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Everest Group (EG) Q3 Earnings Top on Solid Segmental Results
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Everest Group, Ltd.’s (EG - Free Report) third-quarter 2023 operating income per share of $14.14 beat the Zacks Consensus Estimate by 39%. The bottom line rebounded from the year-ago loss of $5.28.
Everest Group witnessed higher premiums across its reinsurance and insurance businesses, improved net investment income and underwriting income and lower expenses.
Everest Group, Ltd. Price, Consensus and EPS Surprise
Everest Group’s total operating revenues of nearly $4 billion increased 25.6% year over year on higher premiums earned and net investment income. The top line beat the consensus mark by 4.9%.
Gross written premiums improved 19.3% year over year to $4.4 billion, driven by 32.7% growth in Reinsurance and 3.5% growth in Insurance. Our estimate was $4.1 billion.
Net investment income was $406 million, more than double year over year. The upside was driven by strong fixed income and alternative investment returns. Our estimate was $238.5 million. The Zacks Consensus Estimate was pegged at $339 million.
Total claims and expenses decreased 6% to $3.3 billion, primarily due to lower incurred losses and loss adjustment expenses. Our estimate was $3.5 billion.
Pre-tax underwriting income was $301 million, rebounding from the year-ago loss of $367 million. Pre-tax catastrophe losses net of estimated recoveries and reinstatement premiums were $170 million, narrower than $730 million in the year-ago quarter.
The combined ratio improved 2050 basis points (bps) year over year to 91.4 in the reported quarter. The Zacks Consensus Estimate was 95, while our estimate was 95.6.
Segment Update
The Reinsurance segment gross written premiums were a record $3.2 billion, up 32.7% year over year. The increase was driven by 43.9% growth in property pro-rata, 41.2% growth in property Cat, 28.8% growth in Casualty XOL and 19.9% in Casualty pro-rata as pricing increased. Our estimate was $2.8 billion.
The combined ratio of the Reinsurance segment improved 2400 bps to 91. Our estimate was 97.4. The Zacks Consensus estimate was 96.
The Insurance segment generated gross written premiums of record $1.2 billion, up 3.5% year over year, driven by a diversified mix of property and specialty lines. Our estimate was $1.3 billion.
The combined ratio improved 1090 bps to 92.6 for the Insurance segment. Our estimate was 90.8. The Zacks Consensus Estimate was 95.
Financial Update
Everest Group exited the third quarter of 2023 with total investments and cash of $34.6 billion, up 15.7% from the 2022 level. Shareholder equity at the end of the reported quarter increased 33.3% from the figure at 2022 end to $11.2 billion.
Book value per share was $251.17 as of Jun 30, 2023, up 20% from the 2022-end level. The annualized net income return on equity was 21.2% versus -12.9% in the year-ago quarter.
Everest Group’s cash flow from operations was $1.4 billion in the quarter, up 27.3% year over year. Everest Group paid common share dividends of $76 million during the quarter.
The Travelers Companies (TRV - Free Report) reported third-quarter 2023 core income of $1.95 per share, which missed the Zacks Consensus Estimate by 33.4%. The bottom line decreased 11.4% year over year, primarily attributable to higher catastrophe losses and net unfavorable prior-year reserve development. Travelers’ total revenues increased 14% from the year-ago quarter to $10.6 billion, primarily driven by higher premiums. The top-line figure beat the Zacks Consensus Estimate by 1.3%.
Net written premiums increased 14% year over year to a record $10.4 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $9.4 billion. Travelers witnessed an underwriting gain of $868 million, up 43% year over year, driven by record net earned premiums of $9.7 billion and a consolidated underlying combined ratio, which improved by 90.6%.
The Progressive Corporation’s (PGR - Free Report) third-quarter 2023 earnings per share of $2.09 beat the Zacks Consensus Estimate of $1.71. The bottom line improved more than fourfold year over year. Net premiums written were $15.6 billion in the quarter, which grew 20% from $13 billion a year ago and beat our estimate of $14.2 billion.
Net premiums earned grew 20% to $14.9 billion, beating our estimate of $13.6 billion and the Zacks Consensus Estimate of $14.8 billion. Net realized losses on securities were $149 million, narrower than a loss of $216.4 million in the year-ago quarter. The combined ratio — the percentage of premiums paid out as claims and expenses — improved 680 bps from the prior-year quarter’s level to 92.4.
RLI Corp. (RLI - Free Report) reported third-quarter 2023 operating earnings of 61 cents per share, beating the Zacks Consensus Estimate by 510%. The bottom line improved 22% from the prior-year quarter. Operating revenues for the reported quarter were $350.4 million, up 12.1% year over year, driven by 9.2% higher net premiums earned and 50.3% higher net investment income. The top line, however, missed the Zacks Consensus Estimate by 7.2%.
Gross premiums written increased 11.3% year over year to $449.3 million. Underwriting income of $4.2 million decreased by 52.3%, primarily due to Hawaiian wildfire losses. The combined ratio deteriorated 170 bps year over year to 98.7. Our estimate was 90.8.
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Everest Group (EG) Q3 Earnings Top on Solid Segmental Results
Everest Group, Ltd.’s (EG - Free Report) third-quarter 2023 operating income per share of $14.14 beat the Zacks Consensus Estimate by 39%. The bottom line rebounded from the year-ago loss of $5.28.
Everest Group witnessed higher premiums across its reinsurance and insurance businesses, improved net investment income and underwriting income and lower expenses.
Everest Group, Ltd. Price, Consensus and EPS Surprise
Everest Group, Ltd. price-consensus-eps-surprise-chart | Everest Group, Ltd. Quote
Operational Update
Everest Group’s total operating revenues of nearly $4 billion increased 25.6% year over year on higher premiums earned and net investment income. The top line beat the consensus mark by 4.9%.
Gross written premiums improved 19.3% year over year to $4.4 billion, driven by 32.7% growth in Reinsurance and 3.5% growth in Insurance. Our estimate was $4.1 billion.
Net investment income was $406 million, more than double year over year. The upside was driven by strong fixed income and alternative investment returns. Our estimate was $238.5 million. The Zacks Consensus Estimate was pegged at $339 million.
Total claims and expenses decreased 6% to $3.3 billion, primarily due to lower incurred losses and loss adjustment expenses. Our estimate was $3.5 billion.
Pre-tax underwriting income was $301 million, rebounding from the year-ago loss of $367 million. Pre-tax catastrophe losses net of estimated recoveries and reinstatement premiums were $170 million, narrower than $730 million in the year-ago quarter.
The combined ratio improved 2050 basis points (bps) year over year to 91.4 in the reported quarter. The Zacks Consensus Estimate was 95, while our estimate was 95.6.
Segment Update
The Reinsurance segment gross written premiums were a record $3.2 billion, up 32.7% year over year. The increase was driven by 43.9% growth in property pro-rata, 41.2% growth in property Cat, 28.8% growth in Casualty XOL and 19.9% in Casualty pro-rata as pricing increased. Our estimate was $2.8 billion.
The combined ratio of the Reinsurance segment improved 2400 bps to 91. Our estimate was 97.4. The Zacks Consensus estimate was 96.
The Insurance segment generated gross written premiums of record $1.2 billion, up 3.5% year over year, driven by a diversified mix of property and specialty lines. Our estimate was $1.3 billion.
The combined ratio improved 1090 bps to 92.6 for the Insurance segment. Our estimate was 90.8. The Zacks Consensus Estimate was 95.
Financial Update
Everest Group exited the third quarter of 2023 with total investments and cash of $34.6 billion, up 15.7% from the 2022 level. Shareholder equity at the end of the reported quarter increased 33.3% from the figure at 2022 end to $11.2 billion.
Book value per share was $251.17 as of Jun 30, 2023, up 20% from the 2022-end level. The annualized net income return on equity was 21.2% versus -12.9% in the year-ago quarter.
Everest Group’s cash flow from operations was $1.4 billion in the quarter, up 27.3% year over year. Everest Group paid common share dividends of $76 million during the quarter.
Zacks Rank
Everest Group currently carries a Zacks Rank #2 (Buy). 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 third-quarter 2023 core income of $1.95 per share, which missed the Zacks Consensus Estimate by 33.4%. The bottom line decreased 11.4% year over year, primarily attributable to higher catastrophe losses and net unfavorable prior-year reserve development. Travelers’ total revenues increased 14% from the year-ago quarter to $10.6 billion, primarily driven by higher premiums. The top-line figure beat the Zacks Consensus Estimate by 1.3%.
Net written premiums increased 14% year over year to a record $10.4 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $9.4 billion. Travelers witnessed an underwriting gain of $868 million, up 43% year over year, driven by record net earned premiums of $9.7 billion and a consolidated underlying combined ratio, which improved by 90.6%.
The Progressive Corporation’s (PGR - Free Report) third-quarter 2023 earnings per share of $2.09 beat the Zacks Consensus Estimate of $1.71. The bottom line improved more than fourfold year over year. Net premiums written were $15.6 billion in the quarter, which grew 20% from $13 billion a year ago and beat our estimate of $14.2 billion.
Net premiums earned grew 20% to $14.9 billion, beating our estimate of $13.6 billion and the Zacks Consensus Estimate of $14.8 billion. Net realized losses on securities were $149 million, narrower than a loss of $216.4 million in the year-ago quarter. The combined ratio — the percentage of premiums paid out as claims and expenses — improved 680 bps from the prior-year quarter’s level to 92.4.
RLI Corp. (RLI - Free Report) reported third-quarter 2023 operating earnings of 61 cents per share, beating the Zacks Consensus Estimate by 510%. The bottom line improved 22% from the prior-year quarter. Operating revenues for the reported quarter were $350.4 million, up 12.1% year over year, driven by 9.2% higher net premiums earned and 50.3% higher net investment income. The top line, however, missed the Zacks Consensus Estimate by 7.2%.
Gross premiums written increased 11.3% year over year to $449.3 million. Underwriting income of $4.2 million decreased by 52.3%, primarily due to Hawaiian wildfire losses. The combined ratio deteriorated 170 bps year over year to 98.7. Our estimate was 90.8.