4 Insurers Poised to Outperform Estimates This Earnings Season

Core Insights - The Finance sector's fourth-quarter 2024 earnings are expected to improve by 24.3%, with revenues estimated to rise by 11.2% [1] Group 1: Industry Performance - Fourth-quarter results for the insurance industry are likely to reflect better pricing, exposure growth, accelerated digitalization, and favorable interest rates, although catastrophe losses may have negatively impacted profitability [1][3] - Underwriting results are expected to benefit from improved pricing, increased exposure, solid retention, new business growth, portfolio repositioning, proper segmentation, reinsurance covers, and favorable reserve development [3] - Catastrophe losses, particularly from Hurricane Milton, are estimated at $34 billion, with insured losses between $17 billion and $28 billion, significantly affecting Florida insurers [4] Group 2: Pricing and Premiums - Higher catastrophe losses are driving policy renewal rates and pricing, with the commercial insurance sector seeing a composite rate increase of 2.64% and personal lines composite rate increasing by 4% in Q4 2024 [5] - Increased travel is likely to have raised auto premiums, although the loss ratio may have been affected by higher vehicle repair and medical costs [6] Group 3: Company-Specific Insights - Palomar Holdings (PLMR) is expected to benefit from new business, strong premium retention, and an increase in investment income, despite rising expenses due to higher incurred losses [9] - Assurant Inc. (AIZ) is likely to see performance improvements from its Global Housing and Global Lifestyle segments, with net investment income benefiting from higher yields [12] - Brighthouse Financial Inc. (BHF) is expected to report a 52.1% increase in earnings, driven by improving life insurance sales and a well-diversified investment portfolio [14][15] - Unum Group (UNM) anticipates a 19% increase in earnings, supported by favorable persistency and better sales in its operating segments [16][17]