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Navigators Group (NAVG) Q4 Earnings Surpass, Increase Y/Y
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The Navigators Group, Inc. reported fourth-quarter 2017 net operating earnings per share of 81 cents, which surpassed the Zacks Consensus Estimate of 50 cents by 62%. Moreover, the bottom line surged about 39.7% year over year.
The Navigators Group, Inc. Price, Consensus and EPS Surprise
The company witnessed another quarter of profitable underwriting results and strong premium growth, driven by a solid performance by the U.S. Insurance and Global Reinsurance segments. The International Insurance segment also displayed a considerable improvement in its results.
Navigators Group’s operating revenues rose 6.2% year over year to about $324.9 million in the reported quarter. However, the top line missed the Zacks Consensus Estimate by 3.6%. Net earned premiums increased 7.4% to $305.1 million buoyed by growth in the U.S. Insurance, International Insurance and at Global Re. The net investment income climbed about 14.3% to $22.9 million.
Total expense increased 7.2% to $298.6 million, primarily due to high net losses and loss adjustment expenses, other operating and interest expenses as well as interest expenses.
Underwriting profit improved 11.9% to $10.4 million. Surge in underwriting profit at the U.S. Insurance segment fueled this upside. Combined ratio improved 10 basis points (bps) to 96.6% from the year-ago quarter.
Full-Year Highlights
For 2017, Navigators Group reported net operating earnings per share of $1.16, surpassing the consensus mark by 36.5% but deteriorating 51% year over year.
Operating revenues increased 6.9% year over year to $1.3 billion.
Segment Update
U.S. Insurance: Net earned premiums grew about 4.5% year over year to $174.4 million. The segment reported underwriting profit of $15.1 million, which soared 73.4% from the prior-year quarter. Combined ratio improved 350 bps to 91.3% in the quarter under review.
International Insurance: Net earned premiums improved 15.9% year over year to $83.2 million. The segment’s underwriting loss of $9.1 million was somewhat wider than the year-earlier loss of $8.5 million. However, combined ratio improved 100 bps to 110.9% in the fourth quarter.
Global Re: The segment’s net earned premiums rose 4.8% year over year to $47.5 million. Underwriting profit plunged 52.4% year over year to about $4.3 million in the quarter under discussion. However, combined ratio improved 1100 bps to 90.9% in the period.
Financial Update
Navigators Group exited the fourth quarter with book value per share of $41.55, up 2.7% from $40.45 as of Dec 31, 2016.
As of Dec 31, 2017, Navigators Group’s total investment and cash amounted to $3.5 billion, up 9.2% from $3.2 billion at year-end 2016. Total shareholders’ equity was $1.23 billion as of Dec 31, 2017, up 4.1% from $1.18 billion at the end of 2016.
Dividend Update
In the fourth quarter, the company approved and paid a dividend of 6 cents per share.
On Feb 15, 2018, the board of directors announced a quarterly cash dividend of 7 cents per share, payable on Mar 23 to shareholders of record as of Mar 2, 2018. This approval represented a 16.7% hike from the previous quarter’s dividend.
Among other players from the same space having reported fourth-quarter earnings so far, the bottom line of The Progressive Corporation (PGR - Free Report) , The Travelers Companies, Inc. (TRV - Free Report) and RLI Corp. (RLI - Free Report) exceeded the respective Zacks Consensus Estimate.
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Navigators Group (NAVG) Q4 Earnings Surpass, Increase Y/Y
The Navigators Group, Inc. reported fourth-quarter 2017 net operating earnings per share of 81 cents, which surpassed the Zacks Consensus Estimate of 50 cents by 62%. Moreover, the bottom line surged about 39.7% year over year.
The Navigators Group, Inc. Price, Consensus and EPS Surprise
The Navigators Group, Inc. Price, Consensus and EPS Surprise | The Navigators Group, Inc. Quote
The company witnessed another quarter of profitable underwriting results and strong premium growth, driven by a solid performance by the U.S. Insurance and Global Reinsurance segments. The International Insurance segment also displayed a considerable improvement in its results.
Navigators Group’s operating revenues rose 6.2% year over year to about $324.9 million in the reported quarter. However, the top line missed the Zacks Consensus Estimate by 3.6%. Net earned premiums increased 7.4% to $305.1 million buoyed by growth in the U.S. Insurance, International Insurance and at Global Re. The net investment income climbed about 14.3% to $22.9 million.
Total expense increased 7.2% to $298.6 million, primarily due to high net losses and loss adjustment expenses, other operating and interest expenses as well as interest expenses.
Underwriting profit improved 11.9% to $10.4 million. Surge in underwriting profit at the U.S. Insurance segment fueled this upside. Combined ratio improved 10 basis points (bps) to 96.6% from the year-ago quarter.
Full-Year Highlights
For 2017, Navigators Group reported net operating earnings per share of $1.16, surpassing the consensus mark by 36.5% but deteriorating 51% year over year.
Operating revenues increased 6.9% year over year to $1.3 billion.
Segment Update
U.S. Insurance: Net earned premiums grew about 4.5% year over year to $174.4 million. The segment reported underwriting profit of $15.1 million, which soared 73.4% from the prior-year quarter. Combined ratio improved 350 bps to 91.3% in the quarter under review.
International Insurance: Net earned premiums improved 15.9% year over year to $83.2 million. The segment’s underwriting loss of $9.1 million was somewhat wider than the year-earlier loss of $8.5 million. However, combined ratio improved 100 bps to 110.9% in the fourth quarter.
Global Re: The segment’s net earned premiums rose 4.8% year over year to $47.5 million. Underwriting profit plunged 52.4% year over year to about $4.3 million in the quarter under discussion. However, combined ratio improved 1100 bps to 90.9% in the period.
Financial Update
Navigators Group exited the fourth quarter with book value per share of $41.55, up 2.7% from $40.45 as of Dec 31, 2016.
As of Dec 31, 2017, Navigators Group’s total investment and cash amounted to $3.5 billion, up 9.2% from $3.2 billion at year-end 2016. Total shareholders’ equity was $1.23 billion as of Dec 31, 2017, up 4.1% from $1.18 billion at the end of 2016.
Dividend Update
In the fourth quarter, the company approved and paid a dividend of 6 cents per share.
On Feb 15, 2018, the board of directors announced a quarterly cash dividend of 7 cents per share, payable on Mar 23 to shareholders of record as of Mar 2, 2018. This approval represented a 16.7% hike from the previous quarter’s dividend.
Zacks Rank
Navigators Group sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Performance of Other P&C Insurers
Among other players from the same space having reported fourth-quarter earnings so far, the bottom line of The Progressive Corporation (PGR - Free Report) , The Travelers Companies, Inc. (TRV - Free Report) and RLI Corp. (RLI - Free Report) exceeded the respective Zacks Consensus Estimate.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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