The Hartford to Release Q1 Earnings: Key Estimates to Watch

The Hartford Insurance Group, Inc. HIG is scheduled to release first-quarter 2025 results on April 24, after market close. The Zacks Consensus Estimate for earnings is pegged at $2.13 per share, which indicates a decline of 9% from the prior-year quarter’s number.  (See the Zacks Earnings Calendar to stay ahead of market-making news.)

The first-quarter earnings estimate has witnessed no upward estimate revisions against six downward movements over the past 30 days. Meanwhile, the Zacks Consensus Estimate for revenues is pegged at $4.8 billion, implying 11.5% growth from the year-ago quarter’s figure.

The Hartford’s Earnings Surprise History

HIG’s bottom line beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 4.66%. This is depicted in the chart below:

The Hartford Insurance Group, Inc. Price and EPS Surprise

The Hartford Insurance Group, Inc. price-eps-surprise | The Hartford Insurance Group, Inc. Quote

What Our Quantitative Model Unveils for HIG

Our proven model does not conclusively predict an earnings beat for The Hartford this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here, as you see below.

Earnings ESP: The Hartford has an Earnings ESP of -4.40%. This is because the Most Accurate Estimate is currently pegged at $2.04 per share, lower than the Zacks Consensus Estimate of $2.13 per share.  You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank: HIG currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors Likely to Shape HIG’s Q1 Results

In the first quarter, revenues of The Hartford are likely to have gained on the back of strong contributions from Business Insurance, Personal Insurance and Employee Benefits businesses. The Zacks Consensus Estimate for overall net premiums earned is pegged at $5.9 billion, which implies a 8.3% rise from the prior-year quarter’s reported figure.  

Rate increases, new business growth, steady retention rates and robust submission flows are expected to have aided the Business Insurance business. However, continued incidence of catastrophe losses is likely to dampen the underwriting results of the segment. The consensus estimate for Business Insurance’s earned premiums stands at $3.4 billion, indicating 10.2% growth from the year-ago quarter’s figure.  

The Personal Insurance unit is anticipated to have benefited from steady rate hikes and renewal written price increases. The homeowner's insurance business is likely to have been aided by new business growth and strong underwriting results. However, the performance of the Personal Insurance segment is expected to have been hurt by elevated direct marketing costs, staffing costs and commissions. 

The Zacks Consensus Estimate for earned premiums of the Personal Insurance segment is pegged at $910 million, which indicates a 11.9% increase from the prior-year quarter’s reported figure. 

The Employee Benefits business is likely to have been driven by improved fully insured ongoing premiums, strong life and disability results, favorable mortality trends and strong persistency rates. However, the upside is expected to have been partly offset by increased staffing costs. The consensus mark for the unit’s revenues is $1.6 billion, indicating a 2.6% rise from the prior-year quarter's figure.

Additionally, The Hartford’s investment results are expected to gain from a higher level of invested assets and improved reinvestment rates. The Zacks Consensus Estimate for overall net investment income is $709 million, implying 19.6% growth from the year-ago quarter’s figure. 

However, the bottom line is expected to have been pressured by rising benefits, losses and loss adjustment expenses, as well as higher insurance operating costs. HIG’s margins are also likely to have been impacted by ongoing investments in digital, analytics and data science capabilities.

Stocks to Consider

Here are some companies from the insurance space, which according to our model, have the right combination of elements to beat on earnings this time around:

Root, Inc. ROOT has an Earnings ESP of +25.84% and a Zacks Rank of 1 at present. The Zacks Consensus Estimate for ROOT’s first-quarter earnings is pegged at 45 cents per share. A loss of 42 cents per share was incurred in the prior-year quarter.

Root’s earnings beat estimates in each of the trailing four quarters, the average surprise being 195.26%. 

Palomar Holdings, Inc. PLMR currently has an Earnings ESP of +1.57% and a Zacks Rank of 2. The Zacks Consensus Estimate for PLMR’s first-quarter earnings is pegged at $1.59 per share, which implies a 45.9% rise from the year-ago quarter’s figure.  

Palomar’s earnings beat estimates in each of the trailing four quarters, the average surprise being 16.64%.

CNO Financial Group, Inc. CNO has an Earnings ESP of +1.69% and a Zacks Rank of 3 at present. The Zacks Consensus Estimate for PLMR’s first-quarter earnings is pegged at 79 cents per share, which implies a 51.9% rise from the year-ago quarter’s figure.  

CNO Financial’s earnings beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 20.41%.

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

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