Benefits and risks of investing in insurance stocks
Insurance stocks can be a great way to build wealth over time without excessive risk. Since insurance companies make money not only from profitable underwriting but from investments as well, they can be excellent total return investments. This is especially true with companies like Markel, which branches out into stock and venture capital investing with its float.
Of course, there's no such thing as a risk-free stock investment, and insurance stocks aren't an exception. By nature, insurance has an element of unpredictability -- after all, the definition of insurance is transferring risk from one party (customers) to another (the insurance company). For example, if there's a particularly bad natural disaster, it can be potentially devastating to insurance company profits.