Hallmark Financial Services, Inc. (HALL - Free Report) incurred first-quarter 2023 operating loss of $2.74 per share, narrower than the Zacks Consensus Estimate of a loss of $4.05 per share but wider than a loss of $1.80 per share incurred in the year-ago quarter.
A decline in the top line and higher expenses weighed on quarterly results.
Quarterly Operational Update
Total revenues declined 53.1% year over year to $39.7 million in the quarter under review. The top line missed the Zacks Consensus Estimate by 8.1%.
Gross premiums written decreased 3.6% year over year to $57.2 million.
Net premiums written increased 2.7% year over year to $42.4 million, attributable to higher premiums in the Commercial segment.
Net investment income was $4.8 million, up more than threefold year over year, primarily due to the reinvestment of cash into higher-yielding securities.
The net combined ratio deteriorated 7880 basis points (bps) to 215.7.
The expense ratio of 131.3 deteriorated 9640 bps year over year.
Total expenses increased 39.5% year over year to $79.6 million due to higher operating expenses and interest expenses.
Segmental Update
Commercial: Net premiums written increased 42% year over year to $28.9 million. The combined ratio improved 2020 bps to 85.7.
Personal: Net premiums decreased 19.3% year over year to $13.5 million. The combined ratio of 110 deteriorated 1040 bps.
Runoff Specialty: Net premiums written was $0.01 million versus $4.2 million in the year-ago quarter.
Corporate: Total revenues were $3.8 million, up 96.6% year over year. The pre-tax loss was $1.6 million, narrower than $2.9 million incurred in the year-ago quarter.
Financial Position
As of first-quarter 2023 end, cash and cash equivalents were $105.5 million, up 78.4% from 2022 end.
Shareholder equity decreased 61% from 2022 end to $23.5 million at first-quarter 2023 end.
Book value per share decreased 63% year over year to $3.62 at first-quarter 2023 end.
Zacks Rank
Hallmark Financial currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Some Other P&C Insurers
The Travelers Companies (TRV - Free Report) reported first-quarter 2022 core income of $4.11 per share, which beat the Zacks Consensus Estimate of $3.64 and our estimate of $3.41. However, the bottom line decreased 2.6% year over year. Travelers’ total revenues increased 10% from the year-ago quarter to $9.7 billion, primarily driven by higher premiums. The top-line figure however missed the Zacks Consensus Estimate of $9.8 billion.
Net written premiums increased 12% year over year to a record $9.4 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $8.9 billion.
Catastrophe losses totaled $422 million, wider than $36 million pre-tax in the prior-year quarter. Catastrophe losses primarily resulted from severe wind and hail storms in multiple states. Travelers witnessed an underwriting gain of $501 million, down 12.9% year over year. The combined ratio deteriorated 410 bps year over year to 95.4.
The Progressive Corporation’s (PGR - Free Report) first-quarter 2023 earnings per share of 65 cents missed the Zacks Consensus Estimate of $1.44 as well as our estimate of $1.50. The bottom line declined 20.7% year over year.
Operating revenues were about $14.2 billion, up 15.8% year over year. This improvement was driven by a 15% increase in premiums, 18.5% higher fees and other revenues, a 7.1% increase in service revenues and a 73.2% higher investment income. The top line exceeded the Zacks Consensus Estimate of $14.1 billion and our estimate of $13.1 billion.
Net premiums earned grew 15% to $13.5 billion and beat our estimate of $12.6 billion. The combined ratio deteriorated 450 bps from the prior-year quarter’s level to 99.
RLI Corp. (RLI - Free Report) reported first-quarter 2023 operating earnings of $1.63 per share, beating the Zacks Consensus Estimate by 34.7%. The bottom line improved 14% from the prior-year quarter. Operating revenues for the reported quarter were $335 million, up 19.4% year over year, driven by 14.3% higher net premiums earned and 51.5% higher net investment income. The top line however missed the Zacks Consensus Estimate by 2.2%.
Gross premiums written increased 15.6% year over year to $415 million. This uptick can be attributed to the solid performance of the Casualty (up 1%), Property (up 45%) and Surety segments (up 13.6%). Underwriting income of $67.9 million increased 14.1%, primarily due to higher profitability in its Property and Casualty segment. Combined ratio remained flat year over year at 77.9.
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Hallmark Financial Services, Inc. (HALL - Free Report) incurred first-quarter 2023 operating loss of $2.74 per share, narrower than the Zacks Consensus Estimate of a loss of $4.05 per share but wider than a loss of $1.80 per share incurred in the year-ago quarter.
A decline in the top line and higher expenses weighed on quarterly results.
Quarterly Operational Update
Total revenues declined 53.1% year over year to $39.7 million in the quarter under review. The top line missed the Zacks Consensus Estimate by 8.1%.
Gross premiums written decreased 3.6% year over year to $57.2 million.
Net premiums written increased 2.7% year over year to $42.4 million, attributable to higher premiums in the Commercial segment.
Net investment income was $4.8 million, up more than threefold year over year, primarily due to the reinvestment of cash into higher-yielding securities.
The net combined ratio deteriorated 7880 basis points (bps) to 215.7.
The expense ratio of 131.3 deteriorated 9640 bps year over year.
Total expenses increased 39.5% year over year to $79.6 million due to higher operating expenses and interest expenses.
Segmental Update
Commercial: Net premiums written increased 42% year over year to $28.9 million. The combined ratio improved 2020 bps to 85.7.
Personal: Net premiums decreased 19.3% year over year to $13.5 million. The combined ratio of 110 deteriorated 1040 bps.
Runoff Specialty: Net premiums written was $0.01 million versus $4.2 million in the year-ago quarter.
Corporate: Total revenues were $3.8 million, up 96.6% year over year. The pre-tax loss was $1.6 million, narrower than $2.9 million incurred in the year-ago quarter.
Financial Position
As of first-quarter 2023 end, cash and cash equivalents were $105.5 million, up 78.4% from 2022 end.
Shareholder equity decreased 61% from 2022 end to $23.5 million at first-quarter 2023 end.
Book value per share decreased 63% year over year to $3.62 at first-quarter 2023 end.
Zacks Rank
Hallmark Financial currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Some Other P&C Insurers
The Travelers Companies (TRV - Free Report) reported first-quarter 2022 core income of $4.11 per share, which beat the Zacks Consensus Estimate of $3.64 and our estimate of $3.41. However, the bottom line decreased 2.6% year over year. Travelers’ total revenues increased 10% from the year-ago quarter to $9.7 billion, primarily driven by higher premiums. The top-line figure however missed the Zacks Consensus Estimate of $9.8 billion.
Net written premiums increased 12% year over year to a record $9.4 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $8.9 billion.
Catastrophe losses totaled $422 million, wider than $36 million pre-tax in the prior-year quarter. Catastrophe losses primarily resulted from severe wind and hail storms in multiple states. Travelers witnessed an underwriting gain of $501 million, down 12.9% year over year. The combined ratio deteriorated 410 bps year over year to 95.4.
The Progressive Corporation’s (PGR - Free Report) first-quarter 2023 earnings per share of 65 cents missed the Zacks Consensus Estimate of $1.44 as well as our estimate of $1.50. The bottom line declined 20.7% year over year.
Operating revenues were about $14.2 billion, up 15.8% year over year. This improvement was driven by a 15% increase in premiums, 18.5% higher fees and other revenues, a 7.1% increase in service revenues and a 73.2% higher investment income. The top line exceeded the Zacks Consensus Estimate of $14.1 billion and our estimate of $13.1 billion.
Net premiums earned grew 15% to $13.5 billion and beat our estimate of $12.6 billion. The combined ratio deteriorated 450 bps from the prior-year quarter’s level to 99.
RLI Corp. (RLI - Free Report) reported first-quarter 2023 operating earnings of $1.63 per share, beating the Zacks Consensus Estimate by 34.7%. The bottom line improved 14% from the prior-year quarter. Operating revenues for the reported quarter were $335 million, up 19.4% year over year, driven by 14.3% higher net premiums earned and 51.5% higher net investment income. The top line however missed the Zacks Consensus Estimate by 2.2%.
Gross premiums written increased 15.6% year over year to $415 million. This uptick can be attributed to the solid performance of the Casualty (up 1%), Property (up 45%) and Surety segments (up 13.6%). Underwriting income of $67.9 million increased 14.1%, primarily due to higher profitability in its Property and Casualty segment. Combined ratio remained flat year over year at 77.9.
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Global demand for oil is through the roof... and oil producers are struggling to keep up. So even though oil prices are well off their recent highs, you can expect big profits from the companies that supply the world with "black gold."
Zacks Investment Research has just released an urgent special report to help you bank on this trend.
In Oil Market on Fire, you'll discover 4 unexpected oil and gas stocks positioned for big gains in the coming weeks and months. You don't want to miss these recommendations.
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