As the earnings season gets underway, analysts from BofA Securities released a preview on Friday of what to expect from major insurers' fourth-quarter reports.
The firm also took a look at how the Los Angeles area wildfires will affect the companies in the current quarter.
Allstate: BofA expects Allstate Corp. (NYSE:ALL) to report $764 million in catastrophe losses for the fourth quarter, equaling a catastrophe load of 5.5%. The firm noted that Allstate reported net catastrophe losses of $286 million in October, which included losses from Hurricane Milton, unfavorable reserve re-estimates from Hurricane Helene and losses from other inclement weather events in North America.
BofA currently sees first-quarter catastrophe losses of $1.46 billion — 10.3% catastrophe load — which includes $700 million from the California wildfires, where the firm expects Allstate to incur more losses from the Eaton fire as compared to the Palisades fire.
BofA Securities maintained a Buy rating on Allstate shares but lowered its price target from $285 to $279.
Allstate is set to report its fourth-quarter financial results on Feb. 5 after the closing bell. Analysts expect the company to report earnings of $5.95 per share and revenue of $14.7 billion for the quarter.
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Chubb: The firm sees Chubb Ltd. (NYSE:CB) reporting $851 million in catastrophe losses, or an 8.1% loss ratio impact, for the first quarter. Chubb was exposed to adverse weather events around the world including European flooding, Hurricane Milton and other weather events in the U.S.
BofA pointed to Chubb as a major underwriter of high-net-worth homeowners' insurance and is modeling $1.9 billion, a 17.5% catastrophe load, of first-quarter catastrophe losses for the insurer. The California wildfires account for $1.3 billion of those projected first-quarter catastrophe losses.
BofA Securities maintained an Underperform rating on Chubb and lowered its price target from $272 to $266.
Chubb is set to report its fourth-quarter financial results on Jan. 28 after the market close. According to estimates from Benzingo Pro, analysts expect the company to report earnings of $5.46 per share on revenue of $12.277 billion.
Progressive: The analysts expect Progressive to report $104 million in catastrophe losses in December, which would bring its fourth-quarter catastrophe losses to $340 million.
BofA models first-quarter catastrophe losses of $584 million, including $90 million from the California wildfires, with two-thirds of those losses from the auto segment.
BofA Securities maintained Progressive with a Buy rating and lowered its price target from $339 to $322.
Progressive is set to report its fourth-quarter results before the opening bell on Jan. 29. Analysts expect the company to report earnings of $3.52 per share and revenue of $18.357 billion for the quarter.
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