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Insurance Stock Q4 Earnings Slated on Feb 10: OB, AON
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We are more than halfway through the Q4 reporting cycle with results from nearly 64% members of the elite S&P 500 Index on board. According to the latest Earnings Trends the performance of the 319 index members that have already reported show total earnings increase of 5.8% on 4.5% higher revenues. The beat ratio is strong with 69.6% companies surpassing bottom-line expectations and 54.5% outperforming the top line.
The Finance sector (one of the 16 Zacks sectors) started the earnings season on a strong note. In fact, 76.7% companies from this sector that have come up their quarterly results have registered 11.3% earnings growth on a 4.3% increase in revenues, both on a year-over-year basis. Moreover, the beat ratios of 72.5% for the bottom line and 56.5% for the top line are higher than the beat ratio of the S&P 500.
The Finance sector is highly diversified and includes several industries like insurance, banks and securities exchanges to name a few.
The insurance industry was severely affected by catastrophe losses in 2016 compared with benign cat activity in 2015. It was also hit by Hurricane Matthew in Q4. The industry is likely to have incurred between $3 billion and $9 billion in loss in the quarter owing to the severity of the hurricane. The quarter also bore the brunt of an earthquake in New Zealand and other catastrophe events. These are expected to have weighed on the underwriting results of insurers, hurting their underwriting income and combined ratio. However, prudent underwriting practices should bring some respite.
Though the Fed raised the interest rate, it was toward the end of Q4. Insurers, therefore, are unlikely to have benefited from the rate hike.
Nonetheless, the broader invested asset base and alternative asset classes are positives. Also, spread compression on products like fixed annuities and universal life is likely to have improved.
To sum up, core business growth, geographic expansion and strategic acquisitions, an improving employment scenario and better payroll should prove beneficial for insurance companies in Q4.
With a number of companies likely to report Q4 results soon, we expect to get a clearer idea of the trends this earnings cycle. Let’s find out how these two insurers might perform when they come up with their quarterly numbers on Feb 10:
Aon plc’s (AON - Free Report) fourth-quarter earnings are expected to see strong growth in the U.S. retail on the back of new business generation. Retention is also likely to have given a boost to Aon’s top line. Strategic investments in innovative technology, data and analytics are likely to have bolstered the underlying performance of the company’s risk-solution segment in the to-be-reported quarter. Continued business generation in Aon’s client treaty and increase in facultative placements may also facilitate Aon’s reinsurance business growth. The HR Ssolution segment is expected to have performed well in the quarter on the back of Aon Hewitt's leadership and in-depth understanding of the market.
In the last-reported quarter, Aon plc surpassed the Zacks Consensus Estimate by 0.78%. Though the company has a favorable Zacks Rank #3 (Hold), its Earnings ESP of 0.00% makes surprise prediction difficult. The Most Accurate estimate stands at $2.49, in line with the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
With respect to the surprise trend, Aon plc surpassed expectations in three of the last four quarters, with an average surprise of 2.55%. (Read more: Aon plc: What's in the Cards This Earnings Season?)
OneBeacon Insurance Group, Ltd. (OB - Free Report) , is a Bermuda-domiciled holding company. Their underwriting companies offer a range of specialty insurance products sold through independent agencies, regional and national brokers, wholesalers and managing general agencies. Each business is managed by an experienced team of specialty insurance professionals focused on a specific customer group or industry segment, and providing distinct products and tailored coverages and services.
In the last-reported quarter, OneBeacon Insurance surpassed the Zacks Consensus Estimate by 26.7%. Though the company has a favorable Zacks Rank #2, its Earnings ESP of 0.00% makes surprise prediction difficult. The Most Accurate estimate and the Zacks Consensus Estimate stand at 16 cents per share.
With respect to the surprise trend, OneBeacon Insurance surpassed expectations in three of the last four quarters, but with an average negative surprise of 35.82%.
OneBeacon Insurance Group, Ltd. Price and EPS Surprise
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Insurance Stock Q4 Earnings Slated on Feb 10: OB, AON
We are more than halfway through the Q4 reporting cycle with results from nearly 64% members of the elite S&P 500 Index on board. According to the latest Earnings Trends the performance of the 319 index members that have already reported show total earnings increase of 5.8% on 4.5% higher revenues. The beat ratio is strong with 69.6% companies surpassing bottom-line expectations and 54.5% outperforming the top line.
The Finance sector (one of the 16 Zacks sectors) started the earnings season on a strong note. In fact, 76.7% companies from this sector that have come up their quarterly results have registered 11.3% earnings growth on a 4.3% increase in revenues, both on a year-over-year basis. Moreover, the beat ratios of 72.5% for the bottom line and 56.5% for the top line are higher than the beat ratio of the S&P 500.
The Finance sector is highly diversified and includes several industries like insurance, banks and securities exchanges to name a few.
The insurance industry was severely affected by catastrophe losses in 2016 compared with benign cat activity in 2015. It was also hit by Hurricane Matthew in Q4. The industry is likely to have incurred between $3 billion and $9 billion in loss in the quarter owing to the severity of the hurricane. The quarter also bore the brunt of an earthquake in New Zealand and other catastrophe events. These are expected to have weighed on the underwriting results of insurers, hurting their underwriting income and combined ratio. However, prudent underwriting practices should bring some respite.
Though the Fed raised the interest rate, it was toward the end of Q4. Insurers, therefore, are unlikely to have benefited from the rate hike.
Nonetheless, the broader invested asset base and alternative asset classes are positives. Also, spread compression on products like fixed annuities and universal life is likely to have improved.
To sum up, core business growth, geographic expansion and strategic acquisitions, an improving employment scenario and better payroll should prove beneficial for insurance companies in Q4.
With a number of companies likely to report Q4 results soon, we expect to get a clearer idea of the trends this earnings cycle. Let’s find out how these two insurers might perform when they come up with their quarterly numbers on Feb 10:
Aon plc’s (AON - Free Report) fourth-quarter earnings are expected to see strong growth in the U.S. retail on the back of new business generation. Retention is also likely to have given a boost to Aon’s top line. Strategic investments in innovative technology, data and analytics are likely to have bolstered the underlying performance of the company’s risk-solution segment in the to-be-reported quarter. Continued business generation in Aon’s client treaty and increase in facultative placements may also facilitate Aon’s reinsurance business growth. The HR Ssolution segment is expected to have performed well in the quarter on the back of Aon Hewitt's leadership and in-depth understanding of the market.
In the last-reported quarter, Aon plc surpassed the Zacks Consensus Estimate by 0.78%. Though the company has a favorable Zacks Rank #3 (Hold), its Earnings ESP of 0.00% makes surprise prediction difficult. The Most Accurate estimate stands at $2.49, in line with the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
According to our proven model a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 for an earnings beat. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
With respect to the surprise trend, Aon plc surpassed expectations in three of the last four quarters, with an average surprise of 2.55%. (Read more: Aon plc: What's in the Cards This Earnings Season?)
Aon PLC Price and EPS Surprise
Aon PLC Price and EPS Surprise | Aon PLC Quote
OneBeacon Insurance Group, Ltd. (OB - Free Report) , is a Bermuda-domiciled holding company. Their underwriting companies offer a range of specialty insurance products sold through independent agencies, regional and national brokers, wholesalers and managing general agencies. Each business is managed by an experienced team of specialty insurance professionals focused on a specific customer group or industry segment, and providing distinct products and tailored coverages and services.
In the last-reported quarter, OneBeacon Insurance surpassed the Zacks Consensus Estimate by 26.7%. Though the company has a favorable Zacks Rank #2, its Earnings ESP of 0.00% makes surprise prediction difficult. The Most Accurate estimate and the Zacks Consensus Estimate stand at 16 cents per share.
With respect to the surprise trend, OneBeacon Insurance surpassed expectations in three of the last four quarters, but with an average negative surprise of 35.82%.
OneBeacon Insurance Group, Ltd. Price and EPS Surprise
OneBeacon Insurance Group, Ltd. Price and EPS Surprise | OneBeacon Insurance Group, Ltd. Quote
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. Be among the very first to see it>>