5 Insurers Poised to Outperform Estimates This Earnings Season

Core Insights - The Finance sector's third-quarter 2024 earnings are projected to improve by 10%, with revenues expected to rise by 5.9% [1] - Insurance industry results are anticipated to benefit from better pricing, exposure growth, accelerated digitalization, and favorable interest rates, although catastrophe losses may impact profitability [1][3] Industry Overview - Underwriting results for insurers are likely to improve due to better pricing, increased exposure, solid retention, new business growth, and favorable reserve development [3] - Catastrophe losses, particularly from Hurricane Helene, are expected to affect profitability, with estimated economic losses exceeding $35 billion and insured losses over $12 billion [3] - Global commercial pricing saw a decline for the first time in seven years, while the U.S. experienced a 3% increase in pricing [4] Company Performance Expectations - Berkshire Hathaway (BRK.B): Expected to benefit from improved pricing and solid retention, with a Zacks Consensus Estimate for earnings at $4.81, a decrease of 3% year-over-year [6][7] - MetLife Inc. (MET): Anticipated to see solid performance driven by Group Benefits and international segments, with earnings estimated at $2.16, reflecting a 9.6% increase year-over-year [7] - Lincoln National Corporation (LNC): Projected to achieve significant growth with earnings expected at $1.64, indicating a 613% increase from the previous year [8] - Willis Towers Watson plc (WTW): Expected to benefit from geographic diversification and operational efficiency, with earnings estimated at $2.68, a 19.4% increase year-over-year [9] - Aflac Inc. (AFL): Anticipated to see a decrease in earnings to $41.69, down 8.2% from the previous year, despite product innovations and cost-saving initiatives [10] Market Trends - Increased travel is likely to have driven up auto premiums, although the loss ratio may be negatively impacted by higher repair and medical costs [4] - A stronger mortgage market is expected to favor mortgage insurance premiums, while low unemployment rates may benefit commercial and group insurance [4] - Life insurers are focusing on protection products, which is expected to drive solid sales and improve investment income due to a larger asset base [5]