If you grow book value, particularly if your liabilities are short, you will grow market value. Many reinsurance and insurance companies aim at growing fully convertible book value per share.
Fully convertible book value per share assumes that you invest your dividends in the common stock (without taxation), and thus compound your gains through reinvestment, taking account of dilution. Hmmm… when will someone dream up the idea of structuring an insurance company as an MLP or a REIT? I don’t think it is likely, but maybe someone could dream it up.
It also implies that all possible dilution is factored in from convertible preferred stock or convertible bonds. Now insurance companies tend to trade near book value over the long run, so companies that can grow their book value rapidly and pay dividends can be interesting investments. Particularly where the liabilities of the company are short — property reinsurance or personal lines insurance, growth in book value plus dividends tends to be a reliable indicator of value creation.
If liabilities are longer, it gets more questionable, because under-reserving becomes more likely — it is very hard to be certain of the reserving of long-dated or volatile coverages.
Anyway, here is a list of insurance companies, and how they have accumulated book value plus dividends over the past seven years. Note that this is a mathematical calculation off a limited database, and that splits and M&A can throw this calculation off. With that caveat, here is the list: