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Insurers Q2 Earnings Preview for Aug 4: MFC, FFG & More
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We are in the thick of second-quarter earnings season with financial results of 317 S&P 500 already on board. Earnings of index members (accounting for 32.7% of the index’s total market capitalization) have declined 3.3% on 0.9% lower revenues as per the Earnings Preview report. However, the beat ratio is 72.9% for the bottom line and 53.6% for the top line.
Earnings of 80% of the companies in the Finance sector (with 75.7% market capitalization) that have already reported their results have declined 4.2%, while revenues managed to increase 1.1%. Beat ratios (66.7% for earnings and 52.8% for revenues) compare unfavorably with the S&P 500.
The insurance industry is part of the broader finance sector. The second quarter witnessed varied catastrophe, including a wildfire in Canada, flooding in Europe, earthquakes in Japan and Ecuador, and hailstorms in Texas. Underwriting results were affected, with underwriting income and combined ratio witnessing deterioration. Industry loss is estimated at $15–$20 billion. The bottom lines of P&C insurers that have already reported suffered due to these catastrophe events. Kemper Corporation (KMPR - Free Report) estimates catastrophe losses of $52 million in the second quarter. The insurer is unlikely to recover any of these losses from its catastrophe reinsurance program. The Navigators Group, Inc. expects to incur loss of $12 million in the to-be-reported quarter.
Despite a slight rise in interest by the Fed last December, the interest rate environment still remains low. This in turn will keep investment results under pressure. Nonetheless, the slight rate rise is a breather for life insurers that suffered spread compression on products like fixed annuities and universal life due to sustained low rates.
Nevertheless, insurers in this well-capitalized industry remain well poised on the back of their expanded and diversified product and service portfolio that is driving premiums higher.
As many as 1090 companies are due to report their quarterly results this week, including 116 S&P 500 members. Among these, let’s see what’s in store for four insurers that are reporting on Aug 4.
Manulife Financial Corporation (MFC - Free Report) provides financial advice, insurance and wealth and asset management solutions for individuals, groups and institutions. The company delivered a 3.23% positive surprise last quarter. Manulife Financial is also poised for an earnings beat this time around as it has the right combination of the two key ingredients of a positive Earnings ESP and a favorable Zacks Rank #3 (Hold) or better.
For the upcoming results, Manulife Financial has an Earnings ESP of +2.94% as the Most Accurate estimate stands at 35 cents and the Zacks Consensus Estimate is pegged lower at 34 cents. Moreover, the company carries a Zacks Rank #3.
With respect to the surprise trend, Manulife Financial surpassed expectations in two of the last four quarters, with an average beat of 0.85%.
Kemper Corporation provides personalized insurance solutions for individuals, families and businesses. The company delivered a 120% negative surprise last quarter. For the second quarter, Kemper has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 10 cents. It currently carries a Zacks Rank #5 (Strong Sell).
With respect to the surprise trend, Kemper lagged expectations in two of the last four quarters, with an average miss of 44.04%.
FBL Financial Group underwrites and markets a broad range of life insurance and annuities to individuals and businesses. The company delivered a 7.14% positive earnings surprise last quarter. FBL Financial has an Earnings ESP of -0.97% as the Most Accurate estimate stands at $1.02 and the Zacks Consensus Estimate is pegged higher at $1.03. It currently carries a Zacks Rank #4 (Sell).
With respect to the surprise trend, FBL Financial surpassed expectations in three of the last four quarters, with an average beat of 5.59%.
The Navigators Group, Inc. is an international specialty insurance holding company with insurance company operations, underwriting management companies and operations at Lloyd's. Navigators Group delivered a 1.49% positive earnings surprise last quarter. It has an Earnings ESP of 0.00% – both the Most Accurate estimate and Zacks Consensus Estimate pegged at 97 cents – and a Zacks Rank #4.
With respect to the surprise trend, Navigators Group lagged expectations in two of the last four quarters, with an average miss of 1.78%.
Keep an eye on our full earnings articles to see how these companies finally fared.
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Insurers Q2 Earnings Preview for Aug 4: MFC, FFG & More
We are in the thick of second-quarter earnings season with financial results of 317 S&P 500 already on board. Earnings of index members (accounting for 32.7% of the index’s total market capitalization) have declined 3.3% on 0.9% lower revenues as per the Earnings Preview report. However, the beat ratio is 72.9% for the bottom line and 53.6% for the top line.
Earnings of 80% of the companies in the Finance sector (with 75.7% market capitalization) that have already reported their results have declined 4.2%, while revenues managed to increase 1.1%. Beat ratios (66.7% for earnings and 52.8% for revenues) compare unfavorably with the S&P 500.
The insurance industry is part of the broader finance sector. The second quarter witnessed varied catastrophe, including a wildfire in Canada, flooding in Europe, earthquakes in Japan and Ecuador, and hailstorms in Texas. Underwriting results were affected, with underwriting income and combined ratio witnessing deterioration. Industry loss is estimated at $15–$20 billion. The bottom lines of P&C insurers that have already reported suffered due to these catastrophe events. Kemper Corporation (KMPR - Free Report) estimates catastrophe losses of $52 million in the second quarter. The insurer is unlikely to recover any of these losses from its catastrophe reinsurance program. The Navigators Group, Inc. expects to incur loss of $12 million in the to-be-reported quarter.
Despite a slight rise in interest by the Fed last December, the interest rate environment still remains low. This in turn will keep investment results under pressure. Nonetheless, the slight rate rise is a breather for life insurers that suffered spread compression on products like fixed annuities and universal life due to sustained low rates.
Nevertheless, insurers in this well-capitalized industry remain well poised on the back of their expanded and diversified product and service portfolio that is driving premiums higher.
As many as 1090 companies are due to report their quarterly results this week, including 116 S&P 500 members. Among these, let’s see what’s in store for four insurers that are reporting on Aug 4.
Manulife Financial Corporation (MFC - Free Report) provides financial advice, insurance and wealth and asset management solutions for individuals, groups and institutions. The company delivered a 3.23% positive surprise last quarter. Manulife Financial is also poised for an earnings beat this time around as it has the right combination of the two key ingredients of a positive Earnings ESP and a favorable Zacks Rank #3 (Hold) or better.
For the upcoming results, Manulife Financial has an Earnings ESP of +2.94% as the Most Accurate estimate stands at 35 cents and the Zacks Consensus Estimate is pegged lower at 34 cents. Moreover, the company carries a Zacks Rank #3.
With respect to the surprise trend, Manulife Financial surpassed expectations in two of the last four quarters, with an average beat of 0.85%.
MANULIFE FINL Price and EPS Surprise
MANULIFE FINL Price and EPS Surprise | MANULIFE FINL Quote
Kemper Corporation provides personalized insurance solutions for individuals, families and businesses. The company delivered a 120% negative surprise last quarter. For the second quarter, Kemper has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 10 cents. It currently carries a Zacks Rank #5 (Strong Sell).
With respect to the surprise trend, Kemper lagged expectations in two of the last four quarters, with an average miss of 44.04%.
KEMPER CORP Price and EPS Surprise
KEMPER CORP Price and EPS Surprise | KEMPER CORP Quote
FBL Financial Group underwrites and markets a broad range of life insurance and annuities to individuals and businesses. The company delivered a 7.14% positive earnings surprise last quarter. FBL Financial has an Earnings ESP of -0.97% as the Most Accurate estimate stands at $1.02 and the Zacks Consensus Estimate is pegged higher at $1.03. It currently carries a Zacks Rank #4 (Sell).
With respect to the surprise trend, FBL Financial surpassed expectations in three of the last four quarters, with an average beat of 5.59%.
FBL FINL GRP-A Price and EPS Surprise
FBL FINL GRP-A Price and EPS Surprise | FBL FINL GRP-A Quote
The Navigators Group, Inc. is an international specialty insurance holding company with insurance company operations, underwriting management companies and operations at Lloyd's. Navigators Group delivered a 1.49% positive earnings surprise last quarter. It has an Earnings ESP of 0.00% – both the Most Accurate estimate and Zacks Consensus Estimate pegged at 97 cents – and a Zacks Rank #4.
With respect to the surprise trend, Navigators Group lagged expectations in two of the last four quarters, with an average miss of 1.78%.
NAVIGATORS GRP Price and EPS Surprise
NAVIGATORS GRP Price and EPS Surprise | NAVIGATORS GRP Quote
Keep an eye on our full earnings articles to see how these companies finally fared.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>