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.
Multi Line Insurers Q2 Earnings on Jul 28: HIG, ORI, RDN
Read MoreHide Full Article
The second-quarter earnings season has hit full throttle, with 126 members of the S&P 500 index having already reported their results. Earnings have declined 1.1% on 2.6% lower revenues as per the Earnings Preview report. However, the beat ratio is 70.6% for the bottom line and 55.6% for the top line.
Coming to the Finance sector, total earnings of 35.6% of the companies that have already reported their results have declined 5.1%, while revenues are also down 0.7%. Nonetheless, the beat ratios (75% for earnings and 59.4% for revenues) compare favorably with the S&P 500.
The multiline insurance industry is part of the broader Finance sector. Let’s see what factors might influence its results this earnings season.
The second quarter bore the brunt of catastrophe loss stemming from a wildfire in Canada, flooding in Europe, earthquakes in Japan and Ecuador, and hailstorms in Texas. These in turn have been a drag on underwing income and deteriorated combined ratio.
While a still soft rate environment may have limited investment income growth, spread compression on products like fixed annuities and universal life should improve.
The companies are poised to deliver improved numbers on focus on core business, geographic expansion and strategic acquisitions.
Companies that are skewed toward providing health benefits may benefit from expansion of the Affordable Care Act. Also, mortgage insurers are poised to benefit from an improving housing market.
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 three multiline insurers that are reporting on Jul 28.
The Hartford Financial Services Group, Inc (HIG - Free Report) is one of the major multi-line insurance and investment companies in the country, providing investment products, group life and group disability insurance, property and casualty (P&C) insurance and mutual funds in the U.S. The company delivered a 7.77% negative earnings surprise last quarter. A beat is uncertain for the to-be-reported quarter too as the company has an Earnings ESP of -3.90% and a Zacks Rank #4 (Sell). The Most Accurate estimate stands at 74 cents and the Zacks Consensus Estimate is pegged higher at 77 cents.
The Hartford is expected to witness growth on the back of steady performance by national accounts, commercial lines and group benefits.
Also, The Hartford is likely to benefit from the discontinuation of unproductive businesses, de-authorizing agents from the AARP program and a new compensation structure focused more on key partner agents. However, intense competition – mainly due to low cost challenges – might limit top-line growth. Underwriting results are expected to be hurt by the occurrence of several catastrophe events in the second quarter. A still low interest rate environment is likely to limit the upside in net investment income. (Read more: The Hartford Q2 Earnings: Disappointment in Store?)
With respect to the surprise trend, The Hartford surpassed expectations in two of the last four quarters, with an average beat of 1.46%.
Radian Group Inc. (RDN - Free Report) is a credit enhancement company which supports homebuyers, mortgage lenders, loan servicers and investors with a suite of private mortgage insurance and related risk-management products and services. The company delivered a 23.33% negative earnings surprise last quarter. For the second quarter of 2016, Radian has an Earnings ESP of -5.00% as the Most Accurate estimate stands at 38 cents and the Zacks Consensus Estimate is pegged higher at 40 cents. The stock has a Zacks Rank #3 (Hold).
With respect to the surprise trend, Radian beat expectations in two of the last four quarters, with an average beat of 4.56%.
Old Republic International Corporation (ORI - Free Report) along with its subsidiaries market, underwrite, and provide risk management services to a wide variety of coverages mostly in the general and title insurance fields. The company delivered a 17.86% positive earnings surprise last quarter. For the second quarter of 2016, Radian has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stand at 35 cents. The stock has a Zacks Rank #3.
With respect to the surprise trend, Old Republic International beat expectations in each of the last four quarters, with an average beat of 18.29%.
Keep an eye on our full earnings articles to see how these companies members finally fared.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report>>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Multi Line Insurers Q2 Earnings on Jul 28: HIG, ORI, RDN
The second-quarter earnings season has hit full throttle, with 126 members of the S&P 500 index having already reported their results. Earnings have declined 1.1% on 2.6% lower revenues as per the Earnings Preview report. However, the beat ratio is 70.6% for the bottom line and 55.6% for the top line.
Coming to the Finance sector, total earnings of 35.6% of the companies that have already reported their results have declined 5.1%, while revenues are also down 0.7%. Nonetheless, the beat ratios (75% for earnings and 59.4% for revenues) compare favorably with the S&P 500.
The multiline insurance industry is part of the broader Finance sector. Let’s see what factors might influence its results this earnings season.
The second quarter bore the brunt of catastrophe loss stemming from a wildfire in Canada, flooding in Europe, earthquakes in Japan and Ecuador, and hailstorms in Texas. These in turn have been a drag on underwing income and deteriorated combined ratio.
While a still soft rate environment may have limited investment income growth, spread compression on products like fixed annuities and universal life should improve.
The companies are poised to deliver improved numbers on focus on core business, geographic expansion and strategic acquisitions.
Companies that are skewed toward providing health benefits may benefit from expansion of the Affordable Care Act. Also, mortgage insurers are poised to benefit from an improving housing market.
INSURANCE-MULTI LINE Industry Price Index
INSURANCE-MULTI LINE Industry Price Index
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 three multiline insurers that are reporting on Jul 28.
The Hartford Financial Services Group, Inc (HIG - Free Report) is one of the major multi-line insurance and investment companies in the country, providing investment products, group life and group disability insurance, property and casualty (P&C) insurance and mutual funds in the U.S. The company delivered a 7.77% negative earnings surprise last quarter. A beat is uncertain for the to-be-reported quarter too as the company has an Earnings ESP of -3.90% and a Zacks Rank #4 (Sell). The Most Accurate estimate stands at 74 cents and the Zacks Consensus Estimate is pegged higher at 77 cents.
The Hartford is expected to witness growth on the back of steady performance by national accounts, commercial lines and group benefits.
Also, The Hartford is likely to benefit from the discontinuation of unproductive businesses, de-authorizing agents from the AARP program and a new compensation structure focused more on key partner agents. However, intense competition – mainly due to low cost challenges – might limit top-line growth. Underwriting results are expected to be hurt by the occurrence of several catastrophe events in the second quarter. A still low interest rate environment is likely to limit the upside in net investment income. (Read more: The Hartford Q2 Earnings: Disappointment in Store?)
With respect to the surprise trend, The Hartford surpassed expectations in two of the last four quarters, with an average beat of 1.46%.
HARTFORD FIN SV Price and EPS Surprise
HARTFORD FIN SV Price and EPS Surprise | HARTFORD FIN SV Quote
Radian Group Inc. (RDN - Free Report) is a credit enhancement company which supports homebuyers, mortgage lenders, loan servicers and investors with a suite of private mortgage insurance and related risk-management products and services. The company delivered a 23.33% negative earnings surprise last quarter. For the second quarter of 2016, Radian has an Earnings ESP of -5.00% as the Most Accurate estimate stands at 38 cents and the Zacks Consensus Estimate is pegged higher at 40 cents. The stock has a Zacks Rank #3 (Hold).
With respect to the surprise trend, Radian beat expectations in two of the last four quarters, with an average beat of 4.56%.
RADIAN GRP INC Price and EPS Surprise
RADIAN GRP INC Price and EPS Surprise | RADIAN GRP INC Quote
Old Republic International Corporation (ORI - Free Report) along with its subsidiaries market, underwrite, and provide risk management services to a wide variety of coverages mostly in the general and title insurance fields. The company delivered a 17.86% positive earnings surprise last quarter. For the second quarter of 2016, Radian has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stand at 35 cents. The stock has a Zacks Rank #3.
With respect to the surprise trend, Old Republic International beat expectations in each of the last four quarters, with an average beat of 18.29%.
OLD REP INTL Price and EPS Surprise
OLD REP INTL Price and EPS Surprise | OLD REP INTL Quote
Keep an eye on our full earnings articles to see how these companies members finally fared.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report>>