Will W.R. Berkley's (WRB) Beat Streak Continue in Q4 Earnings?
W.R. Berkley Corporation WRB is slated to report fourth-quarter 2022 earnings on Jan 26 after market close. The insurer delivered an earnings surprise in each of the last four quarters, the average being 25.63%.
Factors to Consider
Gross premiums written in the fourth quarter of 2022 are expected to have benefited from strong performing other liability, short-tail lines, commercial auto, professional liability and workers’ compensation in the Insurance segment as well as an increase in casualty reinsurance, monoline excess and property reinsurance in 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 fourth-quarter 2022 premiums earned is pegged at $2.5 billion, up 13.2% from the year-ago reported quarter.
Higher income from fixed maturity securities, rising interest rate environment and increase in equity securities are likely to have aided improvement in net investment income. Investment in alternative assets such as private equity fund and direct real estate opportunities are likely to have added to the upside
The Zacks Consensus Estimate for fourth-quarter 2022 net investment income is pegged at $188 million, indicating an upside of 14% from the year-ago reported figure.
The expense ratio is likely to have improved on net premiums earned surpassing compensation expense growth.
Expenses are likely to have increased owing to higher losses and loss expenses, other operating costs and expenses and expenses from non-insurance businesses.
Higher-than-expected cat losses are likely to have weighed on underwriting profitability and thus combined ratio.
The Zacks Consensus Estimate for earnings is pegged at $1.07, indicating a 4.9% 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 +1.17%. 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 Consensus
W.R. Berkley Corporation price-consensus-chart | 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:
First American Financial FAF has an Earnings ESP of +0.35% and a Zacks Rank #2. The Zacks Consensus Estimate for fourth-quarter 2022 earnings is pegged at $1.45, indicating a decrease of 36.4% from the year-ago reported figure.
First American Financial beat earnings estimates in three of the last four reported quarters while missing the same in one.
Chubb Limited CB has an Earnings ESP of +2.72% and a Zacks Rank #3. The Zacks Consensus Estimate for fourth-quarter 2022 earnings is pegged at $4.22, up 10.8% from the figure reported in the year-ago quarter.
Chubb beat earnings estimates in all the last four reported quarters.
Arch Capital Group ACGL has an Earnings ESP of +5.42% and a Zacks Rank #3. The Zacks Consensus Estimate for fourth-quarter 2022 earnings stands at $1.34, indicating an increase of 5.5% from the year-ago reported figure.
Arch Capital beat earnings estimates in three of the last four reported quarters while missing the same in one.
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
Chubb Limited (CB) : Free Stock Analysis Report
W.R. Berkley Corporation (WRB) : Free Stock Analysis Report
First American Financial Corporation (FAF) : Free Stock Analysis Report
Arch Capital Group Ltd. (ACGL) : Free Stock Analysis Report
To read this article on Zacks.com click here.