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5 Insurers Set to Outshine Estimates This Earnings Season
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Per the latest Earnings Preview, the Finance sector’s first-quarter 2022 earnings are expected to decline 16.1% while revenues are estimated to improve 2.7%. Earnings of Insurance, one of the Finance sector industries, are estimated to drop 5.9% while revenues are expected to increase 3.3%. Improved pricing and exposure growth are likely to have driven premiums, which in turn are expected to have aided revenues.
With the help of the Zacks Stock Screener, we have identified five insurers namely, ProAssurance Corporation (PRA - Free Report) , Voya Financial Inc. (VOYA - Free Report) , Horace Mann Educators Corporation (HMN - Free Report) , Arthur J. Gallagher & Company (AJG - Free Report) and Aflac Incorporated (AFL - Free Report) that are poised to outshine the Zacks Consensus Estimate in first-quarter earnings. These stocks have the ideal combination of two ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy), #3 (Hold) — to surpass expectations. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Factors Likely to Impact Q1 Results
Insurers continued to witness improved pricing in the first quarter of 2022. An active catastrophe environment accelerated the policy renewal rate and aided in better pricing in the first quarter, though the magnitude was lower. Reinsurance programs, favorable reserve development and solid capital level are expected to have aided underwriting profitability.
Per Aon, in the first quarter of 2022, insurance and reinsurance industry losses from catastrophes totaled $14 billion or about $13 billion in economic losses.
A larger investment asset base and alternative investments in private equity, hedge funds, and real estate, among others are expected to have aided net investment income.
Life insurers have been redesigning products by moving away from guaranteed savings products toward protection products of unit-linked savings products. Also, 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. Increasing demand for protection products is likely to have driven sales.
Accelerated digitalization ensured smooth functioning of the insurers and is also likely to have saved costs, in turn driving margin expansion.
Banking on operational efficiency resulting in a solid capital position, insurers pursued strategic mergers and acquisitions to sharpen their competitive edge, build on a niche, expand globally, and diversify their portfolio. These apart, insurers continued to boost shareholders’ value via dividend hikes, special dividends as well as share buybacks.
The insurance industry rallied 10.9% in the first quarter against the Finance sector’s decrease of 2.4% and the S&P 500 Index’s decline of 4.7% in the said time frame.
Potential Q1 Outperformers
ProAssurance operates as a holding company for many property and casualty insurance companies. While higher new business written and strong retention rates are expected to have benefited revenues, cost-cutting initiatives are likely to have aided margin improvement.
The Zacks Consensus Estimate for first-quarter earnings is pegged at $9.23, indicating an increase of 924.1% from the year-ago reported figure. PRA has an Earnings ESP of +27.54% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Voya Financial operates as a retirement, investment, and employee benefits company in the United States. Solid performance across Wealth Solutions, Investment Management and Health Solutions is likely to aid quarterly results.
The Zacks Consensus Estimate for Voya’s first-quarter earnings is pegged at $1.36, indicating an increase of 32% from the year-ago reported figure. VOYA has an Earnings ESP of +0.37% and a Zacks Rank #3.
Horace Mann Educators is the largest multi-line financial services company serving the U.S. educator market and is well poised to capitalize on the solid opportunity in the K-12 educator market. Compelling product offerings, a strong distribution network and cross-selling are likely to have aided the quarterly performance.
The Zacks Consensus Estimate for Hartford Financial’s first-quarter earnings is pegged at 94 cents, implying a decrease of 14.6% from the year-ago reported figure. HMN has an Earnings ESP of +3.74% and a Zacks Rank #3.
Arthur J. Gallagher is the largest property/casualty third-party claims administrator. It is the world’s fourth-largest globally among insurance brokers based on revenues. While solid performance at Brokerage and Risk Management segments is likely to have driven revenues, focus on lowering costs is likely to have favored margins in the to-be-reported quarter.
The Zacks Consensus Estimate for Arthur J. Gallagher’s first-quarter earnings is pegged at $2.76, indicating an upside of 36.6% from the year-ago reported figure. AJG has an Earnings ESP of +0.89% and a Zacks Rank #1.
Aflac is a general business holding company and oversees the operations of its subsidiaries by providing management services and making capital available. Higher sales and expense-saving initiatives are likely to favor Aflac’s quarterly results. The Zacks Consensus Estimate for Aflac’s first-quarter earnings is pegged at $1.34, suggesting a decrease of 9.8% from the year-ago reported figure. AFL has an Earnings ESP of +1.76% and a Zacks Rank #3.
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5 Insurers Set to Outshine Estimates This Earnings Season
Per the latest Earnings Preview, the Finance sector’s first-quarter 2022 earnings are expected to decline 16.1% while revenues are estimated to improve 2.7%. Earnings of Insurance, one of the Finance sector industries, are estimated to drop 5.9% while revenues are expected to increase 3.3%. Improved pricing and exposure growth are likely to have driven premiums, which in turn are expected to have aided revenues.
With the help of the Zacks Stock Screener, we have identified five insurers namely, ProAssurance Corporation (PRA - Free Report) , Voya Financial Inc. (VOYA - Free Report) , Horace Mann Educators Corporation (HMN - Free Report) , Arthur J. Gallagher & Company (AJG - Free Report) and Aflac Incorporated (AFL - Free Report) that are poised to outshine the Zacks Consensus Estimate in first-quarter earnings. These stocks have the ideal combination of two ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy), #3 (Hold) — to surpass expectations. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Factors Likely to Impact Q1 Results
Insurers continued to witness improved pricing in the first quarter of 2022. An active catastrophe environment accelerated the policy renewal rate and aided in better pricing in the first quarter, though the magnitude was lower. Reinsurance programs, favorable reserve development and solid capital level are expected to have aided underwriting profitability.
Per Aon, in the first quarter of 2022, insurance and reinsurance industry losses from catastrophes totaled $14 billion or about $13 billion in economic losses.
A larger investment asset base and alternative investments in private equity, hedge funds, and real estate, among others are expected to have aided net investment income.
Life insurers have been redesigning products by moving away from guaranteed savings products toward protection products of unit-linked savings products. Also, 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. Increasing demand for protection products is likely to have driven sales.
Accelerated digitalization ensured smooth functioning of the insurers and is also likely to have saved costs, in turn driving margin expansion.
Banking on operational efficiency resulting in a solid capital position, insurers pursued strategic mergers and acquisitions to sharpen their competitive edge, build on a niche, expand globally, and diversify their portfolio. These apart, insurers continued to boost shareholders’ value via dividend hikes, special dividends as well as share buybacks.
The insurance industry rallied 10.9% in the first quarter against the Finance sector’s decrease of 2.4% and the S&P 500 Index’s decline of 4.7% in the said time frame.
Potential Q1 Outperformers
ProAssurance operates as a holding company for many property and casualty insurance companies. While higher new business written and strong retention rates are expected to have benefited revenues, cost-cutting initiatives are likely to have aided margin improvement.
The Zacks Consensus Estimate for first-quarter earnings is pegged at $9.23, indicating an increase of 924.1% from the year-ago reported figure. PRA has an Earnings ESP of +27.54% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Voya Financial operates as a retirement, investment, and employee benefits company in the United States. Solid performance across Wealth Solutions, Investment Management and Health Solutions is likely to aid quarterly results.
The Zacks Consensus Estimate for Voya’s first-quarter earnings is pegged at $1.36, indicating an increase of 32% from the year-ago reported figure. VOYA has an Earnings ESP of +0.37% and a Zacks Rank #3.
Horace Mann Educators is the largest multi-line financial services company serving the U.S. educator market and is well poised to capitalize on the solid opportunity in the K-12 educator market. Compelling product offerings, a strong distribution network and cross-selling are likely to have aided the quarterly performance.
The Zacks Consensus Estimate for Hartford Financial’s first-quarter earnings is pegged at 94 cents, implying a decrease of 14.6% from the year-ago reported figure. HMN has an Earnings ESP of +3.74% and a Zacks Rank #3.
Arthur J. Gallagher is the largest property/casualty third-party claims administrator. It is the world’s fourth-largest globally among insurance brokers based on revenues. While solid performance at Brokerage and Risk Management segments is likely to have driven revenues, focus on lowering costs is likely to have favored margins in the to-be-reported quarter.
The Zacks Consensus Estimate for Arthur J. Gallagher’s first-quarter earnings is pegged at $2.76, indicating an upside of 36.6% from the year-ago reported figure. AJG has an Earnings ESP of +0.89% and a Zacks Rank #1.
Aflac is a general business holding company and oversees the operations of its subsidiaries by providing management services and making capital available. Higher sales and expense-saving initiatives are likely to favor Aflac’s quarterly results. The Zacks Consensus Estimate for Aflac’s first-quarter earnings is pegged at $1.34, suggesting a decrease of 9.8% from the year-ago reported figure. AFL has an Earnings ESP of +1.76% and a Zacks Rank #3.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.