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W.R. Berkley (WRB) Q1 Earnings Miss Estimates, Revenues Beat
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W.R. Berkley Corporation’s (WRB - Free Report) first-quarter 2020 operating income of 69 cents per share missed the Zacks Consensus Estimate by 2.8%. The bottom line also plunged 26.6% year over year.
Nevertheless, the company benefited from high premiums and strong net investment income. However, the COVID-19 pandemic had an adverse effect on the company’s results.
Behind the Headlines
Operating revenues of nearly $2 billion were up 2.6% year over year. The top line also surpassed the Zacks Consensus Estimate by 3%.
W.R. Berkley’s net premiums written were $1.8 billion, up nearly 8% year over year. Higher premiums written at both the Insurance and Reinsurance & Monoline Excess segments contributed to this upside.
Net investment income improved 10.4% year over year to $174.8 million.
Total expenses moved up 6.4% to $1.8 billion, primarily on higher losses and loss expenses and expenses from non-insurance businesses.
Catastrophe loss totaled $87.9 million in the quarter, which reflects a whopping rise of 594.2% year over year. Creation of provision for handling COVID-19 related claims primarily led to increased catastrophe loss.
Consolidated combined ratio (a measure of underwriting profitability) was 96.9%, deteriorating 260 basis points (bps) year over year.
W.R. Berkley Corporation Price, Consensus and EPS Surprise
Net premiums written at the Insurance segment grew 5.7% year over year to $1.6 billion in the quarter. Combined ratio deteriorated 240 bps year over year to 96.4%.
Net premiums written in the Reinsurance & Monoline Excess segment increased 23.7% year over year to $262.5 million. Combined ratio deteriorated 380 bps year over year to 100.6%.
Financial Update
W.R. Berkley exited the first quarter with total assets worth $26.1 billion, down 2.1% from the 2019-end figure.
Book value per share declined 7.8% from the level at 2019 end to $30.55 as of Mar 31, 2020.
Cash flow from operations totaled $152.6 million in the quarter, which surged 94.8% year over year.
In the quarter under review, the company’s negative return on equity (ROE) of 0.3% compares unfavorably with the prior-year quarter’s ROE of 13.3%.
Share Repurchase and Dividend Update
In the first quarter, W.R. Berkley bought back shares worth $203 million returned $20 million of ordinary dividends to its shareholders.
Among other insurance industry players, which have reported first-quarter earnings so far, the bottom line of Chubb Limited (CB - Free Report) outpaced the Zacks Consensus Estimate.
Upcoming Releases
Some other stocks from the insurance space with the right combination of elements to surpass estimates this reporting cycle are as follows:
Assurant, Inc. (AIZ - Free Report) has an Earnings ESP of +4.28% and a Zacks Rank of 3, at present. The company is slated to announce first-quarter 2020 earnings on May 5.
Cincinnati Financial Corporation (CINF - Free Report) currently has an Earnings ESP of +1.67% and a Zacks Rank #3. The company is slated to announce first-quarter 2020 results on Apr 27.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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W.R. Berkley (WRB) Q1 Earnings Miss Estimates, Revenues Beat
W.R. Berkley Corporation’s (WRB - Free Report) first-quarter 2020 operating income of 69 cents per share missed the Zacks Consensus Estimate by 2.8%. The bottom line also plunged 26.6% year over year.
Nevertheless, the company benefited from high premiums and strong net investment income. However, the COVID-19 pandemic had an adverse effect on the company’s results.
Behind the Headlines
Operating revenues of nearly $2 billion were up 2.6% year over year. The top line also surpassed the Zacks Consensus Estimate by 3%.
W.R. Berkley’s net premiums written were $1.8 billion, up nearly 8% year over year. Higher premiums written at both the Insurance and Reinsurance & Monoline Excess segments contributed to this upside.
Net investment income improved 10.4% year over year to $174.8 million.
Total expenses moved up 6.4% to $1.8 billion, primarily on higher losses and loss expenses and expenses from non-insurance businesses.
Catastrophe loss totaled $87.9 million in the quarter, which reflects a whopping rise of 594.2% year over year. Creation of provision for handling COVID-19 related claims primarily led to increased catastrophe loss.
Consolidated combined ratio (a measure of underwriting profitability) was 96.9%, deteriorating 260 basis points (bps) year over year.
W.R. Berkley Corporation Price, Consensus and EPS Surprise
W.R. Berkley Corporation price-consensus-eps-surprise-chart | W.R. Berkley Corporation Quote
Segmental Details
Net premiums written at the Insurance segment grew 5.7% year over year to $1.6 billion in the quarter. Combined ratio deteriorated 240 bps year over year to 96.4%.
Net premiums written in the Reinsurance & Monoline Excess segment increased 23.7% year over year to $262.5 million. Combined ratio deteriorated 380 bps year over year to 100.6%.
Financial Update
W.R. Berkley exited the first quarter with total assets worth $26.1 billion, down 2.1% from the 2019-end figure.
Book value per share declined 7.8% from the level at 2019 end to $30.55 as of Mar 31, 2020.
Cash flow from operations totaled $152.6 million in the quarter, which surged 94.8% year over year.
In the quarter under review, the company’s negative return on equity (ROE) of 0.3% compares unfavorably with the prior-year quarter’s ROE of 13.3%.
Share Repurchase and Dividend Update
In the first quarter, W.R. Berkley bought back shares worth $203 million returned $20 million of ordinary dividends to its shareholders.
Zacks Rank and Performance of Other Players
W.R. Berkley carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Among other insurance industry players, which have reported first-quarter earnings so far, the bottom line of Chubb Limited (CB - Free Report) outpaced the Zacks Consensus Estimate.
Upcoming Releases
Some other stocks from the insurance space with the right combination of elements to surpass estimates this reporting cycle are as follows:
Assurant, Inc. (AIZ - Free Report) has an Earnings ESP of +4.28% and a Zacks Rank of 3, at present. The company is slated to announce first-quarter 2020 earnings on May 5.
Cincinnati Financial Corporation (CINF - Free Report) currently has an Earnings ESP of +1.67% and a Zacks Rank #3. The company is slated to announce first-quarter 2020 results on Apr 27.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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