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Which Insurer Is The Best Buy For Next Year: Aviva plc, Old Mutual plc, Standard Life Plc Or RSA Insurance Group plc?

Aviva

Aviva (LSE: AV) (NYSE: AV.US) has made stunning progress since the dark says of dividend cuts in March 2013, with the business and its share price going from strength to strength. For example, Aviva has rationalised its operations and focused on core operations, which have helped to improve investor sentiment in the stock and push its share price up by 15% in the last year alone.

The turnaround plan, though, is not yet complete. The planned merger with Friends Life is set to create considerable cost savings and synergies and, looking ahead, Aviva’s forecast growth rate of just 3% next year indicates that the combination of the two companies could be a sound move.

With Aviva trading on a price to earnings (P/E) ratio of just 10.1 and yielding 3.6%, it appeals as an income and value play. And, with the merger, it could deliver improved earnings growth over the medium term, too.

Old Mutual

Despite the current year being forecast to be something of a disappointment for Old Mutual (LSE: OML), with its bottom line expected to fall by 9%, it is all set to bounce back next year. Earnings for 2015 are due to be 15% higher than in the current year and, with Old Mutual trading on a P/E ratio of just 10.9, this equates to a highly appealing price to earnings growth (PEG) ratio of 0.7, which indicates that growth is on offer at a very reasonable price.

In addition, Old Mutual also offers stunning income potential, with shares in the company currently yielding a highly appealing 4.8%. And, with dividends expected to rise by 11.1% next year, Old Mutual could become an even more enticing income play over the medium term, too.

Standard Life

On the face of it, shares in Standard Life (LSE: SL) don’t seem to be all that appealing at the present time. That’s because they trade on a P/E ratio of 18.8 which, at a time when the FTSE 100 has a P/E ratio of 14.5, does not exactly scream ‘value’.

However, when Standard Life’s earnings growth numbers are taken into account, it’s a completely different story. For example, the company is forecast to grow its bottom line by 20% next year, which means that its shares trade on a PEG ratio of just 0.9, which is highly appealing.

In addition, Standard Life also offers superb income potential. Not only does it have a yield of 4.3% at the present time, it is due to increase dividends per share by 6.7% next year. With such strong earnings growth on offer, its shareholder payouts could continue to increase over the medium term, too.

RSA

RSA (LSE: RSA) is in the midst of a turnaround plan that is expected to see its bottom line rise by an impressive 23% next year. Of course, the current year is a different story, with earnings forecast to fall by 20%, thereby meaning that the net gain in 2014 and 2015 is close to zero.

Still, RSA has long term appeal. It has a highly capable CEO in Stephen Hester who has a sound track record and, with dividends per share expected to double next year, it looks set to become a realistic income play once more, with a yield of 3.9% being pencilled in for 2015.

In addition, RSA trades on a relatively appealing P/E ratio of 15.2 which, when combined with its future growth potential, means that a PEG ratio of less than 1 is on offer.

Looking Ahead

While all four companies appear to be sound ‘buys’ at the moment, Old Mutual seems to offer the most appealing mix of income, value and growth potential. As a result, it looks to be the pick of a strong bunch and could deliver excellent share price performance in 2015 and beyond.

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Peter Stephens owns shares of Aviva, Old Mutual, RSA Insurance Group, Friends Life and Standard Life. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.