Insurers Reporting Q2 Earnings On Aug 8: PRI, SNC, HIIQ

The second-quarter earnings season is approaching the finishing line, with 83% of the S&P 500 members having already reported their financial results. Earnings of these 414 index members (with 85.2% of the index’s total market capitalization) have declined 4.5% on 1% lower revenues as per the Earnings Preview report. However, the beat ratio is 70.3% for the bottom line and 51.9% for the top line.

Earnings of 95.6% of the companies in the Finance sector that have already reported have declined 7.4%, while revenues have decreased 3.6%. Beat ratio for earnings compared unfavorable with the S&P 500 index while the same for top line (54.7%) compared favorably.

The insurance industry is part of the broader finance sector. The second quarter witnessed varied catastrophes, including a wildfire in Canada, flooding in Europe, earthquakes in Japan and Ecuador, and hailstorms in Texas. Underwriting results were affected, with underwriting income and combined ratio witnessing deterioration. Industry loss is estimated at $15–$20 billion. The bottom lines of P&C insurers that have already reported suffered due to these catastrophe events.

Despite a slight rise in interest by the Fed last December, the interest rate environment is still low. This in turn will keep investment results under pressure. Nonetheless, the slight rate rise is a breather for life insurers that suffered spread compression on products like fixed annuities and universal life due to sustained low rates.

Nevertheless, insurers in this well-capitalized industry remain well poised on the back of their expanded and diversified product and service portfolio that is driving premiums higher.

Let’s see what’s in store for four insurers that are reporting on Aug 8.

Primerica, Inc. (NYSE:PRI) underwrites term life insurance as well as distributes mutual funds, annuities and other financial products on behalf of third parties. The company delivered a 2.20% positive earnings surprise last quarter. Primerica has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.06. The company carries a Zacks Rank #3 (Hold).

With respect to the surprise trend, Primerica surpassed expectations in three of the last four quarters, with an average beat of 2.66%.

State National Companies, Inc. (NASDAQ:SNC) is an ace specialty provider of property and casualty insurance operating in two niche markets across the United States. The company delivered a 4.17% negative earnings surprise last quarter. State National has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 25 cents. The company carries a Zacks Rank #3.

With respect to the surprise trend, State National beat expectations in two of the last four quarters, with an average beat of 12.9%.

Health Insurance Innovations, Inc (NASDAQ:HIIQ) develops innovative affordable health insurance products. The company delivered a 466.67% positive earnings surprise last quarter. Health Insurance Innovations has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 6 cents. The company carries a Zacks Rank #3.

With respect to the surprise trend, Health Insurance Innovations surpassed expectations in the last four quarters, with an average beat of 250.00%.

Keep an eye on our full earnings articles to see how these companies finally fared.