We recently published a list of the 10 Most Undervalued Insurance Stocks to Buy Now . In this article, we are going to take a look at where Willis Towers Watson Public Limited Company (NASDAQ:WTW) stands against the other undervalued insurance stocks.
The insurance industry has performed better in 2025 than the broader market. The S&P 500 index, which tracks large-cap stocks, has declined over 4.50% so far in 2025. In comparison, two of the leading insurance ETFs, the S&P Insurance ETF and the iShares US Insurance ETF, have surged over 3% and 4.50% year-to-date, respectively.
Insurance Industry in the United States
Despite the losses from wildfires, the analysts see a higher upside for insurance stocks compared to the broader market. There are different reports on the insured losses in Los Angeles. Verisk anticipates insured losses between $28 billion and $35 billion. At the same time, a new report from the UCLA Anderson Forecast indicates that wildfires in L.A. County may have caused total losses ranging between $95 billion and $164 billion, with insured losses estimated at $75 billion.
Earlier in January, Fitch Ratings reported that the losses are likely to “materially exceed” highs from past wildfire events but are unlikely to impact the ratings of property and casualty (P&C) insurers and reinsurers.
“Insured losses should remain within rating sensitivities for affected insurers, given ample capital levels, diversified risk exposure, and insurers’ ability to increase premium rates,” Fitch Ratings said.
Despite the losses, the insurance industry in the U.S. is overall balanced and remains positive. The U.S. has the largest insurance market in the world. The combined value of America’s insurance market is approximately $1.7 trillion, as of 2025. The U.S. has some of the largest insurance companies by assets that influence the global insurance markets.
The P&C insurance sector in the U.S. generated $9.3 billion in underwriting gains during the first quarter of 2024, according to a report by Deloitte. This was a major improvement from an $8.5 billion loss in Q1 2023. The industry also increased its combined ratio to 94.2%, driven by increases in rates in the personal lines sector outweighing the cost of claims.
A business executive reviewing insurance policy documents with a customer.
Our Methodology
We used a Finviz screener to shortlist Insurance companies with a forward P/E under 20. Finally, we listed the most undervalued insurance stocks based on the number of hedge fund holders, as of Q4 2024. The stocks are ranked in ascending order of the hedge fund sentiment.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points ( see more details here ).
Willis Towers Watson Public Limited Company (NASDAQ: WTW )
Forward P/E: 18.94
No. of Hedge Fund Holders: 48
Willis Towers Watson Public Limited Company (NASDAQ:WTW) is a London-based insurance company that offers commercial insurance, brokerage services, and strategic risk investment solutions. The recently launched AI-powered assistant, Expert, adds to WTW’s competitive advantage. The AI assistant is designed to help midsize U.S. businesses in managing HR, compensation, and benefits tasks. The tool helps with research, regulatory guidance, writing, and secure document searches.
Willis Towers Watson Public Limited Company (NASDAQ:WTW) is focused on data-driven solutions to assist risk and capital management. In October 2024, the company launched a machine-led solution designed to transform insurance practices. This solution supports insurers and reinsurers to enhance accuracy and efficiency in P&C reserving.
The company recently announced that it has expanded its partnership with the Karlsruhe Institute of Technology (KIT) in partnership with NASA. This collaboration aims to improve hail risk assessment across Europe, focusing on their spatial and temporal distribution.
WTW continues to transform its operations, ending FY2024 with an operating cash flow of $1.5 billion and FCF of $1.4 billion. The company posted a 5% organic revenue growth, with an adjusted operating margin of 36.1%, showing strong financial performance. In addition, WTW’s Transformation program achieved $473 million in cumulative savings, enhancing operational efficiency.
Overall WTW ranks 7th on our list of the Most Undervalued Insurance Stocks to Buy Now. While we acknowledge the potential of WTW as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than WTW but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock .
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Disclosure: None. This article is originally published at Insider Monkey .