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W.R. Berkley (WRB) Q2 Earnings and Revenues Miss Estimates
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W.R. Berkley Corporation’s (WRB - Free Report) second-quarter 2020 operating income of 6 cents per share missed the Zacks Consensus Estimate of 23 cents by 73.9%. Also, the bottom line plunged 92.7% year over year due to higher catastrophe losses. The COVID-19 pandemic had an adverse impact on the company’s results.
W.R. Berkley Corporation Price, Consensus and EPS Surprise
W.R. Berkley’s net premiums written for the quarter under review were $1.7 billion, down 0.2% year over year, primarily due to lower premiums written at the Insurance segment.
Operating revenues came in at $1.8 billion, down 4.2% year over year, due to lower net premiums written and investment income. Moreover, the top line missed the consensus estimate by 6.6%.
Investment income decreased 54.6% year over year to $84.4 million, primarily due to loss of $58 million from investment funds, which are reported on a one-quarter lag. The loss was due to the first-quarter downturn in the financial markets, which resulted from the COVID-19 related economic shutdown.
Total expenses increased 4.6% to $1.8 billion, primarily due to higher losses and loss expenses.
Catastrophe losses of $145.9 million in the quarter widened from $25.5 million incurred in the year-ago quarter. The catastrophe losses included $20 million for losses related to civil unrest and $40 million attributable to severe weather-related events in the United States. Consolidated combined ratio (a measure of underwriting profitability) was 98.7%, down 480 basis points (bps) year over year.
Segment Details
Net premiums written at the Insurance segment decreased 2% year over year to $1.5 billion in the quarter, primarily due to lower short-tail lines and workers' compensation. Combined ratio deteriorated 390 bps to 97.7%.
Net premiums written in the Reinsurance & Monoline Excess segment increased 16.4% year over year to $196.7 million on higher casualty reinsurance and property reinsurance premium. Combined ratio deteriorated 990 bps to 105.1%.
Financial Update
W.R. Berkley exited the second quarter with total assets worth $27.3 billion, up 2.6% from year-end 2019.
Book value per share decreased 1.7% from 2019 end to $31.33 as of Jun 30, 2020.
Cash flow from operations was $427.3 million in the second quarter of 2020, up 31.7% year over year.
The company’s return on equity contracted 1120 bps to 4.7%.
The company returned $117 million to shareholders in the reported quarter, including $96 million in share repurchases and $21 million in dividend payouts.
Of the insurance industry players that have reported second-quarter results so far, The Progressive Corporation (PGR - Free Report) beat the Zacks Consensus Estimate for earnings.
Upcoming Releases
RLI Corporation (RLI - Free Report) will release second-quarter 2020 earnings on Jul 22 after market close. The Zacks Consensus Estimate for the same stands at 45 cents per share.
The Travelers Companies (TRV - Free Report) will release second-quarter 2020 earnings on Jul 23. The Zacks Consensus Estimate for the same stands at 25 cents per share.
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Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.1% per year.
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W.R. Berkley (WRB) Q2 Earnings and Revenues Miss Estimates
W.R. Berkley Corporation’s (WRB - Free Report) second-quarter 2020 operating income of 6 cents per share missed the Zacks Consensus Estimate of 23 cents by 73.9%. Also, the bottom line plunged 92.7% year over year due to higher catastrophe losses. The COVID-19 pandemic had an adverse impact on the company’s results.
W.R. Berkley Corporation Price, Consensus and EPS Surprise
W.R. Berkley Corporation price-consensus-eps-surprise-chart | W.R. Berkley Corporation Quote
Behind the Headlines
W.R. Berkley’s net premiums written for the quarter under review were $1.7 billion, down 0.2% year over year, primarily due to lower premiums written at the Insurance segment.
Operating revenues came in at $1.8 billion, down 4.2% year over year, due to lower net premiums written and investment income. Moreover, the top line missed the consensus estimate by 6.6%.
Investment income decreased 54.6% year over year to $84.4 million, primarily due to loss of $58 million from investment funds, which are reported on a one-quarter lag. The loss was due to the first-quarter downturn in the financial markets, which resulted from the COVID-19 related economic shutdown.
Total expenses increased 4.6% to $1.8 billion, primarily due to higher losses and loss expenses.
Catastrophe losses of $145.9 million in the quarter widened from $25.5 million incurred in the year-ago quarter. The catastrophe losses included $20 million for losses related to civil unrest and $40 million attributable to severe weather-related events in the United States. Consolidated combined ratio (a measure of underwriting profitability) was 98.7%, down 480 basis points (bps) year over year.
Segment Details
Net premiums written at the Insurance segment decreased 2% year over year to $1.5 billion in the quarter, primarily due to lower short-tail lines and workers' compensation. Combined ratio deteriorated 390 bps to 97.7%.
Net premiums written in the Reinsurance & Monoline Excess segment increased 16.4% year over year to $196.7 million on higher casualty reinsurance and property reinsurance premium. Combined ratio deteriorated 990 bps to 105.1%.
Financial Update
W.R. Berkley exited the second quarter with total assets worth $27.3 billion, up 2.6% from year-end 2019.
Book value per share decreased 1.7% from 2019 end to $31.33 as of Jun 30, 2020.
Cash flow from operations was $427.3 million in the second quarter of 2020, up 31.7% year over year.
The company’s return on equity contracted 1120 bps to 4.7%.
The company returned $117 million to shareholders in the reported quarter, including $96 million in share repurchases and $21 million in dividend payouts.
Zacks Rank
W.R. Berkley currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Another Insurer
Of the insurance industry players that have reported second-quarter results so far, The Progressive Corporation (PGR - Free Report) beat the Zacks Consensus Estimate for earnings.
Upcoming Releases
RLI Corporation (RLI - Free Report) will release second-quarter 2020 earnings on Jul 22 after market close. The Zacks Consensus Estimate for the same stands at 45 cents per share.
The Travelers Companies (TRV - Free Report) will release second-quarter 2020 earnings on Jul 23. The Zacks Consensus Estimate for the same stands at 25 cents per share.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.1% per year.
These 7 were selected because of their superior potential for immediate breakout.
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