Our Highest Conviction Insurance Idea for 2026
A Small-cap and Under-followed Canadian Life Insurer: Trading at a 30%+ Discount to Fair Value, Even After a Conglomerate Discount.
We are adding this stock to the Aurelion Index today.
This piece covers a small, under-covered Canadian life insurer that we believe is trading at a significant discount to fair value based on peer multiples and our own conservative analysis.
This insurer trades at a modest fraction of peer multiples based on book value per share, despite strong growth across segments (40%+ growth in core earnings to shareholders in 2025) and conservative risk parameters in-line with peers. We think the primary reason for the discount is liquidity constraints, which we think will ease as the company continues to grow and eventually sees more attention from investors and sell-side analysts.
Despite the low liquidity and small size negatively affecting valuation, we believe this company presents a great opportunity for long-term investors.
We think this company will continue to grow book value per share at strong rates, while simultaneously the discount will be addressed as liquidity in the shares slowly increases over time, driven by strong financial performance.
Sporting a dividend yield over 4.5%, we think this is an opportunity for long-term investors to ‘get paid while you wait’ for the discount to close.
Table of Contents
Introduction
Company Overview
Insurance Risk Measures
Discount to Intrinsic Value
Price-Targets
Key risks to the Thesis
Our Final Take