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Chubb (CB) Q1 Earnings Top Estimates, Premiums Rise Y/Y

Zacks Equity Research

Chubb Limited CB reported first-quarter 2019 core operating income of $2.54 per share, which outpaced the Zacks Consensus Estimate of $2.49 by 2%. The bottom line improved 8.5% from the year-ago quarter.

The quarter reflected solid premium growth and net investment income as well as lower cat loss.

Including one-time integration and merger-related expenses of 1 cent, amortization of fair value adjustment of acquired invested assets, long-term debt of 7 cents and net realized loss of 21 cents, net income of $2.25 per share declined 2.2% from the prior-year quarter.

Chubb Limited Price, Consensus and EPS Surprise

Chubb Limited Price, Consensus and EPS Surprise | Chubb Limited Quote

Quarter in Detail    

Net premiums written improved 2% year over year to about $7.6 billion in the quarter. Net premiums earned rose 1.6% year over year to $7.2 billion.

Net investment income was $836 million, up 3.7% from the comparable quarter last year.

Property and casualty underwriting income was $712 million, up 10.9% from the year-ago period. Combined ratio improved 90 basis points (bps) to 89.2%.

Chubb reported after-tax catastrophe loss of $201 million in the reported quarter, narrower than than the year-ago quarter’s loss of $303 million.

Segment Update

North America Commercial P&C Insurance: Net premiums written increased 4.9% year over year to about $3 billion. Combined ratio deteriorated 40 bps to 86.6%.

North America Personal P&C Insurance: Net premiums written were up 0.8% year over year to $1.1 billion. Combined ratio improved 1270 bps to 91.5%.

North America Agricultural Insurance: Net premiums written increased 27.9% year over year to $55 million. The current accident year combined ratio, excluding catastrophe losses, was 83.9%, down 1620 bps, largely attributable to lower favorable expense adjustments in the current year.

Overseas General Insurance: Net premiums written rose 0.5% year over year to $2.4 billion. Combined ratio deteriorated 190 bps to 92.3%.

Global Reinsurance: Net premiums written increased 4.7% year over year to $168 million. Combined ratio of 76.8% deteriorated 730 bps from the year-ago period.

Life Insurance: Net premiums written were down 4.1% year over year to $900 million.

Financial Update

Cash balance of $1.3 billion as of Mar 31, 2019 increased 2.2% from 2018 end. Total shareholders’ equity increased 4.1% to $52.4 billion as of Mar 31, 2019.

Book value per share was $114.27 as of Mar 31, 2019, up 4.3% from the level as of Dec 31, 2018.

Core operating ROE was 9.2%.

Operating cash flow was $1.3 billion in the quarter under consideration.

Share Repurchase Update

In the reported quarter, the company bought back shares worth $367 million.

Zacks Rank

Chubb currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other P&C Insurers

Among other players from the insurance industry, which have already reported first-quarter earnings, The Travelers Companies, Inc. TRV and RLI Corp. RLI and The Progressive Corporation PGR outpaced the respective Zacks Consensus Estimate.

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