Back to top

Image: Bigstock

RenaissaceRe (RNR) to Report Q4 Earnings: What's in Store?

Read MoreHide Full Article

RenaissanceRe Holdings Ltd. (RNR - Free Report) is scheduled to report fourth-quarter 2021 earnings on Jan 25, after the closing bell.

Q4 Estimates

The Zacks Consensus Estimate for fourth-quarter earnings per share is pegged at $3.71. It reported a loss of $1.59 per share in the prior-year quarter.

The consensus mark for revenues stands at $1.5 billion, suggesting growth of 34.5% from the year-ago quarter’s reported figure.

Earnings Surprise History

RenaissanceRe has an unimpressive earnings surprise history. Its bottom line beat estimates in two of the trailing four quarters and missed twice, the average negative surprise being 15.34%. This is depicted in the chart below:

Factors to Note

In the fourth quarter, RenaissanceRe’s premiums are likely to have benefited from rate increases across the property market and, professional liability, general casualty and other specialty lines of business. New business growth and policy renewals might have contributed to the to-be-reported quarter’s premiums. The Zacks Consensus Estimate for fourth-quarter net premiums earned is pegged at $1.4 billion, which indicates a surge of 40.3% from the prior-year quarter.

A continued low-interest rate environment and lower returns from fixed maturity and equity investments portfolio may have impacted RNR’s net investment income in the to-be-reported quarter. The consensus mark for net investment income stands at $80 million, suggesting a decline of 2.4% from the year-ago quarter.

An increase in net premiums earned, partly offset by reduced investment income, might get reflected in RenaissanceRe’s top line in the to-be-reported quarter.

The property and casualty (P&C) insurer’s fourth-quarter underwriting performance is likely to have gained on improved pricing, boosting the bottom line. However, the continued incidence of catastrophe losses might have partly offset RenaissanceRe’s underwriting results in the to-be-reported quarter. Also, escalating expenses due to the rise in net claims and claim expenses incurred, and operational costs may have weighed on RNR’s margins in the December quarter, making an earnings beat uncertain.

What Our Quantitative Model Predicts

Our proven model does not conclusively predict an earnings beat for RenaissanceRe 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: RenaissanceRe has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: RNR carries a Zacks Rank #3.

Stocks to Consider

Some stocks worth considering from the P&C insurance  space with a perfect mix of elements to surpass estimates in the upcoming quarterly releases are as follows:

Arch Capital Group Ltd. (ACGL - Free Report) has an Earnings ESP of +1.48% and a Zacks Rank #2. ACGL is scheduled to report fourth-quarter results on Feb 9. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Allstate Corporation (ALL - Free Report) has an Earnings ESP of +5.05% and a Zacks Rank #3. ALL is slated to release fourth-quarter results on Feb 2.

W. R. Berkley Corporation (WRB - Free Report) has an Earnings ESP of +4.41% and a Zacks Rank of 3 at present. WRB is slated to release fourth-quarter results on Jan 27.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.