I was expecting to just use this as a learning experience since this is the first insurance company that I have truly evaluated. I was planning on learning the important insurance industry terms, what they meant, how they affected the company in question, what the float was and how that affected the company’s operations, etc., and analyzing the company using all the knowledge I have gained lately from my recent foray into studying float and put those findings into an article.
I was not expecting to find what I did: a company that is undervalued by every one of my estimates of value, a company that has been for a number of years very disciplined and conservative in its estimates, which I found are of utmost importance in the property and casualty insurance business, and a company that has had underwriting profits every year since 2004, which I found out is really hard to do. If I had the capital available I would love to own this entire company and to build my investment firm with it at the core, a la Warren Buffett with Berkshire Hathaway (BRK.A)(BRK.B) and its insurance companies. However, unless someone out there would like to endow me with nearly $100 million I will just have to be happy buying shares in UNAM and watching my money compound into the future.
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