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W.R. Berkley (WRB) Q2 Earnings Top on Solid Underwriting
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W.R. Berkley Corporation’s (WRB - Free Report) second-quarter 2024 operating income of $1.04 per share beat the Zacks Consensus Estimate of 91 cents by 13%. The bottom line improved 36.8% year over year.
The insurer benefited from continued strong underwriting and improved investment income.
Shares gained 0.8% in the after-market trading session to reflect the outperformance.
W.R. Berkley Corporation Price, Consensus and EPS Surprise
W.R. Berkley’s net premiums written were a record $3.1 billion, up 11.2% year over year. The figure was higher than our estimate of $2.8 billion.
Operating revenues came in at $3.4 billion, up 14.8% 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 0.3%.
Net investment income surged 51.8% to a record $372.1 million, driven by an increase in fixed-maturity income from a growing portfolio with higher yields. The figure was higher than our estimate of $302 million. The Zacks Consensus Estimate was $331 million.
Total expenses increased 11.3% to $2.8 billion, primarily due to higher losses and loss expenses and other operating costs and expenses as well as expenses from non-insurance businesses. The figure matched our estimate.
The loss ratio deteriorated 110 basis points (bps) to 62.6, while the expense ratio deteriorated 40 bps year over year to 28.5.
Catastrophe losses of $89.7 million in the quarter were wider than $53.5 million incurred in the year-ago quarter.
The consolidated combined ratio (a measure of underwriting profitability) deteriorated 150 basis points year over year to 91.1. The Zacks Consensus Estimate was 91.
Segment Details
Net premiums written at the Insurance segment increased 12.2% year over year to $2.8 billion in the quarter, primarily due to higher premiums from other liability, short-tail lines, workers' compensation and auto. The figure was higher than our estimate of $2.7 billion.
The combined ratio deteriorated 150 bps to 92.4. Our estimate was 90.5. The Zacks Consensus Estimate was 91.
Net premiums written in the Reinsurance & Monoline Excess segment increased 3.5% year over year to $316.3 million on higher premiums at property reinsurance and monoline excess. The figure was lower than our estimate of $324 million.
The combined ratio deteriorated 50 bps to 81.8. Our estimate was 88.9. The Zacks Consensus Estimate was 89.
Financial Update
W.R. Berkley exited the second quarter of 2024 with total assets worth $38.9 billion, up 4.8% from year-end 2023. Senior notes and other debt remained almost flat at $1.8 billion.
Book value per share increased 5.4% from 2023 end levels to $20.42 as of Jun 30, 2024.
Cash flow from operations was $881.3 million in the second quarter of 2024, up 24.4% year over year.
Operating return on equity expanded 400 bps to 22.4%.
Total capital returned to shareholders was $381.3 million, consisting of $223.8 million of share repurchases, $127.0 million of special dividends and $30.5 million of regular dividends.
The Travelers Companies (TRV - Free Report) reported second-quarter 2024 core income of $2.51 per share, which beat the Zacks Consensus Estimate by 25.5%. The bottom line skyrocketed from 6 cents earned in the year-ago quarter, driven by solid underlying results, net favorable prior year reserve development and higher net investment income, partially offset by higher catastrophe losses. Travelers’ total revenues increased 12.4% from the year-ago quarter to $11.3 billion, primarily driven by higher premiums. The top-line figure, however, missed the Zacks Consensus Estimate by 1%.
Net written premiums increased 8% year over year to a record $11.1 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $10.4 billion. Travelers witnessed an underwriting loss of $65 million, narrower than a loss of $640 million incurred in the year-ago quarter. The combined ratio improved 630 bps year over year to 100.2 due to an improvement in the underlying combined ratio, higher net favorable prior-year reserve development and lower catastrophe losses as a percentage of net earned premiums. The Zacks Consensus Estimate was pegged at 97.
The Progressive Corporation’s (PGR - Free Report) second-quarter 2024 earnings per share of $2.65 beat the Zacks Consensus Estimate of $1.99. The bottom line improved more than five times year over year. Operating revenues of $18.3 billion beat the Zacks Consensus Estimate by 1.4% and increased 18.9% year over year.
Net premiums earned grew 19% to $17.2 billion and beat our estimate of $16.7 billion. Combined ratio improved 850 bps from the prior-year quarter’s level to 91.9.
Selective Insurance Group, Inc. (SIGI - Free Report) reported second-quarter 2024 operating loss of $1.10 per share against the Zacks Consensus Estimate for earnings of $1.56. The company had reported an operating income of 99 cents per share in the prior year quarter. The quarterly results reflected poor underwriting performance, unfavorable prior-year casualty reserve development and escalating costs, offset by higher premiums and net investment income.
Total revenues of $1.2 billion increased 15% from the year-ago quarter’s figure, primarily due to higher premiums earned, net investment income and net premiums written. The top line missed the Zacks Consensus Estimate by 1.3%.
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W.R. Berkley (WRB) Q2 Earnings Top on Solid Underwriting
W.R. Berkley Corporation’s (WRB - Free Report) second-quarter 2024 operating income of $1.04 per share beat the Zacks Consensus Estimate of 91 cents by 13%. The bottom line improved 36.8% year over year.
The insurer benefited from continued strong underwriting and improved investment income.
Shares gained 0.8% in the after-market trading session to reflect the outperformance.
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 a record $3.1 billion, up 11.2% year over year. The figure was higher than our estimate of $2.8 billion.
Operating revenues came in at $3.4 billion, up 14.8% 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 0.3%.
Net investment income surged 51.8% to a record $372.1 million, driven by an increase in fixed-maturity income from a growing portfolio with higher yields. The figure was higher than our estimate of $302 million. The Zacks Consensus Estimate was $331 million.
Total expenses increased 11.3% to $2.8 billion, primarily due to higher losses and loss expenses and other operating costs and expenses as well as expenses from non-insurance businesses. The figure matched our estimate.
The loss ratio deteriorated 110 basis points (bps) to 62.6, while the expense ratio deteriorated 40 bps year over year to 28.5.
Catastrophe losses of $89.7 million in the quarter were wider than $53.5 million incurred in the year-ago quarter.
The consolidated combined ratio (a measure of underwriting profitability) deteriorated 150 basis points year over year to 91.1. The Zacks Consensus Estimate was 91.
Segment Details
Net premiums written at the Insurance segment increased 12.2% year over year to $2.8 billion in the quarter, primarily due to higher premiums from other liability, short-tail lines, workers' compensation and auto. The figure was higher than our estimate of $2.7 billion.
The combined ratio deteriorated 150 bps to 92.4. Our estimate was 90.5. The Zacks Consensus Estimate was 91.
Net premiums written in the Reinsurance & Monoline Excess segment increased 3.5% year over year to $316.3 million on higher premiums at property reinsurance and monoline excess. The figure was lower than our estimate of $324 million.
The combined ratio deteriorated 50 bps to 81.8. Our estimate was 88.9. The Zacks Consensus Estimate was 89.
Financial Update
W.R. Berkley exited the second quarter of 2024 with total assets worth $38.9 billion, up 4.8% from year-end 2023. Senior notes and other debt remained almost flat at $1.8 billion.
Book value per share increased 5.4% from 2023 end levels to $20.42 as of Jun 30, 2024.
Cash flow from operations was $881.3 million in the second quarter of 2024, up 24.4% year over year.
Operating return on equity expanded 400 bps to 22.4%.
Total capital returned to shareholders was $381.3 million, consisting of $223.8 million of share repurchases, $127.0 million of special dividends and $30.5 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 Other Insurers
The Travelers Companies (TRV - Free Report) reported second-quarter 2024 core income of $2.51 per share, which beat the Zacks Consensus Estimate by 25.5%. The bottom line skyrocketed from 6 cents earned in the year-ago quarter, driven by solid underlying results, net favorable prior year reserve development and higher net investment income, partially offset by higher catastrophe losses. Travelers’ total revenues increased 12.4% from the year-ago quarter to $11.3 billion, primarily driven by higher premiums. The top-line figure, however, missed the Zacks Consensus Estimate by 1%.
Net written premiums increased 8% year over year to a record $11.1 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $10.4 billion. Travelers witnessed an underwriting loss of $65 million, narrower than a loss of $640 million incurred in the year-ago quarter. The combined ratio improved 630 bps year over year to 100.2 due to an improvement in the underlying combined ratio, higher net favorable prior-year reserve development and lower catastrophe losses as a percentage of net earned premiums. The Zacks Consensus Estimate was pegged at 97.
The Progressive Corporation’s (PGR - Free Report) second-quarter 2024 earnings per share of $2.65 beat the Zacks Consensus Estimate of $1.99. The bottom line improved more than five times year over year. Operating revenues of $18.3 billion beat the Zacks Consensus Estimate by 1.4% and increased 18.9% year over year.
Net premiums earned grew 19% to $17.2 billion and beat our estimate of $16.7 billion. Combined ratio improved 850 bps from the prior-year quarter’s level to 91.9.
Selective Insurance Group, Inc. (SIGI - Free Report) reported second-quarter 2024 operating loss of $1.10 per share against the Zacks Consensus Estimate for earnings of $1.56. The company had reported an operating income of 99 cents per share in the prior year quarter. The quarterly results reflected poor underwriting performance, unfavorable prior-year casualty reserve development and escalating costs, offset by higher premiums and net investment income.
Total revenues of $1.2 billion increased 15% from the year-ago quarter’s figure, primarily due to higher premiums earned, net investment income and net premiums written. The top line missed the Zacks Consensus Estimate by 1.3%.