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Insurance Stocks' Q2 Earnings Due on Jul 28: KNSL, FAF & More
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Insurance industry players are likely to have benefited from improved pricing, strong retention, new business, solid retention, favorable renewals, reinsurance agreements, compelling products and service portfolios and adoption of technologies to curb operational costs in the second quarter. However, an active catastrophe season is likely to have remained a partial offset. Some of the insurers like Kinsale Capital Group, Inc. (KNSL - Free Report) , First American Financial Corporation (FAF - Free Report) , The Hartford Financial Services Group, Inc. (HIG - Free Report) , Arthur J. Gallagher (AJG - Free Report) and Willis Towers Watson plc (WTW - Free Report) are set to announce quarterly results on Jul 28.
Premiums are likely to have benefited from price hikes, operational strength, higher retention, strong renewal, the appointment of retail agents and higher new business premiums. Occurrences of natural disasters accelerated the policy renewal rate and aided better pricing in the second quarter.
Reinsurance covers, favorable reserve development and solid capital level are likely to have aided underwriting profitability and combined ratio.
Better pricing, reinsurance arrangements, portfolio repositioning and prudent underwriting practice are likely to improve underwriting results. Per analysts at Goldman Sachs, published in Reinsurance News, the estimated insured losses in the United States from catastrophes in the second quarter of the year could be more than $4 billion. Per analysts at Goldman Sachs, losses in the second quarter would be nearly 40% of the 10-year average of $11.1 billion for seasonal catastrophes in the United States in the quarter.
Higher reported net asset values, higher income from other alternative investments, growth in equity portfolio dividends, higher income received from private equity partnerships, hedge funds and the improving interest rate environment are expected to have driven net investment income.
Riding on a solid capital position, the insurers executed strategic mergers and acquisitions, which are likely to have boosted portfolios, diversified operations, enabled the companies to penetrate more profitable market segments as well as expanded their international presence.
The increased adoption of technologies such as robotic process automation, Chatbot and RoboAdvisory, artificial intelligence and data analytics, insurtech solutions, telematics and cloud computing is expected to have improved operational efficiency and limit costs, thus aiding margins.
Let’s see how the following five insurers are placed ahead of their second-quarter 2022 earnings on Jul 28.
Our proprietary model clearly indicates that a company needs to have the right combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase the odds of an earnings beat. You can see the complete list of today’s Zacks #1 Rank stocks here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Kinsale Capital Group’s premium income is expected to improve on the back of increasing submissions and rate increases. The combination of highly controlled underwriting combined with advanced technology-driven low costs and a focus on the Excess and Surplus Lines Insurance market is likely to have driven the profitability and growth of Kinsale Capital.
The Zacks Consensus Estimate for Kinsale Capital's second-quarter earnings per share is pegged at $1.68, indicating an increase of 31.2% from the prior-year quarter. Kinsale Capital has an Earnings ESP of 0.00% and carries a Zacks Rank #4 (Sell). The insurer delivered an earnings surprise in each of the last four quarters, the average being 26.43%. This is depicted in the chart below:
Kinsale Capital Group, Inc. Price and EPS Surprise
First American Financial’s Title Insurance and Services segment is expected to have benefited from higher direct premiums and escrow fees, higher average deal size in commercial business and the impact of strong home price appreciation on residential purchase transactions as well as the acquisition of ServiceMac. Higher operating revenues in the home warranty business are expected to have driven the Specialty Insurance business.
The Zacks Consensus Estimate for First American Financial’s second-quarter earnings of $1.62 per share implies a decline of 23.9% from the prior-year quarter’s reported number. First American Financial has an Earnings ESP of 0.00% and carries a Zacks Rank #4. The insurer delivered an earnings surprise in three of the last four quarters and missed in the other quarter, the average being 21.79%. This is depicted in the chart below:
First American Financial Corporation Price and EPS Surprise
Hartford Financial’s revenues are likely to have gained from a higher contribution from its Commercial Lines, Hartford Funds and Corporate segments. HIG is likely to have continued witnessing strong sales in the to-be-reported quarter. HIG is likely to have benefited from better written premiums in the Commercial Lines segment. Hartford Funds and Group Benefits are also likely to have contributed to this upside.
The Zacks Consensus Estimate for Hartford Financial’s second-quarter earnings of $1.52 per share implies a 34.8% decrease from the prior-year quarter’s reported number. Hartford Financial has an Earnings ESP of +0.40% and carries a Zacks Rank #3. The bottom line beat estimates in each of the last four quarters, the average surprise being 42.51%. This is depicted in the chart below:
The Hartford Financial Services Group, Inc. Price and EPS Surprise
Arthur J. Gallagher’s fees and commissions in the to-be-reported quarter are likely to have benefited from revenues associated with acquisitions, organic revenue growth, organic change in base commission and fee revenues. Its property and casualty brokerage operations are likely to have benefited from new business, strong retention, exposure and renewal premium increases across most geographies and lines of coverage. (Read more: Will Arthur J. Gallagher Beat Q2 Earnings Estimates?)
The Zacks Consensus Estimate for Arthur J. Gallagher’s second-quarter earnings per share stands at $1.68, indicating an increase of 43.6% from the year-ago quarter reported figure. Arthur J. Gallagher has an Earnings ESP of +0.37% and a Zacks Rank 3. The insurer delivered an earnings surprise in each of the last four quarters, the average being 6.52%. This is depicted in the chart below:
Willis Towers’ second-quarter revenues are likely to have witnessed the impact of increased demand for advisory work, new business in North America, increased retention and technology sales, offset by lower growth in Medicare Advantage. In the second quarter, the Health, Wealth and Career segment is likely to have benefited from strong demand for rewards consulting, pay benchmarking and software, the combination of increased retention, new client appointments and project work, growth from new clients and strong operating leverage from growth. (Read more: Can Willis Towers Pull Off a Surprise in Q2 Earnings?)
The Zacks Consensus Estimate for Willis Towers’ earnings per share is pegged at $2.31, suggesting a decrease of 13.2% from the year-ago reported figure. Willis Towers has an Earnings ESP of +1.36% and carries a Zacks Rank of 3. The insurer delivered an earnings surprise in each of the last four quarters, the average being 14.30%. This is depicted in the chart below:
Willis Towers Watson Public Limited Company Price and EPS Surprise
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Insurance Stocks' Q2 Earnings Due on Jul 28: KNSL, FAF & More
Insurance industry players are likely to have benefited from improved pricing, strong retention, new business, solid retention, favorable renewals, reinsurance agreements, compelling products and service portfolios and adoption of technologies to curb operational costs in the second quarter. However, an active catastrophe season is likely to have remained a partial offset. Some of the insurers like Kinsale Capital Group, Inc. (KNSL - Free Report) , First American Financial Corporation (FAF - Free Report) , The Hartford Financial Services Group, Inc. (HIG - Free Report) , Arthur J. Gallagher (AJG - Free Report) and Willis Towers Watson plc (WTW - Free Report) are set to announce quarterly results on Jul 28.
Premiums are likely to have benefited from price hikes, operational strength, higher retention, strong renewal, the appointment of retail agents and higher new business premiums. Occurrences of natural disasters accelerated the policy renewal rate and aided better pricing in the second quarter.
Reinsurance covers, favorable reserve development and solid capital level are likely to have aided underwriting profitability and combined ratio.
Better pricing, reinsurance arrangements, portfolio repositioning and prudent underwriting practice are likely to improve underwriting results. Per analysts at Goldman Sachs, published in Reinsurance News, the estimated insured losses in the United States from catastrophes in the second quarter of the year could be more than $4 billion. Per analysts at Goldman Sachs, losses in the second quarter would be nearly 40% of the 10-year average of $11.1 billion for seasonal catastrophes in the United States in the quarter.
Higher reported net asset values, higher income from other alternative investments, growth in equity portfolio dividends, higher income received from private equity partnerships, hedge funds and the improving interest rate environment are expected to have driven net investment income.
Riding on a solid capital position, the insurers executed strategic mergers and acquisitions, which are likely to have boosted portfolios, diversified operations, enabled the companies to penetrate more profitable market segments as well as expanded their international presence.
The increased adoption of technologies such as robotic process automation, Chatbot and RoboAdvisory, artificial intelligence and data analytics, insurtech solutions, telematics and cloud computing is expected to have improved operational efficiency and limit costs, thus aiding margins.
Let’s see how the following five insurers are placed ahead of their second-quarter 2022 earnings on Jul 28.
Our proprietary model clearly indicates that a company needs to have the right combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase the odds of an earnings beat. You can see the complete list of today’s Zacks #1 Rank stocks here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Kinsale Capital Group’s premium income is expected to improve on the back of increasing submissions and rate increases. The combination of highly controlled underwriting combined with advanced technology-driven low costs and a focus on the Excess and Surplus Lines Insurance market is likely to have driven the profitability and growth of Kinsale Capital.
The Zacks Consensus Estimate for Kinsale Capital's second-quarter earnings per share is pegged at $1.68, indicating an increase of 31.2% from the prior-year quarter. Kinsale Capital has an Earnings ESP of 0.00% and carries a Zacks Rank #4 (Sell). The insurer delivered an earnings surprise in each of the last four quarters, the average being 26.43%. This is depicted in the chart below:
Kinsale Capital Group, Inc. Price and EPS Surprise
Kinsale Capital Group, Inc. price-eps-surprise | Kinsale Capital Group, Inc. Quote
First American Financial’s Title Insurance and Services segment is expected to have benefited from higher direct premiums and escrow fees, higher average deal size in commercial business and the impact of strong home price appreciation on residential purchase transactions as well as the acquisition of ServiceMac. Higher operating revenues in the home warranty business are expected to have driven the Specialty Insurance business.
The Zacks Consensus Estimate for First American Financial’s second-quarter earnings of $1.62 per share implies a decline of 23.9% from the prior-year quarter’s reported number. First American Financial has an Earnings ESP of 0.00% and carries a Zacks Rank #4. The insurer delivered an earnings surprise in three of the last four quarters and missed in the other quarter, the average being 21.79%. This is depicted in the chart below:
First American Financial Corporation Price and EPS Surprise
First American Financial Corporation price-eps-surprise | First American Financial Corporation Quote
Hartford Financial’s revenues are likely to have gained from a higher contribution from its Commercial Lines, Hartford Funds and Corporate segments. HIG is likely to have continued witnessing strong sales in the to-be-reported quarter.
HIG is likely to have benefited from better written premiums in the Commercial Lines segment. Hartford Funds and Group Benefits are also likely to have contributed to this upside.
The Zacks Consensus Estimate for Hartford Financial’s second-quarter earnings of $1.52 per share implies a 34.8% decrease from the prior-year quarter’s reported number. Hartford Financial has an Earnings ESP of +0.40% and carries a Zacks Rank #3. The bottom line beat estimates in each of the last four quarters, the average surprise being 42.51%. This is depicted in the chart below:
The Hartford Financial Services Group, Inc. Price and EPS Surprise
The Hartford Financial Services Group, Inc. price-eps-surprise | The Hartford Financial Services Group, Inc. Quote
Arthur J. Gallagher’s fees and commissions in the to-be-reported quarter are likely to have benefited from revenues associated with acquisitions, organic revenue growth, organic change in base commission and fee revenues. Its property and casualty brokerage operations are likely to have benefited from new business, strong retention, exposure and renewal premium increases across most geographies and lines of coverage. (Read more: Will Arthur J. Gallagher Beat Q2 Earnings Estimates?)
The Zacks Consensus Estimate for Arthur J. Gallagher’s second-quarter earnings per share stands at $1.68, indicating an increase of 43.6% from the year-ago quarter reported figure. Arthur J. Gallagher has an Earnings ESP of +0.37% and a Zacks Rank 3. The insurer delivered an earnings surprise in each of the last four quarters, the average being 6.52%. This is depicted in the chart below:
Arthur J. Gallagher & Co. Price and EPS Surprise
Arthur J. Gallagher & Co. price-eps-surprise | Arthur J. Gallagher & Co. Quote
Willis Towers’ second-quarter revenues are likely to have witnessed the impact of increased demand for advisory work, new business in North America, increased retention and technology sales, offset by lower growth in Medicare Advantage. In the second quarter, the Health, Wealth and Career segment is likely to have benefited from strong demand for rewards consulting, pay benchmarking and software, the combination of increased retention, new client appointments and project work, growth from new clients and strong operating leverage from growth. (Read more: Can Willis Towers Pull Off a Surprise in Q2 Earnings?)
The Zacks Consensus Estimate for Willis Towers’ earnings per share is pegged at $2.31, suggesting a decrease of 13.2% from the year-ago reported figure. Willis Towers has an Earnings ESP of +1.36% and carries a Zacks Rank of 3. The insurer delivered an earnings surprise in each of the last four quarters, the average being 14.30%. This is depicted in the chart below:
Willis Towers Watson Public Limited Company Price and EPS Surprise
Willis Towers Watson Public Limited Company price-eps-surprise | Willis Towers Watson Public Limited Company Quote
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