Yahoo Finance Insurance Stocks' Q1 Earnings Due on May 2: AIZ, PRU & More
Better pricing, exposure growth, diversified portfolio, solid retention, favorable renewals, reinsurance agreements and accelerated digitalization in the first quarter are likely to have benefited insurance industry players such as Assurant Inc. AIZ, Prudential Financial PRU, Unum Group UNM, RenaissanceRe Holdings Ltd. RNR and American Financial Group, Inc. AFG, which are due to report tomorrow. However, an active catastrophe level and inflationary pressure are likely to have weighed on their performance.
Improved pricing, solid retention and exposure growth across business lines are likely to have aided premiums. An active catastrophe environment accelerated the policy renewal rate and aided in better pricing in the first quarter. Per a report by MarketScout, commercial property and casualty insurance rates in the United States increased more than 5% in the to-be-reported quarter.
The first quarter of 2023 bore the brunt of March storms. Aon estimates insured losses in the first quarter to be $15 billion, while economic losses are estimated to be $63 million. Nonetheless, better pricing, reinsurance arrangements, portfolio repositioning, reinsurance covers, favorable reserve development and prudent underwriting are likely to drive an improvement in underwriting results.
Increased travel across the world is likely to have induced higher auto premiums. A stronger mortgage market is likely to have favored mortgage insurance premiums. A low unemployment rate is likely to have aided commercial insurance and group insurance.
Insurers, being beneficiaries of an improving rate environment, are likely to witness improved investment results. The first quarter witnessed one rate hike by the Fed. A larger investment asset base, higher reinvestment rate and alternative investments in private equity, hedge funds and real estate among others are expected to have aided net investment income.
Accelerated digitalization is expected to have saved costs, thus aiding margins. A solid capital position is likely to have aided insurers in strategic mergers and acquisitions to sharpen their competitive edge, build on a niche, expand geographically and diversify their portfolio, apart from enhancing shareholders value via share buybacks and raising dividends.
Let’s take a sneak peek into how the abovementioned insurers are poised prior to their first-quarter 2023 earnings on May 2.
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Assurant’s first-quarter revenues are likely to have benefited from improved net earned premiums, higher fees and other income and net investment income. Earnings for the first quarter are expected to grow year over year, mainly driven by improved performance in Global Housing, as well as more modest growth in Global Lifestyle. Total benefits, losses and expenses might have escalated because of higher policyholder benefits, underwriting, selling, general and administrative expenses, goodwill impairment and interest expense. Continued share buybacks are likely to have aided the bottom line in the to-be-reported quarter. (Read more: Assurant to Report Q1 Earnings: What's in the Cards?)
The Zacks Consensus Estimate for Assurant’s first-quarter earnings per share of $2.25 indicates a 40% increase from the year-ago quarter reported figure. The company has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell).
AIZ’s earnings surpassed estimates in three of the last four reported quarters, while missing in one. This is depicted in the chart below:
Assurant, Inc. Price and EPS Surprise
Assurant, Inc. price-eps-surprise | Assurant, Inc. Quote
Prudential Financial’s U.S. business is likely to have been affected by lower net investment spread results. International businesses are likely to have been impacted by lower net investment spread results and favorable underwriting results, while Group Insurance is likely to have benefited from more favorable underwriting results in both group life and disability. Individual life sales are likely to have decreased in the to-be-reported quarter due to lower variable life sales.
The Zacks Consensus Estimate for the bottom line is pegged at $3.02 per share, indicating a 4.7% decrease from the year-ago quarter’s reported figure. The company has an Earnings ESP of -0.27% and a Zacks Rank #3. (Read more: Prudential to Report Q1 Earnings: What's in the Cards?)
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
PRU’s earnings beat estimates in one of the last four reported quarters and missed in the other three. The same is depicted in the chart below:
Prudential Financial, Inc. Price and EPS Surprise
Prudential Financial, Inc. price-eps-surprise | Prudential Financial, Inc. Quote
Unum Group’s premiums in the to-be-reported quarter are likely to have benefited from solid persistency in-force business and strong sales. The Unum U.S. segment is likely to have benefited from favorable benefits experience in group product lines, disciplined sales trends, strong persistency in group lines and growth of new product lines. Favorable benefits experience, higher premium income, in-force block growth and higher sales are likely to have favored performance at Colonial Life. Expenses are likely to have increased. A continued share buyback is likely to have provided a boost to the bottom line. (Read more: Is a Beat in Store for Unum Group in Q1 Earnings?)
The Zacks Consensus Estimate for UNM’s bottom line is pegged at $1.65, indicating a 21.3% increase from the year-ago quarter reported figure. The company has an Earnings ESP of +0.30% and a Zacks Rank #1.
UNM’s earnings surpassed estimates in three of the last four quarters, while missing in one. This is depicted in the chart below:
Unum Group Price and EPS Surprise
Unum Group price-eps-surprise | Unum Group Quote
RenaissanceRe’s premium is likely to have benefited from premium growth at both its Casualty and Specialty plus Property segments. Management anticipates net earned premiums of around $975 million within its Casualty and Specialty segment in the first quarter of 2023. Expenses are likely to have increased owing to higher net claims and claim expenses, acquisition costs and operational expenses. Continued share buybacks are likely to have aided the bottom line in the to-be-reported quarter.
The Zacks Consensus Estimate for the bottom line is pegged at $7.34, indicating a 106.7% increase from the year-ago quarter reported figure. The company has an Earnings ESP of +3.37% and a Zacks Rank #3.
RNR’s earnings surpassed estimates in two of the last four quarters, while missing in the other two. This is depicted in the chart below:
RenaissanceRe Holdings Ltd. Price and EPS Surprise
RenaissanceRe Holdings Ltd. price-eps-surprise | RenaissanceRe Holdings Ltd. Quote
American Financial Group’s first-quarter results are likely to benefit from strong performance across Property and transportation, Specialty casualty, Specialty financial and other specialty businesses as well as increasing renewal rate in the entire P&C group. Exposure to cat loss and rising expenses are likely to have weighed on profitability.
The Zacks Consensus Estimate for AFG’s bottom line is pegged at $2.88, indicating a 19.1% decrease from the year-ago quarter reported figure. The company has an Earnings ESP of 0.00% and a Zacks Rank 3.
AFG’s earnings surpassed estimates in the last four quarters. This is depicted in the chart below:
American Financial Group, Inc. Price and EPS Surprise
American Financial Group, Inc. price-eps-surprise | American Financial Group, Inc. Quote
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Prudential Financial, Inc. (PRU) : Free Stock Analysis Report
Assurant, Inc. (AIZ) : Free Stock Analysis Report
RenaissanceRe Holdings Ltd. (RNR) : Free Stock Analysis Report
Unum Group (UNM) : Free Stock Analysis Report
American Financial Group, Inc. (AFG) : Free Stock Analysis Report
