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Will Everest Re (RE) Pull Off a Surprise in Q4 Earnings?
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Everest Re Group is slated to report fourth-quarter 2022 earnings on Feb 8, after market close. The insurer delivered an earnings surprise in three of the last four quarters and missed in the other one, the average being 10.26%.
Factors to Consider
Premium growth is likely to have been driven by an increase in the reinsurance business and insurance business.
The Insurance segment is likely to have benefited from growth across most lines of business driven by positive rate and exposure increases, new business and strong renewal retention.
The Reinsurance segment is likely to have benefited from increases in casualty pro rata business and casualty excess of loss business, partially offset by a decline in property pro rata business and property casualty excess of loss business.
The Zacks Consensus Estimate for premiums earned is pegged at $3.1 billion, indicating an increase of 10.8% from the year-ago reported figure. We expect net premiums earned to be $3.1 billion.
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 $3.3 billion, indicating a 9.5% increase from the year-ago reported figure. We expect revenues to be $3.4 billion.
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 $194 million, indicating a decline of 5.4% from the year-ago reported figure. We expect net investment income to be $174.1 million.
Higher-than-expected cat losses are likely to have weighed on underwriting profitability and thus combined ratio.
Rate increase, exposure growth, prudent underwriting and traditional risk management capabilities are likely to have favored the combined ratio in the to-be-reported quarter. The consensus estimate for the combined ratio is pegged at 89, indicating an improvement of 300 basis points from the year-ago reported number. We expect the combined ratio to be 87.8 for the to-be-reported quarter.
The consensus estimate for the Reinsurance segment combined ratio is pegged at 86. The consensus estimate for the Insurance segment combined ratio is pegged at 88.
The Zacks Consensus Estimate for Everest Re’s fourth-quarter earnings is currently pegged at a loss of $9.29, indicating an increase of 1.86% from the year-ago quarter reported figure. We expect the bottom line to be $11 per share for the to-be-reported quarter.
What the Zacks Model Says
Our proven model predicts an earnings beat for 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.
Earnings ESP: Everest Re has an Earnings ESP of +3.73%. This is because the Most Accurate Estimate of $9.64 is pegged higher than the Zacks Consensus Estimate of $9.29. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Some other insurance stocks with the right combination of elements to deliver an earnings beat this time around are:
American International Group, Inc. (AIG - Free Report) has an Earnings ESP of +5.73% and a Zacks Rank of 2. The Zacks Consensus Estimate for fourth-quarter 2022 earnings is pegged at $1.19 per share, indicating a decrease of 24.7% from the year-ago reported figure.
AIG’s earnings beat estimates in three of the last four reported quarters while missing in one.
Arch Capital Group Ltd. (ACGL - Free Report) has an Earnings ESP of +5.42% and a Zacks Rank of 3. The Zacks Consensus Estimate for Arch Capital’s fourth-quarter 2022 earnings is pegged at $1.34 per share, indicating an increase of 5.5% from the year-ago reported figure.
ACGL’s earnings beat estimates in three of the last four quarters and missed in the other one.
NMI Holdings Inc. (NMIH - Free Report) has an Earnings ESP of +2.33% and a Zacks Rank of 3. The Zacks Consensus Estimate for NMI Holdings’ fourth-quarter 2022 earnings is pegged at 86 cents per share, indicating an increase of 17.8% from the year-ago reported figure.
NMIH’s earnings beat estimates in each of the four trailing quarters.
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Will Everest Re (RE) Pull Off a Surprise in Q4 Earnings?
Everest Re Group is slated to report fourth-quarter 2022 earnings on Feb 8, after market close. The insurer delivered an earnings surprise in three of the last four quarters and missed in the other one, the average being 10.26%.
Factors to Consider
Premium growth is likely to have been driven by an increase in the reinsurance business and insurance business.
The Insurance segment is likely to have benefited from growth across most lines of business driven by positive rate and exposure increases, new business and strong renewal retention.
The Reinsurance segment is likely to have benefited from increases in casualty pro rata business and casualty excess of loss business, partially offset by a decline in property pro rata business and property casualty excess of loss business.
The Zacks Consensus Estimate for premiums earned is pegged at $3.1 billion, indicating an increase of 10.8% from the year-ago reported figure. We expect net premiums earned to be $3.1 billion.
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 $3.3 billion, indicating a 9.5% increase from the year-ago reported figure. We expect revenues to be $3.4 billion.
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 $194 million, indicating a decline of 5.4% from the year-ago reported figure. We expect net investment income to be $174.1 million.
Higher-than-expected cat losses are likely to have weighed on underwriting profitability and thus combined ratio.
Rate increase, exposure growth, prudent underwriting and traditional risk management capabilities are likely to have favored the combined ratio in the to-be-reported quarter. The consensus estimate for the combined ratio is pegged at 89, indicating an improvement of 300 basis points from the year-ago reported number. We expect the combined ratio to be 87.8 for the to-be-reported quarter.
The consensus estimate for the Reinsurance segment combined ratio is pegged at 86. The consensus estimate for the Insurance segment combined ratio is pegged at 88.
The Zacks Consensus Estimate for Everest Re’s fourth-quarter earnings is currently pegged at a loss of $9.29, indicating an increase of 1.86% from the year-ago quarter reported figure. We expect the bottom line to be $11 per share for the to-be-reported quarter.
What the Zacks Model Says
Our proven model predicts an earnings beat for 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.
Earnings ESP: Everest Re has an Earnings ESP of +3.73%. This is because the Most Accurate Estimate of $9.64 is pegged higher than the Zacks Consensus Estimate of $9.29. 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-eps-surprise | Everest Re Group, Ltd. Quote
Zacks Rank: Everest Re carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Stocks to Consider
Some other insurance stocks with the right combination of elements to deliver an earnings beat this time around are:
American International Group, Inc. (AIG - Free Report) has an Earnings ESP of +5.73% and a Zacks Rank of 2. The Zacks Consensus Estimate for fourth-quarter 2022 earnings is pegged at $1.19 per share, indicating a decrease of 24.7% from the year-ago reported figure.
AIG’s earnings beat estimates in three of the last four reported quarters while missing in one.
Arch Capital Group Ltd. (ACGL - Free Report) has an Earnings ESP of +5.42% and a Zacks Rank of 3. The Zacks Consensus Estimate for Arch Capital’s fourth-quarter 2022 earnings is pegged at $1.34 per share, indicating an increase of 5.5% from the year-ago reported figure.
ACGL’s earnings beat estimates in three of the last four quarters and missed in the other one.
NMI Holdings Inc. (NMIH - Free Report) has an Earnings ESP of +2.33% and a Zacks Rank of 3. The Zacks Consensus Estimate for NMI Holdings’ fourth-quarter 2022 earnings is pegged at 86 cents per share, indicating an increase of 17.8% from the year-ago reported figure.
NMIH’s earnings beat estimates in each of the four trailing quarters.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.