Validus Holdings (VR) Estimates Cat Loss Worth $60 Million
Validus Holdings, Ltd. VR estimates catastrophe loss of $60 million in the second quarter of 2016 stemming from events like earthquake, wildfires and hail storms. The loss estimate also accounted for Jubilee Oil that exceeded the non-notable loss event threshold in the second quarter.
Notably, the wildfire in Canada that amounted to a loss of $26.9 million was largely responsible for the consolidated loss. The Canadian wildfires, which started on May 1, severely affected the company’s policyholders in the area.
The company expects loss from Kumamoto earthquake to be about $15.3 million, Texas hailstorms to approximate $10.3 million, and Jubilee Oil to be about $7.5 million.
The Zacks Consensus Estimate for the second quarter is currently pegged at $1.09, which translates into a year-over-year decline of 3.1%. We expect the estimates to move down as analysts incorporate the impact of catastrophe loss in their numbers.
In the last quarter too, Validus Holdings had to incur a loss of $2.0 million which limited bottom-line growth. However, the downside was partially offset by favorable policy acquisition cost ratio.
VALIDUS HOLDING Price
VALIDUS HOLDING Price | VALIDUS HOLDING Quote
Validus Holdings is scheduled to announce its second-quarter results on Jul 27. However, our proven model does not conclusively show that the company will beat on earnings. This is because Validus has an Earnings ESP of -8.2% and a Zacks Rank #4 (Sell), which lowers the possibility of an earnings surprise.
Concurrently, Validus projected the amount of loss that the industry had to incur. The company estimates loss from Canadian Wildfires to approximate $3.6–$4.8 billion; Texas Hailstorms to be about $2.8 billion; Kumamoto Earthquake loss to be between $3.0-4.0 billion; and loss from Jubilee Oil is to be more than $1.0 billion.
Other insurers too reported their cat loss estimates for the second quarter. Kemper Corporation KMPR estimates cat loss to be around $52 million, while Chubb Ltd. CB anticipates cat loss of approximately $315 million.
A Stock to Consider
A better-ranked multi-insurer is Brown & Brown BRO. This stock holds a Zacks Rank #2 (Buy).
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