Kemper loses top spot on US P&C price-to-estimated EPS rankings

Kemper Corp. no longer has the highest price-to-estimated ratio among P&C insurers listed on major US exchanges, according to an S&P Global Market Intelligence analysis.

The insurer ended the last quarter with the highest price-to-estimated 2023 earnings ratio among its peers at 475.8x but ended the third quarter at -97.9x.

Kemper reported weak second-quarter earnings, in part due to a large number of catastrophes. Fitch Ratings downgraded its long-term issuer default rating for the company from BBB+ to BBB due to "continued heightened loss trends in Kemper Auto and personal insurance segments, higher catastrophe losses and adverse prior-year reserve development. The rating action also reflects deterioration in Kemper's property and casualty capitalization."

The Allstate Corp., the second-most expensive US P&C carrier in the previous quarter with a multiple of 48.9x, also ended the period with a negative price-to-estimated 2023 earnings multiple of 43.3x. Analysts anticipate the company will incur a loss per share of $2.57 in 2023, compared to a reported loss per share of 97 cents for the prior period.

Both companies also fell out of the top 15 list of US P&C insurers in terms of highest price-to-estimated 2023 earnings ratio.

ProAssurance leads the way

Despite an estimated 23.1% decline in its normalized EPS, ProAssurance Corp. had the highest price-to-estimated 2023 earnings ratio among listed US P&C insurers at 54.6x. Based on analyst estimates, ProAssurance's normalized EPS will decline year over year to 35 cents in 2023 from the 45 cents it reported in 2022.

Analysts expect Kinsale Capital Group Inc.'s EPS to jump by 46% in 2023, the largest predicted increase in the 25 companies included in the analysis. Analysts anticipate the company to produce EPS of $11.38 in 2023, compared to $7.80 in 2022.

Overall, analysts project that the P&C industry's median EPS will rise 18.7% year over year in 2023.

– Click here for the US P&C Q2 earnings recap. – Click here for the US life Q2 earnings recap.

Aflac, Primerica switch places

As of the end of the third quarter, Aflac Inc. was the most expensive US life carrier, with a price-to-estimated full-year 2023 earnings multiple of 12.7x. Primerica Inc. took the second position with a multiple of 12.3x. Primerica also posted the strongest result in terms of one-year total return among all US life insurers included in the analysis at 58.5%.

The other public life insurance players trading at more than 10x their estimated 2023 EPS estimates are Principal Financial Group Inc. and Globe Life Inc.

The group of 15 public life insurers in this analysis is expected to see its median 2023 earnings per share increase 18.7% compared to the past year.