It is not surprising that investors look for investment opportunities that can help them avoid inflation’s ravages, with the 31-year record high of inflation. Because insurance companies usually fare well during inflation, we think it could be wise to add fundamentally sound insurance stocks Hartford Financial (HIG), Fairfax Financial (FRFHF), and Alleghany (NYSE:) to one’s portfolio. So, let’s discuss these names.The stock market has been volatile of late owing to rising inflation. This was the largest jump in 30+ years for the Consumer Price Index, which rose 6.2% to October from one year ago. Although the inflationary environment is not favorable to all industries, it may be good for some, like insurance. High inflation generally leads to higher interest rate, which helps insurers earn more from their investments. It also increases their profitability.

According to personal finance expert Suze Orman, “Only stocks have a track record of earning more than inflation.” During times like these, insurance companies, being of a defensive nature, can help combat inflation. A report from Insurance Journal states that the premiums in the global insurance market will exceed $7 trillion by 2022. That’s earlier than was expected.

So, to help protect one’s portfolio from inflation, we think it could be wise to scoop up quality insurance stocks—The Hartford Financial Services Group, Inc. (NYSE:), Fairfax Financial Holdings Limited (OTC:), and Alleghany Corporation (Y).

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