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The Allstate Corporation (ALL - Free Report) recently released its fourth-quarter 2022 estimates. Simultaneously, the insurer also disclosed full-year estimates for some of its metrics.
Sound Premium Growth
Premiums written within the Property-Liability business of ALL are expected to increase 11.4% year over year to $11.5 billion in the fourth quarter of 2022. The growth came on the back of improved average auto and home insurance premiums.
Auto premiums written are estimated at $7.8 billion, up 13.3% year over year, thanks to growing Allstate brand average premiums.
ALL has been steadily pursuing auto rate hikes in the second half of 2022 as a response to mitigate headwinds arising from elevated loss costs. In fact, rate increases implemented last year are estimated to increase annualized written premiums by around 16.9%.
With sound growth in premiums (the most significant contributor to an insurer’s top line), Allstate's revenues might receive an impetus in the fourth quarter.
Allstate is expected to incur pre-tax catastrophe losses of $779 million in the fourth quarter. Catastrophe losses in the month of December ($593 million, pre-tax) contributed a massive chunk to the quarter’s figure. Costs arising from Winter Storm Elliott made up for around 80% of December’s estimated catastrophe losses.
Needless to say, the incidence of catastrophe losses dampens an insurer’s underwriting results and combined ratio. Within the Property-Liability business, the combined ratio of ALL in the fourth quarter and full year 2022 is projected at 109.1% and 106.6%, respectively.
Along with inflicting damage to underwriting results, significant catastrophe losses can also hamper the bottom-line results of Allstate. In the fourth quarter of 2022, ALL anticipates net loss in the range of $285 million and $335 million, while the adjusted net loss is expected within $335-$385 million.
Investment Income Estimate and Capital Deployment Update
In the fourth quarter, net investment income is likely to be $557 million, which is expected to comprise $147 million of performance-based investment income. Management estimates the share buyback program to be concluded by the end of September 2023.
Zacks Rank & Price Performance
Shares of Allstate have rallied 10.8% in a year compared with the industry’s 3% growth.
Image Source: Zacks Investment Research
ALL currently has a Zacks Rank #5 (Strong Sell).
Stocks to Consider
Some better-ranked stocks in the property and casualty (P&C) insurance space are Kinsale Capital Group, Inc. (KNSL - Free Report) , Everest Re Group, Ltd. and Argo Group International Holdings, Ltd. , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Kinsale Capital’s earnings surpassed estimates in each of the last four quarters, the average being 15.16%. The Zacks Consensus Estimate for KNSL’s 2023 earnings suggests an improvement of 22.3%, while the same for revenues suggests growth of 31.4% from the respective 2022 estimates. The consensus mark for KNSL’s 2023 earnings has moved 0.7% north in the past 60 days.
The bottom line of Everest Re outpaced estimates in three of the trailing four quarters and missed the mark once, the average being 10.26%. The Zacks Consensus Estimate for RE’s 2023 earnings suggests an improvement of 77.2%, while the same for revenues suggests growth of 12.5% from the corresponding 2022 estimates. The consensus mark for RE’s 2023 earnings has moved 3.9% north in the past 30 days.
Argo Group’s earnings surpassed estimates in three of the trailing four quarters and missed the mark once, the average being 36.84%. The Zacks Consensus Estimate for ARGO’s 2023 earnings is pegged at $3.00 per share, which indicates a more than three-fold increase from the 2022 estimate. ARGO boasts an impressive Value Score of A.
Shares of Kinsale Capital and Everest Re have gained 48.1% and 20.2%, respectively, in a year. However, the Argo Group stock has lost 53.1% in the same time frame.
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Allstate (ALL) Unveils Preliminary Fourth-Quarter Estimates
The Allstate Corporation (ALL - Free Report) recently released its fourth-quarter 2022 estimates. Simultaneously, the insurer also disclosed full-year estimates for some of its metrics.
Sound Premium Growth
Premiums written within the Property-Liability business of ALL are expected to increase 11.4% year over year to $11.5 billion in the fourth quarter of 2022. The growth came on the back of improved average auto and home insurance premiums.
Auto premiums written are estimated at $7.8 billion, up 13.3% year over year, thanks to growing Allstate brand average premiums.
ALL has been steadily pursuing auto rate hikes in the second half of 2022 as a response to mitigate headwinds arising from elevated loss costs. In fact, rate increases implemented last year are estimated to increase annualized written premiums by around 16.9%.
With sound growth in premiums (the most significant contributor to an insurer’s top line), Allstate's revenues might receive an impetus in the fourth quarter.
Catastrophe Losses Hurting ALL’s Underwriting Results
Allstate is expected to incur pre-tax catastrophe losses of $779 million in the fourth quarter. Catastrophe losses in the month of December ($593 million, pre-tax) contributed a massive chunk to the quarter’s figure. Costs arising from Winter Storm Elliott made up for around 80% of December’s estimated catastrophe losses.
Needless to say, the incidence of catastrophe losses dampens an insurer’s underwriting results and combined ratio. Within the Property-Liability business, the combined ratio of ALL in the fourth quarter and full year 2022 is projected at 109.1% and 106.6%, respectively.
Along with inflicting damage to underwriting results, significant catastrophe losses can also hamper the bottom-line results of Allstate. In the fourth quarter of 2022, ALL anticipates net loss in the range of $285 million and $335 million, while the adjusted net loss is expected within $335-$385 million.
Investment Income Estimate and Capital Deployment Update
In the fourth quarter, net investment income is likely to be $557 million, which is expected to comprise $147 million of performance-based investment income. Management estimates the share buyback program to be concluded by the end of September 2023.
Zacks Rank & Price Performance
Shares of Allstate have rallied 10.8% in a year compared with the industry’s 3% growth.
Image Source: Zacks Investment Research
ALL currently has a Zacks Rank #5 (Strong Sell).
Stocks to Consider
Some better-ranked stocks in the property and casualty (P&C) insurance space are Kinsale Capital Group, Inc. (KNSL - Free Report) , Everest Re Group, Ltd. and Argo Group International Holdings, Ltd. , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Kinsale Capital’s earnings surpassed estimates in each of the last four quarters, the average being 15.16%. The Zacks Consensus Estimate for KNSL’s 2023 earnings suggests an improvement of 22.3%, while the same for revenues suggests growth of 31.4% from the respective 2022 estimates. The consensus mark for KNSL’s 2023 earnings has moved 0.7% north in the past 60 days.
The bottom line of Everest Re outpaced estimates in three of the trailing four quarters and missed the mark once, the average being 10.26%. The Zacks Consensus Estimate for RE’s 2023 earnings suggests an improvement of 77.2%, while the same for revenues suggests growth of 12.5% from the corresponding 2022 estimates. The consensus mark for RE’s 2023 earnings has moved 3.9% north in the past 30 days.
Argo Group’s earnings surpassed estimates in three of the trailing four quarters and missed the mark once, the average being 36.84%. The Zacks Consensus Estimate for ARGO’s 2023 earnings is pegged at $3.00 per share, which indicates a more than three-fold increase from the 2022 estimate. ARGO boasts an impressive Value Score of A.
Shares of Kinsale Capital and Everest Re have gained 48.1% and 20.2%, respectively, in a year. However, the Argo Group stock has lost 53.1% in the same time frame.