Everest Group, Ltd. EG is slated to report fourth-quarter 2024 earnings on Feb. 3, after market close. EG's earnings beat estimates in three of the trailing four quarters while missing in one.

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Factors to Consider

Premium growth is likely to have been driven by the solid performance of EG’s Reinsurance and Insurance segments. We expect the net written premium to increase 18.2% to $4.5 billion in the fourth quarter.

The Insurance segment is likely to have benefited from an increase in property, short tail business, specialty casualty business and other specialty lines of business, as well as new business. We estimate premiums earned to increase 4.3% to $1 billion in the to-be-reported quarter.

The Reinsurance segment is expected to have benefited from solid international growth, improved property pro rata and property catastrophe excess of loss lines of business. We expect premiums earned to improve 14.5% to $3 billion in the fourth quarter.

Net investment income is likely to have gained from higher assets under management, new money yields and alternative assets. We expect net investment income to be $419.5 million, up 2.1% from the year-ago reported quarter. The Zacks Consensus Estimate is pegged at $495 million, indicating an increase of 20.4% from the year-ago reported figure.

The top line in the to-be-reported quarter is expected to have gained from higher net written premiums and net investment income. The Zacks Consensus Estimate for revenues is pegged at $4.44 billion, indicating a rise of 21.3% from the year-ago reported figure.

Despite catastrophe losses that induce volatility in profits, underwriting results are likely to benefit from rate increases, exposure growth and traditional risk management capabilities in the to-be-reported quarter. We expect the combined ratio to be 89.8 in the to-be-reported quarter. The  Zacks Consensus Estimate for the metric is pegged at 105. 

We estimate underwriting income from the Insurance segment to be $161.9 million. The same from the Reinsurance segment is expected to be $245.4 million in the to-be-reported quarter.

Total claims & expenses are likely to have increased largely owing to higher incurred losses and loss adjustment expenses, commission, brokerage, taxes and fees, other underwriting expenses, corporate expenses, interest, fees and bond issue cost amortization expense. We expect the metric to increase 7.9% to $3.6 billion. 

The attritional loss ratio is likely to have improved owing to contributions from both segments, portfolio management actions and disciplined underwriting.

Share buybacks in the to-be-reported quarter are anticipated to have provided a boost to the bottom line.

The Zacks Consensus Estimate for fourth-quarter earnings per share is pegged at a loss of $5.77, indicating a decrease of 122.9% from the year-ago quarter reported figure.

What the Zacks Model Says

Our proven model does not predict an earnings beat for Everest Group this time around. This is because a stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) that increases the odds of an earnings beat. This is not the case here, as you can see below.

Earnings ESP: Everest Group has an Earnings ESP of -43.22%. This is because the Most Accurate Estimate is pegged at a loss of $8.26 while the Zacks Consensus Estimate is pegged at a loss of $5.77. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: EG carries a Zacks Rank #4 (Sell) at present.

Stocks to Consider

American International Group, Inc. AIG has an Earnings ESP of +2.65% and a Zacks Rank of 3 at present. The Zacks Consensus Estimate for fourth-quarter 2024 earnings is pegged at $1.26, indicating a decline of 29.6% from the year-ago reported figure. You can see the complete list of today’s Zacks #1 Rank stocks here.

AIG’s earnings beat estimates in three of the last four quarters while missed in one.

Assurant, Inc. AIZ has an Earnings ESP of +4.05% and a Zacks Rank of 3 at present. The Zacks Consensus Estimate for fourth-quarter 2024 earnings is pegged at $3.82, indicating a decline of 16.5% from the year-ago reported figure. 

AIZ’s earnings beat estimates in each of the last four quarters.

Principal Financial Group, Inc. PFG has an Earnings ESP of +0.03% and a Zacks Rank of 3 at present. The Zacks Consensus Estimate for fourth-quarter 2024 earnings is pegged at $1.95, indicating an increase of 6.5% from the year-ago reported figure. 

PFG’s earnings beat estimates in one of the last four quarters while missing in the other three.

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