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Insurance earnings roundup, Feb. 2

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Insurance earnings roundup, Feb. 2

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

Managed care

Cigna Corp. reported fourth-quarter 2016 adjusted income from operations of $485 million, or $1.87 per share, compared with $486 million, or $1.87 per share, in the year-ago period.

The S&P Capital IQ consensus normalized EPS estimate for the fourth quarter of 2016 was $1.74.

Shareholders' net income for the fourth quarter of 2016 was $382 million, or $1.47 per share, down from $426 million, or $1.64 per share, in the year-ago period. Fourth-quarter 2016 shareholders' net income included special item charges of $119 million after tax, or 46 cents per share, for the establishment of an allowance against risk corridor program receivables and transaction costs related to Cigna's proposed merger with Anthem Inc.

Multiline

The Hartford Financial Services Group Inc. reported a fourth-quarter 2016 net loss of $81 million, or 22 cents per share, compared with net income of $421 million, or $1.01 per share, a year ago.

The loss was mostly due to a $423 million after-tax charge resulting from a reinsurance agreement with National Indemnity Co. covering The Hartford's asbestos and environmental liability exposures. The loss also included an unlock charge of $12 million, after tax, compared to an after-tax unlock benefit of $35 million a year earlier.

Core earnings for the period were $415 million, or $1.08 per share, compared with $445 million, or $1.07 cents per share, a year earlier.

Both core and net earnings were impacted by a $102 million after-tax decrease in property and casualty underwriting results. They were partially offset by a $40 million after-tax increase in investment income from limited partnerships and other alternative investments. The Hartford said that the weaker P&C underwriting results were mostly due to higher current accident-year personal auto liability losses.

The S&P Capital IQ consensus normalized EPS estimate for the quarter was 93 cents.

For 2017, The Hartford expects its commercial lines combined ratio to be between 92.5% and 94.5%. It anticipates its personal lines combined ratio coming in between 99.0% and 101.0%. Property and casualty net investment income, before tax and excluding limited partnerships and other alternative investments, is projected to be between $975 million and $1.03 billion.

Property and casualty

Marsh & McLennan Cos. Inc. reported fourth-quarter 2016 net income attributable to the company of $436 million, or 84 cents per share, up from $375 million, or 71 cents per share, in the year-ago quarter.

Adjusted EPS for the quarter was 89 cents, compared with 71 cents in the prior-year period.

The S&P Capital IQ consensus normalized EPS estimate for the quarter was 83 cents.

Operating income for the quarter increased to $633 million from $594 million in the year-ago period.

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Validus Holdings Ltd. reported fourth-quarter 2016 net operating income available to common shareholders of $64.3 million, or 80 cents per share, compared with $105.4 million, or $1.24 per share, for the quarter ended Dec. 31, 2015.

The S&P Capital IQ consensus normalized EPS estimate for the quarter was 70 cents.

Net income available to common shareholders was $7.8 million, or 10 cents per share, for the quarter ended Dec. 31, 2016, compared to $69.0 million, or 81 cents per common share, for the year-ago period.

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Hanover Insurance Group Inc. reported a fourth-quarter 2016 after-tax operating loss of $19.7 million, or 46 cents per share, compared with operating income of $80.3 million, or $1.82 per share, in the year-ago period.

The fourth-quarter 2016 operating loss included the strengthening of domestic prior-year loss and loss adjustment expense reserves of $174.1 million, or $113.2 million after tax.

The net loss for the quarter was $13.5 million, or 32 cents per share, compared with net income of $77.6 million, or $1.76 per share, in the fourth quarter of 2015.

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Selective Insurance Group Inc. reported fourth-quarter 2016 operating income of $44.4 million, or 75 cents per share, versus $47.1 million, or 81 cents per share, in the prior-year quarter.

Net income was $39.4 million, or 67 cents per share, compared with $45.4 million, or 78 cents per share, a year ago.