INSURANCE COMPANIES

LPI, TAKAFUL, TUNE INSURANCE .....and many more

WHY WE NEED TO HAVE THESE STOCKS

Based on the above, LPI, TAKAFUL and TUNE Ins

ROE 18-20%

NP Margin 18-20%

ROE 14 - 20%

LPI and TAKAFUL has >10 years listed track record and their Earnings CAGR = 12.86% to 20% (for 10 years track record)

TUNE Ins - only 3 years track record

WHICH ONE IS THE BEST

All of the three has PE of about 18-21X.

Each of them has different dividend yield records and capital appreciation.  LPI appears to have the lower risk due to consistent dividend yield, while Tune does not pay any dividend.

LIMITED REVIEW

I have only done a very limited review (not even research), hence, do your own detail evaluation.  Insurance, if done well, is a great biz, with great ROE, NP Margin, and also Double Digits growth and it appears to be recession prove, it is good to have one or two of them in your pocket.

Oh, most importantly, their average CAGR gain (Capital & dividend) based on the share price and dividend paid, is about 12-16%.  

MY VIEW

These are one of the few that you must KEEP say, 10-20 years.  Of course, do reveiw regularly, to see if the CAGR gain is still above 10%.  If it has greatly exceeded that, i.e. CAGR (price+div) > CAGR net profit over last 10 years, then time to let go.

OTHERS INSURERS

MAA has a negative compounding profit of 9.5% for last 10 years and revenue dropped from RM2.8b to RM0.7b.  Meanwhile, Manulife is flat for the last 10 years.  So, avoid these two insurers.

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