In This Article:
It has been about a month since the last earnings report for Chubb (CB). Shares have added about 2.4% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Chubb due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Chubb Q3 Earnings Surpass Expectations on Solid Underwriting
Chubb Limited reported third-quarter 2024 core operating income of $5.72 per share, which beat the Zacks Consensus Estimate by 16%. The bottom line increased 15.6% year over year.
Chubb's results reflect strong performance in North America P&C, Overseas General and Life Insurance divisions, solid underwriting income and improved investment income, partially offset by a higher level of catastrophe.
Quarter in Detail
Net premiums written improved 5.5% year over year to $13.8 billion in the quarter. Our estimate and the Zacks Consensus Estimate were both pegged at $14.3 billion.
Pre-tax net investment income was $1.5 billion, up 14.7% year over year. The figure matched both the Zacks Consensus Estimate as well as our estimate.
Revenues of $15 billion missed the consensus estimate by 1.5% and improved 6.5% year over year.
Property and casualty (P&C) underwriting income was $1.4 billion, up 11.7% year over year. The Zacks Consensus Estimate was pegged at $1.1 billion. Global P&C underwriting income, excluding Agriculture, was $1.3 billion, up 10.2%.
Chubb incurred a pre-tax P&C catastrophe loss, net of reinsurance and including reinstatement premiums of $765 million, which was wider than the year-ago catastrophe loss of $670 million. The pre-tax P&C catastrophe loss included $250 million from Hurricane Helene.
The P&C combined ratio improved 70 basis points (bps) on a year-over-year basis to 87.7% in the quarter under review. The Zacks Consensus Estimate for the combined ratio was pegged at 90.
Segmental Update
North America Commercial P&C Insurance: Net premiums written increased 7.2% year over year to $5.5 billion. Our estimate was $5.3 billion. The combined ratio deteriorated 230 bps to 86.5%, reflecting due to higher catastrophe losses and lower favorable prior period development, partially offset by a better current accident year excluding catastrophe losses results. Our estimate was 87.9.
North America Personal P&C Insurance: Net premiums written climbed 10% year over year to $1.6 billion. Our estimate was $1.6 billion. The combined ratio improved 900 bps to 81.3%, reflecting lower catastrophe losses, higher favorable prior period development, and better current accident year excluding catastrophe losses results. Our estimate was 96.2.
North America Agricultural Insurance: Net premiums written decreased 9.3% from the year-ago quarter to $1.4 billion, primarily due to lower commodity prices. Our estimate was $1.5 billion. The combined ratio improved 280 bps to 90.4%. Our estimate was 75.2%.
Overseas General Insurance: Net premiums written jumped 4.9% year over year to $3.3 billion. Our estimate and the Zacks Consensus Estimate were both pegged at $3.5 billion. The combined ratio improved 100 bps to 86% due to lower catastrophe losses and higher favorable prior period development. Our estimate was 88.3.
Global Reinsurance: Net premiums written jumped 34.8% year over year to $352 million. Our estimate was $293.6 million. The combined ratio deteriorated 1,310 bps to 94.4%. Our estimate was 116.9.
Life Insurance: Net premiums written increased 6.8% year over year to $1.6 billion. Our estimate was $2 billion.
The Life Insurance segment income was $284 million, up 2.3% in constant dollars, with International Life up 9.1%. The Zacks Consensus Estimate was pegged at $312 million.