Technology

Insurance Stock Q2 Earnings Roster for Aug 4: PRU, ALL & More

The insurance industry, which consists of property and casualty (P&C) as well as life insurers, has been bearing the brunt of COVID-19 pandemic like many others.

Insurers had earlier predicted that their second-quarter results will be impacted significantly by coronavirus-induced restrictions. The June quarter is likely to have witnessed a decline in new sales of insurance products.

The process and flow of renewals slowed down substantially ever since the pandemic surfaced. Even though the property market started with a steady trend in February, it gradually fell victim to weak investment income, induced by soft investment yields and equity market declines. Property and casualty insurers are more susceptible to equity investments than life insurers. The life insurance industry has been particularly hit hard by the very low interest rate levels, given their exposure to products that provide guaranteed minimum returns.

Given the current economic condition, property and casualty insurers should be better off than life insurers. They have been enjoying top-line growth with wide diversified businesses.

In the second quarter of 2020, Personal and Commercial lines of insurance are likely to have continued experiencing improved rate.
Marsh’s Global Insurance Market Index estimated commercial policy pricing to increase 6% in the second quarter per a FINSMES report.

Further, the industry players with wide exposure to auto insurance business should have been relatively better-placed in the period ending June 2020. Notably, a slew of precautionary measures to contain the spread of the COVID-19 outbreak prompted Americans to stay home. Although many parts of the country continue to reopen economic activities following the relaxation of lockdown, very few people are taking risks to venture outside. Hence, traffic is still scanty on the road. Thus, it bodes well for players dealing in the automobile insurance business in the form of lower claims outgo.

Apart from COVID-19-related losses, the insurers incurred losses from inclement weather events and civil unrest.

For Life insurers, changes in the product portfolio like shifting from the guaranteed savings products to the protection category of unit-linked savings products and refraining from selling long-duration term-life insurance are likely to have helped them maintain solid sales and profitability.

Nonetheless, insurers are leveraging the latest technology to boost risk management capabilities and curb operational expenses.

The insurance industry belongs to the Finance sector, which is anticipated to see a 43.7% plunge in second-quarter earnings, according to the latest Earnings Trends.

Let’s see how some of the sector participants are placed ahead of their respective second-quarter earnings releases on Aug 4.

Prudential Financial, Inc.'s PRU second-quarter results are likely to reflect the re-pricing of products, shift toward lower risk and less capital-intensive products, growth in asset-based businesses, solid international operations with focus on directing earnings mix to higher-growth markets and a deeper reach in the pension risk transfer market.

The international Insurance segment is likely to have contributed to its performance.

U.S. Financial Wellness is also expected to have benefited from advice, investment, and retirement income and protection solutions, thereby aiding full-service retirement plan sales and Group Insurance sales.

The company estimates net investment income to be lower by $15 million in the second quarter, reflecting the difference between new money rates and disposition yields on investment portfolio. (Read More: What Awaits Prudential Financial This Earnings Season?)

The company’s bottom line surpassed estimates in two (and missed the same in the remaining two) of the last four quarters, the average negative surprise being 0.08%.

Prudential Financial, Inc. Price and EPS Surprise

Prudential Financial, Inc. Price and EPS Surprise

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

The Zacks quantitative model predicts that 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, which is the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.

Prudential Financial currently has a Zacks Rank #3 (Hold) and an Earnings ESP of 0.73%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The Allstate Corporation ALL provides a range of life insurance and investment products to its diverse customer base. The company’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average being 18.5%. The company expects to incur $1.19 million in pre-tax catastrophe losses due to weather-related disruption that occurred in April, May and June.

The company’s earnings results are expected to reflect strong profitability in auto and homeowners insurance.  In the auto insurance business, it is likely to have gained from a decline in auto accident claims due to fewer driving as Americans remain at home in the wake of the coronavirus outbreak. (Read More: Whats's in the Cards for Allstate's Earnings in Q2?)

The company currently has a Zacks Rank of 3 and an Earnings ESP of +11.10%.

The Zacks Consensus Estimate for the company’s second-quarter earnings has moved 18% south to $1.41 per share over the past 30 days, suggesting a 35.3% drop from the prior-year reported figure.

The Allstate Corporation Price and EPS Surprise

The Allstate Corporation Price and EPS Surprise

The Allstate Corporation price-eps-surprise | The Allstate Corporation Quote

Fidelity National Financial, Inc. FNF, which is a leading provider of title insurance, specialty insurance and claims management services, is expected to witness a year-over-year decline in earnings when it reports results for the quarter ended June 2020.

The company’s bottom line surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 21.13%.

The company currently has a Zacks Rank of 2 and an Earnings ESP of 0.00%.

The Zacks Consensus Estimate for second-quarter earnings is currently pegged at 71 cents, which indicates a 22.8% plunge from the prior-year reported number.

Fidelity National Financial, Inc. Price and EPS Surprise

Fidelity National Financial, Inc. Price and EPS Surprise

Fidelity National Financial, Inc. price-eps-surprise | Fidelity National Financial, Inc. Quote

Alleghany Corporation Y and its subsidiaries engage in property and casualty (P&C) reinsurance and insurance businesses in the United States and internationally.

The company’s bottom line beat estimates in two (and missed the same in the remaining two) of the last four quarters, the average negative surprise being 40.6%.

The company is currently Zacks #3 Ranked and has an Earnings ESP of 0.00%.

The Zacks Consensus Estimate for second-quarter loss is currently pegged at $1.46. The company delivered earnings of $12.40 in the year-ago period.

Alleghany Corporation Price and EPS Surprise

Alleghany Corporation Price and EPS Surprise

Alleghany Corporation price-eps-surprise | Alleghany Corporation Quote

Assurant, Inc.’s AIZ bottom line beat estimates in three of the last four quarters and missed the mark in one, delivering a surprise of 2.64%, on average. Its second-quarter performance is likely to have benefited from solid results at Global Lifestyle, Housing business lines.

Global Lifestyle is likely to have benefited from expanded partnerships with market leaders and new entrants, additions of mobile subscribers, continued mobile growth in both the new and existing programs as well as strength in Global Automotive.

Global Housing’s performance is likely to have been driven by a superior customer platform, favorable non-catastrophe loss and increased lender-placed income in the June quarter. (Read More: Assurant to Report Q2 Earnings: What's in the Cards?)

Assurant, Inc. Price and EPS Surprise

Assurant, Inc. Price and EPS Surprise

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

Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.

See these 7 breakthrough stocks now>>
 


Click to get this free report

The Allstate Corporation (ALL): Free Stock Analysis Report

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

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

Fidelity National Financial, Inc. (FNF): Free Stock Analysis Report

Alleghany Corporation (Y): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Latest Technology Videos

Zacks

Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

Learn More