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Accident and Health Insurers Q2 Earnings Preview: AFL, AMSF
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The second-quarter earnings season is in full swing this week. So far, we have results from 126 S&P 500 members (as of Jul 22) that combined account for 32.7% of the index’s total market capitalization as per the Earnings Trends report. Revenues are up 2.6% while earnings are down 1.1%. However, the beat ratio is 70.6% for the bottom line and 55.6% for the top line.
Accident and Health insurance is part of the broader Medical sector. So far, 15.4% of the total Medical sector has come up with second-quarter results. The sector is expected to deliver 1.8% earnings growth backed by 7.7% higher revenues. This compares favorably with the projected 3.4% earnings decline on 0.5% lower revenues for the S&P 500 index.
Let’s see what factors might have influenced its performance in the second quarter.
Accident and Health insurers face intense competition in workers’ compensation insurance (one of the most popular accident policies) due to abundant market capacity. Premium rates have been declining for this insurance line and will continue to fall through 2016.
Also, diversified product offerings and expansion into newer markets are likely to have driven revenues. Cost management should give the bottom line a boost.
Health insurers will see top-line growth with higher enrollment. The supplemental health insurance policies are highly sought after as out-of-pocket medical costs are growing for many Americans. Health Care Reform has spurred demand for supplemental coverage and companies are experiencing top-line growth from these products.
Additionally, the firms are generating steady free cash flow, and will push up their bottom line through share buybacks.
As many as 189 S&P 500 companies will release results from Jul 25–29.
Let’s find out what’s in store for these two accident and health insurers that will report second-quarter earnings results on Jul 28:
Aflac Inc. (AFL - Free Report) through its subsidiary, American Family Life Assurance Company of Columbus, provides supplemental health and life insurance products. Last quarter, Aflac delivered a 6.8% positive earnings surprise. It has an Earnings ESP of +0.60% and a Zacks Rank #2 (Buy). The Most Accurate estimate for the quarter is $1.69, a penny above the Zacks Consensus Estimate.
We expect sales of third sector products to be down, given the production strength seen in 2015. Also sales of first sector products will be low since Aflac is taking steps like production caps, commission restructuring, product re-pricing and in select cases, product discontinuance, to control its sales.
Aflac is likely to witness an increase in revenues and pretax income in the quarter. In addition, Aflac U.S. is likely to have experienced premium sales growth.
With respect to the surprise trend, the company surpassed estimates in three out of the last four quarters. The average beat for the trailing four quarters is 4.1% (Read more: Is a Surprise in Store for Aflac This Earnings Season?)
Amerisafe, Inc. (AMSF - Free Report) , based in DeRidder, LA, is an insurance holding company that provides workers’ compensation insurance in the United States.
Last quarter, the company’s earnings beat the Zacks Consensus Estimate by 57.5%. It has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stand at 86 cents. So, although the company carries a favorable Zacks Rank #3 (Hold), surprise prediction is difficult.
With respect to surprise trend, the company surpassed estimates in each of the last four quarters. The average beat for the trailing four quarters is 25.86%.
Stay tuned! Check back on our full write-up on earnings releases of these stocks.
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Accident and Health Insurers Q2 Earnings Preview: AFL, AMSF
The second-quarter earnings season is in full swing this week. So far, we have results from 126 S&P 500 members (as of Jul 22) that combined account for 32.7% of the index’s total market capitalization as per the Earnings Trends report. Revenues are up 2.6% while earnings are down 1.1%. However, the beat ratio is 70.6% for the bottom line and 55.6% for the top line.
Accident and Health insurance is part of the broader Medical sector. So far, 15.4% of the total Medical sector has come up with second-quarter results. The sector is expected to deliver 1.8% earnings growth backed by 7.7% higher revenues. This compares favorably with the projected 3.4% earnings decline on 0.5% lower revenues for the S&P 500 index.
Let’s see what factors might have influenced its performance in the second quarter.
Accident and Health insurers face intense competition in workers’ compensation insurance (one of the most popular accident policies) due to abundant market capacity. Premium rates have been declining for this insurance line and will continue to fall through 2016.
Also, diversified product offerings and expansion into newer markets are likely to have driven revenues. Cost management should give the bottom line a boost.
Health insurers will see top-line growth with higher enrollment. The supplemental health insurance policies are highly sought after as out-of-pocket medical costs are growing for many Americans. Health Care Reform has spurred demand for supplemental coverage and companies are experiencing top-line growth from these products.
Additionally, the firms are generating steady free cash flow, and will push up their bottom line through share buybacks.
As many as 189 S&P 500 companies will release results from Jul 25–29.
Let’s find out what’s in store for these two accident and health insurers that will report second-quarter earnings results on Jul 28:
Aflac Inc. (AFL - Free Report) through its subsidiary, American Family Life Assurance Company of Columbus, provides supplemental health and life insurance products. Last quarter, Aflac delivered a 6.8% positive earnings surprise. It has an Earnings ESP of +0.60% and a Zacks Rank #2 (Buy). The Most Accurate estimate for the quarter is $1.69, a penny above the Zacks Consensus Estimate.
We expect sales of third sector products to be down, given the production strength seen in 2015. Also sales of first sector products will be low since Aflac is taking steps like production caps, commission restructuring, product re-pricing and in select cases, product discontinuance, to control its sales.
Aflac is likely to witness an increase in revenues and pretax income in the quarter. In addition, Aflac U.S. is likely to have experienced premium sales growth.
With respect to the surprise trend, the company surpassed estimates in three out of the last four quarters. The average beat for the trailing four quarters is 4.1% (Read more: Is a Surprise in Store for Aflac This Earnings Season?)
AFLAC INC Price and EPS Surprise
AFLAC INC Price and EPS Surprise | AFLAC INC Quote
Amerisafe, Inc. (AMSF - Free Report) , based in DeRidder, LA, is an insurance holding company that provides workers’ compensation insurance in the United States.
Last quarter, the company’s earnings beat the Zacks Consensus Estimate by 57.5%. It has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stand at 86 cents. So, although the company carries a favorable Zacks Rank #3 (Hold), surprise prediction is difficult.
With respect to surprise trend, the company surpassed estimates in each of the last four quarters. The average beat for the trailing four quarters is 25.86%.
AMERISAFE INC Price and EPS Surprise
AMERISAFE INC Price and EPS Surprise | AMERISAFE INC Quote
Stay tuned! Check back on our full write-up on earnings releases of these stocks.
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 >>