We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Everest Re (RE) Q4 Earnings Beat, Revenues Miss Estimates
Read MoreHide Full Article
Everest Re Group, Ltd.’s fourth-quarter 2022 operating income per share of $12.21 beat the Zacks Consensus Estimate by 31.4% and our estimate of $8.25. The bottom line increased 33.9% year over year.
Everest Re witnessed higher premiums across its reinsurance and insurance businesses. RE experienced improved pricing as well as terms and conditions and deepening relationships with new and existing core clients.
Everest Re Group, Ltd. Price, Consensus and EPS Surprise
Everest Re’s total operating revenues of $3.2 billion increased 6.4% year over year on higher premiums earned and net investment income. The top line, however, missed the consensus estimate by 2.9% and our estimate of $3.3 billion.
Gross written premiums improved 6.1% year over year to $3.6 billion, largely driven by double-digit growth in the Insurance segment. However, it missed and our estimate of $3.8 billion
Net investment income was $210 million, up 2.4% year over year, driven by rising fixed-income returns as new money yields continue to improve. It beat our estimate of $174 million.
Total claims and expenses increased 2.6% to $2.7 billion, primarily due to higher commission, brokerage, taxes and fees, other underwriting expenses and interest, fees and bond issue cost amortization expense. Our estimate was $2.8 billion.
Pre-tax underwriting loss of $368 million includes $15 million of pre-tax catastrophe losses net of estimated recoveries and reinstatement premiums as previously announced. The losses were primarily from Winter Storm Elliott.
The combined ratio improved 410 basis points (bps) year over year to 87.8 in the reported quarter.
Segment Update
The Reinsurance segment generated premiums of $2.4 billion, up 0.4% year over year, driven by growth with core casualty clients and the advantage of increased mortgage opportunities, offset by targeted reductions in property portfolio and foreign exchange movements. Our estimate was $2.6 billion.
The combined ratio of the Reinsurance segment improved 510 bps to 86.4.
The Insurance segment generated a premium of $1.3 billion, up 19% year over year, driven by balanced and diversified growth across most lines of business and geographies. Our estimate was $1.2 billion.
The combined ratio improved 140 bps to 91.4 for the Insurance segment.
Full-Year Highlights
Operating income per share of $27.08 beat the Zacks Consensus Estimate of $24.14. The bottom line decreased 6.5% year over year. Our estimate was $23.07
Operating revenues of $12.5 billion increased 7.8% year over year. The top line beat the consensus estimate of $12.4 billion. Our estimate was $12.6 billion.
Gross written premium improved 6.9% to $14 billion, which was almost in line with our estimates. The combined ratio improved 180 basis points.
Financial Update
Everest Re exited 2022 with total investments and cash of $29.9 billion, up 0.7% from the 2021 level. Shareholder equity at the end of the reported quarter decreased 17% from 2021 end to $8.4 billion.
Book value per share was $215.54 as of Dec 31, 2022, down 16.5% year over year.
The annualized net income return on equity was 17.7%, which expanded 310 bps from the year-ago quarter.
Everest Re’s cash flow from operations was 3.7 billion in the quarter, down 3.6% year over year.
The Travelers Companies, Inc. (TRV - Free Report) reported fourth-quarter 2022 core income of $3.40 per share, which matched the Zacks Consensus Estimate. The bottom line decreased 35% year over year. Total revenues increased 7.5% from the year-ago quarter to about $9.6 billion, primarily driven by higher premiums and fee income. The top-line figure beat the Zacks Consensus Estimate by 0.2%.
Net written premiums increased 10% year over year to $8.8 billion. The figure was higher than our estimate of $8.6 billion. Catastrophe losses totaled $459 million pre-tax, wider than $36 million pre-tax in the prior-year quarter. Travelers witnessed an underwriting gain of $449 million, down 51.5% year over year. The combined ratio deteriorated 650 bps year over year to 94.5.
The Progressive Corporation’s (PGR - Free Report) fourth-quarter 2022 earnings per share of $1.50 beat the Zacks Consensus Estimate of $1.49 as well as our estimate of $1.34. The bottom line improved 42.9% year over year
Net premiums earned grew 11% to $12.9 billion and beat our estimate of $12.3 billion. The combined ratio — the percentage of premiums paid out as claims and expenses — improved 80 bps from the prior-year quarter’s level to 93.9.
RLI Corp. (RLI - Free Report) reported fourth-quarter 2022 operating earnings of $1.53 per share, beating the Zacks Consensus Estimate by 41.7%. The bottom line improved 26.4% from the prior-year quarter. Operating revenues for the reported quarter were $329.5 million, up 19.4% year over year. The top line beat the Zacks Consensus Estimate by 0.4%.
Gross premiums written increased 14% year over year to $383.8 million. Underwriting income of $54 million increased 8.7%, primarily due to higher profitability at its Property segment. The combined ratio deteriorated 140 bps year over year to 82.1.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Everest Re (RE) Q4 Earnings Beat, Revenues Miss Estimates
Everest Re Group, Ltd.’s fourth-quarter 2022 operating income per share of $12.21 beat the Zacks Consensus Estimate by 31.4% and our estimate of $8.25. The bottom line increased 33.9% year over year.
Everest Re witnessed higher premiums across its reinsurance and insurance businesses. RE experienced improved pricing as well as terms and conditions and deepening relationships with new and existing core clients.
Everest Re Group, Ltd. Price, Consensus and EPS Surprise
Everest Re Group, Ltd. price-consensus-eps-surprise-chart | Everest Re Group, Ltd. Quote
Operational Update
Everest Re’s total operating revenues of $3.2 billion increased 6.4% year over year on higher premiums earned and net investment income. The top line, however, missed the consensus estimate by 2.9% and our estimate of $3.3 billion.
Gross written premiums improved 6.1% year over year to $3.6 billion, largely driven by double-digit growth in the Insurance segment. However, it missed and our estimate of $3.8 billion
Net investment income was $210 million, up 2.4% year over year, driven by rising fixed-income returns as new money yields continue to improve. It beat our estimate of $174 million.
Total claims and expenses increased 2.6% to $2.7 billion, primarily due to higher commission, brokerage, taxes and fees, other underwriting expenses and interest, fees and bond issue cost amortization expense. Our estimate was $2.8 billion.
Pre-tax underwriting loss of $368 million includes $15 million of pre-tax catastrophe losses net of estimated recoveries and reinstatement premiums as previously announced. The losses were primarily from Winter Storm Elliott.
The combined ratio improved 410 basis points (bps) year over year to 87.8 in the reported quarter.
Segment Update
The Reinsurance segment generated premiums of $2.4 billion, up 0.4% year over year, driven by growth with core casualty clients and the advantage of increased mortgage opportunities, offset by targeted reductions in property portfolio and foreign exchange movements. Our estimate was $2.6 billion.
The combined ratio of the Reinsurance segment improved 510 bps to 86.4.
The Insurance segment generated a premium of $1.3 billion, up 19% year over year, driven by balanced and diversified growth across most lines of business and geographies. Our estimate was $1.2 billion.
The combined ratio improved 140 bps to 91.4 for the Insurance segment.
Full-Year Highlights
Operating income per share of $27.08 beat the Zacks Consensus Estimate of $24.14. The bottom line decreased 6.5% year over year. Our estimate was $23.07
Operating revenues of $12.5 billion increased 7.8% year over year. The top line beat the consensus estimate of $12.4 billion. Our estimate was $12.6 billion.
Gross written premium improved 6.9% to $14 billion, which was almost in line with our estimates. The combined ratio improved 180 basis points.
Financial Update
Everest Re exited 2022 with total investments and cash of $29.9 billion, up 0.7% from the 2021 level. Shareholder equity at the end of the reported quarter decreased 17% from 2021 end to $8.4 billion.
Book value per share was $215.54 as of Dec 31, 2022, down 16.5% year over year.
The annualized net income return on equity was 17.7%, which expanded 310 bps from the year-ago quarter.
Everest Re’s cash flow from operations was 3.7 billion in the quarter, down 3.6% year over year.
Zacks Rank
Everest Re currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Property & Casualty Insurers
The Travelers Companies, Inc. (TRV - Free Report) reported fourth-quarter 2022 core income of $3.40 per share, which matched the Zacks Consensus Estimate. The bottom line decreased 35% year over year. Total revenues increased 7.5% from the year-ago quarter to about $9.6 billion, primarily driven by higher premiums and fee income. The top-line figure beat the Zacks Consensus Estimate by 0.2%.
Net written premiums increased 10% year over year to $8.8 billion. The figure was higher than our estimate of $8.6 billion. Catastrophe losses totaled $459 million pre-tax, wider than $36 million pre-tax in the prior-year quarter. Travelers witnessed an underwriting gain of $449 million, down 51.5% year over year. The combined ratio deteriorated 650 bps year over year to 94.5.
The Progressive Corporation’s (PGR - Free Report) fourth-quarter 2022 earnings per share of $1.50 beat the Zacks Consensus Estimate of $1.49 as well as our estimate of $1.34. The bottom line improved 42.9% year over year
Net premiums earned grew 11% to $12.9 billion and beat our estimate of $12.3 billion. The combined ratio — the percentage of premiums paid out as claims and expenses — improved 80 bps from the prior-year quarter’s level to 93.9.
RLI Corp. (RLI - Free Report) reported fourth-quarter 2022 operating earnings of $1.53 per share, beating the Zacks Consensus Estimate by 41.7%. The bottom line improved 26.4% from the prior-year quarter. Operating revenues for the reported quarter were $329.5 million, up 19.4% year over year. The top line beat the Zacks Consensus Estimate by 0.4%.
Gross premiums written increased 14% year over year to $383.8 million. Underwriting income of $54 million increased 8.7%, primarily due to higher profitability at its Property segment. The combined ratio deteriorated 140 bps year over year to 82.1.