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Everest Re (EG) Q2 Earnings and Revenues Beat, Rise Y/Y
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Everest Re Group, Ltd.’s (EG - Free Report) second-quarter 2023 operating income per share of $15.21 beat the Zacks Consensus Estimate by 37%. The bottom line increased 55.4% year over year.
Everest Re witnessed higher premiums across its reinsurance and insurance businesses, and improved net investment income and underwriting income, partly offset by higher expenses.
Everest Group, Ltd. Price, Consensus and EPS Surprise
Everest Re’s total operating revenues of nearly $3.6 billion increased 18.7% year over year on higher premiums earned and net investment income. The top line beat the consensus mark by 0.9%.
Gross written premiums improved 22.3% year over year to $4.2 billion, driven by 26.9% growth in Reinsurance and 14.1% growth in Insurance. Our estimate was $4 billion.
Net investment income was $357 million, surging 58% year over year. The upside was driven by strong fixed income and alternative investment returns. Our estimate was $254.5 million.
Total claims and expenses increased 6.9% to $2.9 billion, primarily due to higher incurred losses and loss adjustment expenses, commission, brokerage, taxes and fees, other underwriting expenses, corporate expenses and interest, and fees and bond issue cost amortization expense. Our estimate was $3.2 billion.
Pre-tax underwriting income was $401 million, rising 67.1% year over year.
Pre-tax catastrophe losses net of estimated recoveries and reinstatement premiums were $27 million, narrower than $85 million in the year-ago quarter.
The combined ratio improved 410 basis points (bps) year over year to 87.7 in the reported quarter. Our estimate was 91.
Segment Update
The Reinsurance segment gross written premiums were a record $2.8 billion, up 26.9% year over year. The increase was driven by 34.7% growth in property pro-rata, 29.6% growth in property Cat, and 16.2% in Casualty pro-rata as pricing increased. Our estimate was $2.6 billion.
The combined ratio of the Reinsurance segment improved 230 bps to 86. Our estimate was 90.2.
The Insurance segment generated gross written premiums of record $1.4 billion, up 14.1% year over year, driven by a diversified mix of property, marine, aviation, energy and other specialty lines. Our estimate was $1.4 billion.
The combined ratio deteriorated 20 bps to 92.7 for the Insurance segment. Our estimate was 90.8.
Financial Update
Everest Re exited the second quarter of 2023 with total investments and cash of $33.6 billion, up 12.3% from the 2022 level. Shareholder equity at the end of the reported quarter increased 29.2% from the figure at 2022 end to $10.9 billion.
Book value per share was $251.17 as of Jun 30, 2023, up 11.8% from the 2022-end level.
The annualized net income return on equity was 21.8%, up 100 bps year over year.
Everest Re’s cash flow from operations was $1.1 billion in the quarter, up 53.8% year over year.
Everest Re paid common share dividends of $72 million during the quarter.
The Travelers Companies (TRV - Free Report) reported second-quarter 2023 core income of 6 cents per share, which missed the Zacks Consensus Estimate of $2.27. The bottom line decreased 97.7% year over year, primarily attributable to higher-than-expected catastrophe loss.
Travelers’ total revenues increased 9.8% from the year-ago quarter to $10.1 billion, primarily driven by higher premiums. The top-line figure was almost in line with the Zacks Consensus Estimate.
Net written premiums increased 14% year over year to a record $10.3 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $9.1 billion.
Travelers witnessed an underwriting gain of $781 million, up 38% year over year, driven by record net earned premiums of $9.2 billion and a consolidated underlying combined ratio, which improved 170 basis points. The combined ratio deteriorated 820 basis points year over year to 106.5 due to higher catastrophe losses and lower net favorable prior-year reserve development, partially offset by a lower underlying combined ratio.
The Progressive Corporation’s (PGR - Free Report) second-quarter 2023 earnings per share of 50 cents missed the Zacks Consensus Estimate of 88 cents. The bottom line declined 47.4% year over year.
Net premiums earned grew 19% to $14.5 billion and beat our estimate of $12.9 billion as well as the Zacks Consensus Estimate of $14.3 billion. The combined ratio deteriorated 480 bps from the prior-year quarter’s level to 104.
Policies in force were solid in the Personal Auto segment, increasing 17% from the year-ago month’s figure to 19.7 million. Special Lines improved 7% to 5.8 million.
W.R. Berkley Corporation’s (WRB - Free Report) second-quarter 2023 operating income of $1.14 per share beat the Zacks Consensus Estimate by 6.5%. The bottom line increased 1.8% year over year.
Operating revenues came in at $2.9 billion, down 57.4% year over year, on the back of higher net premiums earned as well as higher net investment income. The top line missed the consensus estimate by 1.2%.
W.R. Berkley’s net premiums written were a record $2.8 billion, up 8.7% year over year, as market conditions remained favorable for most lines of business. Our estimate for the same was $2.7 billion.
Catastrophe losses totaled $53.5 million in the quarter. The consolidated combined ratio (a measure of underwriting profitability) deteriorated 100 basis points to 89.6, in line with the Zacks Consensus Estimate. Our estimate for the combined ratio was 91.3.
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Everest Re (EG) Q2 Earnings and Revenues Beat, Rise Y/Y
Everest Re Group, Ltd.’s (EG - Free Report) second-quarter 2023 operating income per share of $15.21 beat the Zacks Consensus Estimate by 37%. The bottom line increased 55.4% year over year.
Everest Re witnessed higher premiums across its reinsurance and insurance businesses, and improved net investment income and underwriting income, partly offset by higher expenses.
Everest Group, Ltd. Price, Consensus and EPS Surprise
Everest Group, Ltd. price-consensus-eps-surprise-chart | Everest Group, Ltd. Quote
Operational Update
Everest Re’s total operating revenues of nearly $3.6 billion increased 18.7% year over year on higher premiums earned and net investment income. The top line beat the consensus mark by 0.9%.
Gross written premiums improved 22.3% year over year to $4.2 billion, driven by 26.9% growth in Reinsurance and 14.1% growth in Insurance. Our estimate was $4 billion.
Net investment income was $357 million, surging 58% year over year. The upside was driven by strong fixed income and alternative investment returns. Our estimate was $254.5 million.
Total claims and expenses increased 6.9% to $2.9 billion, primarily due to higher incurred losses and loss adjustment expenses, commission, brokerage, taxes and fees, other underwriting expenses, corporate expenses and interest, and fees and bond issue cost amortization expense. Our estimate was $3.2 billion.
Pre-tax underwriting income was $401 million, rising 67.1% year over year.
Pre-tax catastrophe losses net of estimated recoveries and reinstatement premiums were $27 million, narrower than $85 million in the year-ago quarter.
The combined ratio improved 410 basis points (bps) year over year to 87.7 in the reported quarter. Our estimate was 91.
Segment Update
The Reinsurance segment gross written premiums were a record $2.8 billion, up 26.9% year over year. The increase was driven by 34.7% growth in property pro-rata, 29.6% growth in property Cat, and 16.2% in Casualty pro-rata as pricing increased. Our estimate was $2.6 billion.
The combined ratio of the Reinsurance segment improved 230 bps to 86. Our estimate was 90.2.
The Insurance segment generated gross written premiums of record $1.4 billion, up 14.1% year over year, driven by a diversified mix of property, marine, aviation, energy and other specialty lines. Our estimate was $1.4 billion.
The combined ratio deteriorated 20 bps to 92.7 for the Insurance segment. Our estimate was 90.8.
Financial Update
Everest Re exited the second quarter of 2023 with total investments and cash of $33.6 billion, up 12.3% from the 2022 level. Shareholder equity at the end of the reported quarter increased 29.2% from the figure at 2022 end to $10.9 billion.
Book value per share was $251.17 as of Jun 30, 2023, up 11.8% from the 2022-end level.
The annualized net income return on equity was 21.8%, up 100 bps year over year.
Everest Re’s cash flow from operations was $1.1 billion in the quarter, up 53.8% year over year.
Everest Re paid common share dividends of $72 million during the quarter.
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 Some Other P&C Insurers
The Travelers Companies (TRV - Free Report) reported second-quarter 2023 core income of 6 cents per share, which missed the Zacks Consensus Estimate of $2.27. The bottom line decreased 97.7% year over year, primarily attributable to higher-than-expected catastrophe loss.
Travelers’ total revenues increased 9.8% from the year-ago quarter to $10.1 billion, primarily driven by higher premiums. The top-line figure was almost in line with the Zacks Consensus Estimate.
Net written premiums increased 14% year over year to a record $10.3 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $9.1 billion.
Travelers witnessed an underwriting gain of $781 million, up 38% year over year, driven by record net earned premiums of $9.2 billion and a consolidated underlying combined ratio, which improved 170 basis points. The combined ratio deteriorated 820 basis points year over year to 106.5 due to higher catastrophe losses and lower net favorable prior-year reserve development, partially offset by a lower underlying combined ratio.
The Progressive Corporation’s (PGR - Free Report) second-quarter 2023 earnings per share of 50 cents missed the Zacks Consensus Estimate of 88 cents. The bottom line declined 47.4% year over year.
Net premiums earned grew 19% to $14.5 billion and beat our estimate of $12.9 billion as well as the Zacks Consensus Estimate of $14.3 billion. The combined ratio deteriorated 480 bps from the prior-year quarter’s level to 104.
Policies in force were solid in the Personal Auto segment, increasing 17% from the year-ago month’s figure to 19.7 million. Special Lines improved 7% to 5.8 million.
W.R. Berkley Corporation’s (WRB - Free Report) second-quarter 2023 operating income of $1.14 per share beat the Zacks Consensus Estimate by 6.5%. The bottom line increased 1.8% year over year.
Operating revenues came in at $2.9 billion, down 57.4% year over year, on the back of higher net premiums earned as well as higher net investment income. The top line missed the consensus estimate by 1.2%.
W.R. Berkley’s net premiums written were a record $2.8 billion, up 8.7% year over year, as market conditions remained favorable for most lines of business. Our estimate for the same was $2.7 billion.
Catastrophe losses totaled $53.5 million in the quarter. The consolidated combined ratio (a measure of underwriting profitability) deteriorated 100 basis points to 89.6, in line with the Zacks Consensus Estimate. Our estimate for the combined ratio was 91.3.