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Chubb (CB) Q3 Earnings Beat Estimates, Premiums Rise Y/Y

Zacks Equity Research

Chubb Limited CB reported third-quarter 2019 core operating income of $2.70 per share, which outpaced the Zacks Consensus Estimate by 2.3%. The upside was driven by higher premium revenues. The bottom line improved 12% from the year-ago quarter.

The company also benefited from an improved pricing and underwriting environment as well as product, customer and distribution-related growth initiatives in the United States, Asia and Latin America.

Quarter in Detail    

Net premiums written improved 6.3% year over year to about $8.6 billion in the quarter. Net premiums earned rose 5.3% to $8.3 billion.

Net investment income was $873 million, up 6.1%.

Property and casualty (P&C) underwriting income was $754 million, up 12.6% from the year-ago quarter. Global P&C underwriting income, which excludes Agriculture, was $753 million, up 27.7%.

Combined ratio improved 70 basis points (bps) to 90.2%, reflecting lower catastrophe losses and higher crop insurance losses.

Chubb reported after-tax catastrophe loss of $191 million in the third quarter, plunging 48.7% year over year.

Chubb Limited Price, Consensus and EPS Surprise

Chubb Limited Price, Consensus and EPS Surprise

Chubb Limited price-consensus-eps-surprise-chart | Chubb Limited Quote

Segment Update    

North America Commercial P&C Insurance: Net premiums written increased 7.9% year over year to about $3.5 billion. Combined ratio deteriorated 110 bps to 86.9%.

North America Personal P&C Insurance: Net premiums written slipped 2.7% year over year to $1.3 billion. Combined ratio improved 1850 bps to 83.1%.

North America Agricultural Insurance: Net premiums written increased 6.2% from the year-ago quarter to $938 million. Combined ratio deteriorated 920 bps to 99.9%.

Overseas General Insurance: Net premiums written rose 7.1% year over year to $2.2 billion. Combined ratio deteriorated 20 bps to 90.5%.

Global Reinsurance: Net premiums written declined 14% from the year-ago quarter to $141 million. Combined ratio of 87.7% improved 560 bps.

Life Insurance: Net premiums written were up 8.5% year over year to $612 million on the back of growth in the Asian international life operations.

Financial Update

Cash balance of $1.5 billion as of Sep 30, 2019 increased 18.5% from 2018 end.

Total shareholders’ equity increased 8.5% from 2018 end to $54.6 billion as of Sep 30, 2019.

Book value per share was $120.33 as of Sep 30, 2019, up 9.8% from the Dec 31, 2018 figure.

Core operating ROE was 9.5%.

Operating cash flow was $2.2 billion in the quarter under consideration.

Share Repurchase Update

In the quarter, the company bought back shares worth $478 million.

Zacks Rank

Chubb currently carries a Zacks Rank #3 (Hold).

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

Performance of Other Insurers

Of the insurance industry players that have reported third-quarter results so far, the bottom-line figures of The Progressive Corporation PGR and RLI Corp. RLI beat the respective Zacks Consensus Estimate. However, The Travelers Companies, Inc. TRV missed the mark.

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