We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
5 P&C Insurers to Buy Ahead of Another Active Hurricane Season
Read MoreHide Full Article
Year 2022 is expected to see an active hurricane season. Per Colorado State University (CSU), the 2022 above-average hurricane season may have 19 named storms, including nine hurricanes and four major hurricanes. This year’s hurricane season could be about 130% of the average season per CSU.
The hurricane season typically starts in June and lasts through November during a year, gathering strength in August and September. Thus, property and casualty insurers’ third-quarter results are affected the most. Better pricing, prudent underwriting, increased exposure, favorable reserve development and a solid capital position help insurers withstand blows from the catastrophes.
Better pricing, prudent underwriting, increased exposure, favorable reserve development and a solid capital position help RLI Corporation (RLI - Free Report) , W.R. Berkley Corporation (WRB - Free Report) , Kinsale Capital Group, Inc. (KNSL - Free Report) , AXIS Capital Holdings Limited (AXS - Free Report) and Everest Re Group, Ltd. withstand blows from the catastrophe events.
Per a report published by Swiss Re Institute, global insured catastrophe losses incurred in 2021 were $112 billion, which made it the fourth-costliest year. Natural catastrophes accounted for $105 billion of global insured losses, an increase of 17% from the 2020 level, per the report. The industry incurred a $3.8 billion net underwriting loss against a $5.2 billion underwriting gain in 2020, per a report from Verisk and the American Property Casualty Insurance Association. The combined ratio deteriorated 100 basis points to 99.6 in 2021.
However, net income improved 2.6% in 2021 driven by growth in investment income and realized capital gains while policyholders’ surplus increased to a record $1 trillion as of Dec 31, 2021, per Verisk and the American Property Casualty Insurance Association.
Coming back to this year, the first quarter of 2022 incurred insurance and reinsurance industry losses from catastrophes of $14 billion or about $13 billion in economic losses, per a report from Aon.
Nonetheless, improved pricing places insurers well to weather catastrophe loss, while frequent occurrences of natural disasters should accelerate the policy renewal rate.
Per Marsh, global commercial insurance prices in the first quarter of 2022 increased 11%, marking the 18th straight quarter of price increase. Per the report, property rates increased 7%, casualty pricing rose 7%, U.S. financial and professional lines pricing increased 26%, and cyber insurance pricing rose 26%. Per Willis Towers Watson’s 2022 Insurance Marketplace Realities report, rates will continue to rise but by a small margin. Better pricing will help insurers write higher premiums. Per Deloitte insights, global non-life premiums are estimated to grow 3.7% in 2022.
Stocks to Buy
Frequent catastrophes that accelerate policy renewal rates and lead to upward pricing pressure will boost the performance of Zacks Property and Casualty Insurance industry players. With the help of our Zacks Stock Screener, we have selected five stocks that carry a favorable Zacks Rank and have witnessed upward estimate revisions.
RLI Corporation is a specialty property-casualty underwriter that caters primarily to niche markets and is one of the industry’s most profitable P&C writers with an impressive track record of delivering 26 consecutive years of underwriting profitability. A broad range of product offerings, focus on specialty insurance lines, business expansion, sustained rate increase, expanded distribution and operational strength bode well for this Zacks Rank #1 (Strong Buy) insurer’s growth. You can see the complete list of today’s Zacks #1 Rank stocks here
Estimates for its 2022 bottom line have jumped over the past 30 days by 14.5% and suggest a 13.2% increase from the year-ago reported number. RLI has an impressive VGM Score of B.
W.R. Berkley Corporation is one of the nation’s largest commercial lines property casualty insurance providers benefiting from its insurance business. This Zacks Rank #2 (Buy) insurer should continue to benefit from its well-performing insurance business. Rate increases, reserving discipline, and growing premiums from international business, mainly supported by the emerging markets, bode well.
Estimates for W.R. Berkley’s 2022 bottom line have jumped 8% over the past 60 days and suggest a 15% increase from the year-ago reported number. The expected long-term growth rate is pegged at 9%. The insurer carries an impressive VGM Score of B.
Axis Capital Holdings is a leading specialty insurer and a global reinsurer, aiming leadership in specialty risks. The company’s focus on building Specialty Insurance, Reinsurance as well as Accident and Health insurance portfolio, its strong market presence, better pricing, margin expansion and effective capital deployment should drive growth. This Zacks Rank #2 insurer remains focused on business lines that are likely to provide solid double-digit ROE opportunities.
Estimates for AXS’ 2022 bottom line have risen 1.5% over the past 30 days and suggest a 22.4% increase from the year-ago reported number. Axis Capital has an impressive VGM Score of A.
Everest Re Group writes property and casualty, reinsurance and insurance in the United States, Bermuda and international markets. RE has a huge market share in the insurance and reinsurance market and is expected to benefit from capital adequacy, financial flexibility, traditional risk management capabilities, improved pricing and its focus on building a portfolio with a mix toward product lines with better rate adequacy and higher long-term margins.
Estimates for Everest Re’s 2022 bottom line have increased 1.5% over the past 30 days and suggest an 18.3% increase from the year-ago reported number. The expected long-term growth rate is pegged at 9.9%. This Zacks Rank #2 insurer has an impressive VGM Score of A.
Kinsale Capital Group offers various insurance and reinsurance products across all 50 states of the United States, the District of Columbia, the Commonwealth of Puerto Rico and the U.S. Virgin Islands. This Zacks Rank #2 insurer is poised for long-term growth, given its continued focus on the E&S market, improved revenues, solid underwriting results and effective capital deployment measures.
Estimates for Kinsale Capital’s 2022 bottom line have moved 2.6% north over the past 30 days, implying an 18.3% increase from the year-ago reported number.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
5 P&C Insurers to Buy Ahead of Another Active Hurricane Season
Year 2022 is expected to see an active hurricane season. Per Colorado State University (CSU), the 2022 above-average hurricane season may have 19 named storms, including nine hurricanes and four major hurricanes. This year’s hurricane season could be about 130% of the average season per CSU.
The hurricane season typically starts in June and lasts through November during a year, gathering strength in August and September. Thus, property and casualty insurers’ third-quarter results are affected the most. Better pricing, prudent underwriting, increased exposure, favorable reserve development and a solid capital position help insurers withstand blows from the catastrophes.
Better pricing, prudent underwriting, increased exposure, favorable reserve development and a solid capital position help RLI Corporation (RLI - Free Report) , W.R. Berkley Corporation (WRB - Free Report) , Kinsale Capital Group, Inc. (KNSL - Free Report) , AXIS Capital Holdings Limited (AXS - Free Report) and Everest Re Group, Ltd. withstand blows from the catastrophe events.
Per a report published by Swiss Re Institute, global insured catastrophe losses incurred in 2021 were $112 billion, which made it the fourth-costliest year. Natural catastrophes accounted for $105 billion of global insured losses, an increase of 17% from the 2020 level, per the report. The industry incurred a $3.8 billion net underwriting loss against a $5.2 billion underwriting gain in 2020, per a report from Verisk and the American Property Casualty Insurance Association. The combined ratio deteriorated 100 basis points to 99.6 in 2021.
However, net income improved 2.6% in 2021 driven by growth in investment income and realized capital gains while policyholders’ surplus increased to a record $1 trillion as of Dec 31, 2021, per Verisk and the American Property Casualty Insurance Association.
Coming back to this year, the first quarter of 2022 incurred insurance and reinsurance industry losses from catastrophes of $14 billion or about $13 billion in economic losses, per a report from Aon.
Nonetheless, improved pricing places insurers well to weather catastrophe loss, while frequent occurrences of natural disasters should accelerate the policy renewal rate.
Per Marsh, global commercial insurance prices in the first quarter of 2022 increased 11%, marking the 18th straight quarter of price increase. Per the report, property rates increased 7%, casualty pricing rose 7%, U.S. financial and professional lines pricing increased 26%, and cyber insurance pricing rose 26%. Per Willis Towers Watson’s 2022 Insurance Marketplace Realities report, rates will continue to rise but by a small margin. Better pricing will help insurers write higher premiums. Per Deloitte insights, global non-life premiums are estimated to grow 3.7% in 2022.
Stocks to Buy
Frequent catastrophes that accelerate policy renewal rates and lead to upward pricing pressure will boost the performance of Zacks Property and Casualty Insurance industry players. With the help of our Zacks Stock Screener, we have selected five stocks that carry a favorable Zacks Rank and have witnessed upward estimate revisions.
RLI Corporation is a specialty property-casualty underwriter that caters primarily to niche markets and is one of the industry’s most profitable P&C writers with an impressive track record of delivering 26 consecutive years of underwriting profitability. A broad range of product offerings, focus on specialty insurance lines, business expansion, sustained rate increase, expanded distribution and operational strength bode well for this Zacks Rank #1 (Strong Buy) insurer’s growth. You can see the complete list of today’s Zacks #1 Rank stocks here
Estimates for its 2022 bottom line have jumped over the past 30 days by 14.5% and suggest a 13.2% increase from the year-ago reported number. RLI has an impressive VGM Score of B.
W.R. Berkley Corporation is one of the nation’s largest commercial lines property casualty insurance providers benefiting from its insurance business. This Zacks Rank #2 (Buy) insurer should continue to benefit from its well-performing insurance business. Rate increases, reserving discipline, and growing premiums from international business, mainly supported by the emerging markets, bode well.
Estimates for W.R. Berkley’s 2022 bottom line have jumped 8% over the past 60 days and suggest a 15% increase from the year-ago reported number. The expected long-term growth rate is pegged at 9%. The insurer carries an impressive VGM Score of B.
Axis Capital Holdings is a leading specialty insurer and a global reinsurer, aiming leadership in specialty risks. The company’s focus on building Specialty Insurance, Reinsurance as well as Accident and Health insurance portfolio, its strong market presence, better pricing, margin expansion and effective capital deployment should drive growth. This Zacks Rank #2 insurer remains focused on business lines that are likely to provide solid double-digit ROE opportunities.
Estimates for AXS’ 2022 bottom line have risen 1.5% over the past 30 days and suggest a 22.4% increase from the year-ago reported number. Axis Capital has an impressive VGM Score of A.
Everest Re Group writes property and casualty, reinsurance and insurance in the United States, Bermuda and international markets. RE has a huge market share in the insurance and reinsurance market and is expected to benefit from capital adequacy, financial flexibility, traditional risk management capabilities, improved pricing and its focus on building a portfolio with a mix toward product lines with better rate adequacy and higher long-term margins.
Estimates for Everest Re’s 2022 bottom line have increased 1.5% over the past 30 days and suggest an 18.3% increase from the year-ago reported number. The expected long-term growth rate is pegged at 9.9%. This Zacks Rank #2 insurer has an impressive VGM Score of A.
Kinsale Capital Group offers various insurance and reinsurance products across all 50 states of the United States, the District of Columbia, the Commonwealth of Puerto Rico and the U.S. Virgin Islands. This Zacks Rank #2 insurer is poised for long-term growth, given its continued focus on the E&S market, improved revenues, solid underwriting results and effective capital deployment measures.
Estimates for Kinsale Capital’s 2022 bottom line have moved 2.6% north over the past 30 days, implying an 18.3% increase from the year-ago reported number.