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W.R. Berkley's (WRB) Q4 Earnings Beat on Higher Premiums
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W.R. Berkley Corporation’s (WRB - Free Report) fourth-quarter 2023 operating income of $1.45 per share beat the Zacks Consensus Estimate of $1.35 by 7.4%. The bottom line improved 25% year over year.
The insurer benefited from higher premiums, a rise in the core portfolio, increased underwriting income and an improvement in the loss ratio.
W.R. Berkley Corporation Price, Consensus and EPS Surprise
W.R. Berkley’s net premiums written were $2.7 billion, up 12% year over year. The figure was lower than our estimate of $2.8 billion.
Operating revenues came in at $3.2 billion, up 9.3% year over year, on the back of higher net premiums earned as well as improved net investment income. The top line beat the consensus estimate by 1.3%.
Net investment income surged 35.5% to a record $313.3 million, driven by a 52.9% increase in the core portfolio. The figure was higher than our estimate of $276 million.
Total expenses increased 7.3% to $2.7 billion, primarily due to higher losses and loss expenses and other operating costs and expenses. The figure matched our estimate.
The loss ratio improved 60 basis points (bps) to 60, while the expense ratio deteriorated 60 bps year over year to 28.4.
Catastrophe losses of $32 million in the quarter were wider than the $30.8 million incurred in the year-ago quarter.
Pre-tax underwriting income increased 8.2% to $315.9 million. The consolidated combined ratio (a measure of underwriting profitability) remained flat year over year to 88.4.
Segment Details
Net premiums written at the Insurance segment increased 12.2% year over year to $2.4 billion in the quarter, primarily due to higher premiums from other liability, short-tail lines, workers' compensation and auto. The figure was lower than our estimate of $2.5 billion.
The combined ratio deteriorated 20 bps to 89.4.
Net premiums written in the Reinsurance & Monoline Excess segment increased 10.2% year over year to $309.3 million on higher premiums at property reinsurance and monoline excess. The figure was higher than our estimate of $307.4 million.
The combined ratio improved 160 bps to 81.2.
Full-Year Highlights
Operating income of $4.92 per share beat the Zacks Consensus Estimate by 1.8%. The bottom line improved 12.3% year over year.
Operating revenues came in at $12 billion, up 10.3% year over year, on the back of higher net premiums earned as well as improved net investment income and increased revenues from non-insurance businesses. The top line came in line with the consensus estimate.
W.R. Berkley’s net premiums written were $10.9 billion, up 9.5% year over year. The figure was lower than our estimate of $11.1 billion.
Pre-tax underwriting income was $1.1 billion. The consolidated combined ratio was 89.7, which deteriorated 40 bps year over year.
Financial Update
W.R. Berkley exited 2023 with total assets worth $37.2 billion, up 9.8% from year-end 2022. Senior notes and other debt decreased 0.04% from 2022 end levels to $1.8 billion.
Book value per share increased 14% from 2022 end levels to $29.06 as of Dec 31, 2023.
Cash flow from operations was $2.9 million in 2023, up 14% year over year. Operating return on equity expanded 380 bps to 23.2%.
Capital Deployment
WRB returned $1 billion, consisting of $537.2 million of share repurchases, $390 million of special dividends and $111.4 million of regular dividends.
The Travelers Companies (TRV - Free Report) reported its fourth-quarter 2023 core income of $7.01 per share, which beat the Zacks Consensus Estimate of $5.04. The bottom line more than doubled year over year, driven by higher underlying underwriting gain, lower catastrophe losses and higher net investment income. Travelers’ total revenues increased 13.5% from the year-ago quarter to $10.9 billion, primarily driven by higher premiums. The top-line figure beat the Zacks Consensus Estimate by 0.2%.
Net written premiums increased 13% year over year to about $10 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $9.7 billion. Travelers witnessed an underwriting gain of $1.4 billion, up more than three-fold year over year, driven by higher business volumes. The combined ratio improved 870 bps year over year to 85.8, driven by a lower underlying combined ratio and lower catastrophe losses.
Brown & Brown, Inc.’s (BRO - Free Report) fourth-quarter 2023 adjusted earnings of 58 cents per share beat the Zacks Consensus Estimate by 9.4%. The bottom line increased 16% year over year.
Total revenues of $1.03 billion beat the Zacks Consensus Estimate by 4.6%. The top line improved 13.8% year over year. The upside can be primarily attributed to commission and fees, which grew 12.4% year over year to $1 billion. Our estimate for commission and fees was $943.6 million. Organic revenues improved 7.7% to $922.9 million in the quarter under review.
Adjusted EBITDAC was $317.7 million, up 11.7% year over year. EBITDAC margin, however, contracted 40 bps year over year to 31%. Our estimate for adjusted EBITDAC was $291.4 million.
The Progressive Corporation’s (PGR - Free Report) fourth-quarter 2023 earnings per share of $2.96 beat the Zacks Consensus Estimate of $2.38. The bottom line improved 97.3% year over year. Net premiums written were $15.1 billion in the quarter, up 21% from $12.5 billion a year ago. Premiums beat our estimate of $14 billion. Net premiums earned grew 22% to $15.8 billion and beat our estimate of $14.8 billion.
Operating revenues of $16.6 billion beat the Zacks Consensus Estimate by 3% and increased 23.2% year over year. Net realized gain on securities was $303.4 billion against a loss of $72.8 million in the year-ago quarter. The combined ratio — the percentage of premiums paid out as claims and expenses — improved 520 bps from the prior-year quarter’s level to 88.7.
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W.R. Berkley's (WRB) Q4 Earnings Beat on Higher Premiums
W.R. Berkley Corporation’s (WRB - Free Report) fourth-quarter 2023 operating income of $1.45 per share beat the Zacks Consensus Estimate of $1.35 by 7.4%. The bottom line improved 25% year over year.
The insurer benefited from higher premiums, a rise in the core portfolio, increased underwriting income and an improvement in the loss ratio.
W.R. Berkley Corporation Price, Consensus and EPS Surprise
W.R. Berkley Corporation price-consensus-eps-surprise-chart | W.R. Berkley Corporation Quote
Behind the Headlines
W.R. Berkley’s net premiums written were $2.7 billion, up 12% year over year. The figure was lower than our estimate of $2.8 billion.
Operating revenues came in at $3.2 billion, up 9.3% year over year, on the back of higher net premiums earned as well as improved net investment income. The top line beat the consensus estimate by 1.3%.
Net investment income surged 35.5% to a record $313.3 million, driven by a 52.9% increase in the core portfolio. The figure was higher than our estimate of $276 million.
Total expenses increased 7.3% to $2.7 billion, primarily due to higher losses and loss expenses and other operating costs and expenses. The figure matched our estimate.
The loss ratio improved 60 basis points (bps) to 60, while the expense ratio deteriorated 60 bps year over year to 28.4.
Catastrophe losses of $32 million in the quarter were wider than the $30.8 million incurred in the year-ago quarter.
Pre-tax underwriting income increased 8.2% to $315.9 million. The consolidated combined ratio (a measure of underwriting profitability) remained flat year over year to 88.4.
Segment Details
Net premiums written at the Insurance segment increased 12.2% year over year to $2.4 billion in the quarter, primarily due to higher premiums from other liability, short-tail lines, workers' compensation and auto. The figure was lower than our estimate of $2.5 billion.
The combined ratio deteriorated 20 bps to 89.4.
Net premiums written in the Reinsurance & Monoline Excess segment increased 10.2% year over year to $309.3 million on higher premiums at property reinsurance and monoline excess. The figure was higher than our estimate of $307.4 million.
The combined ratio improved 160 bps to 81.2.
Full-Year Highlights
Operating income of $4.92 per share beat the Zacks Consensus Estimate by 1.8%. The bottom line improved 12.3% year over year.
Operating revenues came in at $12 billion, up 10.3% year over year, on the back of higher net premiums earned as well as improved net investment income and increased revenues from non-insurance businesses. The top line came in line with the consensus estimate.
W.R. Berkley’s net premiums written were $10.9 billion, up 9.5% year over year. The figure was lower than our estimate of $11.1 billion.
Pre-tax underwriting income was $1.1 billion. The consolidated combined ratio was 89.7, which deteriorated 40 bps year over year.
Financial Update
W.R. Berkley exited 2023 with total assets worth $37.2 billion, up 9.8% from year-end 2022. Senior notes and other debt decreased 0.04% from 2022 end levels to $1.8 billion.
Book value per share increased 14% from 2022 end levels to $29.06 as of Dec 31, 2023.
Cash flow from operations was $2.9 million in 2023, up 14% year over year.
Operating return on equity expanded 380 bps to 23.2%.
Capital Deployment
WRB returned $1 billion, consisting of $537.2 million of share repurchases, $390 million of special dividends and $111.4 million of regular dividends.
Zacks Rank
W.R. Berkley currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Some Other P&C Insurers
The Travelers Companies (TRV - Free Report) reported its fourth-quarter 2023 core income of $7.01 per share, which beat the Zacks Consensus Estimate of $5.04. The bottom line more than doubled year over year, driven by higher underlying underwriting gain, lower catastrophe losses and higher net investment income. Travelers’ total revenues increased 13.5% from the year-ago quarter to $10.9 billion, primarily driven by higher premiums. The top-line figure beat the Zacks Consensus Estimate by 0.2%.
Net written premiums increased 13% year over year to about $10 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $9.7 billion. Travelers witnessed an underwriting gain of $1.4 billion, up more than three-fold year over year, driven by higher business volumes. The combined ratio improved 870 bps year over year to 85.8, driven by a lower underlying combined ratio and lower catastrophe losses.
Brown & Brown, Inc.’s (BRO - Free Report) fourth-quarter 2023 adjusted earnings of 58 cents per share beat the Zacks Consensus Estimate by 9.4%. The bottom line increased 16% year over year.
Total revenues of $1.03 billion beat the Zacks Consensus Estimate by 4.6%. The top line improved 13.8% year over year. The upside can be primarily attributed to commission and fees, which grew 12.4% year over year to $1 billion. Our estimate for commission and fees was $943.6 million. Organic revenues improved 7.7% to $922.9 million in the quarter under review.
Adjusted EBITDAC was $317.7 million, up 11.7% year over year. EBITDAC margin, however, contracted 40 bps year over year to 31%. Our estimate for adjusted EBITDAC was $291.4 million.
The Progressive Corporation’s (PGR - Free Report) fourth-quarter 2023 earnings per share of $2.96 beat the Zacks Consensus Estimate of $2.38. The bottom line improved 97.3% year over year. Net premiums written were $15.1 billion in the quarter, up 21% from $12.5 billion a year ago. Premiums beat our estimate of $14 billion. Net premiums earned grew 22% to $15.8 billion and beat our estimate of $14.8 billion.
Operating revenues of $16.6 billion beat the Zacks Consensus Estimate by 3% and increased 23.2% year over year. Net realized gain on securities was $303.4 billion against a loss of $72.8 million in the year-ago quarter. The combined ratio — the percentage of premiums paid out as claims and expenses — improved 520 bps from the prior-year quarter’s level to 88.7.