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Travelers (TRV) to Report Q3 Earnings: What's in the Offing?

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The Travelers Companies, Inc. (TRV - Free Report) is set to report third-quarter 2021 earnings on Oct 19. The company delivered an earnings surprise of 46.81% in the last reported quarter.

Factors to Consider

Solid renewal rate change, robust retention across all the segments, new businesses, and improved pricing might have aided Travelers’ third-quarter premium .The Zacks Consensus Estimate for premiums is pegged at $7.7 billion, indicating a 4.8% decline from third-quarter 2020.

Travelers estimates net investment income from non-fixed income portfolio in the range of $425 million to $435 million in the to-be-reported quarter. Given a low interest rate environment, the benefits of higher average levels of invested assets are likely to have been offset by a lower average portfolio yield. The Zacks Consensus Estimate for NII is pegged at $629 million, down 6.3% from the year-ago reported figure.

Strong renewal premium change in the Agency Homeowners business, solid retention, new business in both Agency Auto and Agency Homeowners, improved policies in force and multi-channel distribution might have aided the Personal Insurance segment in the quarter to be reported.

Higher net written premiums are likely to have driven the top line in the to-be-reported quarter. The Zacks Consensus Estimate for revenues is currently pegged at $8.5 billion, indicating a 3.4% increase from the year-ago reported figure.

Underwriting profitability is likely to have been weighed down by the catastrophe loss stemming from Hurricane Ida.

Continued share buybacks are anticipated to have provided an additional boost to the bottom line.

However, expenses are expected to have risen on higher amortization of deferred acquisition costs, general and administrative expenses.

The Zacks Consensus Estimate for third-quarter 2021 earnings per share is pegged at $2.04, down 34.62% from year- ago reported figure.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Travelers 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: Travelers has an Earnings ESP of -24.67%. This is because the Most Accurate Estimate is pegged at $1.54, lower than the Zacks Consensus Estimate of $2.04. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
 

Zacks Rank: Travelers 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:

ProAssurance Corporation (PRA - Free Report) has an Earnings ESP of +4.92% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Root, Inc. (ROOT - Free Report) has an Earnings ESP of +5.34% and a Zacks Rank #3.

W.R. Corporation (WRB - Free Report) has an Earnings ESP of +1.52% and a Zacks Rank of 3.

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