W.R. Berkley Corporation ( WRB Quick Quote WRB - Free Report) has been benefiting from higher premiums, lower claims frequency in certain lines of business and sufficient liquidity. Growth Projections
The Zacks Consensus Estimate for W.R. Berkley’s 2023 earnings is $4.57, indicating a 4.3% increase from the year-ago reported figure on 8.1% higher revenues of $11.86 billion. The consensus estimate for 2024 earnings is pegged at $5.44, indicating a 19.1% increase from the year-ago reported figure on 8.1% higher revenues of $12.82 billion.
Earnings Surprise History
WRB has a decent earnings surprise history. It beat estimates in three of the last four quarters and missed in one, the average being 12.24%.
Zacks Rank & Price Performance
W.R. Berkley currently carries a Zacks Rank #3 (Hold). In the past year, the stock has lost 14.6% against the
industry’s growth of 2.3%. Image Source: Zacks Investment Research Business Tailwinds
The Insurance business of W.R. Berkley is well-poised to grow, given higher premiums from other liability, short-tail lines, workers' compensation, commercial automobile and professional liability.
Higher premiums at casualty reinsurance, property reinsurance and monoline excess are likely to drive the performance of the Reinsurance & Monoline Excess segment. Underwriting income should gain from the compounding rate improvement above loss cost trends along with growth in exposure and lower claims frequency in certain lines of business. W.R. Berkley is one of the largest commercial lines property and casualty insurance providers. It has a solid balance sheet with sufficient liquidity and robust cash flows that support growth initiatives and effective capital deployment. Net investment income witnessed a CAGR of 5.4% in the past eight years (2015-2022). The combination of a high-quality fixed maturity portfolio, along with solid operating cash flow, enabled the insurer to invest at higher interest rates in the first quarter of 2023. The metric should continue to improve as WRB also invests in alternative assets, such as private equity funds and direct real estate opportunities. W.R. Berkley maintains a solid balance sheet with sufficient liquidity and strong cash flows. The company generated strong operating cash flow of $445 million in the first quarter of 2023. A strong capital position helps the company deploy capital via share repurchases, special dividends and dividend hikes that enhance shareholders’ value. Stocks to Consider
Some better-ranked stocks from the property and casualty insurance industry are
Kinsale Capital Group, Inc. ( KNSL Quick Quote KNSL - Free Report) , RLI Corp. ( RLI Quick Quote RLI - Free Report) and Axis Capital Holdings Limited ( AXS Quick Quote AXS - Free Report) . While Kinsale Capital and RLI Corp. sport a Zacks Rank #1 (Strong Buy), Axis Capital carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here. Kinsale Capital has a solid track record of beating earnings estimates in each of the last trailing four quarters, the average being 14.77%. In the past year, KNSL has gained 58.1%. The Zacks Consensus Estimate for KNSL’s 2023 and 2024 earnings per share is pegged at $10.32 and $12.41, indicating a year-over-year increase of 32.3% and 20.2%, respectively. RLI Corp.’s earnings surpassed estimates in each of the last trailing four quarters, the average earnings surprise being 45.50%. In the past year, RLI Corp. has gained 11.4%. The Zacks Consensus Estimate for RLI’s 2023 earnings has moved 2.9% north in the past seven days. Axis Capital beat estimates in three of the last trailing four quarters and missed in one, the average being 6.50%. The Zacks Consensus Estimate for 2023 has moved 2.7% north in the past 30 days. The Zacks Consensus Estimate for AXS’ 2023 and 2024 earnings per share is pegged at $7.70 and $8.60, indicating a year-over-year increase of 32.5% and 11.7%, respectively. In the year-to-date period, AXS has lost 5.7%.