U.S. Markets closed
  • S&P 500

    4,432.99
    -40.76 (-0.91%)
     
  • Dow 30

    34,584.88
    -166.42 (-0.48%)
     
  • Nasdaq

    15,043.97
    -137.93 (-0.91%)
     
  • Russell 2000

    2,236.87
    +3.96 (+0.18%)
     
  • Crude Oil

    71.96
    -0.01 (-0.01%)
     
  • Gold

    1,753.90
    +2.50 (+0.14%)
     
  • Silver

    22.42
    +0.13 (+0.58%)
     
  • EUR/USD

    1.1736
    -0.0036 (-0.3051%)
     
  • 10-Yr Bond

    1.3700
    +0.0390 (+2.93%)
     
  • Vix

    20.81
    +2.12 (+11.34%)
     
  • GBP/USD

    1.3745
    -0.0052 (-0.3766%)
     
  • USD/JPY

    109.9040
    +0.1860 (+0.1695%)
     
  • BTC-USD

    47,551.73
    -556.70 (-1.16%)
     
  • CMC Crypto 200

    1,193.48
    -32.05 (-2.61%)
     
  • FTSE 100

    6,963.64
    -63.84 (-0.91%)
     
  • Nikkei 225

    30,500.05
    +176.75 (+0.58%)
     

AXIS Capital (AXS) Estimates Q4 Catastrophe Loss of $195-$205M

  • Oops!
    Something went wrong.
    Please try again later.
·4 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

AXIS Capital Holdings Limited AXS estimates fourth-quarter 2020 catastrophe loss of $195-$205 million before income taxes. The estimated loss of $125 million, pre-tax, can be attributed to COVID-19 pandemic, which is an addition to the estimate of $235 million provided in the first quarter.

The other catastrophe and weather-related estimated losses in the range of $70 million to $80 million before income taxes, can be attributed to Hurricanes Zeta and Delta and regional weather events in the United States.

The Zacks Consensus Estimate for AXIS Capital’s fourth-quarter earnings is currently pegged at 79 cents, indicating a surge of 1,480% from the year-ago quarter reported figure.  We expect estimates to move south once analysts start incorporating loss estimates into their numbers.

Colorado State University hurricane researchers had predicted an extremely active Atlantic hurricane season in 2020, citing warm sea surface temperatures and low wind shear in the tropical Atlantic as primary factors. The CSU Tropical Meteorology Project team had predicted 24 named storms for 2020. Of those, 12 were expected to become hurricanes and five were expected to achieve major hurricane strength.

RMS, the world’s leading catastrophe risk solutions company, estimates total onshore U.S. insured losses from Hurricane Zeta to be between $3 and $5 billion. The estimate includes losses to the National Flood Insurance Program (NFIP) in the range of $200 to $400 million.

RMS also estimated total onshore US losses from Hurricane Delta between $2.0 billion and $3.5 billion. The loss estimate includes losses to the National Flood Insurance Program between $200 million and $400 million.

Being a property and casualty insurer, this Zacks Rank #4 (Sell) insurer has substantial exposure to losses from natural disasters, man-made catastrophes and other catastrophic events, which has been inducing volatility in its underwriting results. In the first nine months of 2020, catastrophe and weather-related losses, net of reinstatement premiums, were $325 million. The catastrophe and weather-related losses included $137 million associated with first party coverages attributable to the COVID-19 pandemic.

Combined ratios deteriorated 870 basis points in the first nine months of 2020.

Shares of AXIS Capital have gained 29.9% in the past six months’ time period, outperforming the industry’s increase of 16.4%.

Q4 Catastrophe Loss Estimate by Other P&C Insurers

United Insurance Holdings Corp. UIHC estimates fourth-quarter 2020 catastrophe loss between $85 million and $100 million before income taxes or between $67 million and $79 million after tax, net of expected reinsurance recoveries. The estimated loss can be attributed to three named windstorms hurricanes Delta and Zeta, and Tropical Storm Eta as well as other non-named windstorm catastrophe events.

RenaissanceRe Holdings Ltd. RNR projects a net negative impact of around $170 million on fourth-quarter operational results, which is scheduled to release on Jan 26, 2021. The adverse impact is likely to have resulted from incidence of numerous catastrophe events in both third and fourth quarters of 2020, and alterations in estimated losses from catastrophe events of the third quarter.

Another P&C insurer, namely The Allstate Corporation ALL has also been exposed to severe catastrophe events, which have limited its underwriting profitability.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.

See these 7 breakthrough stocks now>>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
RenaissanceRe Holdings Ltd. (RNR) : Free Stock Analysis Report
 
The Allstate Corporation (ALL) : Free Stock Analysis Report
 
Axis Capital Holdings Limited (AXS) : Free Stock Analysis Report
 
United Insurance Holdings Corp. (UIHC) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research