W. R. Berkley Corporation ( WRB Quick Quote WRB - Free Report) is slated to report second-quarter 2021 results on Jul 22, after market close. The company delivered an earnings surprise of 21.35% 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 second-quarter 2021 premiums earned is pegged at $1.9 billion, indicating an increase of 14.3% from the year-ago quarter’s reported figure. Net investment income in the to-be-reported quarter is likely to have been affected by decrease in income from fixed maturity securities due to lower investment yields, decrease in real estate and decline in income from investment funds. The downside is likely to have been offset by an increase arbitrage trading account, equity securities and decrease in investment expense. The Zacks Consensus Estimate for second-quarter 2021 net investment income is pegged at $138 million, indicating an increase of 62.3% from the year-ago quarter’s reported figure. 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 insurer expects COVID-19 to affect contingency and event cancellation, workers’ compensation, and other lines of business. Expense ratio is likely to have improved by virtue of growth in net premiums earned as well as reduced costs associated with travel and entertainment due to the pandemic. The Zacks Consensus Estimate for second-quarter 2021 expense ratio is pegged at 29.8, indicating an improvement of 90 basis points from the year-ago quarter’s reported figure. Compounding rate improvement in excess of loss cost trends, lower claims frequency and non-cat property losses, along with growth in lines of business that produce the best risk adjusted returns are likely to have driven underwriting income. Continued share buybacks are anticipated to have provided additional upside to the bottom line. However, expenses are expected to have risen on higher losses and loss expenses and other operating costs and interest expenses. The Zacks Consensus Estimate for second-quarter 2021 earnings per share is pegged at 95 cents, indicating an increase of 1483.3% from the year-ago quarter’s reported figure. What the Zacks Model Says
Our proven model predicts 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. Earnings ESP: W. R. Berkley has an Earnings ESP of +10.53%. This is because the Most Accurate Estimate is pegged at $1.05, higher than the Zacks Consensus Estimate of 95 cents. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter. Zacks Rank: W. R. Berkley currently carries a Zacks Rank #3. Other Stocks to Consider
Some other insurance stocks with the right combination of elements to deliver an earnings beat this time around are:
The Allstate Corporation ( ALL Quick Quote ALL - Free Report) currently has an Earnings ESP of +0.55% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here. Hallmark Financial Services, Inc. ( HALL Quick Quote HALL - Free Report) presently has an Earnings ESP of +37.5% and a Zacks Rank #2. Kinsale Capital Group, Inc. ( KNSL Quick Quote KNSL - Free Report) currently has an Earnings ESP of +0.30% and is a Zacks #2 Ranked stock.