U.S. markets closed
  • S&P 500

    3,825.33
    +39.95 (+1.06%)
     
  • Dow 30

    31,097.26
    +321.83 (+1.05%)
     
  • Nasdaq

    11,127.84
    +99.11 (+0.90%)
     
  • Russell 2000

    1,727.76
    +19.77 (+1.16%)
     
  • Crude Oil

    108.46
    +2.70 (+2.55%)
     
  • Gold

    1,812.90
    +5.60 (+0.31%)
     
  • Silver

    19.77
    -0.51 (-2.50%)
     
  • EUR/USD

    1.0426
    -0.0057 (-0.54%)
     
  • 10-Yr Bond

    2.8890
    -0.0830 (-2.79%)
     
  • GBP/USD

    1.2103
    -0.0072 (-0.59%)
     
  • USD/JPY

    135.1750
    -0.5530 (-0.41%)
     
  • BTC-USD

    19,216.34
    -92.89 (-0.48%)
     
  • CMC Crypto 200

    420.84
    +0.70 (+0.17%)
     
  • FTSE 100

    7,168.65
    -0.63 (-0.01%)
     
  • Nikkei 225

    25,935.62
    -457.42 (-1.73%)
     

Multiline Insurance Q1 Earnings on May 3: PRU, AIZ & More

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

The multiline insurance industry players are likely to have benefited from improved pricing, exposure growth, solid retention, favorable renewals, reinsurance agreements, product redesign, bundled offering and accelerated digitalization in the first quarter of 2022.

Insurers Prudential Financial Inc. PRU, Assurant Inc. AIZ, American International Group, Inc. AIG and Radian Group Inc. RDN are likely to have benefited from these factors.

Premiums are likely to have benefited from improved pricing, strong retention and exposure growth. An active catastrophe environment accelerated the policy renewal rate and aided in better pricing in the first quarter though the magnitude was lower. Reinsurance covers, favorable reserve development and solid capital level are thus likely to have aided underwriting profitability.

Life insurance premiums are likely to have benefited from increasing demand for protection products, in turn driving sales. Life insurers continue to roll out investment products that provide bundled covers of guaranteed retirement income, life and healthcare to cater to customers preferring policies with “living” benefits more than those with death benefits.

A larger investment asset base and alternative investments in private equity, hedge funds, and real estate, among others are expected to have aided net investment income.

Accelerated digitalization are expected to have expedited business operations and saved costs, thus aiding margins.

Banking on the solid capital position, insurers pursued strategic mergers and acquisitions to sharpen their competitive edge, build on a niche, expand geographically, and diversify their portfolio to have a compelling product offering.

Let’s take a sneak peek into how the following insurers are poised prior to their first-quarter earnings on May 3.

According to the Zacks model, a company needs the right combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — to increase the odds of an earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Prudential Financial’s U.S. business is likely to have benefited from a higher net investment spread, driven by increased variable investment income and fee income. The upside is likely to have been offset by less favorable underwriting experience due to COVID-related mortality and higher expenses. Prudential Financial’s international businesses are likely to have gained from continued business growth, higher net investment spread, lower expenses, and higher earnings from joint venture investments. Expenses are likely to have increased due to higher policyholders’ benefits, dividends to policyholders and general and administrative expenses. Prudential expects seasonal expenses and other items to be lower in the first quarter of 2022 by $105 million. (Read more: Prudential to Report Q1 Earnings: What's in Store?)

The Zacks Consensus Estimate for Prudential’s earnings per share of $2.67 indicates a 35% decrease from the year-ago quarter reported figure. The company has an Earnings ESP of 0.00% and a Zacks Rank 4 (Sell).

PRU surpassed estimates in the four quarters of 2021. This is depicted in the chart below:

Prudential Financial, Inc. Price and EPS Surprise

Prudential Financial, Inc. Price and EPS Surprise
Prudential Financial, Inc. Price and EPS Surprise

Prudential Financial, Inc. price-eps-surprise | Prudential Financial, Inc. Quote

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

Assurant’s net earned premiums are likely to have benefited from continued growth from strong U.S. sales in the Global Automotive business. The Global Lifestyle segment is expected to have benefited from growth in Global Automotive, continued expansion in mobile within Connected Living and greater contributions from Global Financial Services and Other. Total benefits, losses and expenses might have escalated due to higher selling, underwriting, general and administrative expenses and interest expense. (Read more: Is a Beat in the Cards for Assurant in Q1 Earnings?)

The Zacks Consensus Estimate for Assurant’s earnings per share of $2.86 indicates a 15.8% increase from the year-ago quarter reported figure. The company has an Earnings ESP of +8.57% and a Zacks Rank 3.

AIZ surpassed estimates in the four reported quarters of 2021. This is depicted in the chart below:

Assurant, Inc. Price and EPS Surprise

Assurant, Inc. Price and EPS Surprise
Assurant, Inc. Price and EPS Surprise

Assurant, Inc. price-eps-surprise | Assurant, Inc. Quote

AIG’s general Insurance net premiums earned are likely to have increased on the back of improved retention, new business and a continued improvement in the insurance premium rate. Profits from General Insurance are expected to have increased significantly due to high retention rates and robust new business volumes. While premiums from Life and Retirement might have increased due to improved pension risk transfer activities, its transformative program named AIG 200 is expected to have enabled the company to curb costs and expenses in the first quarter. (Read more: What to Expect From American International Q1 Earnings?)

The Zacks Consensus Estimate for AIG’s earnings per share of $1.24 indicates an 18.1% increase from the year-ago quarter reported figure. AIG has an Earnings ESP of -7.26% and a Zacks Rank 3.

AIG surpassed estimates in the four reported quarters of 2021. This is depicted in the chart below:

American International Group, Inc. Price and EPS Surprise

American International Group, Inc. Price and EPS Surprise
American International Group, Inc. Price and EPS Surprise

American International Group, Inc. price-eps-surprise | American International Group, Inc. Quote

The Zacks Consensus Estimate for Radian Group’s earnings per share of 91 cents indicates an increase of 33.8% from the year-ago reported figure. Higher persistency and strong NIW volume are likely to have improved insurance in force. Given the strong credit characteristics of the new loans insured, we expect the company to see fewer claims than before.

Radian has an Earnings ESP of 0.00% and a Zacks Rank #3.

RDN’s earnings outpaced estimates in three of the four reported quarters of 2021. The same is depicted in the chart below:

Radian Group Inc. Price and EPS Surprise

Radian Group Inc. Price and EPS Surprise
Radian Group Inc. Price and EPS Surprise

Radian Group Inc. price-eps-surprise | Radian Group Inc. Quote

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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

American International Group, Inc. (AIG) : Free Stock Analysis Report

Prudential Financial, Inc. (PRU) : Free Stock Analysis Report

Assurant, Inc. (AIZ) : Free Stock Analysis Report

Radian Group Inc. (RDN) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research