Everest Re Group (RE) to Report Q3: What's in the Cards?

Everest Re Group RE is slated to report third-quarter 2020 results on Oct 29, after market close. The company delivered an earnings surprise of 10.11% in the last-reported quarter.

Factors to Consider

Premiums are likely to have benefited from its global presence, product diversification, strong renewal retention and better pricing. The Zacks Consensus Estimate for premiums earned is pegged at $2.2 billion.

The Insurance segment is likely to have benefited from product diversification, staffing up of underwriting operations, international insurance growth and ramp up of Canadian and European platforms. The Lloyds platform is likely to have added to the upside. The Zacks Consensus Estimate for premiums earned is pegged at $579 million, up 55.6% from the year-ago reported quarter.

The Reinsurance segment is likely to have been aided by growth initiatives including deployment of increased capacity to pro-rata deal, which has attractive original pricing terms and conditions.

Repositioning of its portfolio by moving up fixed-income credit quality, reducing equity exposure, and increased income from other invested assets may have aided net investment income. The company also expects improvement in limited partnerships. The Zacks Consensus Estimate for net investment income is pegged at $210 million.

The company estimates pre-tax net catastrophe losses of $300 million, net of reinsurance and reinstatement premiums, stemming from hurricanes Laura, Isaias and Sally, wildfires in California and Oregon, and other events including the Midwest United States Derecho windstorm. Nonetheless, despite huge losses, the company expects strength and diversification of its business to help it post net income in the to-be- reported quarter.

Nonetheless, the Zacks Consensus Estimate for Insurance segment combined ratio is pegged at 103, implying a deterioration of 700 basis points from the year-ago period reported figure.

The Zacks Consensus Estimate is pegged at 39 cents per share, suggesting 88.5% year-over-year decrease.

Everest Re Group, Ltd. Price and EPS Surprise

  Everest Re Group, Ltd. Price and EPS Surprise

Everest Re Group, Ltd. price-eps-surprise | Everest Re Group, Ltd. Quote

What the Zacks Model Says

Our proven model does not conclusively predict an earnings beat for Everest Re 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 as you can see below.

Earnings ESP: Everest Re has an Earnings ESP of 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 39 cents. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: Everest Re currently carries a Zacks Rank of 4 (Sell).

Stocks to Consider

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

Arch Capital Group ACGL has an Earnings ESP of +5.33% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Watford Holdings WTRE has an Earnings ESP of +70.13% and a Zacks Rank #3.

CNO Financial CNO has an Earnings ESP of +2.52% and a Zacks Rank of 2.

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