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Earnings roundup: Humana, Allstate report lower adjusted earnings YOY in Q4'17

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Earnings roundup: Humana, Allstate report lower adjusted earnings YOY in Q4'17

With earnings season in gear, S&P Global Market Intelligence presents a snapshot of recently reported financial results for companies in the insurance space.

Life and health

Prudential Financial Inc. posted fourth-quarter 2017 after-tax adjusted operating income of $1.17 billion, or $2.69 per share, compared with $1.09 billion, or $2.46 per share, in the prior-year period.

The S&P Capital IQ consensus normalized EPS estimate for the quarter was $2.64.

Net income attributable to the company was $3.77 billion, or $8.61 per share, in the quarter, an increase from $284 million, or 65 cents per share, in the fourth quarter of 2016.

Prudential Financial's fourth-quarter 2017 net income included a benefit of $2.87 billion, or $6.64 per share, related to recently enacted federal tax reform. That benefit was related to the remeasurement of net deferred tax liabilities stemming from a lower corporate tax rate and the adoption of a territorial tax system.

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Manulife Financial Corp. reported a fourth-quarter 2017 net loss attributable to shareholders of C$1.61 billion, or 83 Canadian cents per share, compared with income of C$63 million, or 1 cent per share, in the prior-year period.

Core earnings came in at C$1.21 billion, or 59 cents per common share, versus C$1.29 billion, or 63 cents per common share, the previous year.

The S&P Capital IQ consensus normalized EPS estimate for the period was 59 cents.

Impacting fourth-quarter 2017 net earnings was a charge of approximately C$1.8 billion, post-tax, resulting from the cut in the U.S. corporate income tax rate. The company also recorded a C$1.0 billion charge related to its decision to reduce the allocation of alternative long-duration assets in its portfolio mix supporting the North American legacy businesses.

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Torchmark Corp. posted fourth-quarter 2017 net income of $1.0 billion, or $8.71 per share, up from $135.4 million, or $1.12 per share, in the prior-year period.

Net income per share for the quarter before adjusting for tax reform would have been $1.30 per share.

Net operating income from all operations was $146.8 million, or $1.24 per share, up from $139.55 million, or $1.16 per share, in the fourth quarter of 2016.

The S&P Capital IQ normalized EPS estimate for the period was $1.23.

Torchmark projects that net operating income from continuing operations per share will be in a range of $5.90 to $6.10 for the year ending Dec. 31, 2018.

The S&P Capital IQ normalized EPS estimate for the period is $6.06.

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Primerica Inc. reported fourth-quarter 2017 net adjusted operating income of $72.3 million, or $1.60 per share, up from $55.9 million, or $1.19 per share, in the fourth quarter of 2016.

Net income was $168.4 million, or $3.72 per share, versus $56.9 million, or $1.21 per share, in the year-ago period. Fourth-quarter net income results reflect a net benefit of $95.5 million to recognize the transition effect of the Tax Cuts and Jobs Act.

The S&P Global consensus normalized EPS estimate for the period was $1.43.

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American Equity Investment Life Holding Co. reported fourth-quarter 2017 operating income of $74.5 million, or 82 cents per share, up from $56.0 million, or 63 cents per share, for the fourth quarter of 2016.

The S&P Global consensus normalized EPS estimate for the quarter was 68 cents.

Net income was $36.8 million, or 41 cents per share, down from $120.8 million, or $1.35 per share, in the year-ago period.

The impact of tax reform was a reduction of net income for the quarter of $35.9 million, or 40 cents per share, due to the rate change on net deferred tax assets at the time of enactment.

Managed care

Humana Inc. reported fourth-quarter 2017 GAAP consolidated pretax income of $490 million, compared with a loss of $486 million in the 2016 fourth quarter. GAAP EPS was $1.29, compared with a per-share loss of $2.68 in the year-ago quarter.

The year-over-year comparison was favorably impacted by the reserve strengthening recorded in the fourth quarter of 2016 for the company's non-strategic closed block of long-term care insurance business and the improvement in earnings associated with the individual commercial segment in the most recent quarter, as well as an increase in earnings year over year for its group and specialty segment. These items were partially offset by the decline in earnings for the healthcare services and retail segments. GAAP EPS was impacted by a charge of 94 cents per share due to the tax law.

Adjusted consolidated pretax income was $576 million, down from $694 million in the year-ago quarter, primarily due to lower earnings in the retail and healthcare services segments, partially offset by higher earnings in the group and specialty segment. Adjusted EPS for the quarter was $2.06, compared with $2.34 in the prior-year quarter.

The S&P Capital IQ consensus normalized EPS estimate for the quarter was $2.00.

For 2018, Humana said it expects GAAP EPS of $13.16 to $13.66 and non-GAAP EPS of $13.50 to $14.00. This guidance includes a net benefit from tax reform of approximately $2.00.

The S&P Capital IQ consensus normalized EPS estimate for 2018 is $12.45.

Property and casualty

Allstate Corp. posted fourth-quarter 2017 adjusted net income of $762 million, or $2.09 per share, down from $807 million, or $2.17 per share, in the year-ago period.

The S&P Capital IQ consensus normalized EPS estimate for the quarter was $1.53.

Fourth-quarter 2017 net income applicable to common shareholders was $1.22 billion, or $3.35 per share, compared with $811 million, or $2.18 per share, in the fourth quarter of 2016.

Recently enacted tax reform resulted in a $506 million increase to net income. Fourth-quarter adjusted net income excludes the impact of tax reform and goodwill impairment-related to changes in reportable segments.

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Cincinnati Financial Corp. reported fourth-quarter 2017 non-GAAP operating income of $153 million, or 93 cents per share, compared with $125 million, or 75 cents per share, in the year-ago quarter.

The S&P Global consensus normalized EPS estimate for the quarter was 87 cents.

Net income was $642 million, or $3.88 per share, up from $100 million, or 60 cents per share, in the fourth quarter of 2016.

The fourth-quarter net income increase reflects a $495 million benefit from net deferred income tax liability revaluation due to U.S. tax reform, a $27 million increase in after-tax property casualty underwriting income and a $19 million after-tax increase in net realized investment gains.

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AXIS Capital Holdings Ltd. reported fourth-quarter 2017 non-GAAP operating income of $19.9 million, or 24 cents per common share, compared with $100.5 million, or $1.14 per common share, in the year-ago period.

The S&P Capital IQ consensus normalized EPS estimate for the quarter was 26 cents.

The company reported a fourth-quarter 2017 net loss available to common shareholders of $38.1 million, or a loss of 46 cents per share, compared with net income available to common shareholders of $130.9 million, or $1.48 per share, in the year-ago quarter.

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White Mountains Insurance Group Ltd. reported fourth-quarter 2017 comprehensive income attributable to common shareholders of $22.5 million, compared with a comprehensive loss of $39.1 million in the prior-year period.

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Aspen Insurance Holdings Ltd. posted a fourth-quarter 2017 operating loss of $178.1 million, or a loss of $3.14 per share, compared with an operating loss after tax of $7.4 million, or a loss of 34 cents per share, in the same quarter of 2016.

The company reported an after-tax net loss of $184.9 million, or a net loss of $3.25 per share, for the quarter, versus an after-tax net loss of $71.5 million, or a net loss of $1.41 per share, in the year-ago period.

Title

Investors Title Co. reported fourth-quarter 2017 net income attributable to the company of $9.6 million, or $5.08 per share, up from $5.1 million, or $2.67 per share, in the prior-year period.

Following U.S. tax reform, the revaluation of Investors Title's deferred tax assets and liabilities resulted in a benefit to the year and the quarter of approximately $5.3 million, or $2.82 per share.