Earnings results often indicate what direction a company will take in the months ahead. With Q4 behind us, let’s have a look at Erie Indemnity (NASDAQ: ERIE) and its peers.
Property & Casualty (P&C) insurers protect individuals and businesses against financial loss from damage to property or from legal liability. This is a cyclical industry, and the sector benefits when there is 'hard market', characterized by strong premium rate increases that outpace loss and cost inflation, resulting in robust underwriting margins. The opposite is true in a 'soft market'. Interest rates also matter, as they determine the yields earned on fixed-income portfolios. On the other hand, P&C insurers face a major secular headwind from the increasing frequency and severity of catastrophe losses due to climate change. Furthermore, the liability side of the business is pressured by 'social inflation'—the trend of rising litigation costs and larger jury awards.
The 37 property & casualty insurance stocks we track reported a strong Q4. As a group, revenues beat analysts’ consensus estimates by 4.8%.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
Erie Indemnity (NASDAQ: ERIE)
Operating under a unique business model dating back to 1925, Erie Indemnity (NASDAQ: ERIE) serves as the attorney-in-fact for Erie Insurance Exchange, managing policy issuance, claims handling, and investment services for this reciprocal insurer.
Erie Indemnity reported revenues of $951 million, up 2.9% year on year. This print fell short of analysts’ expectations by 2.5%, but it was still a very strong quarter for the company with a beat of analysts’ EPS estimates.
Interestingly, the stock is up 2.2% since reporting and currently trades at $269.45.
Best Q4: HCI Group (NYSE: HCI)
Starting as a Florida "take-out" insurer that assumed policies from the state-backed Citizens Property Insurance Corporation, HCI Group (NYSE: HCI) provides property and casualty insurance, primarily homeowners coverage, while leveraging proprietary technology to improve underwriting and claims processing.
HCI Group reported revenues of $246.2 million, up 52.1% year on year, outperforming analysts’ expectations by 3.8%. The business had an incredible quarter with an impressive beat of analysts’ book value per share and EPS estimates.
The market seems content with the results as the stock is up 5% since reporting. It currently trades at $171.66.
Is now the time to buy HCI Group? Access our full analysis of the earnings results here, it’s free.
Weakest Q4: Trupanion (NASDAQ: TRUP)
Born from a vision to help pet owners avoid economic euthanasia when faced with expensive veterinary bills, Trupanion (NASDAQ: TRUP) provides medical insurance for cats and dogs through data-driven, vertically-integrated products priced specifically for each pet's unique characteristics.
Trupanion reported revenues of $376.9 million, up 11.7% year on year, in line with analysts’ expectations. It was a softer quarter as it posted a significant miss of analysts’ EPS estimates.
As expected, the stock is down 17.4% since the results and currently trades at $26.54.
Read our full analysis of Trupanion’s results here.
Assured Guaranty (NYSE: AGO)
Serving as a financial safety net for over $11 trillion in debt service payments since its founding in 2003, Assured Guaranty (NYSE: AGO) provides credit protection products that guarantee scheduled payments on municipal bonds, infrastructure projects, and structured finance obligations.
Assured Guaranty reported revenues of $277 million, up 77.6% year on year. This print surpassed analysts’ expectations by 39.6%. Overall, it was an incredible quarter as it also recorded a beat of analysts’ EPS estimates and an impressive beat of analysts’ net premiums earned estimates.
Assured Guaranty scored the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is flat since reporting and currently trades at $86.19.
Read our full, actionable report on Assured Guaranty here, it’s free.
Assured Guaranty (NYSE: AGO)
Serving as a financial safety net for over $11 trillion in debt service payments since its founding in 2003, Assured Guaranty (NYSE: AGO) provides credit protection products that guarantee scheduled payments on municipal bonds, infrastructure projects, and structured finance obligations.
Assured Guaranty reported revenues of $277 million, up 77.6% year on year. This number beat analysts’ expectations by 39.6%. It was an incredible quarter as it also logged a beat of analysts’ EPS estimates and an impressive beat of analysts’ net premiums earned estimates.
Assured Guaranty pulled off the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is flat since reporting and currently trades at $86.19.
Read our full, actionable report on Assured Guaranty here, it’s free.
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