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Insurance Stocks' Q4 Earnings on Jan 31: CB, UNM and RNR
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Better pricing, exposure growth, solid retention, favorable renewals, reinsurance agreements and accelerated digitalization in the fourth quarter are likely to have benefited insurance industry players such as Chubb Limited (CB - Free Report) , Unum Group (UNM - Free Report) and RenaissanceRe Holdings Ltd (RNR - Free Report) , which are due to report tomorrow. However, an active catastrophe level is likely to have weighed on their performance.
Premiums are likely to have benefited from continued improved pricing, strong retention and exposure growth across business lines. An active catastrophe environment accelerated the policy renewal rate and aided in better pricing in the fourth quarter.
The fourth quarter of 2022 bore the brunt of winter storm Elliot. Karen Clark & Company estimates industry losses from Elliot to be about $5.4 billion. Nonetheless, better pricing, reinsurance arrangements, portfolio repositioning, reinsurance covers, favorable reserve development and prudent underwriting are likely to drive an improvement in underwriting results.
Increased travel across the world is likely to have induced higher auto premiums. A stronger mortgage market is likely to have favored mortgage insurance premiums. A low unemployment rate is likely to have aided commercial insurance and group insurance.
Insurers, being beneficiaries of an improving rate environment, are likely to witness improved investment results. The last year saw seven rate hikes, with the fourth quarter witnessing two hikes by the Fed. A larger investment asset base and alternative investments in private equity, hedge funds and real estate among others are expected to have aided net investment income.
Accelerated digitalization is expected to have saved costs, thus aiding margins. A solid capital position aided insurers in strategic mergers and acquisitions to sharpen their competitive edge, build on a niche, expand geographically and diversify their portfolio, apart from enhancing shareholders value via share buybacks and raising dividends.
Let’s take a sneak peek into how the abovementioned insurers are poised prior to their fourth-quarter 2022 earnings on Jan 31.
According to the Zacks model, a company needs the right combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — to increase the odds of an earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Chubb’s fourth-quarter premiums are expected to have benefited from strong premium retention, new business and renewal retention. The top line is likely to have benefited from improved premium revenues as well as higher investment income. Higher-than-expected cat losses are likely to have weighed on underwriting profitability and thus, combined ratio. Expenses are likely to have increased because of higher loss and loss expenses. Nonetheless, continued share buyback is anticipated to have provided an additional boost to the bottom line. (Read more: Will Chubb Pull Off a Surprise This Earnings Season?)
The Zacks Consensus Estimate for Chubb’s fourth-quarter earnings per share of $4.22 indicates a 10.8% increase from the year-ago quarter reported figure. The company has an Earnings ESP of +2.72% and a Zacks Rank #3.
CB’s earnings surpassed estimates in the last four reported quarters. This is depicted in the chart below:
Unum’s Unum U.S. segment is likely to have benefited from favorable benefits experience in group product lines and higher premium income. Favorable benefits experience, higher premium income, in-force block growth and higher sales are likely to have favored performance at Colonial Life. Growth in the in-force block and higher persistency are likely to have benefited Unum International in the to-be-reported quarter. Expenses are likely to have increased. Nonetheless, continued share buyback is anticipated to have provided an additional boost to the bottom line. (Read more: Unum Group to Report Q4 Earnings: What's in the Offing?)
The Zacks Consensus Estimate for the bottom line is pegged at $1.46, indicating a 64% increase from the year-ago quarter reported figure. The consensus estimate for revenues is pegged at $3 billion, indicating an increase of 0.4% year over year. The company has an Earnings ESP of -0.06% and a Zacks Rank #2 (Buy).
RenaissanceRe’s fourth-quarter results are likely to benefit from higher premiums at both its Casualty and Specialty plus Property segments. Expenses are likely to have increased. Higher-than-expected cat losses are likely to have weighed on underwriting profitability and thus, combined ratio. Nonetheless, continued share buyback is anticipated to have provided an additional boost to the bottom line.
The Zacks Consensus Estimate for earnings is pegged at $6.58, indicating a 39.7% increase from the year-ago quarter reported figure. The consensus estimate for revenues is pegged at $1.8 billion, indicating an increase of 27.3% year over year. The company has an Earnings ESP of 0.00% and a Zacks Rank #2.
RNR’s earnings surpassed estimates in two of the last four quarters while missing in the other two. This is depicted in the chart below:
RenaissanceRe Holdings Ltd. Price and EPS Surprise
Image: Bigstock
Insurance Stocks' Q4 Earnings on Jan 31: CB, UNM and RNR
Better pricing, exposure growth, solid retention, favorable renewals, reinsurance agreements and accelerated digitalization in the fourth quarter are likely to have benefited insurance industry players such as Chubb Limited (CB - Free Report) , Unum Group (UNM - Free Report) and RenaissanceRe Holdings Ltd (RNR - Free Report) , which are due to report tomorrow. However, an active catastrophe level is likely to have weighed on their performance.
Premiums are likely to have benefited from continued improved pricing, strong retention and exposure growth across business lines. An active catastrophe environment accelerated the policy renewal rate and aided in better pricing in the fourth quarter.
The fourth quarter of 2022 bore the brunt of winter storm Elliot. Karen Clark & Company estimates industry losses from Elliot to be about $5.4 billion. Nonetheless, better pricing, reinsurance arrangements, portfolio repositioning, reinsurance covers, favorable reserve development and prudent underwriting are likely to drive an improvement in underwriting results.
Increased travel across the world is likely to have induced higher auto premiums. A stronger mortgage market is likely to have favored mortgage insurance premiums. A low unemployment rate is likely to have aided commercial insurance and group insurance.
Insurers, being beneficiaries of an improving rate environment, are likely to witness improved investment results. The last year saw seven rate hikes, with the fourth quarter witnessing two hikes by the Fed. A larger investment asset base and alternative investments in private equity, hedge funds and real estate among others are expected to have aided net investment income.
Accelerated digitalization is expected to have saved costs, thus aiding margins. A solid capital position aided insurers in strategic mergers and acquisitions to sharpen their competitive edge, build on a niche, expand geographically and diversify their portfolio, apart from enhancing shareholders value via share buybacks and raising dividends.
Let’s take a sneak peek into how the abovementioned insurers are poised prior to their fourth-quarter 2022 earnings on Jan 31.
According to the Zacks model, a company needs the right combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — to increase the odds of an earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Chubb’s fourth-quarter premiums are expected to have benefited from strong premium retention, new business and renewal retention. The top line is likely to have benefited from improved premium revenues as well as higher investment income. Higher-than-expected cat losses are likely to have weighed on underwriting profitability and thus, combined ratio. Expenses are likely to have increased because of higher loss and loss expenses. Nonetheless, continued share buyback is anticipated to have provided an additional boost to the bottom line. (Read more: Will Chubb Pull Off a Surprise This Earnings Season?)
The Zacks Consensus Estimate for Chubb’s fourth-quarter earnings per share of $4.22 indicates a 10.8% increase from the year-ago quarter reported figure. The company has an Earnings ESP of +2.72% and a Zacks Rank #3.
CB’s earnings surpassed estimates in the last four reported quarters. This is depicted in the chart below:
Chubb Limited Price and EPS Surprise
Chubb Limited price-eps-surprise | Chubb Limited Quote
Unum’s Unum U.S. segment is likely to have benefited from favorable benefits experience in group product lines and higher premium income. Favorable benefits experience, higher premium income, in-force block growth and higher sales are likely to have favored performance at Colonial Life. Growth in the in-force block and higher persistency are likely to have benefited Unum International in the to-be-reported quarter. Expenses are likely to have increased. Nonetheless, continued share buyback is anticipated to have provided an additional boost to the bottom line. (Read more: Unum Group to Report Q4 Earnings: What's in the Offing?)
The Zacks Consensus Estimate for the bottom line is pegged at $1.46, indicating a 64% increase from the year-ago quarter reported figure. The consensus estimate for revenues is pegged at $3 billion, indicating an increase of 0.4% year over year. The company has an Earnings ESP of -0.06% and a Zacks Rank #2 (Buy).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Unum’s earnings outpaced estimates in the last four reported quarters. The same is depicted in the chart below:
Unum Group Price and EPS Surprise
Unum Group price-eps-surprise | Unum Group Quote
RenaissanceRe’s fourth-quarter results are likely to benefit from higher premiums at both its Casualty and Specialty plus Property segments. Expenses are likely to have increased. Higher-than-expected cat losses are likely to have weighed on underwriting profitability and thus, combined ratio. Nonetheless, continued share buyback is anticipated to have provided an additional boost to the bottom line.
The Zacks Consensus Estimate for earnings is pegged at $6.58, indicating a 39.7% increase from the year-ago quarter reported figure. The consensus estimate for revenues is pegged at $1.8 billion, indicating an increase of 27.3% year over year. The company has an Earnings ESP of 0.00% and a Zacks Rank #2.
RNR’s earnings surpassed estimates in two of the last four quarters while missing in the other two. This is depicted in the chart below:
RenaissanceRe Holdings Ltd. Price and EPS Surprise
RenaissanceRe Holdings Ltd. price-eps-surprise | RenaissanceRe Holdings Ltd. Quote
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.