eToro has launched a new portfolio offering called InsuranceWorld, aimed at providing exposure to the insurance sector. This offering is designed to provide diversified exposure to the sector by carefully selecting a mix of top-performing insurance companies for users to invest in.
The insurance industry is known for its stable nature and coverage across a wide range of sectors, making it a valuable addition to any investment portfolio. In fact, the industry has proven to be more resilient than others during times of economic and market volatility, making it an attractive defensive investment play. The InsuranceWorld portfolio provides users with the opportunity to invest in a growing and steady industry, which is projected to reach a market size of $8.3 trillion by 2026.
Besides, insurance companies are highly profitable, as they collect premiums from customers but rarely pay out claims, allowing them to build up excess capital that can be reinvested for further returns. This stability is reinforced by the fact that insurance is an essential service, so demand is not highly sensitive to economic cycles. Additionally, regulations such as the EU’s Solvency II directive mandate that insurers hold a certain amount of capital, reducing the likelihood of insolvency.
Investors in insurance stocks also benefit from dividend payments, which provide an additional source of returns. Moreover, developing countries offer growth opportunities for insurance companies, as many populations in these countries are underinsured. For instance, companies such as Ping An Insurance in China and the UK’s Prudential, which focuses on Asia and Africa, are well-positioned to expand their businesses in the coming years.
Previously, it was reported that eToro, the brokerage firm established in 2007, had broadened its range of trading instruments. With clients in over 140 countries, the company operates under various jurisdictions and holds licenses from reputable regulators.