The third-quarter 2024 earnings season is heating up in the Insurance sector. So far, S&P 500 sector components like Marsh & McLennan, AON, Hartford Financial, and some others have reported quarterly numbers and beat earnings expectations.

The Insurance space belongs to the Finance sector (one of the 16 broad Zacks sectors within the Zacks Industry classification), overall earnings of which are projected to increase 10% from the year-ago quarter. Revenues are expected to inch up 5.9%, as indicated by our latest Earnings Preview.

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Insurance players like Aflac Incorporated (AFL Quick QuoteAFL - Free Report) , MetLife, Inc. (MET Quick QuoteMET - Free Report) , The Allstate Corporation (ALL Quick QuoteALL - Free Report) , Prudential Financial, Inc. (PRU Quick QuotePRU - Free Report) and AXIS Capital Holdings Limited (AXS Quick QuoteAXS - Free Report) are scheduled to release their results tomorrow. Before checking the key projections for these stocks, let's take a look at the general factors that are likely to shape the companies’ upcoming results.

Important Points for Investors

The third-quarter earnings season for insurance companies is likely to reflect strong underwriting fundamentals, ongoing digital advancements, favorable client retention, rate hikes and strategic reinsurance agreements. Gains from investments, solid policy renewals, and organic growth in the commercial sector are likely to have bolstered the industry’s overall performance.

A surge in catastrophe-related events may have further accelerated policy renewals and supported favorable pricing adjustments. According to Market Scout’s Market Barometer, the commercial insurance market experienced a 3.8% composite rate increase, with sectors like commercial auto and transportation seeing the highest uptick at 7.3%. However, events such as Hurricane Helene have significantly impacted catastrophe-related expenses.

The insurers’ net investment income is expected to reflect a larger asset base, rising bond yields and increased interest income from fixed-maturity securities, contributing to a positive financial outlook for insurers in the third quarter. Strong cash flows from operations and advances in Insurtech enhancing efficiency, are also likely to have boosted performance across the sector.

What’s in Store for AFL, MET, ALL, PRU & AXS on Oct. 30?

Our proprietary model clearly indicates that a company needs to have the right combination of two key elements — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase the odds of an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Against the above backdrop, let’s find out how the following five companies are placed ahead of their third-quarter earnings release tomorrow.

Aflac: The Zacks Consensus Estimate for Aflac’s net earned premiums indicates a 2.4% year-over-year decline. The consensus mark for adjusted revenues in the Aflac Japan segment signals a 5.8% fall from the year-ago level. Nonetheless, the consensus estimate for the adjusted expense ratio in Aflac U.S. indicates a 170 bps improvement year over year, aiding the bottom line. (Read more: Can Aflac Beat Q3 Earnings Estimates Despite Soft Japan Operations?)

The Zacks Consensus Estimate for the third-quarter earnings and top line stands at $1.69 per share and $4.6 billion, respectively, indicating an earnings decline of 8.2% and a revenue decrease of 7% from the corresponding year-ago quarter’s actuals. Aflac’s earnings beat the Zacks Consensus Estimate in three of the last four quarters and missed once, the average surprise being 8.2%.

Our proven model predicts a likely earnings beat for Aflac this time around, as the stock has an Earnings ESP of +0.66% and a Zacks Rank #3.

You can see the complete list of today’s Zacks #1 Rank stocks here.

MetLife: The Zacks Consensus Estimate for net investment income is pegged at $5.1 billion for the quarter under review, suggesting a 6.3% year-over-year increase. The Zacks Consensus Estimate for Group Benefits business' adjusted earnings is pegged at $454.4 million. Rising profits from Asia and Latin America regions are likely to have aided its quarterly performance, partially offset by lower profits from the U.S. and EMEA businesses.

The Zacks Consensus Estimate for the third-quarter earnings and top line stands at $2.16 per share and $18.5 billion, respectively, indicating an earnings increase of 9.6% and revenue growth of 1.3% from the corresponding year-ago quarter’s figures. As far as earnings surprises are concerned, MetLife’s earnings beat the Zacks Consensus Estimate once in the last four quarters, met on one occasion and missed two others, the average surprise being 1.3%.

Our proven model predicts a likely earnings beat for MetLife this time around. This is because the stock has an Earnings ESP of +0.98% and a Zacks Rank #3.

The Allstate Corporation: This leading property-casualty insurer’s third-quarter revenues are expected to have been supported by premium growth. Rate increases and strong policy retention rates are likely to aid its results. Allstate’s third-quarter earnings are expected to have taken a boost from 90% higher adjusted net income from the Protection Services business. (Read more: Allstate Q3 Countdown: Smart Move to Buy or Stick With Hold?)

The Zacks Consensus Estimate for the to-be-reported quarter’s bottom and top line is pegged at $2.20 per share and $16.2 billion, respectively, indicating an earnings surge of 171.6% and a revenue increase of 11.4% from the corresponding year-ago quarter’s readings. ALL’s bottom line beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 142.7%.

Our proven model does not conclusively predict an earnings beat for Allstate this time around. This is because the stock has an Earnings ESP of 0.00% and a Zacks Rank #3.

Prudential Financial: The Zacks Consensus Estimate for PRU’s total premiums indicates 121.3% year-over-year growth. The consensus mark for net investment income signals a 7.8% rise from the year-ago level. However, adjusted operating income from international business and group insurance are expected to have declined in the to-be-reported quarter. (Read more: Prudential Financial Set to Report Q3 Earnings: What's in the Cards?)

The Zacks Consensus Estimate for the third-quarter earnings and top line stands at $3.47 per share and $14.6 billion, respectively, indicating an earnings increase of 0.9% and revenue growth of 43.9% from the corresponding year-ago quarter. Prudential Financial’s earnings beat the Zacks Consensus Estimate in one of the last four quarters and missed thrice, the average surprise being 0.8%.

Our proven model does not conclusively predict an earnings beat for Prudential Financial this time around as the stock has an Earnings ESP of -0.25% and a Zacks Rank #3.

AXIS Capital: The Zacks Consensus Estimate for AXS’ net premiums earned from the Insurance segment indicates 10.1% year-over-year growth. The consensus mark for net investment income signals a 16.2% rise from the year-ago level. However, the consensus estimate for the total combined ratio is pegged at 93.52%, up from 92.7% a year ago. (Read more: Should AXS Stock Be in Your Portfolio Ahead of Q3 Earnings?)

The Zacks Consensus Estimate for the third-quarter earnings and top line stands at $2.50 per share and $1.6 billion, respectively, indicating an earnings gain of 6.8% and revenue growth of 5.8% from the corresponding year-ago quarter. AXIS Capital’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 94.6%.

Our proven model predicts a likely earnings beat for AXIS Capital this time around as well, as the stock has an Earnings ESP of +2.87% and a Zacks Rank #3.