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Travelers (TRV) to Report Q4 Earnings: What's in the Store?
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The Travelers Companies, Inc. (TRV - Free Report) is set to report fourth-quarter 2022 earnings on Jan 24. The insurer delivered an earnings surprise in each of the last four quarters, the average being 25.39%.
Factors to Consider
Premium in the to-be-reported quarter is likely to have driven by strong retention rates across all segments, new business premiums and positive renewal premium changes. The Zacks Consensus Estimate for premiums is pegged at $8.8 billion, indicating a 9.2% increase from the year-ago reported number.
Higher average levels of invested assets, reliable results from the fixed-income portfolio and strong returns from the non-fixed income portfolio are likely to have aided net investment income. TRV expects net investment income of $531 million after-tax ($625 million pre-tax), comprising $510 million after-tax ($601 million pre-tax) from the fixed income portfolio.
The Personal Insurance segment in the to-be-reported quarter is likely to have benefited from continued solid growth at the profitable agency auto and homeowners business. The Zacks Consensus Estimate for earned premiums at Personal Insurance is pegged at $3.5 billion, an improvement of 11.2% from the year-ago reported figure.
Higher premiums, improved net investment income and increased fee income are likely to have boosted the top line in the to-be-reported quarter. The Zacks Consensus Estimate for revenues is currently pegged at $9.6 billion, indicating a 7.3% increase from the year-ago reported figure.
Travelers estimates fourth-quarter catastrophe loss of about $362 million ($459 million pre-tax). The loss primarily stemmed from the winter storm that impacted much of the United States and Canada in late December. The consensus estimate for the combined ratio is pegged at 92, indicating a deterioration of 200 basis points from the year-ago reported number.
TRV expects fourth-quarter results should include underlying underwriting gain of $571 million ($723 million pre-tax) and net favorable prior year reserve development of $145 million ($185 million pre-tax).
Continued share buybacks are anticipated to have provided an additional boost to the bottom line.
Expenses are expected to have increased on higher amortization of deferred acquisition costs, claims and claim adjustment expenses, general and administrative expenses and increased interest expenses. The consensus mark for the loss and loss-adjustment expense ratio is pegged at 64, indicating an increase of 6.7% from the year-ago reported figure.
Travelers projects net income to be $819 million or $3.44 per share while core income is expected to be $810 million or $3.40 per share.
The Zacks Consensus Estimate for fourth-quarter 2022 earnings per share is pegged at $4.19, suggesting a decline of 19.4% from the year-ago reported figure.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Travelers this time around. This is because a stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). That is not the case here.
Earnings ESP: Travelers has an Earnings ESP of -3.47%. This is because the Most Accurate Estimate is pegged at $4.04, lower than the Zacks Consensus Estimate of $4.19. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
The Travelers Companies, Inc. Price and EPS Surprise
Some insurance stocks with the right combination of elements to come up with an earnings beat this time around are:
Arch Capital Group Ltd. (ACGL - Free Report) has an Earnings ESP of +4.48% and a Zacks Rank of 3. The Zacks Consensus Estimate for fourth-quarter 2022 earnings is pegged at $1.34, indicating an increase of 5.5% from the year-ago reported figure.
ACGL’s earnings beat estimates in three of the last four reported quarters while missed in one.
Chubb Limited (CB - Free Report) has an Earnings ESP of +11.47% and a Zacks Rank #3. The Zacks Consensus Estimate for fourth-quarter 2022 earnings is pegged at $4.26, up 11.8% from the figure reported in the year-ago quarter.
CB’s earnings beat estimates in each of the last four reported quarters.
First American Financial Corporation (FAF - Free Report) has an Earnings ESP of +0.35% and a Zacks Rank of 2. The Zacks Consensus Estimate for fourth-quarter 2022 earnings stands at $1.45, indicating a decrease of 36.4% from the year-ago reported figure.
FAF’s earnings beat estimates in three of the last four reported quarters while missed in one.
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Travelers (TRV) to Report Q4 Earnings: What's in the Store?
The Travelers Companies, Inc. (TRV - Free Report) is set to report fourth-quarter 2022 earnings on Jan 24. The insurer delivered an earnings surprise in each of the last four quarters, the average being 25.39%.
Factors to Consider
Premium in the to-be-reported quarter is likely to have driven by strong retention rates across all segments, new business premiums and positive renewal premium changes. The Zacks Consensus Estimate for premiums is pegged at $8.8 billion, indicating a 9.2% increase from the year-ago reported number.
Higher average levels of invested assets, reliable results from the fixed-income portfolio and strong returns from the non-fixed income portfolio are likely to have aided net investment income. TRV expects net investment income of $531 million after-tax ($625 million pre-tax), comprising $510 million after-tax ($601 million pre-tax) from the fixed income portfolio.
The Personal Insurance segment in the to-be-reported quarter is likely to have benefited from continued solid growth at the profitable agency auto and homeowners business. The Zacks Consensus Estimate for earned premiums at Personal Insurance is pegged at $3.5 billion, an improvement of 11.2% from the year-ago reported figure.
Higher premiums, improved net investment income and increased fee income are likely to have boosted the top line in the to-be-reported quarter. The Zacks Consensus Estimate for revenues is currently pegged at $9.6 billion, indicating a 7.3% increase from the year-ago reported figure.
Travelers estimates fourth-quarter catastrophe loss of about $362 million ($459 million pre-tax). The loss primarily stemmed from the winter storm that impacted much of the United States and Canada in late December. The consensus estimate for the combined ratio is pegged at 92, indicating a deterioration of 200 basis points from the year-ago reported number.
TRV expects fourth-quarter results should include underlying underwriting gain of $571 million ($723 million pre-tax) and net favorable prior year reserve development of $145 million ($185 million pre-tax).
Continued share buybacks are anticipated to have provided an additional boost to the bottom line.
Expenses are expected to have increased on higher amortization of deferred acquisition costs, claims and claim adjustment expenses, general and administrative expenses and increased interest expenses. The consensus mark for the loss and loss-adjustment expense ratio is pegged at 64, indicating an increase of 6.7% from the year-ago reported figure.
Travelers projects net income to be $819 million or $3.44 per share while core income is expected to be $810 million or $3.40 per share.
The Zacks Consensus Estimate for fourth-quarter 2022 earnings per share is pegged at $4.19, suggesting a decline of 19.4% from the year-ago reported figure.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Travelers this time around. This is because a stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). That is not the case here.
Earnings ESP: Travelers has an Earnings ESP of -3.47%. This is because the Most Accurate Estimate is pegged at $4.04, lower than the Zacks Consensus Estimate of $4.19. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
The Travelers Companies, Inc. Price and EPS Surprise
The Travelers Companies, Inc. price-eps-surprise | The Travelers Companies, Inc. Quote
Zacks Rank: Travelers currently carries a Zacks Rank #3. 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:
Arch Capital Group Ltd. (ACGL - Free Report) has an Earnings ESP of +4.48% and a Zacks Rank of 3. The Zacks Consensus Estimate for fourth-quarter 2022 earnings is pegged at $1.34, indicating an increase of 5.5% from the year-ago reported figure.
ACGL’s earnings beat estimates in three of the last four reported quarters while missed in one.
Chubb Limited (CB - Free Report) has an Earnings ESP of +11.47% and a Zacks Rank #3. The Zacks Consensus Estimate for fourth-quarter 2022 earnings is pegged at $4.26, up 11.8% from the figure reported in the year-ago quarter.
CB’s earnings beat estimates in each of the last four reported quarters.
First American Financial Corporation (FAF - Free Report) has an Earnings ESP of +0.35% and a Zacks Rank of 2. The Zacks Consensus Estimate for fourth-quarter 2022 earnings stands at $1.45, indicating a decrease of 36.4% from the year-ago reported figure.
FAF’s earnings beat estimates in three of the last four reported quarters while missed in one.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.