W.R. Berkley Gears Up to Report Q1 Earnings: What's in the Cards?

W.R. Berkley Corporation WRB is slated to report first-quarter 2025 earnings on April 21, after market close. The insurer delivered an earnings surprise in each of the last four reported quarters.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Factors to Consider

Gross premiums written in the Insurance segment are likely to have benefited from the well-performing other liability, short-tail lines and commercial auto. We expect the metric to be $3 billion, indicating an increase of 5.5% from the year-ago reported number.

Reinsurance & Monoline Excess segment’s gross premiums written are expected to have improved, banking on well-performing monoline excess and property reinsurance. We expect the metric to be $452 million, suggesting a rise of 2.4% from the year-ago reported number.
 
The Zacks Consensus Estimate for first-quarter 2025 premiums earned is pegged at $2.98 billion, indicating an increase of 8% from the year-ago reported quarter. Our estimate for the metric is pegged at $2.84 billion, indicating a 2.9% upside from the year-ago reported number.

Improving cash flows and an increase in fixed-maturity income from a growing portfolio with higher yields are likely to have aided net investment income. The Zacks Consensus Estimate for first-quarter 2025 net investment income is pegged at $346 million, indicating an increase of 8.1% from the year-ago reported quarter. We estimate the metric to be $380.4 million, indicating an increase of 18.9% from the year-ago reported number.

Improvement in premiums, coupled with higher investment income, is likely to have aided revenues in the to-be-reported quarter. The Zacks Consensus Estimate is pegged at $3.48 billion, indicating an upside of 7.5% from the year-ago reported figure.

Higher losses and loss expenses, expenses from non-insurance business, higher investment in technology and data and analytics, as well as new startup operating unit expenses, are likely to have increased expenses. We expect total expenses to increase 4.7% to $2.8 billion.

Improvements in net premiums earned and initiatives driving technological and operational efficiencies throughout the business are likely to have contributed to the improved expense ratio. We estimate the metric to be 29.3 in the to-be-reported quarter. 

Underwriting profitability is likely to have benefited from prudent pricing and increased exposure. However, catastrophe losses relating to the recent California wildfires are likely to have weighed on the improvement. The Zacks Consensus Estimate for the combined ratio is pegged at 91, while our estimate is pegged at 89.2.

Continued share buybacks are likely to have provided additional support to the bottom line. The Zacks Consensus Estimate for earnings per share is pegged at $1.01, indicating a 2.8% decrease from the year-ago quarter’s reported number.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for W.R. Berkley 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). This is not the case, as you can see below:

Earnings ESP: W.R. Berkley has an Earnings ESP of 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $1.01. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter. 
 

W.R. Berkley Corporation Price and EPS Surprise

W.R. Berkley Corporation price-eps-surprise | W.R. Berkley Corporation Quote

Zacks Rank: W.R. Berkley currently carries a Zacks Rank #3. 

Stocks to Consider

Here are three P&C insurance stocks you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:

Chubb Limited CB has an Earnings ESP of +0.22% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for first-quarter 2025 earnings is pegged at $3.26, indicating a year-over-year decrease of 39.7%. You can see the complete list of today’s Zacks #1 Rank stocks here.

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

Cincinnati Financial Corporation CINF has an Earnings ESP of +2.00% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for first-quarter 2025 earnings is pegged at a loss of 50 cents, indicating a year-over-year decrease of 129%. 

CINF’s earnings beat estimates in three of the last four reported quarters and missed in one.

First American Financial Corporation FAF has an Earnings ESP of +0.28% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for first-quarter 2025 earnings is pegged at 67 cents, indicating a year-over-year increase of 48.8%. 

FAF’s earnings beat estimates in three of the last four reported quarters and missed in one. 

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This article originally published on Zacks Investment Research (zacks.com).

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