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The Zacks Analyst Blog Highlights: Chubb, RenaissanceRe Holdings and W.R. Berkley

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For Immediate Release

Chicago, IL – July 24, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Chubb Limited (CB - Free Report) , RenaissanceRe Holdings Ltd. (RNR - Free Report) and W.R. Berkley Corp. (WRB - Free Report) .

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Here are highlights from Monday’s Analyst Blog:

Insurers Set to Report Q2 Earnings July 24: CB, RNR, WRB

The second-quarter earnings season is gathering momentum with 87 members of the elite S&P 500 index having reported financial numbers so far. Per the latest Earnings Preview, performances of these index participants indicate 20.9% increase in total earnings on 10.3% higher revenues. The beat ratio is impressive with 86.2% companies surpassing bottom-line expectations and 77% outperforming on the top-line front.

The Finance sector (of the 16 Zacks sectors) is expected to deliver earnings growth in mid- 20s on 4.2% stronger revenues per the Earnings Preview.

Integral to the Finance sector, the insurance industry is likely to witness better results this yet-to-be-reported quarter on the back of an improving rate environment, tax cuts and a favorable operating environment.

The second quarter managed to escape the harsh onslaughts of Mother Nature though there were successive rain storms in the United States as well as Canada. A Morgan Stanley analyst noted that the second-quarter cat loss estimate is equivalent to about half of what insurers have usually suffered as a result of natural calamities in any given second quarter per a carriermanagement.com report.

Improved pricing, prudent underwriting practices, portfolio repositioning as well as reliance on reinsurance covers possibly have helped insurers survive the deficits.

A steadily progressing interest rate environment is likely to have highly boosted net investment income, an important component of an insurer’s top line. Reflecting economic stability, the Federal Reserve raised interest rate in June, marking the second hike in 2018.

Diversified portfolio, a wide geographic footprint, strategic consolidations and lower taxes are anticipated to have enhanced insurers’ performance in the quarter to be reported.

With 750 companies (175 S&P 500 members) set to announce earnings results this week, let’s find out where the following insurers stand ahead of their quarterly releases on Jul 24.

Chubb Limited’s premiums have probably increased on an improved commercial property and casualty pricing plus a compelling product portfolio. Riding on a steady improvement in interest rates along with better-than-expected private equity distributions, the company might have experienced better investment results. It anticipates quarterly investment income run rate to range between $875 million and $885 million. A lower level of cat loss should have led to an improved combined ratio.

The Zacks Consensus Estimate of $2.63 per share for the yet-to-be-reported quarter reflects a 5.2% year-over-year increase. Chubb carries a Zacks Rank #3 (Hold), which increases the predictive power of ESP. Further, combined with an Earnings ESP of +1.16%, makes us confident of a likely positive surprise.

(Read more: Chubb Limited Q2 Earnings: Is a Beat in the Cards?)

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

The Zacks Consensus Estimate for RenaissanceRe Holdings Ltd. is pegged at $3.01, up 7.9% year over year. Though the company is a Zacks #3 Ranked player, its Earnings ESP of 0.00% makes surprise prediction difficult.

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

The Zacks Consensus Estimate for W.R. Berkley Corp. stands at 82 cents, up 26.2% year over year. The company has an Earnings ESP of +0.61%, which increases the odds of a likely earnings surprise. However, combined with a Zacks Rank #4 (Sell), which lowers the predictive power of ESP, leaves our surprise prediction inconclusive.

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Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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Chubb Limited (CB) - free report >>

W.R. Berkley Corporation (WRB) - free report >>

RenaissanceRe Holdings Ltd. (RNR) - free report >>