. The company also invests in emerging sectors like renewable energy through its subsidiary Power Sustainable.

P/E: 12.2

5 Yr Revenue Growth: -4.0%

5 Yr Earnings Growth: 10.6%

5 Yr Dividend Growth: 7.1%

Yield: 4.4%

  • Exposure to Great-West Lifeco, a leader in life insurance.
  • Diversified income streams from insurance, asset management, and investments.
  • Solid dividend yield of ~6%, appealing to income-focused investors.
  • Strong position in wealth management through IG Wealth and Mackenzie Investments.
  • Investments in renewable energy and private equity offer growth potential.
  • Conservative management approach ensures financial stability.
  • Great-West Lifeco’s Growth: Monitor how Power Corporation’s largest subsidiary performs, especially in expanding its U.S. and European businesses.
  • Wealth Management Expansion: IG Wealth and Mackenzie Investments are benefiting from rising interest in financial planning and asset management.
  • Renewable Energy Investments: Power Sustainable’s growth could add a new layer of long-term returns.
  • Consolidation in Financial Services: Power Corporation’s holdings may benefit from industry-wide M&A trends, creating opportunities for scale and synergies.
  • Reliance on Great-West Lifeco: A downturn in Great-West’s performance could heavily impact Power Corporation’s results.
  • Market Sensitivity: Asset management businesses are sensitive to market volatility, which could hurt revenues.
  • Interest Rate Impacts: While higher rates benefit life insurance, they could also hurt asset management margins and valuations.
  • Conglomerate Discount: Investors may undervalue Power Corporation’s shares due to its holding company structure.

Why insurance stocks in Canada moving forward?

There’s certainly a bullish case for insurance stocks, considering the current economic environment.

Not everybody knows the complexities of the 80-page insurance policy they deliver you annually. But we know you need insurance to drive a vehicle, to own a home, and many get a life insurance policy at some point. 

Even health insurance products in the United States are available to protect people from costly situations regarding their private healthcare situation.

But, you’re likely unaware that there are many different types of Canadian insurance stocks and insurance providers, and there aren’t too many “all in one” solutions here in Canada.

From P&C (property and casualty) insurers to life insurers, there is a ton of variety here among Canadian stocks. Buying one might not get you exposure to all types.

Canadian fintech stocks might struggle as spending relaxes due to higher interest rates. However, increasing rates benefits insurance companies and financial companies as a whole.

For the most part, insurance companies invest their collected premiums into low-risk assets, many of which are highly dependent on interest rates.

In the situation of life insurance companies, they also offer products that are highly dependent on rates. When rates go up, these companies earn more and can charge more.

Related

Best Canadian Bank Stocks to Buy

Do insurance ETFs exist?

Finding a pure-play insurance ETF here in Canada is not easy. This is simply because we do not have enough companies nor the popularity to generate enough fund flows regarding insurance stocks.

However, something like the iShares Equal Weight Banc & Lifeco ETF (TSE:CEW), or the CI U.S. & Canada Lifeco Income ETF (TSE:FLI) can give you good exposure to the sector.

CEW is an ETF that offers exposure to both Canadian insurers and Canadian banks. At the same time, FLI is both Canadian and United States insurance companies.

3X Your Investment Returns

I back tested one of the most underrated investment strategies on the market today against the strategy the majority of Canadians utilize right now.

My findings could fundamentally change how you invest, especially if you're a dividend investor.

I am offering the case study to readers absolutely free for a limited time:

    We respect your privacy. Unsubscribe at any time.