5 Insurance Stocks to Buy for a Decade of Rising Dividends

Insurance companies generate income through underwriting, investing premiums (float), and paying out claims. Successful underwriting at breakeven or profitable levels, combined with smart investments in fixed-income securities, allows these insurers to consistently pay out and increase dividends over time. For long-term, dividend-focused investors, five insurance stocks with a strong history of dividend growth and potential for continued growth over the next decade are worth considering: Aflac, Chubb, Cincinnati Financial, Old Republic, and Travelers Companies.

Aflac has raised its dividend for 45 consecutive years, boasting a 2% forward dividend yield and an average dividend growth rate of 11.4% over the past decade. The company has also reduced its outstanding share count by nearly 16% since 2022, boosting earnings and share appreciation. Although Aflac's latest dividend increase was modest at 5.1%, its strong track record of dividend growth makes it a solid choice for dividend growth investors.

Chubb, known for high-end homeowner policies, has a 33-year track record of consecutive dividend growth and has delivered total returns of 105% over the past five years, outperforming the S&P 500. Strong underwriting profitability and a recent $460 million gain on its $740 million investment in USI Insurance services contribute to Chubb's potential for continued success over the next decade.

Cincinnati Financial has raised its dividend for 66 years, currently offering a 2.2% forward dividend yield. The insurer has a 7% average annual dividend growth rate over the past decade and a manageable payout ratio of 42%, making it one of the Dividend Kings. While Q2 results showed underwriting losses, strong investment gains have offset this, and Cincinnati Financial's focus on stock-heavy investments is unlikely to hinder its long-term total return.

Old Republic, with a 46-year record of consecutive annual dividend growth, is a Dividend King on the verge of clinching this status. Although net income fell by nearly 13% in the latest quarter, Old Republic reported a 9% jump in net premiums and a 5.7% increase in book value over the past year. However, concerns about future payout and stock price growth due to the ongoing housing slowdown and lower earnings warrant caution.

Travelers Companies has a forward dividend yield of 1.77% and a track record of dividend growth. With strong potential for further growth over the next decade, these five insurance stocks present compelling opportunities for long-term, dividend-focused investors.