By Joan E. Solsman
TAKING THE PULSE: After calm weather stretched over several
quarters, first-quarter results for insurers are expected to be
hurt by severe-weather events such as windstorms in Europe, an
earthquake in Chile, and heavy storms in Northeastern U.S. Though
some insurers have preannounced their catastrophe losses from the
disasters, neither Travelers Cos. (TRV) nor Allstate Corp. (ALL)
have done so, making the losses--expected to be larger than average
across the industry--a big uncertainty about their results.
COMPANIES TO WATCH:
Travelers Cos. (TRV) - reports April 23
Wall Street Expectations: Analysts surveyed by Thomson Reuters
anticipate $1.39 a share in operating earnings on $5.11 billion in
revenue. For the same period a year earlier, the company reported
$1.11 in operating earnings on $5.74 billion in revenue.
Key Issues: Unlike many rivals, Travelers was consistently
profitable during the financial crisis because of its conservative
investing. Fourth-quarter profit was the company's best since going
public in 2002, but the blockbuster results had more to do with
stellar investment returns and a mild storm season, as premiums
actually fell. Travelers' main business of commercial-lines
insurance is one of the industry's most competitive markets.
Allstate Corp. (ALL) - reports April 28
Wall Street Expectations: The company is seen posting an 86-cent
operating profit and $6.21 billion of property-liability premiums
written. In 2009, operating earnings were 84 cents and it had $6.27
billion in such premiums written.
Key Issues: Lately, Allstate has benefited from the stock-market
rally buoying its investment portfolio, while credit write-downs
simultaneously subsided. But equities cooled somewhat in the first
quarter, and the country's largest publicly traded insurer of homes
and autos is exposed to catastrophe losses because of storm damage.
Investors will be looking to see if results in its auto segment
will catch up with improvements made in other parts of the
company.
American International Group Inc. (AIG) - reports in May
Wall Street Expectations: Analysts project earnings of 73 cents
and revenue of $23.09 billion. The previous year, before the
company's 1-for-20 reverse stock split, it reported a loss of $1.98
a share and $20.46 billion in revenue.
Key Issues: The company's results have substantially improved,
but the government-backed insurance giant still has far to go. AIG
has made progress selling assets to repay taxpayers and is working
to complete sales of two foreign life-insurance businesses. It has
been reducing risk at its derivatives unit, and an improving market
and economy have helped its prospects. But core insurance
operations and other businesses, though stabilized, remain
weak.
(The Thomson Reuters estimates and year-earlier results may not
be comparable because of one-time items and other adjustments.)
-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291;
joan.solsman@dowjones.com