Is a Beat in Store for W.R. Berkley (WRB) in Q3 Earnings?
W.R. Berkley Corporation WRB is slated to report third-quarter 2023 earnings on Oct 23 after market close. The insurer delivered an earnings surprise in the last reported quarter.
Factors to Consider
Well-performing other liability, short-tail lines and commercial auto are likely to have benefited Insurance segment gross premiums written in the third quarter of 2023. We expect the metric to be $3 billion.
Increases in monoline excess and property reinsurance are likely to have aided the Reinsurance & Monoline Excess segment’s gross premiums written. We expect the metric to be $387.1 million.
Gross premiums written in the third quarter of 2023 are expected to have benefited from higher premiums at the Insurance segment as well as the Reinsurance & Monoline Excess segment. Growth is also likely to have been driven by higher premiums in the international unit, mainly supported by the emerging markets of the United Kingdom, Continental Europe, South America, Canada, Scandinavia, Asia and Australia.
The Zacks Consensus Estimate for third-quarter 2023 premiums earned is pegged at $2.6 billion, up 7.3% from the year-ago reported quarter. We estimate the metric to be $2.6 billion.
Its short duration high credit quality investment portfolio, along with an improved rate environment, is likely to have aided net investment income. The Zacks Consensus Estimate for third-quarter 2023 net investment income is pegged at $256 million, indicating an upside of 26.1% from the year-ago reported figure. We estimate the metric to be $257.9 million.
The expense ratio is likely to have improved on net premiums earned in excess of compensation expense growth.
Expenses are likely to have increased owing to higher losses and loss expenses, other operating costs and expenses from non-insurance businesses.
Higher-than-expected cat losses are likely to have weighed on underwriting profitability and, consequently, the combined ratio.
Continued share buybacks are likely to have provided additional support to the bottom line.
The Zacks Consensus Estimate for earnings is pegged at $1.14, indicating a 12.9% increase from the year-ago quarter reported number.
What the Zacks Model Says
Our proven model predicts an earnings beat for W.R. Berkley this time around. This is because the stock has the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).
Earnings ESP: W.R. Berkley has an Earnings ESP of +1.39%. This is because the Most Accurate Estimate of $1.15 is pegged higher than the Zacks Consensus Estimate $1.14. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
W.R. Berkley Corporation Price and EPS Surprise
W.R. Berkley Corporation price-eps-surprise | W.R. Berkley Corporation Quote
Zacks Rank: W.R. Berkley currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Stocks to Consider
Here are three stocks from the insurance industry that you may want to consider, as our model shows that these also have the right combination of elements to post the earnings beat:
Arch Capital Group ACGL has an Earnings ESP of +1.37% and a Zacks Rank of 2. The Zacks Consensus Estimate for third-quarter 2023 earnings is pegged at $1.48, indicating an increase of 428.6% from the year-ago reported figure.
ACGL’s earnings beat estimates in the last four reported quarters.
Chubb Limited CB has an Earnings ESP of +2.25% and a Zacks Rank #3. The Zacks Consensus Estimate for third-quarter 2023 earnings is pegged at $4.21, indicating an increase of 32.8%.
CB’s earnings beat estimates in three of the last four reported quarters and missed in one.
Cincinnati Financial Corporation CINF has an Earnings ESP of +3.00% and a Zacks Rank of 2. The Zacks Consensus Estimate for third-quarter 2023 earnings stands at $1.07, implying an increase of 46.6% from the year-ago reported quarter.
CINF’s earnings beat estimates in three of the last four reported quarters and missed in one.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Chubb Limited (CB) : Free Stock Analysis Report
W.R. Berkley Corporation (WRB) : Free Stock Analysis Report
Cincinnati Financial Corporation (CINF) : Free Stock Analysis Report
Arch Capital Group Ltd. (ACGL) : Free Stock Analysis Report
