We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Everest Re (RE) Q1 Earnings Top, Revenues Lag Estimates
Read MoreHide Full Article
Everest Re Group, Ltd.’s first-quarter 2022 operating income per share of $10.31 beat the Zacks Consensus Estimate by 23.9%. The bottom line increased 58.9% year over year.
Everest Re witnessed higher premiums across its reinsurance and insurance businesses. A not-so-active cat environment aided underwriting income, driving the combined ratio.
Everest Re Group, Ltd. Price, Consensus and EPS Surprise
Everest Re’s total operating revenues of nearly $3.1 billion increased 14.8% year over year on higher premiums earned. The top line, however, missed the consensus estimate by 2.6%.
Gross written premiums improved 9% year over year to $3.2 billion. The Reinsurance segment generated premiums of $2.2 billion, up 6% year over year, including a highly successful Jan 1 renewal where Everest achieved growth in targeted classes, notably casualty pro-rata and international treaty, while optimizing the property portfolio to reduce catastrophe volatility and maximize returns. The Insurance segment generated a premium of $1 billion, up 15% year over year, driven by balanced and diversified growth across core classes and geographies.
Net investment income was $242.8 million, down 6.8% year over year.
Total claims and expenses increased 9.4% to $2.6 billion primarily due to higher incurred losses and loss adjustment expenses, commission, brokerage, taxes and fees, other underwriting expenses, corporate expenses and interest, fees and bond issue cost amortization expense.
Pre-tax underwriting income was $235 million including $115 million of catastrophe losses net of recoveries and reinstatement premiums. Catastrophe events comprised Australian flood losses, European storms, and March 2022 events in the United States.
The combined ratio improved 650 basis points (bps) year over year to 91.6 in the reported quarter. The combined ratio of the Reinsurance segment improved 610 bps to 91.4 while the same improved 800 bps to 91.9 for the Insurance segment.
Financial Update
Everest Re exited the first quarter of 2022 with total investments and cash of $29.3 billion, down 1.2% from the 2021 level. Shareholder equity at the end of the reported quarter decreased 6% from 2021 end to $9.5 billion.
Book value per share was $241.52 as of Mar 31, 2022, down 6.4% from the 2021-end level.
The annualized net income return on equity was 16.2%, up 480 bps.
Everest Re’s cash flow from operations was $846.4 million in the quarter, down 6.4% year over year.
Everest Re paid common share dividends of $61 million during the quarter and bought back shares worth $1.3 million in the first quarter of 2022.
Of the insurance industry players that have reported first-quarter results so far, The Travelers Companies (TRV - Free Report) and RLI Corporation (RLI - Free Report) beat the respective Zacks Consensus Estimate for earnings, while The Progressive Corporation (PGR - Free Report) missed the mark.
Travelers reported first-quarter 2022 core income of $4.22 per share, which beat the Zacks Consensus Estimate by 14% and increased 54.6% year over year. Total revenues increased 6.8% from the year-ago quarter to $8.8 billion, primarily due to higher premiums and fee income but missed the consensus estimate. Travelers’ combined ratio deteriorated 530 bps year over year to 91.3.
RLI’s first-quarter 2022 operating earnings of $1.43 per share beat the Zacks Consensus Estimate by 40.2% and improved 64.4% from the prior-year quarter. Operating revenues were $287 million, up 17.1% year over year and beat the Zacks Consensus Estimate by 0.8%. RLI’s gross premiums written increased 22% year over year to $359.2 million. The combined ratio improved 900 bps year over year to 77.9.
Progressive’s first-quarter 2022 earnings per share of $1.12 missed the Zacks Consensus Estimate of $1.24 and declined 34.9% from the year-ago quarter. Net premiums written were $13.2 billion in the quarter, up 12% from $11.7 billion a year ago. Progressive’s combined ratio deteriorated 520 bps from the prior-year quarter to 94.7.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Everest Re (RE) Q1 Earnings Top, Revenues Lag Estimates
Everest Re Group, Ltd.’s first-quarter 2022 operating income per share of $10.31 beat the Zacks Consensus Estimate by 23.9%. The bottom line increased 58.9% year over year.
Everest Re witnessed higher premiums across its reinsurance and insurance businesses. A not-so-active cat environment aided underwriting income, driving the combined ratio.
Everest Re Group, Ltd. Price, Consensus and EPS Surprise
Everest Re Group, Ltd. price-consensus-eps-surprise-chart | Everest Re Group, Ltd. Quote
Operational Update
Everest Re’s total operating revenues of nearly $3.1 billion increased 14.8% year over year on higher premiums earned. The top line, however, missed the consensus estimate by 2.6%.
Gross written premiums improved 9% year over year to $3.2 billion. The Reinsurance segment generated premiums of $2.2 billion, up 6% year over year, including a highly successful Jan 1 renewal where Everest achieved growth in targeted classes, notably casualty pro-rata and international treaty, while optimizing the property portfolio to reduce catastrophe volatility and maximize returns. The Insurance segment generated a premium of $1 billion, up 15% year over year, driven by balanced and diversified growth across core classes and geographies.
Net investment income was $242.8 million, down 6.8% year over year.
Total claims and expenses increased 9.4% to $2.6 billion primarily due to higher incurred losses and loss adjustment expenses, commission, brokerage, taxes and fees, other underwriting expenses, corporate expenses and interest, fees and bond issue cost amortization expense.
Pre-tax underwriting income was $235 million including $115 million of catastrophe losses net of recoveries and reinstatement premiums. Catastrophe events comprised Australian flood losses, European storms, and March 2022 events in the United States.
The combined ratio improved 650 basis points (bps) year over year to 91.6 in the reported quarter. The combined ratio of the Reinsurance segment improved 610 bps to 91.4 while the same improved 800 bps to 91.9 for the Insurance segment.
Financial Update
Everest Re exited the first quarter of 2022 with total investments and cash of $29.3 billion, down 1.2% from the 2021 level. Shareholder equity at the end of the reported quarter decreased 6% from 2021 end to $9.5 billion.
Book value per share was $241.52 as of Mar 31, 2022, down 6.4% from the 2021-end level.
The annualized net income return on equity was 16.2%, up 480 bps.
Everest Re’s cash flow from operations was $846.4 million in the quarter, down 6.4% year over year.
Everest Re paid common share dividends of $61 million during the quarter and bought back shares worth $1.3 million in the first quarter of 2022.
Zacks Rank
Everest Re 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 Some Other P&C Insurers
Of the insurance industry players that have reported first-quarter results so far, The Travelers Companies (TRV - Free Report) and RLI Corporation (RLI - Free Report) beat the respective Zacks Consensus Estimate for earnings, while The Progressive Corporation (PGR - Free Report) missed the mark.
Travelers reported first-quarter 2022 core income of $4.22 per share, which beat the Zacks Consensus Estimate by 14% and increased 54.6% year over year. Total revenues increased 6.8% from the year-ago quarter to $8.8 billion, primarily due to higher premiums and fee income but missed the consensus estimate. Travelers’ combined ratio deteriorated 530 bps year over year to 91.3.
RLI’s first-quarter 2022 operating earnings of $1.43 per share beat the Zacks Consensus Estimate by 40.2% and improved 64.4% from the prior-year quarter. Operating revenues were $287 million, up 17.1% year over year and beat the Zacks Consensus Estimate by 0.8%. RLI’s gross premiums written increased 22% year over year to $359.2 million. The combined ratio improved 900 bps year over year to 77.9.
Progressive’s first-quarter 2022 earnings per share of $1.12 missed the Zacks Consensus Estimate of $1.24 and declined 34.9% from the year-ago quarter. Net premiums written were $13.2 billion in the quarter, up 12% from $11.7 billion a year ago. Progressive’s combined ratio deteriorated 520 bps from the prior-year quarter to 94.7.