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Upcoming P&C Insurers' Q2 Earnings: CINF, AXS, RE, AXS
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The second-quarter earnings season is well underway, with 25% members of the S&P 500 index having reported their financial results already. Earnings of the 126 index members that have reported, as per the Earnings Preview report, declined 1.1% on 2.6% lower revenues. However, the beat ratio is 70.6% for the bottom line and 55.6% for the top line.
About 35.6% of the companies in the Finance sector have already reported their results. Total earnings are down 5.1%, on 0.7% lower revenues. The beat ratio is 75% for earnings and 59.4% for revenues. Both compare favorably with the S&P 500.
The property and casualty (P&C) insurance industry is part of the broader finance sector. Let’s see how the second quarter has turned up for insurers so far. This quarter witnessed varied catastrophes, including a wildfire in Canada, flooding in Europe, earthquakes in Japan and Ecuador, and hailstorms in Texas. The industry is estimated to incur an expected loss of $15 billion to over $20 billion due to 25 weather events that occurred in the quarter. These have weighed on the underwriting results of insurers, and hurt their underwriting income and combined ratio.
However, prudent underwriting approaches have likely limited capital erosion.
To the disappointment of the sector, the interest rate remains unchanged as the Federal Reserve stayed away from raising the same due to weak employment data and Brexit induced uncertainties. Therefore, investment income, which forms a major component of insurers’ revenues, remained under pressure. But a broader invested asset base and alternative asset classes bring some respite.
Nonetheless, insurers in this well-capitalized industry remain well poised on the back of their expanded and diversified product and service portfolio, which is driving premiums higher. Effective capital deployment involving share buybacks should boost the bottom line.
As many as 951 companies are due to report their quarterly results this week including 189 S&P 500 members. Among these, let’s see what’s in store for four P&C insurers that are reporting early this week.
AXIS Capital Holding Ltd (AXS - Free Report) is a global provider of specialty lines insurance and treaty reinsurance. The company operates in Bermuda, the U.S., Singapore, and Europe. The company delivered a positive 0.94% earnings surprise last quarter. AXIS Capital has an Earnings ESP of 0.00% and a Zacks Rank #3 (Hold). The Most Accurate estimate and the Zacks Consensus Estimate for the quarter are both pegged at 35 cents. The company is scheduled to release second-quarter results on Jul 26 after market close.
With respect to the surprise trend, AXIS Capital surpassed expectations in two of the last four quarters, with an average miss of 8.35%.
Chubb Limited (CB - Free Report) provides specialized insurance products such as personal accident, supplemental health and life insurance to individuals in select countries. Its reinsurance operations include both P&C and life companies. For the second quarter, Chubb has an Earnings ESP of 0.00%. It currently carries a Zacks Rank #3. The Most Accurate estimate and the Zacks Consensus Estimate for the quarter are both pegged at $2.26.
Underwriting results of Chubb suffered due to its exposure to various catastrophe events. Catastrophe loss for the second quarter is estimated at $315 million ($390 million pretax), higher than $280 million, pretax, earlier expected. However, this marks the first full quarter post ACE Limited-Chubb Corp merger. The company expects an increase in net written premium. Management also expects investment income between $820 million and $840 million. (Read: Will Chubb Q2 Earnings Suffer Due to Catastrophe Loss?)
With respect to the surprise trend, Chubb surpassed expectations in three of the last four quarters, with an average beat of 2.87%. The company is scheduled to release second quarter results on Jul 26 after market close.
Cincinnati Financial Corporation (CINF - Free Report) markets property and casualty insurance as its main business. Cincinnati Financial delivered a 15.59% positive earnings surprise last quarter. The company has an Earnings ESP of 0.00% and a Zacks Rank #2 (Buy). The Most Accurate estimate and the Zacks Consensus Estimate for the quarter are both pegged at 52 cents.
Cincinnati Financial’s estimated catastrophe loss might have a negative impact on its earnings. Notably, the company has projected pretax catastrophe loss between $160 million and $170 million. Combined ratio in the second quarter is estimated between 98% and 101%.
Several growth initiatives as well as a gradual increase in insurance rates are likely to drive revenues in its Commercial Lines Property Casualty Insurance segment. Moreover, the company is expected to experience premium growth owing to quality new business from local independent agencies. (Read: Cincinnati Financial: What's Up this Earnings Season?)
With respect to the surprise trend, Cincinnati Financial surpassed expectations in the last four quarters, with an average miss of 51.40%. The company is scheduled to release second-quarter results on Jul 26 after market close.
Everest Re Group Ltd writes property and casualty, reinsurance and insurance in the U.S, Bermuda and international markets. The company also offers other innovative products like excess and surplus lines of insurance. Everest Re virtually underwrites all classes and categories of business in treaty, facultative and specialty lines both through brokers and directly with ceding companies. Everest Re delivered a 7.65% negative earnings surprise last quarter. The company has an Earnings ESP of - 2.92% and a Zacks Rank #3. The Most Accurate estimate stands at $2.64 while the Zacks Consensus Estimate for the quarter is pegged higher at $2.72.
With respect to the surprise trend, Everest Re surpassed expectations in two of the last four quarters, with an average miss of 9.58%. The company is scheduled to release second-quarter results on Jul 25 after market close.
Keep an eye on our full earnings articles to see how these companies finally fared.
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Upcoming P&C Insurers' Q2 Earnings: CINF, AXS, RE, AXS
The second-quarter earnings season is well underway, with 25% members of the S&P 500 index having reported their financial results already. Earnings of the 126 index members that have reported, as per the Earnings Preview report, declined 1.1% on 2.6% lower revenues. However, the beat ratio is 70.6% for the bottom line and 55.6% for the top line.
About 35.6% of the companies in the Finance sector have already reported their results. Total earnings are down 5.1%, on 0.7% lower revenues. The beat ratio is 75% for earnings and 59.4% for revenues. Both compare favorably with the S&P 500.
The property and casualty (P&C) insurance industry is part of the broader finance sector. Let’s see how the second quarter has turned up for insurers so far. This quarter witnessed varied catastrophes, including a wildfire in Canada, flooding in Europe, earthquakes in Japan and Ecuador, and hailstorms in Texas. The industry is estimated to incur an expected loss of $15 billion to over $20 billion due to 25 weather events that occurred in the quarter. These have weighed on the underwriting results of insurers, and hurt their underwriting income and combined ratio.
However, prudent underwriting approaches have likely limited capital erosion.
To the disappointment of the sector, the interest rate remains unchanged as the Federal Reserve stayed away from raising the same due to weak employment data and Brexit induced uncertainties. Therefore, investment income, which forms a major component of insurers’ revenues, remained under pressure. But a broader invested asset base and alternative asset classes bring some respite.
Nonetheless, insurers in this well-capitalized industry remain well poised on the back of their expanded and diversified product and service portfolio, which is driving premiums higher. Effective capital deployment involving share buybacks should boost the bottom line.
As many as 951 companies are due to report their quarterly results this week including 189 S&P 500 members. Among these, let’s see what’s in store for four P&C insurers that are reporting early this week.
AXIS Capital Holding Ltd (AXS - Free Report) is a global provider of specialty lines insurance and treaty reinsurance. The company operates in Bermuda, the U.S., Singapore, and Europe. The company delivered a positive 0.94% earnings surprise last quarter. AXIS Capital has an Earnings ESP of 0.00% and a Zacks Rank #3 (Hold). The Most Accurate estimate and the Zacks Consensus Estimate for the quarter are both pegged at 35 cents. The company is scheduled to release second-quarter results on Jul 26 after market close.
With respect to the surprise trend, AXIS Capital surpassed expectations in two of the last four quarters, with an average miss of 8.35%.
AXIS CAP HLDGS Price and EPS Surprise
AXIS CAP HLDGS Price and EPS Surprise | AXIS CAP HLDGS Quote
Chubb Limited (CB - Free Report) provides specialized insurance products such as personal accident, supplemental health and life insurance to individuals in select countries. Its reinsurance operations include both P&C and life companies. For the second quarter, Chubb has an Earnings ESP of 0.00%. It currently carries a Zacks Rank #3. The Most Accurate estimate and the Zacks Consensus Estimate for the quarter are both pegged at $2.26.
Underwriting results of Chubb suffered due to its exposure to various catastrophe events. Catastrophe loss for the second quarter is estimated at $315 million ($390 million pretax), higher than $280 million, pretax, earlier expected. However, this marks the first full quarter post ACE Limited-Chubb Corp merger. The company expects an increase in net written premium. Management also expects investment income between $820 million and $840 million. (Read: Will Chubb Q2 Earnings Suffer Due to Catastrophe Loss?)
With respect to the surprise trend, Chubb surpassed expectations in three of the last four quarters, with an average beat of 2.87%. The company is scheduled to release second quarter results on Jul 26 after market close.
CHUBB LTD Price and EPS Surprise
CHUBB LTD Price and EPS Surprise | CHUBB LTD Quote
Cincinnati Financial Corporation (CINF - Free Report) markets property and casualty insurance as its main business. Cincinnati Financial delivered a 15.59% positive earnings surprise last quarter. The company has an Earnings ESP of 0.00% and a Zacks Rank #2 (Buy). The Most Accurate estimate and the Zacks Consensus Estimate for the quarter are both pegged at 52 cents.
Cincinnati Financial’s estimated catastrophe loss might have a negative impact on its earnings. Notably, the company has projected pretax catastrophe loss between $160 million and $170 million. Combined ratio in the second quarter is estimated between 98% and 101%.
Several growth initiatives as well as a gradual increase in insurance rates are likely to drive revenues in its Commercial Lines Property Casualty Insurance segment. Moreover, the company is expected to experience premium growth owing to quality new business from local independent agencies. (Read: Cincinnati Financial: What's Up this Earnings Season?)
With respect to the surprise trend, Cincinnati Financial surpassed expectations in the last four quarters, with an average miss of 51.40%. The company is scheduled to release second-quarter results on Jul 26 after market close.
CINCINNATI FINL Price and EPS Surprise
CINCINNATI FINL Price and EPS Surprise | CINCINNATI FINL Quote
Everest Re Group Ltd writes property and casualty, reinsurance and insurance in the U.S, Bermuda and international markets. The company also offers other innovative products like excess and surplus lines of insurance. Everest Re virtually underwrites all classes and categories of business in treaty, facultative and specialty lines both through brokers and directly with ceding companies. Everest Re delivered a 7.65% negative earnings surprise last quarter. The company has an Earnings ESP of - 2.92% and a Zacks Rank #3. The Most Accurate estimate stands at $2.64 while the Zacks Consensus Estimate for the quarter is pegged higher at $2.72.
With respect to the surprise trend, Everest Re surpassed expectations in two of the last four quarters, with an average miss of 9.58%. The company is scheduled to release second-quarter results on Jul 25 after market close.
EVEREST RE LTD Price and EPS Surprise
EVEREST RE LTD Price and EPS Surprise | EVEREST RE LTD Quote
Keep an eye on our full earnings articles to see how these companies finally fared.
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