Markel (NYSE:MKL) is a small-specialty insurer with a superb record of underwriting and investing. Progressive (NYSE:PGR) is at the heart of two long-term trends in auto insurance that could fuel growth for decades. Berkshire Hathaway (NYSE:BRK-B) is Warren Buffett's diversified conglomerate, but its insurance operations are the heart of the business. In this video, Motley Fool Stock Advisor analyst Brendan Mathews explains why these three insurance stocks are his favorites for 2014 and beyond.
Markel is well-known among insurance industry analysts and a favorite among longtime Fools, but for most investors, Markel is undiscovered territory. That's too bad, because the company has written insurance at an average combined ratio of 96 during the past 10 years. And, thanks to its Chief Investment Officer, Tom Gayner, the company has outpaced the S&P 500 by a full 2% annually during the past decade.
If you watch television, you've probably seen Progressive's commercials and spokeswomen, Flo. What you may not know is that Progressive is at the heart of two major structural changes in the auto insurance industry -- direct sales, and usage-based policies. These trends could fuel growth at this well-managed insurer for decades.
All investors should be familiar with Berkshire Hathaway, and it's outstanding collection of businesses from railroads to Dairy Queen. And, insurance is the engine that fuel's Warren Buffett's empire. The company is an outstanding underwriter, and it seems inevitable that GEICO will eventually surpass State Farm as the nation's number one auto insurer.