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Everest Group Q3 Earnings, Revenues Miss on Higher Catastrophe Loss
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Everest Group, Ltd.’s (EG - Free Report) third-quarter 2024 operating income of $14.62 per share missed the Zacks Consensus Estimate by 22.7%. The bottom line jumped 3.4% year over year.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Everest Group witnessed above-average cat loss as well as lower premiums in Insurance. Higher premiums in Reinsurance and improved net investment income limited the downside.
Everest Group, Ltd. Price, Consensus and EPS Surprise
Everest Group’s total operating revenues of $4.3 billion climbed 6.5% year over year on higher premiums earned and net investment income. The top line however missed the consensus mark by 4.4%.
Gross written premiums improved 0.8% year over year to $4.2 billion, driven by 1.7% growth in Reinsurance, partially offset by a 2.1% decline in Insurance. Our estimate was $5.3 billion.
Net investment income was $496 million, which surged 22.2% year over year. The upside was driven by a larger asset base as well as strong core fixed income investment returns. Our estimate was $412 million. The Zacks Consensus Estimate was pegged at $478 million.
Total claims and expenses rose 13.5% to $3.7 billion, primarily due to higher incurred losses and loss adjustment expenses, commission, brokerage, taxes and fees, other underwriting expenses, corporate expenses and interest, fees and bond issue cost amortization expense. Our estimate was $3.9 billion.
Underwriting income was $272 million, which declined 9.6% year over year. Pre-tax catastrophe losses net of estimated recoveries and reinstatement premiums were $279 million, wider than a loss of $170 million in the year-ago quarter.
The combined ratio deteriorated 160 basis points (bps) year over year to 93.1 in the reported quarter. The Zacks Consensus Estimate was 96, while our estimate was 95.5.
Segment Update
The Reinsurance segment’s gross written premiums were $3.3 billion, up 1.7% year over year. Growth was driven by a 19.2% increase in Property and 9.3% in Property Catastrophe XOL, partially offset by a 7.2% decrease in Casualty, a 5.9% decrease in Casualty XOL and a 28.6% decrease in Financial Lines when adjusting for reinstatement premiums. Our estimate was $3.8 billion.
The combined ratio of the Reinsurance segment deteriorated 70 bps to 91.8. The Zacks Consensus Estimate was 98. Our estimate was 97.1.
The Insurance segment generated gross written premiums of $1.2 billion, down 2.8% year over year. A 21% growth in Property/Short Tail and 17.7% in Other Specialty lines was offset by a decrease of 27.6% in Accident and Health, as the insurer exited the medical stop loss business, and 10.3% in Specialty Casualty, primarily in North America, reflecting its focus on lines of business with better- expected margins. Our estimate was $1.5 billion.
The combined ratio deteriorated 460 bps to 97.1 for the Insurance segment. Our estimate was 92.2. The Zacks Consensus Estimate was pegged at 95.
Financial Update
Everest Group exited the third quarter of 2024 with total investments and cash of $42.1 billion, up 13.3% from the 2023-end level. Shareholder equity at the end of the reported quarter increased 16.2% from the figure at the end of 2023 to $15.3 billion.
Book value per share was $356.77 as of Sept. 30, 2024, up 37.9% from the 2023-end level. The annualized net income return on equity was 16.4%, which contracted 230 bps from the year-ago quarter.
Everest Group’s cash flow from operations was $1.7 billion in the quarter, up 21.4% year over year. The company paid common share dividends of $86 million during the quarter and bought back shares worth $100 million.
MetLife, Inc. (MET - Free Report) reported third-quarter 2024 adjusted operating earnings of $1.93 per share, which missed the Zacks Consensus Estimate by 10.7%. The bottom line declined 1% year over year. Adjusted operating revenues of $17.6 billion decreased 3.4% year over year. The top line missed the consensus mark by 4.7%.
Earlier, management estimated a variable investment income of $1.5 billion for 2024. Corporate & Other adjusted losses are anticipated between $750 million and $850 million. The effective tax rate is projected to be in the range of 24-26%. MetLife Holdings segment’s adjusted PFOs are expected to witness a year-over-year decline of 13-15%. The unit’s adjusted earnings are forecast to be $700-$900 million.
Adjusted earnings in the Asia segment are anticipated to grow 20%. Adjusted earnings in the EMEA unit are likely to be in the range of $60-$65 million for the remaining quarters of 2024.
Prudential Financial, Inc. (PRU - Free Report) reported third-quarter 2024 adjusted operating income of $3.48 per share, which beat the Zacks Consensus Estimate by 0.2%. However, the bottom line decreased 3.8% year over year.
Total revenues of $19.5 billion surged 94% year over year and beat the Zacks Consensus Estimate by 33.7%. The increase in revenues was due to higher premiums, policy charges and fee income and net investment income.
The Hartford Financial Services Group, Inc. (HIG - Free Report) reported third-quarter 2024 adjusted operating earnings of $2.53 per share, which beat the Zacks Consensus Estimate by 1.6%. The bottom line increased 10.5% year over year. Operating revenues of HIG amounted to $4.7 billion, which improved 10.9% year over year in the quarter under review. The top line beat the consensus mark by 1.1%.
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Everest Group Q3 Earnings, Revenues Miss on Higher Catastrophe Loss
Everest Group, Ltd.’s (EG - Free Report) third-quarter 2024 operating income of $14.62 per share missed the Zacks Consensus Estimate by 22.7%. The bottom line jumped 3.4% year over year.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Everest Group witnessed above-average cat loss as well as lower premiums in Insurance. Higher premiums in Reinsurance and improved net investment income limited the downside.
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 $4.3 billion climbed 6.5% year over year on higher premiums earned and net investment income. The top line however missed the consensus mark by 4.4%.
Gross written premiums improved 0.8% year over year to $4.2 billion, driven by 1.7% growth in Reinsurance, partially offset by a 2.1% decline in Insurance. Our estimate was $5.3 billion.
Net investment income was $496 million, which surged 22.2% year over year. The upside was driven by a larger asset base as well as strong core fixed income investment returns. Our estimate was $412 million. The Zacks Consensus Estimate was pegged at $478 million.
Total claims and expenses rose 13.5% to $3.7 billion, primarily due to higher incurred losses and loss adjustment expenses, commission, brokerage, taxes and fees, other underwriting expenses, corporate expenses and interest, fees and bond issue cost amortization expense. Our estimate was $3.9 billion.
Underwriting income was $272 million, which declined 9.6% year over year.
Pre-tax catastrophe losses net of estimated recoveries and reinstatement premiums were $279 million, wider than a loss of $170 million in the year-ago quarter.
The combined ratio deteriorated 160 basis points (bps) year over year to 93.1 in the reported quarter. The Zacks Consensus Estimate was 96, while our estimate was 95.5.
Segment Update
The Reinsurance segment’s gross written premiums were $3.3 billion, up 1.7% year over year. Growth was driven by a 19.2% increase in Property and 9.3% in Property Catastrophe XOL, partially offset by a 7.2% decrease in Casualty, a 5.9% decrease in Casualty XOL and a 28.6% decrease in Financial Lines when adjusting for reinstatement premiums. Our estimate was $3.8 billion.
The combined ratio of the Reinsurance segment deteriorated 70 bps to 91.8. The Zacks Consensus Estimate was 98. Our estimate was 97.1.
The Insurance segment generated gross written premiums of $1.2 billion, down 2.8% year over year. A 21% growth in Property/Short Tail and 17.7% in Other Specialty lines was offset by a decrease of 27.6% in Accident and Health, as the insurer exited the medical stop loss business, and 10.3% in Specialty Casualty, primarily in North America, reflecting its focus on lines of business with better- expected margins. Our estimate was $1.5 billion.
The combined ratio deteriorated 460 bps to 97.1 for the Insurance segment. Our estimate was 92.2. The Zacks Consensus Estimate was pegged at 95.
Financial Update
Everest Group exited the third quarter of 2024 with total investments and cash of $42.1 billion, up 13.3% from the 2023-end level. Shareholder equity at the end of the reported quarter increased 16.2% from the figure at the end of 2023 to $15.3 billion.
Book value per share was $356.77 as of Sept. 30, 2024, up 37.9% from the 2023-end level. The annualized net income return on equity was 16.4%, which contracted 230 bps from the year-ago quarter.
Everest Group’s cash flow from operations was $1.7 billion in the quarter, up 21.4% year over year. The company paid common share dividends of $86 million during the quarter and bought back shares worth $100 million.
Zacks Rank
Everest Group currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Multiline Insurers
MetLife, Inc. (MET - Free Report) reported third-quarter 2024 adjusted operating earnings of $1.93 per share, which missed the Zacks Consensus Estimate by 10.7%. The bottom line declined 1% year over year. Adjusted operating revenues of $17.6 billion decreased 3.4% year over year. The top line missed the consensus mark by 4.7%.
Earlier, management estimated a variable investment income of $1.5 billion for 2024. Corporate & Other adjusted losses are anticipated between $750 million and $850 million. The effective tax rate is projected to be in the range of 24-26%.
MetLife Holdings segment’s adjusted PFOs are expected to witness a year-over-year decline of 13-15%. The unit’s adjusted earnings are forecast to be $700-$900 million.
Adjusted earnings in the Asia segment are anticipated to grow 20%. Adjusted earnings in the EMEA unit are likely to be in the range of $60-$65 million for the remaining quarters of 2024.
Prudential Financial, Inc. (PRU - Free Report) reported third-quarter 2024 adjusted operating income of $3.48 per share, which beat the Zacks Consensus Estimate by 0.2%. However, the bottom line decreased 3.8% year over year.
Total revenues of $19.5 billion surged 94% year over year and beat the Zacks Consensus Estimate by 33.7%. The increase in revenues was due to higher premiums, policy charges and fee income and net investment income.
The Hartford Financial Services Group, Inc. (HIG - Free Report) reported third-quarter 2024 adjusted operating earnings of $2.53 per share, which beat the Zacks Consensus Estimate by 1.6%. The bottom line increased 10.5% year over year.
Operating revenues of HIG amounted to $4.7 billion, which improved 10.9% year over year in the quarter under review. The top line beat the consensus mark by 1.1%.