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Insurance Stocks Q4 Earnings on Feb 8: AIZ, WTW and More

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The insurance industry players are likely to have benefited from improved pricing, exposure growth, solid retention, favorable renewals, reinsurance agreements, product redesign, and accelerated digitalization in the fourth quarter. Insurers Assurant Inc. (AIZ - Free Report) , Willis Towers Watson plc (WTW - Free Report) , CNO Financial Group Inc. (CNO - Free Report) and Voya Financial Inc. (VOYA - Free Report) likely have benefited from these factors. A low-rate interest rate environment remained a partial offset.

Non-life premiums are likely to have benefited from improved pricing. Occurrences of natural disasters are likely to have prompted price rise in the fourth quarter also. Per Willis Towers Watson’s 2021 Insurance Marketplace Realities report, except for one, 29 lines should witness a price rise. Reinsurance covers, favorable reserve development and solid capital level are thus likely to have aided underwriting profitability.

Better pricing, reinsurance arrangements, portfolio repositioning and prudent underwriting practice are likely to drive improvement in underwriting results. The fourth quarter of 2021 witnessed a benign cat environment though it bore the brunt of a tornado in Kentucky, a wildfire in Colorado and a few storms.

Life insurance premiums are likely to have benefited from increasing demand for protection products driving higher sales. Life insurers continue to roll out investment products that provide bundled covers of guaranteed retirement income, life and healthcare to cater to customers preferring policies with “living” benefits more than those with death benefits.

A still near-zero interest rate environment is likely to have weighed on investment income and yield. Thus, a higher invested asset base, as well as increased investment in alternative assets, is likely to have limited the downside.

Blockchain, artificial intelligence, advanced analytics, telematics, cloud computing and robotic process automation are expected to have expedited business operations and saved costs, thus aiding margins.

Banking on the solid capital position, insurers pursued strategic mergers and acquisitions to sharpen their competitive edge, build on a niche, expand geographically, and diversify their portfolio to have a compelling product offering.

Let’s take a sneak peek into how the following insurers are poised prior to their fourth-quarter earnings on Feb 8.

According to the Zacks model, a company needs the right combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — to increase the odds of an earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Assurant’s revenues are likely to have benefited from improved net earned premiums, and fees and other income. The Global Lifestyle segment is expected to have benefited from the well-performing Global Automotive and Connected Living. The Global Housing segment is likely to have benefited on the back of increased premium rates, average-insured values and solid growth in Multifamily housing. (Read more: What's in Store for Assurant This Earnings Season?)

The Zacks Consensus Estimate for Assurant’s earnings per share of $2.30 indicates a 26.4% increase from the year-ago quarter reported figure. The company has an Earnings ESP of -2.17% and a Zacks Rank 3.  

AIZ surpassed estimates in all the three reported quarters of 2021. This is depicted in the chart below:

Assurant, Inc. Price and EPS Surprise

Assurant, Inc. Price and EPS Surprise

Assurant, Inc. price-eps-surprise | Assurant, Inc. Quote

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

Willis Towers Watson is likely to have witnessed the impact of increased demand for advisory services, new business activity, strong renewals, technology sales, growth in Medicare Advantage and Life sales. Willis Towers expects to deliver margin improvement in the fourth quarter. (Will Willis Towers Retain Its Beat Streak in Q4 Earnings?)

The Zacks Consensus Estimate for Willis Towers Watson’s earnings per share of $5.35 indicates an increase of 2.3% from the year-ago reported figure. The consensus estimate for revenues is pegged at $2.8 billion, up 1.3% year over year.

Willis Towers has an Earnings ESP of +6.79% and a Zacks Rank #3.

Willis Towers’ earnings outpaced estimates in all the three reported quarters of 2021.

The same is depicted in the chart below:

The Zacks Consensus Estimate for CNO Financial's earnings per share of 59 cents per share indicates an increase of 3.5% from the year-ago reported figure. The consensus estimate for revenues is pegged at $905.2 million, indicating a decline of 15.9% year over year.

CNO Financial has an Earnings ESP of -1.55% and a Zacks Rank #3. Cost-reduction efforts, continued investments in cutting-edge technology driving sales and productivity are likely to aid fourth-quarter results.

CNO Financial’s earnings outpaced estimates in all the three reported quarters of 2021.

The same is depicted in the chart below:

CNO Financial Group, Inc. Price and EPS Surprise

CNO Financial Group, Inc. Price and EPS Surprise

CNO Financial Group, Inc. price-eps-surprise | CNO Financial Group, Inc. Quote

The Zacks Consensus Estimate for Voya Financial's earnings per share of $1.48 per share indicates an increase of 2.8% from the year-ago reported figure. The consensus estimate for revenues is pegged at $233.6 million, indicating a decline of 41.3% year over year.

Voya Financial has an Earnings ESP of -2.03% and a Zacks Rank #3. Higher-growth, higher-return, and capital-light businesses, boasting a solid presence are likely to aid fourth-quarter results. Cost savings, expansion of distribution network and achievement of efficiencies through automation are likely to have aided the upside.

Voya Financial’s earnings outpaced estimates in one of the three reported quarters of 2021 while missed in two.

The same is depicted in the chart below:

Voya Financial, Inc. Price and EPS Surprise

Voya Financial, Inc. Price and EPS Surprise

Voya Financial, Inc. price-eps-surprise | Voya Financial, Inc. Quote

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