Back to top

Image: Bigstock

Everest Re (RE) to Report Q2 Earnings: What's in the Offing?

Read MoreHide Full Article

Everest Re Group (RE - Free Report) is slated to report second-quarter 2022 earnings on Jul 27, after market close. The insurer delivered an earnings surprise of 23.9% in the last reported quarter.

Factors to Consider

Premium growth is likely to have benefited from an increase in the reinsurance and insurance businesses.

The Insurance segment is likely to have benefited from increases in specialty casualty business and other specialty business, exposure increases, rate, strong renewal retention and new business across the core segments, lines and geographies, most notably across its  long-tail lines.

The Reinsurance segment is likely to have benefited from solid growth in Casualty and financial lines, the strong underlying rate in underwriting and increased Everest participation in treaties.

The Zacks Consensus Estimate for premiums earned is pegged at $2.9 billion, indicating an increase of 12.9% from the year-ago reported figure.

Higher net written premiums are likely to have boosted the top line in the to-be-reported quarter. The Zacks Consensus Estimate for revenues is currently pegged at $3.1 billion, indicating a 6.2% increase from the year-ago reported figure.

Net investment income is likely to have been affected by a decline in limited partnership income. The downside is likely to have been partially offset by an additional income from fixed maturity investments. The Zacks Consensus Estimate for net investment income is pegged at $286 million, indicating a decline of 29.7% from the year-ago reported figure.

Per Colorado State University (CSU), the 2022 above-average hurricane season may have 19 named storms, including nine hurricanes and four major hurricanes. This year’s hurricane season could be about 130% of the average season per CSU. The estimated insured losses in the United States from catastrophes in the second quarter could be more than $4 billion per analysts at Goldman Sachs, published in Reinsurance News. The Zacks Consensus Estimate for the combined ratio is pegged at 91, indicating a deterioration of 200 basis points from the year-ago reported figure of 89.

The Zacks Consensus Estimate for second-quarter 2022 earnings of $8.96 per share indicates a decrease of 38.7% from the year-ago quarter reported figure.

What the Zacks Model Says

Our proven model does not conclusively predict an earnings beat for Everest Re 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: Everest Re has an Earnings ESP of +3.08%. This is because the Most Accurate Estimate of $9.23 is pegged higher than the Zacks Consensus Estimate of $8.96. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Everest Re Group, Ltd. Price and EPS Surprise

Everest Re Group, Ltd. Price and EPS Surprise

Everest Re Group, Ltd. price-eps-surprise | Everest Re Group, Ltd. Quote

Zacks Rank: Everest Re carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

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

Argo Group International Holdings, Ltd. (ARGO - Free Report) has an Earnings ESP of +2.98% and a Zacks Rank of 3. The Zacks Consensus Estimate for second-quarter 2022 earnings is pegged at $1.12, indicating a decrease of 30% from the year-ago reported figure.

ARGO’s earnings beat estimates in each of the four trailing quarters.

CCC Intelligent Solutions Holdings Inc. (CCCS - Free Report) has an Earnings ESP of +4.35% and a Zacks Rank of 3. The Zacks Consensus Estimate for second-quarter 2022 earnings stands at 8 cents, indicating a decline of 99.5% from the year-ago reported figure.

CCCS beat earnings estimates in two of the last four reported quarters while missing the same in the other two.

Cincinnati Financial Corporation (CINF - Free Report) has an Earnings ESP of +2.86% and a Zacks Rank of 3. The Zacks Consensus Estimate for second-quarter 2022 earnings is pegged at $1.05, down 41.3% from the figure reported in the year-ago quarter.

CINF beat earnings estimates in each of the four trailing quarters.

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

Published in