3 Insurance Dividend Stocks That Could Pay You More Every Year in Retirement
Some insurers have raised their dividends every single year for over four decades, and three of them are doing it right now with payout ratios so conservative they could survive a catastrophic claims year without skipping a beat.
Insurers collect premiums today and pay claims later, and the best of them turn that gap into a dividend that grows year after year. Aflac (NYSE:AFL | AFL Price Prediction), Travelers (NYSE:TRV) and Chubb (NYSE:CB) all raised their quarterly payouts this year, and Aflac’s run is the longest: management counts 43 consecutive years of dividend increases. The starting yields are modest. What you’re buying is a payout that keeps growing, backed by underwriting profits, rising investment income, and payout ratios low enough to absorb a bad year.
Aflac: A Raise Record Built on Cancer and Medical Policies
Aflac yields 2.02% at a share price of $119.64, the highest starting yield of the three. The quarterly dividend is $0.61, up from $0.58, a 5.2% raise. The company’s chief executive put the commitment: “We treasure our 43 consecutive years of dividend increases and remain committed to extending this record in 2026.”
Aflac’s business differs significantly from the other two names here. It sells supplemental health and life policies that pay cash to policyholders who are diagnosed with cancer, hospitalized, or disabled, and much of that business is in Japan. Hurricanes and hailstorms don’t touch it. The number that matters is the benefit ratio, the share of premiums paid back as claims. In Japan, it came in at 64% last quarter, down 250 basis points from a year earlier.
Dividend safety: The annual dividend of $2.38 per share uses about 25.6% of trailing earnings of $9.30 per share. Dividends are the smallest piece of what Aflac returns to shareholders: last quarter it paid $309 million in dividends next to $983 million of buybacks. Unencumbered liquidity stood at $3.3 billion, $2.3 billion above its minimum, and adjusted leverage of 21.8% sits within its 20 to 25% target. Combined risk-based capital was slightly above 600%.
Bull case: As medical costs rise, Aflac’s product becomes more useful to households. The chief executive said, “The need for our products is actually more compelling in this type of environment because the financial risk to the household becomes more pronounced and more impactful.” The stock trades at about 13 times trailing earnings with a beta of 0.556, which fits a portfolio built for steady income.
Risk: Because so much of the business is in Japan, a weak yen reduces reported results. The currency took $0.05 off second-quarter adjusted EPS of $1.75, and Japan net earned premiums fell 3.7% in yen terms.
Travelers: Record Investment Income Backs a Bigger Check
Travelers yields 1.22% at $389. Alongside Friday’s third-quarter results, it declared another quarterly dividend of $1.25, keeping this year’s raise from $1.10 in place. That raise was about 13.6%, the biggest of the three. The quarterly rate has gone up every year in the dividend record back to 2009, when it was $0.33.
For property and casualty insurers, underwriting quality comes down to the combined ratio: claims plus expenses as a share of premiums. A reading below 100% means the insurer made money on its policies before counting any investment income. Travelers posted a third-quarter combined ratio of 86.8%. Its underlying ratio, which strips out disasters and reserve changes, came in at 84.1% and has stayed below 86% for the ninth consecutive quarter. Core EPS of $9.18 beat the $7.36 estimate.
Dividend safety: The dividend uses only about 12.6% of trailing EPS of $37.23. Last quarter Travelers paid $261 million in dividends against $3.9 billion of operating cash flow. Debt-to-capital of 21.7% is inside its 15% to 25% target. The float is earning more, too: after-tax net investment income reached a record $908 million, and management expects fixed-income investment income of more than $3.6 billion next year.
The bull case here is that management thinks this level of earnings can last. According to the CFO, “The zip code that we’re in now is just a completely different zip code than we used to be in, and we don’t see any reason that that’s likely to change.” The stock is up 35.61% year to date and still trades at about 11 times forward earnings.
Risk: Catastrophes are the biggest swing factor. Tornadoes and hail in the central United States produced $538 million of pre-tax disaster losses last quarter, and one heavy storm season can wipe out a year of underwriting gains.
Chubb: An All-Weather Underwriter With a Steady Raise Habit
Chubb yields 1.11% at $358.01. Its quarterly dividend is $1.02, up from $0.97, a 5.2% raise. The rate has risen every year since 2016, when it rose from $0.67 to $0.69, with no cuts along the way.
Chubb is legally based in Zurich but listed on the NYSE. It writes property, casualty, accident and health, and life insurance worldwide. Its second-quarter combined ratio of 83.8% means about 16 cents of underwriting profit on every premium dollar, and P&C underwriting income rose 18.8% to $1.94B. Adjusted net investment income hit a record $1.88B, earned on a $175B invested asset base.
Dividend safety: The dividend uses about 13.9% of trailing EPS of $28.23. Operating cash flow was $3.73B last quarter, against $395 million of dividends. The board also approved a new $7.5 billion buyback program. Debt of $18.1B yields a leverage ratio of 19.1%, and tangible book value per share rose 17.1% year over year.
Bull case: Chubb’s size and spread across regions keep its results steady. The CEO called it “an all-weather firm” and pointed to premium growth of 15.6% in Latin America and 12% in Asia. The stock trades at about 12 times forward earnings.
Risk: Prices are moderating. Management warned that “soft market conditions have begun to spread beyond property to more casualty lines, particularly E&S,” while primary casualty loss costs are rising 6% to 7% a year. If pricing falls behind claims costs, underwriting margins will be reduced.
Three Ways to Collect a Growing Insurance Dividend
Aflac has the longest record and the highest yield, and its earnings come from health claims rather than the weather. Travelers gave the biggest raise this year, and Chubb brings the widest global book. All three pay out less than a third of earnings, which leaves plenty of room to keep raising. Over the next few quarters, watch combined ratios and investment income, since those two numbers fund the next raise.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
