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What's in the Cards for W. R. Berkley (WRB) in Q1 Earnings?

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W. R. Berkley Corporation (WRB - Free Report) is slated to report first-quarter 2021 results on Apr 20, after market close. The company delivered an earnings surprise of 17.95% in the last reported quarter.

Factors at Play 

Gross premiums written in the to-be-reported quarter are likely to have benefited from solid performance across professional liability, commercial auto, other liability and short-tail lines in the Insurance segment as well as an increase in property reinsurance, monoline excess and casualty reinsurance in the Reinsurance & Monoline Excess segments.

The Zacks Consensus Estimate for first-quarter 2021 premiums earned is pegged at $1.8 billion, indicating an increase of 9.2% from the year-ago quarter’s reported figure.

Net investment income in the to-be-reported quarter is likely to have benefited from higher income from investment funds due to market value adjustments and arbitrage trading income from investments in special purpose acquisition companies.

Loss cost trends are likely to have been impacted by COVID-related claims in certain lines of business as well as other effects of COVID-19 associated with economic conditions, inflation, and social-distancing and work-from-home rules.

The ongoing pandemic’s impacts on claim frequency and severity will likely continue to affect the company’s results in the to-be reported quarter.
The pandemic is likely to have affected contingency and event cancellation, workers’ compensation, and other lines of business.

Expense ratio is likely to have improved on the back of higher net premiums earned and reduced costs due to the pandemic, including travel and entertainment.

The Zacks Consensus Estimate for first-quarter 2021 expense ratio is pegged at 31.3, indicating an improvement of 110 basis points from the year-ago quarter’s reported figure.

Rate improvement, lower claim frequency and non-capital property losses are likely to have driven underwriting income. The improvement is likely to have been offset by higher catastrophe losses, resulting from natural catastrophe losses and COVID-related losses.

The company’s share buyback activity is likely to have aided the bottom line.
However, expenses are expected to have risen on higher losses and loss expenses, expenses from non-insurance businesses, and other operating costs and interest expenses.

The Zacks Consensus Estimate for first-quarter 2021 earnings per share is pegged at 96 cents, indicating an increase of 39.1% from the year-ago quarter’s reported figure.

What the Zacks Model Says

Our proven model does not conclusively predict an earnings beat for W. R. Berkley this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Earnings ESP: W. R. Berkley has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are both pegged at 96 cents. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

W.R. Berkley Corporation Price and EPS Surprise

 

Zacks Rank: W. R. Berkley currently carries a Zacks Rank #3.

Stocks to Consider

Some insurance stocks with the right combination of elements to deliver an earnings beat this time around are:

The Allstate Corporation (ALL - Free Report) currently has an Earnings ESP of +2.14% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cincinnati Financial Corporation (CINF - Free Report) presently has an Earnings ESP of +6.30% and a Zacks Rank #2.

Kingstone Companies, Inc. (KINS - Free Report) currently has an Earnings ESP of +70% and is a Zacks #2 Ranked stock.

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