Which Cdn. insurance company is the best investment?

Over the last 12 months Industrial Alliance has gone up by almost 55% on a total return basis, compared to 34% for Manulife, 24% for Sun, 10.5% for Great West life and 17.5% for Power Financial.

If one were to ask me which company is a better company, the answer is not simple. Great West and Sun Life have the most conservative management and did not get into financial trouble in 2008 as Manulife did.

Often the best companies are not always the best investments. It is really all about what specific factors will drive this sector higher and which companies offer the most upside under that scenario.

Power Financial is really a holding company that owns Great West Life, Investors Group and Mackenzie Financial. If you want a pure play in insurance from the Power Group companies you need to play Great West Life directly.

Manulife has a much larger presence in Emerging Markets than the others and that combined with its large wealth management business has helped propel the stock higher.

Industrial Alliance is not as globally diversified as the others, but offers the most positive interest rate sensitivity. This is the main reason why this stock has sharply outperformed its peers.

My decision to invest in one or another is largely dependent on the economic outlook and how one company reacts differently to its peers.

Posted in Blog Post.

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