Two Insurance Stocks To Buy During This Turbulent Market

The Impact of Trump’s Economic Policies on Global Markets and Investors

President Trump’s economic policies have introduced significant uncertainty and volatility into global markets, reshaping America’s relationships with its international allies. One of the most dramatic moves has been the U.S. withdrawal from NATO, which has sent shockwaves through international alliances. European countries, in response, have scrambled to increase their defense spending to unprecedented levels. These sweeping changes have left investors questioning the long-term implications for their portfolios. The equity, bond, currency, and commodity markets are being driven by forces that are difficult to predict, making it challenging for investors to navigate this new economic landscape. Since Trump’s inauguration on January 20, U.S. stocks have lost a staggering $3 trillion in value, leaving many investors feeling uncertain about the future. The only clear strategy for investors in this fast-paced and unpredictable environment is to remain liquid and agile, allowing them to respond quickly to the rapid changes taking place.

Market Performance and Shifting Investment Strategies

Heading into 2025, one of the most popular investment strategies was to "buy American exceptionalism" by investing heavily in the tech sector and rotating into health and energy stocks. However, this strategy has struggled to gain traction amid the administration’s unpredictable behavior. While U.S. markets have faltered, international markets, particularly in China and Germany, have seen double-digit growth since January 20th. This shift in market dynamics has left many investors reevaluating their portfolios and looking for new opportunities in more stable regions. The coming week will be a critical test of Trump’s approach to the markets, with the imposition of 25% tariffs on steel and aluminum set to take effect on March 12th, followed by a potential government shutdown on March 14th. These events could further exacerbate market volatility and make it even more challenging for investors to find their footing.

The Administration’s Focus on Main Street Over Wall Street

In a recent speech to the Economic Club of New York, Treasury Secretary Scott Bessent emphasized that the administration’s focus is on "Main Street" rather than Wall Street. This statement contradicts the notion of a "Trump Put," which was a widely held belief that the administration would step in to support the markets during times of turmoil. However, this notion now seems increasingly dubious, as Trump continues to announce tariffs only to pause or reverse them, sometimes within hours. This erratic behavior has left investors questioning whether the administration has a coherent strategy for supporting the markets or if it is simply reacting to events on a whim. As a result, investor confidence in the administration’s ability to stabilize the markets has been shaken, leading many to adopt a more cautious approach to their investments.

Insurance Stocks as a Safe Haven in Uncertain Times

As investors become increasingly defensive in the face of market uncertainty, insurance stocks have emerged as a potential safe haven. Insurance companies often perform well during periods of economic volatility, as demand for risk management products remains stable regardless of broader economic conditions. Two insurance companies that are worth considering in this environment are Root (ticker: ROOT) and Ryan Specialty Holdings (ticker: RYAN). These companies represent different approaches to the insurance industry, offering investors a range of options depending on their risk tolerance and investment goals.

Root: A Technology-Driven Disruptor in the Auto Insurance Industry

Root is a technology-first insurance company that is disrupting the auto insurance industry through its innovative use of artificial intelligence and telematics. By leveraging these technologies, Root is able to price risk more accurately than traditional insurers, giving it a competitive edge in the market. In a surprising turn, the company reported a profit in the fourth quarter, with higher-than-expected sales. While sales growth slowed to 68% after four consecutive quarters of triple-digit expansion, Root achieved its first profitable year in 2024, marking a significant milestone for this innovative insurer. Looking ahead, analysts expect Root’s revenue growth to moderate to 18% in the first quarter, with single-digit growth in subsequent quarters. While the company’s near-term earnings outlook shows a profitable first quarter followed by three quarters of losses, with a projected full-year 2025 loss of 42 cents per share, Root is expected to return to profitability in 2026, with a projected profit of 81 cents per share. This suggests that Root has a promising long-term outlook, making it an attractive option for investors who are willing to take on higher levels of risk in pursuit of greater rewards.

Ryan Specialty Holdings: A Steady Performer in Specialty Insurance

Ryan Specialty Holdings offers a different perspective on the insurance industry as a leading international specialty insurance organization. The company operates as a wholesale broker and underwriting manager, providing specialized insurance solutions to retail insurance brokers and their clients. Since going public in 2021, Ryan has demonstrated consistent growth through both organic expansion and strategic acquisitions. The company’s focus on specialty insurance markets, which typically command higher margins than standard insurance lines, has been a key driver of its success. With over 3,700 professionals across more than 50 offices worldwide, Ryan’s diversified presence helps insulate it from regional economic disruptions. This makes it a more stable investment option compared to Root, which offers higher growth potential but with greater volatility. As market uncertainty continues to grow amid policy shifts and potential economic disruptions, both Root and Ryan Specialty Holdings offer investors the opportunity to adopt a defensive positioning while still maintaining exposure to potential growth. By considering these companies, investors can align their investment choices with their risk tolerance and investment horizons, ensuring that they are well-positioned to weather the current market turbulence.