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What's in the Cards for Travelers (TRV) in Q3 Earnings?

The Travelers Companies, Inc. TRV is set to report third-quarter 2022 earnings on Oct 19. The insurer delivered an earnings surprise in each of the last four quarters, the average being 26.8%.

Factors to Consider

Premium in the to-be-reported quarter is likely to have been driven by strong retention rates across all segments, new business premiums, positive renewal premium changes. The Zacks Consensus Estimate for premiums is pegged at $8.6 billion, indicating a 9.2% increase from the year-ago reported number.

Travelers expects fixed income net investment income, including earnings from short-term securities, to be around $470 million after-tax in the third quarter. Higher average levels of invested assets, reliable results from the fixed-income portfolio, strong returns from the non-fixed-income portfolio and a higher interest rate are likely to have aided net investment income.

The Personal Insurance segment in the to-be-reported quarter is likely to have benefited from continued growth at the profitable agency auto and homeowners business. The Zacks Consensus Estimate for earned premiums at Personal Insurance is pegged at $3.4 billion, an improvement of 10.2% from the year-ago reported figure.

Higher net written premiums are likely to have boosted the top line in the to-be-reported quarter. The Zacks Consensus Estimate for revenues is currently pegged at $9.2 billion, indicating a 4.2% increase from the year-ago reported figure.
Improved pricing and increased exposure are likely to have aided underwriting profitability. The Zacks Consensus Estimate for the combined ratio is pegged at 98.

Continued share buybacks are anticipated to have provided an additional boost to the bottom line.

Expenses are expected to have increased on higher claims and claim adjustment expenses, interest expenses, amortization of deferred acquisition costs, general and administrative expenses. The consensus mark for the loss and loss-adjustment expense ratio is pegged at 68, indicating an increase of 1.5% from the year-ago reported figure.

The Zacks Consensus Estimate for third-quarter 2022 earnings per share is pegged at $1.83, suggesting a decline of 29.6% from the year-ago reported figure.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Travelers this time around. This is because a stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). That is not the case here.

Earnings ESP: Travelers has an Earnings ESP of -24.55%. This is because the Most Accurate Estimate is pegged at $1.38, lower than the Zacks Consensus Estimate of $1.83. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

The Travelers Companies, Inc. Price and EPS Surprise

The Travelers Companies, Inc. Price and EPS Surprise
The Travelers Companies, Inc. Price and EPS Surprise

The Travelers Companies, Inc. price-eps-surprise | The Travelers Companies, Inc. Quote

Zacks Rank: Travelers currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

Some insurance stocks with the right combination of elements to deliver an earnings beat this time around are:

CNO Financial Group, Inc. CNO has an Earnings ESP of +1.72% and a Zacks Rank of 2. The Zacks Consensus Estimate for third-quarter 2022 earnings is pegged at 49 cents, indicating a decrease of 31.9% from the year-ago reported figure.

CNO Financial beat earnings estimates in three of the last four reported quarters while missing the same in one.

EverQuote, Inc. EVER has an Earnings ESP of +8.21% and a Zacks Rank #2. The Zacks Consensus Estimate for third-quarter 2022 earnings is pegged at a loss 41 cents, down 127.8% from the figure reported in the year-ago quarter.

EverQuote beat earnings estimates in three of the last four reported quarters while missing the same in one.

Horace Mann Educators Corporation HMN has an Earnings ESP of +28.21% and a Zacks Rank of 2. The Zacks Consensus Estimate for third-quarter 2022 earnings stands at 59 cents, indicating an increase of 18% from the year-ago reported figure.

Horace Mann 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.


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CNO Financial Group, Inc. (CNO) : Free Stock Analysis Report
 
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