4 Insurance Stocks’ Q3 Results Are Coming: What to Expect

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4 Insurance Stocks’ Q3 Results Are Coming: What to Expect

Insurance industry stocks are expected to have benefited from continued improving pricing, exposure growth, portfolio optimization, solid customer retention, renewals, reinsurance contracts and accelerated digitalization in the third quarter. Catastrophe losses and an increase in the frequency of claims are likely to have had a positive effect. Some of the insurers will report their third quarter results on October 24th Arthur J. Gallagher & Co. AJG, Hartford Financial Services Group, Inc. HIGH, Cincinnati Financial Corporation CINF and Kinsale Capital Group KNSL.

Solid retention, engagement growth across business lines and improved pricing are likely to have boosted premiums. An active catastrophe environment is expected to have accelerated policy renewal rates and led to better pricing in the third quarter of 2024. According to Market Scout’s Market Barometer, the commercial insurance sector experienced an overall rate increase of 3.8%. According to the report, the overall retail rate increased by 6.75% in the third quarter of 2024, indicating a slight slowdown compared to the figures for the same quarter last year.

According to reports in Reinsurance News, CNA Financial Corporation estimates net pretax catastrophe losses of $143 million for the third quarter of 2024. According to the report, approximately 75% of catastrophe losses are associated with four major events, including $55 million from Hurricane Helene. The remaining approximately $35 million in losses are spread across several additional events in the third quarter.

Underwriting profit is likely to have benefited from better pricing, reinsurance arrangements, portfolio repositioning, reinsurance coverage and favorable reserve development.

Motor vehicle premiums are likely to have improved given increased travel around the world. A low unemployment rate may have benefited commercial insurance and group insurance.

A larger fixed asset base, strong cash flow from operating activities, higher bond yields as well as an increase in interest income from fixed-term securities are expected to have supported net investment income.

Accelerated digitalization, robotic process automation, cognitive intelligence and blockchain are expected to help insurers reduce operating costs and increase margins. This digital transformation is expected to drive premium growth and increase efficiency. The increased use of data analytics and AI integration enables brokers to offer personalized services, increase operational efficiency, improve risk assessment and streamline operations.

Solid capitalization helped insurers engage in strategic mergers and acquisitions to strengthen their competitive advantage, expand geographically and diversify their portfolio. A sustainable distribution of assets to shareholders through dividend increases, special dividends and share buybacks creates trust among insurers.

Let’s find out how the following insurers rank ahead of their third-quarter 2024 results on October 24.

According to our proprietary model, the combination of two key ingredients – a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) – increases the likelihood of an earnings beat. Use our Earnings ESP filter to discover the best stocks to buy or sell before they’re reported.

Arthur J. Gallagher’s third quarter results are expected to benefit from solid performance in both segments, supported by new business, solid customer retention and higher renewal premiums across all business lines. The property and casualty brokerage business is likely to have benefited from continued strong customer loyalty, higher new business generation and rising renewal premiums. The risk management segment is expected to have benefited from excellent customer retention, an increase in customer business activity and higher new claims. However, total expenses are likely to have increased primarily due to higher compensation, reimbursements, interest and amortization. (Read more: Here’s what to expect from Arthur J. Gallagher’s Q3 results)

Stay current with all quarterly releases: View the Zacks Earnings Calendar.

The Zacks Consensus Estimate for its bottom line is $2.26, up 13% from the reported figure for the prior-year quarter. The company has an ESP of +0.01% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

AJG’s earnings beat estimates in each of the last four reported quarters. The same is shown in the following table:

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