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The Zacks Analyst Blog Highlights MetLife, Prudential Financial, Reinsurance Group of America, Marsh & McLennan Companies and Aflac
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For Immediate Release
Chicago, IL – October 20, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: MetLife Inc. (MET - Free Report) , Prudential Financial Inc. (PRU - Free Report) , Reinsurance Group of America Inc. (RGA - Free Report) , Marsh & McLennan Companies Inc. (MMC - Free Report) and Aflac Inc. (AFL - Free Report) .
Here are highlights from Wednesday’s Analyst Blog:
5 Insurers Set to Outperform This Earnings Season
Per the latest Earnings Preview, the Finance sector’s third-quarter 2022 earnings are expected to decline 8.5% while revenues are estimated to improve 3.2%. Earnings of Insurance, one of the Finance sector industries, are estimated to drop 7.3% while revenues are expected to increase 1.2%. Better pricing and exposure growth are likely to have driven premiums, which in turn are expected to have aided insurers’ revenues.
With the help of the Zacks Stock Screener, we have identified five insurers namely, MetLife Inc., Prudential Financial Inc., Reinsurance Group of America Inc., Marsh & McLennan Companies Inc. and Aflac Inc. which are poised to outshine the Zacks Consensus Estimate in third-quarter earnings. These stocks have the ideal combination of two ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy), #3 (Hold) — to surpass expectations. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Factors Likely to Impact Q3 Results
The third quarter of 2022 bore the brunt of Hurricane Ian. Swiss Re estimates claims stemming from Hurricane Ian claims in the range of $50 billion to $65 billion. The Progressive Corporation incurred $760 million of catastrophe losses due to Hurricane Ian in the third quarter of 2022 that weighed on its quarterly results. Arch Capital Group expects pre-tax net catastrophe losses of $530 million to $560 million across the property casualty insurance and reinsurance segments for the third quarter.
Insurers witnessed improved pricing in the third quarter of 2022. An active catastrophe environment accelerated the policy renewal rate and aided better pricing. These, coupled with reinsurance programs, favorable reserve development and solid capital level, are likely to have aided underwriting profitability.
Insurers, being beneficiaries of an improving rate environment, are expected to come up with improved investment results. The third quarter itself saw two rate hikes. A larger investment asset base and alternative investments in private equity, hedge funds, and real estate, among others, coupled with an improving rate environment, are expected to have aided net investment income, an important component of insurers’ top line.
Life insurers have been redesigning products by moving away from guaranteed savings products toward protection products of unit-linked savings products. Also, life insurers continue to roll out investment products that provide bundled covers of guaranteed retirement income, life and healthcare to cater to customers preferring policies with “living” benefits more than those with death benefits. Increasing demand for protection products is likely to have driven sales.
The insurance industry continues to invest in digitalization. Accelerated digitalization is likely to have saved costs and driven margin expansion.
Banking on operational efficiency resulting in a solid capital position, insurers continue to engage in strategic mergers and acquisitions, build on a niche, expand globally, diversify their portfolio and deploy capital to make dividend hikes and pay special dividends. Share buybacks are expected to have provided an additional upside to the bottom line.
Potential Q3 Outperformers
MetLife is an insurance-based global financial services company providing protection and investment products to a range of individual and institutional customers. Its focus on launching insurance products in different fields is likely to have aided premium growth. Cost control, improving efficiency and streamlining of business are likely to have added to the upside.
The Zacks Consensus Estimate for MetLife’s third-quarter earnings is pegged at $1.16, suggesting a decrease of 51.5% from the year-ago reported figure. MET has an Earnings ESP of +7.43% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Prudential is a financial services leader, offers an array of financial products and services. Solid asset-based businesses, improved margins in the Group Insurance business and international operations, a high-performing asset management business and deeper reach in the pension risk transfer market and cost management are likely to have aided third-quarter performance.
The Zacks Consensus Estimate for third-quarter earnings is pegged at $2.23, indicating a decline of 41% from the year-ago reported figure. PRU has an Earnings ESP of +1.21% and a Zacks Rank #3.
Reinsurance Group of America is a leading global provider of traditional life and health reinsurance and financial solutions. Better pricing, expanding business in the pension risk transfer market, niche position in reinsurance markets, expansion of international footprint and higher investment income are likely to aid quarterly results.
The Zacks Consensus Estimate for RGA’s third-quarter earnings is pegged at $2.93, indicating a surge of 363.7% from the year-ago reported figure. It has an Earnings ESP of +1.28% and a Zacks Rank #2.
Marsh & McLennan Companies is a globally leading insurance broker. Continued rate increases across commercial property and casualty, new business generation and solid retention rates, partly weighed down by elevated expenses, are likely to have aided the quarterly performance.
The Zacks Consensus Estimate for MET’s third-quarter earnings is pegged at $1.16, implying an increase of 7.4% from the year-ago reported figure. MMC has an Earnings ESP of +0.25% and a Zacks Rank #3.
Aflac, through its subsidiaries, provides supplemental health and life insurance products. While the U.S. operations are likely to have benefited from interest rate hikes by the Fed, improved returns from alternative investments are likely to have favored Japan operations.
The Zacks Consensus Estimate for Aflac’s third-quarter earnings is pegged at $1.22, indicating a downside of 20.3% from the year-ago reported figure. AFL has an Earnings ESP of +0.74% and a Zacks Rank #3.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights MetLife, Prudential Financial, Reinsurance Group of America, Marsh & McLennan Companies and Aflac
For Immediate Release
Chicago, IL – October 20, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: MetLife Inc. (MET - Free Report) , Prudential Financial Inc. (PRU - Free Report) , Reinsurance Group of America Inc. (RGA - Free Report) , Marsh & McLennan Companies Inc. (MMC - Free Report) and Aflac Inc. (AFL - Free Report) .
Here are highlights from Wednesday’s Analyst Blog:
5 Insurers Set to Outperform This Earnings Season
Per the latest Earnings Preview, the Finance sector’s third-quarter 2022 earnings are expected to decline 8.5% while revenues are estimated to improve 3.2%. Earnings of Insurance, one of the Finance sector industries, are estimated to drop 7.3% while revenues are expected to increase 1.2%. Better pricing and exposure growth are likely to have driven premiums, which in turn are expected to have aided insurers’ revenues.
With the help of the Zacks Stock Screener, we have identified five insurers namely, MetLife Inc., Prudential Financial Inc., Reinsurance Group of America Inc., Marsh & McLennan Companies Inc. and Aflac Inc. which are poised to outshine the Zacks Consensus Estimate in third-quarter earnings. These stocks have the ideal combination of two ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy), #3 (Hold) — to surpass expectations. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Factors Likely to Impact Q3 Results
The third quarter of 2022 bore the brunt of Hurricane Ian. Swiss Re estimates claims stemming from Hurricane Ian claims in the range of $50 billion to $65 billion. The Progressive Corporation incurred $760 million of catastrophe losses due to Hurricane Ian in the third quarter of 2022 that weighed on its quarterly results. Arch Capital Group expects pre-tax net catastrophe losses of $530 million to $560 million across the property casualty insurance and reinsurance segments for the third quarter.
Insurers witnessed improved pricing in the third quarter of 2022. An active catastrophe environment accelerated the policy renewal rate and aided better pricing. These, coupled with reinsurance programs, favorable reserve development and solid capital level, are likely to have aided underwriting profitability.
Insurers, being beneficiaries of an improving rate environment, are expected to come up with improved investment results. The third quarter itself saw two rate hikes. A larger investment asset base and alternative investments in private equity, hedge funds, and real estate, among others, coupled with an improving rate environment, are expected to have aided net investment income, an important component of insurers’ top line.
Life insurers have been redesigning products by moving away from guaranteed savings products toward protection products of unit-linked savings products. Also, life insurers continue to roll out investment products that provide bundled covers of guaranteed retirement income, life and healthcare to cater to customers preferring policies with “living” benefits more than those with death benefits. Increasing demand for protection products is likely to have driven sales.
The insurance industry continues to invest in digitalization. Accelerated digitalization is likely to have saved costs and driven margin expansion.
Banking on operational efficiency resulting in a solid capital position, insurers continue to engage in strategic mergers and acquisitions, build on a niche, expand globally, diversify their portfolio and deploy capital to make dividend hikes and pay special dividends. Share buybacks are expected to have provided an additional upside to the bottom line.
Potential Q3 Outperformers
MetLife is an insurance-based global financial services company providing protection and investment products to a range of individual and institutional customers. Its focus on launching insurance products in different fields is likely to have aided premium growth. Cost control, improving efficiency and streamlining of business are likely to have added to the upside.
The Zacks Consensus Estimate for MetLife’s third-quarter earnings is pegged at $1.16, suggesting a decrease of 51.5% from the year-ago reported figure. MET has an Earnings ESP of +7.43% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
MetLife, Inc. price-eps-surprise | MetLife, Inc. Quote
Prudential is a financial services leader, offers an array of financial products and services. Solid asset-based businesses, improved margins in the Group Insurance business and international operations, a high-performing asset management business and deeper reach in the pension risk transfer market and cost management are likely to have aided third-quarter performance.
The Zacks Consensus Estimate for third-quarter earnings is pegged at $2.23, indicating a decline of 41% from the year-ago reported figure. PRU has an Earnings ESP of +1.21% and a Zacks Rank #3.
Prudential Financial, Inc. price-eps-surprise | Prudential Financial, Inc. Quote
Reinsurance Group of America is a leading global provider of traditional life and health reinsurance and financial solutions. Better pricing, expanding business in the pension risk transfer market, niche position in reinsurance markets, expansion of international footprint and higher investment income are likely to aid quarterly results.
The Zacks Consensus Estimate for RGA’s third-quarter earnings is pegged at $2.93, indicating a surge of 363.7% from the year-ago reported figure. It has an Earnings ESP of +1.28% and a Zacks Rank #2.
Reinsurance Group of America, Incorporated price-eps-surprise | Reinsurance Group of America, Incorporated Quote
Marsh & McLennan Companies is a globally leading insurance broker. Continued rate increases across commercial property and casualty, new business generation and solid retention rates, partly weighed down by elevated expenses, are likely to have aided the quarterly performance.
The Zacks Consensus Estimate for MET’s third-quarter earnings is pegged at $1.16, implying an increase of 7.4% from the year-ago reported figure. MMC has an Earnings ESP of +0.25% and a Zacks Rank #3.
Marsh & McLennan Companies, Inc. price-eps-surprise | Marsh & McLennan Companies, Inc. Quote
Aflac, through its subsidiaries, provides supplemental health and life insurance products. While the U.S. operations are likely to have benefited from interest rate hikes by the Fed, improved returns from alternative investments are likely to have favored Japan operations.
The Zacks Consensus Estimate for Aflac’s third-quarter earnings is pegged at $1.22, indicating a downside of 20.3% from the year-ago reported figure. AFL has an Earnings ESP of +0.74% and a Zacks Rank #3.
Aflac Incorporated price-eps-surprise | Aflac Incorporated Quote
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.