Barclays on U.S. Insurance/Non-Life: Adjusting EPS Estimates For 2Q11 Catastrophe Losses: AWH, RE and THG
Tweet
Share
E-mailGet Alerts RE Hot Sheet
Price: $351.28 --0%
Rating Summary:
11 Buy, 4 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
11 Buy, 4 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Join SI Premium – FREE
Barclays on U.S. Insurance/Non-Life: Adjusting EPS Estimates For 2Q11 Catastrophe Losses: AWH, RE and THG
Barclays analyst said, "We are reducing our EPS estimates for AWH and THG due to higher-than-anticipated pre-announced catastrophe losses, and raising our EPS estimate for RE for better-than-expected 2Q11 results.
"Everest Re (NYSE: RE) announced 2Q11 catastrophe losses of $80mn after-tax ($1.47/share, 1.4% of BV), which is in line with our outlook. Despite elevated 2Q11 catastrophe losses, RE still expects to report an underwriting profit in 2Q11, which is better than we anticipated. As a result, we are raising our 2011 EPS estimate for RE to $1.20 from $0.75...Everest Re could benefit from moderate increases in property catastrophe reinsurance pricing, although we would need to see evidence of less volatility in operating results before becoming more constructive on the stock. Also, we remain concerned regarding the company's loss reserve adequacy in its U.S. Insurance business. RE currently trades at 0.76x 1Q11 book value, below its historical median valuation of 1.3x (historical range: 0.7x-2.1x)."
"Allied World Assurance (NYSE: AWH) expects 2Q11 catastrophe losses of $65mn-$75mn pre-tax ($1.64/share after-tax, 2% of BV), including $25mn of reserve strengthening for 1Q11 catastrophes, which is higher than we projected. As a result, we are lowering our 2011 EPS estimate for AWH to $3.55 from $4.65...AWH has a strong franchise in primary commercial insurance and reinsurance and is building an onshore primary insurance platform; however, we are concerned about the sustainability of reserve releases."
"Hanover Insurance (NYSE: THG) expects 2Q11 catastrophe losses of $145mn-$160mn pre-tax ($2.08-$2.30/share after-tax, 4% of BV), which is higher than we expected. As a result, we are reducing our 2011 EPS estimate for THG to $1.70 from $2.40. THG's valuation of less than 70% of stated book value appears attractive. However, THG's ROE is expected to remain below its cost of capital and the recently-completed £313mn ($510mn) acquisition of Chaucer increases execution risk in our view."
Barclays analyst said, "We are reducing our EPS estimates for AWH and THG due to higher-than-anticipated pre-announced catastrophe losses, and raising our EPS estimate for RE for better-than-expected 2Q11 results.
"Everest Re (NYSE: RE) announced 2Q11 catastrophe losses of $80mn after-tax ($1.47/share, 1.4% of BV), which is in line with our outlook. Despite elevated 2Q11 catastrophe losses, RE still expects to report an underwriting profit in 2Q11, which is better than we anticipated. As a result, we are raising our 2011 EPS estimate for RE to $1.20 from $0.75...Everest Re could benefit from moderate increases in property catastrophe reinsurance pricing, although we would need to see evidence of less volatility in operating results before becoming more constructive on the stock. Also, we remain concerned regarding the company's loss reserve adequacy in its U.S. Insurance business. RE currently trades at 0.76x 1Q11 book value, below its historical median valuation of 1.3x (historical range: 0.7x-2.1x)."
"Allied World Assurance (NYSE: AWH) expects 2Q11 catastrophe losses of $65mn-$75mn pre-tax ($1.64/share after-tax, 2% of BV), including $25mn of reserve strengthening for 1Q11 catastrophes, which is higher than we projected. As a result, we are lowering our 2011 EPS estimate for AWH to $3.55 from $4.65...AWH has a strong franchise in primary commercial insurance and reinsurance and is building an onshore primary insurance platform; however, we are concerned about the sustainability of reserve releases."
"Hanover Insurance (NYSE: THG) expects 2Q11 catastrophe losses of $145mn-$160mn pre-tax ($2.08-$2.30/share after-tax, 4% of BV), which is higher than we expected. As a result, we are reducing our 2011 EPS estimate for THG to $1.70 from $2.40. THG's valuation of less than 70% of stated book value appears attractive. However, THG's ROE is expected to remain below its cost of capital and the recently-completed £313mn ($510mn) acquisition of Chaucer increases execution risk in our view."
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Viking Holdings (VIK) PT Raised to $82 at Mizuho
- DA Davidson Starts Everus (ECG) at Buy
- Cummins (CMI) PT Lowered to $675 at Jefferies
Create E-mail Alert Related Categories
Analyst CommentsRelated Entities
BarclaysSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
