3 Insurance Dividend Stocks Built to Keep Paying Through Tough Times
Insurers get paid first and settle claims later, and that gap quietly funds some of the market's most durable dividends. Three NYSE giants spend only a sliver of profits on payouts, yet one faces a storm-season swing the others dodge.
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Insurance companies collect premiums up front and pay claims later, and the cash held in between earns interest. When underwriting remains disciplined, that model produces steady profits that can fund a dividend in good years and bad. Travelers (NYSE:TRV | TRV Price Prediction), Allstate (NYSE:ALL) and Chubb (NYSE:CB) are three of the largest property and casualty insurance companies listed on the NYSE. Travelers shows the model at its best: it has raised its quarterly dividend every year since 2004. All three pair modest yields with strong dividend coverage. Each company pays out a small piece of its earnings and keeps raising the check.
Travelers: A Dividend Raised Every Year Since 2004
Travelers insures businesses of every size, from small firms reached through its Simply Business brand to large corporations. It also sells personal auto and homeowners policies. At a share price of $395.19, the stock yields 1.17% on trailing dividends of $4.70 per share. The current quarterly payment is $1.25, and the next one has already been declared.
Dividend safety: The dividend uses about 12% of trailing earnings of $38.03 per share. In the third quarter alone, core earnings came to $9.18 per share, beating the $7.36 consensus. Core return on equity reached 24.1% over the trailing four quarters. The consolidated combined ratio was 86.8%, which means Travelers spent about 86.8 cents on claims and expenses for every premium dollar and kept the rest as underwriting profit. Operating cash flow totaled $3.878 billion. Debt-to-capital of 21.7% falls inside the company’s 15% to 25% target range, and shareholders’ equity stands at $28.995 billion.
The dividend record sets Travelers apart from the other two. The most recent raise increased the quarterly payout from $1.10 to $1.25, following steps from $1.05 to $1.10 and $1.00 to $1.05 in the two prior years. Buybacks are also reducing the share count. Repurchases totaled $4.585 billion year to date, with $2.415 billion left on the authorization. With fewer shares outstanding, each future raise costs the company less to fund.
Bull case: Higher interest rates keep increasing Travelers’ investment income. Pre-tax net investment income hit a record $1.10 billion, up 6% year over year. The fixed income book yield rose to 4.02% from 3.86% at the end of last year, and that income comes in whether storms hit or not. CEO Alan Schnitzer cited “real confidence heading into 2027 and beyond.” The stock has gained 37.77% year to date and still trades at a trailing P/E of 10 and a forward P/E of 14.
Risk: Travelers’ personal lines are reducing. Personal auto policies in force fell 9.2%, and homeowners policies fell 6.8%. Margins are still strong, but a smaller consumer book leaves more of the growth to business insurance and investment income.
Allstate: Highest Yield, Thinnest Payout
Allstate is best known for car and home insurance, sold through its own agents, independent agents, and direct channels. It also offers protection plans, roadside assistance, and Arity, its driving-data business. In total, it covers 217.6 million policies in force. At $254.91, Allstate yields 1.59%, the highest of the three, on trailing dividends of $4.24 per share. The quarterly payout is $1.08, up from $1.00 a year earlier.
Dividend safety: Allstate has the smallest payout of the group. The dividend takes about 10% of trailing earnings of $44.09 per share. Adjusted EPS came in at $10.65, $8.99 and $9.76 over the past three quarters, each one many times the $1.08 dividend. The third-quarter figure beat the $6.96 consensus, and Allstate has exceeded EPS forecasts for five consecutive quarters. Shareholders’ equity rose 17.54% year over year to $32.311 billion, and trailing return on equity is 38.9%.
The dividend history shows a higher quarterly payout every year from $0.20 in 2010 to today’s $1.08. Buybacks add to that. Allstate returned about $1.5 billion through repurchases and dividends in the third quarter, with $1.3 billion left on its $4.0 billion authorization.
Bull case: Allstate is growing its policy count again. Property-Liability policies rose 3.3%, homeowners earned premiums climbed 11.5%, and new business grew 10.2% in homeowners and 6.3% in auto. Net investment income increased $228 million year over year. CEO Tom Wilson said, “Earnings reflected strong underwriting margins on auto and homeowners insurance, higher investment income, and continued growth of Protection Services.” Allstate is also the cheapest of the three, at a trailing P/E of 6 and a forward P/E of 10.
Risk: Because Allstate leans heavily on homeowners coverage, it takes the full force of severe weather. Third-quarter catastrophe losses rose to $1.65 billion from $558 million a year earlier and added 7.1 points to the combined ratio. GAAP diluted EPS was $8.03. That still covers the dividend easily, but quarterly results will keep swinging with the storm season.
Chubb: Record Earnings From the Widest Business Mix
Chubb describes itself as the world’s largest publicly traded property and casualty insurance company, and its market value is about $139.48 billion. It insures businesses and individuals worldwide, covering property and casualty, accident and health, reinsurance, and life risks. The company is incorporated in Zurich and its shares trade on the NYSE. At $365.06, Chubb yields 1.07% on trailing dividends of $3.98 per share. The latest raise increased the quarterly payment to $1.02 from $0.97.
Dividend safety: The dividend uses about 14% of trailing earnings of $28.53 per share. Third-quarter core operating income reached a record $7.66 per share, and year-to-date core operating income per share rose 24.5% to $21.94. The P&C combined ratio was 84.1%. Operating cash flow was $3.95 billion in the first quarter and $3.73 billion in the second. Shareholders’ equity is $80.845 billion against total financial debt of $18.1 billion, for a leverage ratio of 19.1%.
Available records show the quarterly payout climbing from $0.73 in 2019 to $1.02, with a raise every year over that span. Chubb also bought back $2.12 billion of stock through the first half of the year.
Bull case: Chubb earns from more sources than the other two. Adjusted net investment income hit a record $1.88 billion in the second quarter, up 11.4%, on an invested asset base of about $175 billion. Life premiums rose 14.4%, and Overseas General net premiums written grew 10.2% in that quarter. CEO Evan G. Greenberg expressed confidence in continued double-digit growth in operating earnings, EPS, and tangible book value, excluding catastrophes and currency effects. The stock trades at 13 times both trailing and forward earnings.
Risk: Pricing is softening in global property and financial lines, and Chubb is choosing to give up volume rather than write underpriced business. It is actively declining to renew some large-account property policies. Revenue fell 6.8% year over year in the second quarter, and third-quarter net premiums written grew only 1.9%.
Three Insurers, One Dependable Income Formula
Travelers has the longest verified record of annual raises. Allstate pays the highest yield with the smallest payout ratio. Chubb has the biggest balance sheet and the widest earnings mix. In all three, the dividend takes only a small share of profits, investment income is rising with higher rates, and buybacks keep cutting the share count. If this kind of multi-decade raise run is what you want in a portfolio, we ranked ten of the strongest Dividend Kings by valuation in a free report you can grab here. Next, watch catastrophe losses in the upcoming earnings reports and each company’s next dividend declaration for another 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.
