Can you put a price on the risk of a motorway pile-up, a spouse’s early demise, or a supertanker foundering as it edges into the South China Sea? If you can, you should probably be in insurance. In some cases mandatory, in others a practical necessity, an underwritten risk is the bedrock that enables most of us to go about our daily business feeling a degree of financial safety.

This is also one of the world’s biggest markets, worth an estimated $5.9tn in gross premiums written last year, according to Research and Markets, which forecasts that it will reach nearly $8.4tn by 2026, a compound annual growth rate of more than 9%.

The attractions for investors are clear. The most efficient players generate large amounts of surplus capital, which they regularly stuff into shareholders’ pockets in the form of bumper dividends, special payouts or stock buybacks.

Some are also playing an increasingly important role in addressing environmental and climate change – by effectively pricing climate risk they can help enable both consumers and businesses to make the transition to more sustainable practices.

The five European insurers that top-performing portfolio managers rate most highly – judging by where they invest their funds – play in various parts of the market, but they are all among the big beasts of the sector. Here is the shortlist in the insurance category of the Citywire Elite Company Emea Awards, which will be held at the London Stock Exchange on 21 June.

Source: FactSet. PE = price-earnings ratio. PE and dividend yield based on 12-month forecasts

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The smallest of the insurers on the shortlist, though still weighing in with a market value of more than £32bn, is Prudential (GB:PRU), the London-listed life and health insurer that is really a pure play on Asia’s growth.

Formerly a sprawling financial empire, Prudential in its modern form is the result of several recent landmark moves, beginning with the separation of its asset manager, M&G, and its UK and European life arm, and ending with the demerger of its US business, Jackson Financial.

It means the Pru’s top exposures are to the high-growth markets of Southeast Asia, including Indonesia, Malaysia, Hong Kong and Singapore. It also has an investments operation, Eastspring, which manages more than $222bn of assets.

Conversely, the largest of the five shortlisted insurers is Allianz (DE:ALV), not far off three times the size of Prudential with a stock market value of more than €85bn. Allianz, headquartered in Munich, serves more than 122 million customers in over 70 countries and employs almost 160,000 staff.

The group provides life and health cover, as well as property and casualty insurance – including the risks of big natural disasters such as earthquakes, floods and hurricanes – and it has a fund management arm that oversees nearly €2.2tn in assets and includes the bonds giant Pimco.

The group has returned to the front foot, including with record quarterly operating profits, over the past 12 months after it became mired in a fraud scandal involving the collapse of its Structured Alpha funds in the US.

Last May, Allianz Global Investors’ US arm pleaded guilty to criminal securities fraud and agreed to pay more than $6bn in settlements after being accused of misleading pension funds and having significant gaps in its oversight. It has since bounced back financially, and its shares have recovered their poise.

Durable dividends

If examples of reliable dividend payers are on the agenda, then surely Chubb (US:CB) cuts the mustard. Earlier this month, the US-listed group’s shareholders approved the 30th annual increase in the company’s dividend, an enviable track record.

As a further means of returning capital to shareholders, the group has an ongoing stock buyback programme that is worth $2.5bn for the current financial year but two years ago was a chunky $5bn.

Although Chubb’s listing is in the US, which is also by far its biggest market, the company has its headquarters in Zurich, where it is also incorporated. Chubb, founded in 1882, is one of the world’s biggest property and casualty insurers, providing both personal and commercial cover. It also has a life arm and a division that specialises in providing agriculture and crop cover for North American farmers.

Chubb’s position in the property and casualty market means it is regularly exposed to big financial payouts. As an example it took a $975m hit for claims against Hurricane Ian last year. Ian was a category four hurricane that hit Florida in September and was forecast to cost insurers more than $50bn in payouts.

In spite of the hit, however, Chubb remained profitable during the period using the combined ratio, a measure that sets the amount paid out in claims and costs against the value received in premiums. Over the year as a whole Chubb’s underwriting profit in property and casualty insurance was a record $4.6bn, up more than 23% on the previous 12-month period.

Axa (FR:CS) is the only one of the five shortlisted insurers that also offers banking services – in France and Germany – though this is an extremely small part of business, which is dominated by property and casualty, life insurance and savings, and asset management. In fact, the group recently sold off its Belgian banking arm.

Founded in 1985, Axa operates in 51 countries with 93 million customers and its listing on the Paris arm of the Euronext exchange values it at just over €63bn.

The group clocked up revenues of more than €100bn last year, around half of which were in the property and casualty arm, which sells personal as well as commercial cover. Net profits came in at just under €6.7bn, prompting it to lift its dividend by 10% and approve a share buyback programme worth up to €1.1bn.

The final company on the shortlist is Zurich Insurance Group (CH:ZURN), a Swiss-based business that was founded in 1872 and operates in more than 200 countries.

The group has just completed a six-year process of transforming itself into a simpler but sharper business. In financial terms, that led to record operating profits of $6.5bn for 2022, the highest since before the global financial crisis. Zurich’s shares also touched a record high earlier last year.

It reports as three divisions: property and casualty, life and Farmers, a wholly owned subsidiary that specialises in car, truck, fire and life cover in the US.