Wednesday, June 14, 2017

W. R. Berkley (WRB) Firms Up with Mexican Operating Units

W. R. Berkley Corporation WRB has recently announced that it will establish two operating units, namely Berkley International Fianzas México S.A. and Berkley International Seguros México S.A. These units will commence coverage across Mexico in the next few weeks.

Berkley International Fianzas México will intensify focus on surety business, while Berkley International Seguros México will provide an expanded portfolio of specialty commercial insurance products and services.

The Zacks Rank #3 (Hold) property and casualty insurer noted that the Mexican insurance market is quite dynamic but has been less penetrated. The company thus believes establishing a unit there and intends to leverage operational capabilities only to help capitalize on growth opportunities further.

W.R. Berkley has been establishing operating units in different countries to grow on available opportunities as well as consolidating the footprints there. In a year’s time, the insurer has formed operating units in North Asia, Southeast Asia, South Africa and Colombia.

Recently, W.R. Berkley has established two independent operating units — Berkley Entertainment & Sports and Berkley Environmental — to focus on niche business. These, along with other strategic endeavors, have helped the company accelerate the premium growth. In its International unit, premium growth is mainly supported by emerging markets of the United Kingdom, Continental Europe, South America, Canada, Scandinavia, Asia and Australia.

With new units continuing to burgeon and established businesses no longer losing volume (retention rate was approximately 80% for 10 successive quarters), the overall growth is clearly visible. The expected long-term earnings growth is 9%.

Shares of W.R. Berkley jumped 23.58% over a year, outperforming the Zacks categorized Property and Casualty Insurance industry’s 20.34% increase. The company’s focus on fueling growth through inorganic and organic endeavors, rate increases, reserving discipline and a solid balance sheet should continue to drive the shares higher.

Stocks to Consider

Better-ranked property and casualty insurers are First American Financial Corp. FAF, State National Companies, Inc. SNC and American Financial Group, Inc. AFG.

First American Financial provides financial services. The company delivered positive surprises in last four quarters with average beat of 14.12%. The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

State National Companies provides property and casualty insurance in the United States. The company delivered positive surprises in two of last four quarters with average beat of 20.54%. The company carries a Zacks Rank #2 (Buy).

American Financial primarily engages in property and casualty insurance, focusing on specialized commercial products for businesses. The company has delivered positive surprises in three of last four quarters with an average beat of 11.47%. The company holds a Zacks Rank #2.

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Zacks Investment Research

June 14, 2017 at 03:35AM

from Zacks Equity Research