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 The Travelers Companies, Inc. (NYSE:TRV) 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.

An experienced insurance agent explaining the benefits of an insurance product to 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).

The Travelers Companies, Inc. (NYSE:TRV)

Forward P/E: 13.39

No. of Hedge Fund Holders: 52

The Travelers Companies, Inc. (NYSE:TRV) is one of the largest insurance providers in the U.S. It provides a wide range of property and casualty insurance products. TRV specializes in offering coverage for personal, business, and specialty needs. The company offers various products including home, auto, and life insurance, as well as commercial lines for businesses.

On February 19, Keefe, Bruyette & Woods analyst Meyer Shields upgraded the rating of TRV shares from Market Perform to Outperform, raising the price target from $268 to $275. The analyst raised the rating on TRV following its Q4 results. The Travelers Companies Inc. (NYSE:TRV) reported a record core income of $2.1 billion in Q4 2024, a 30% increase year-over-year, and a full-year core income of $5 billion, up 64% compared to 2023. The earnings per share for the full year was $21.58, up 64% from a year ago.

Shields has slightly lowered the EPS estimate for 2025 from $22.20 to $21.75 per share. This adjustment was made due to the impact of California wildfire losses earlier this year. However, the analyst has increased its 2026 EPS estimate from $24.35 to $24.60 per share.

Overall TRV ranks 5th on our list of the Most Undervalued Insurance Stocks to Buy Now. While we acknowledge the potential of TRV 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 TRV but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks To Invest In According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.