Higher Premiums to Aid CNA Financial (CNA) in Q2 Earnings?
CNA Financial Corporation CNA is set to report second-quarter 2023 results on Jul 31, after market close. This insurer delivered a negative earnings surprise of 5.14% in the last reported quarter.
Let’s discuss the factors that are likely to be reflected in the upcoming quarterly results.
Factors at Play
Higher new business, rate increase, positive renewal premium change and retention across its Specialty, Commercial and International segments are likely to have driven premiums for the insurer in the second quarter. The Zacks Consensus Estimate for premiums earned is pegged at $2.3 billion, up 9.5% from the year-ago reported number.
Premiums are likely to have increased across business lines in all the segments. International premiums are expected to have increased across all the geographies in which the insurer operates.
We expect gross premium written in Specialty to increase 1.1% to $1.9 billion in the second quarter. Gross premium written at Commercial is expected to increase 13.1% to $1.6 billion. We expect second-quarter gross premium written in International to increase 17.5% to $449 million.
We expect gross premium written at Property & Casualty, comprising Specialty, Commercial and International to increase 7.4% to $4 billion.
We expect net earned premiums at Life & Group to be $114.3 million, implying a decline of 3.2% from the year-ago reported numbers, due to long-term care policy buyouts.
What Our Quantitative Model Predicts
Our proven model does not conclusively predict an earnings beat for CNA Financial this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here, as you will see below.
Earnings ESP: CNA Financial has an Earnings ESP of -10.71%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
CNA Financial Corporation Price and EPS Surprise
CNA Financial Corporation price-eps-surprise | CNA Financial Corporation Quote
Zacks Rank: CNA Financial currently carries a Zacks Rank #4 (Sell).
Stocks to Consider
Investors can also consider the following players from the same space that have the right combination of elements to beat on earnings in this reporting cycle.
Assurant, Inc. AIZ has an Earnings ESP of +0.52% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for second-quarter 2023 earnings is pegged at $2.60, indicating a year-over-year decline of 11.8%. You can see the complete list of today’s Zacks #1 Rank stocks here.
AIZ’s earnings beat estimates in three of the last four quarters and missed in the other one.
American Equity Investment Life Holding Company AEL has an Earnings ESP of +7.85% and a Zacks Rank #2 at present. The Zacks Consensus Estimate for second-quarter 2023 earnings is pegged at $1.67, indicating a year-over-year increase of 70.4%.
AEL’s earnings beat estimates in three of the last four quarters and missed in the other one.
Brighthouse Financial, Inc. BHF has an Earnings ESP of +0.42% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for second-quarter 2023 earnings is pegged at $3.55, indicating a year-over-year increase of 7.9%.
BHF’s earnings beat estimates in two of the last four quarters and missed in the other two.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Assurant, Inc. (AIZ) : Free Stock Analysis Report
CNA Financial Corporation (CNA) : Free Stock Analysis Report
American Equity Investment Life Holding Company (AEL) : Free Stock Analysis Report
Brighthouse Financial, Inc. (BHF) : Free Stock Analysis Report
