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We expect property and casualty insurer The Chubb Corp. (CB - Analyst Report) to beat expectations when it reports fourth-quarter and full year 2013 results on Jan 30.

Why a Likely Positive Surprise?

Our proven model shows that Chubb is likely to beat earnings because it has the right combination of two key ingredients.
Positive Zacks ESP: Expected Surprise Prediction or Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +0.49%. This is a leading indicator of a likely positive earnings surprise for shares.

Zacks Rank #1 (Strong Buy): Note that stocks with a Zacks Ranks #1, 2 and 3 have a significantly higher chance of beating earnings. The Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.  

The combination of Chubb’s Zacks Rank #1 (Strong Buy) and +0.49% ESP makes us confident of a positive earnings beat on Jan 30.

What is Driving the Better-Than-Expected Earnings?

Price strengthening in the Commercial lines as well as Personal lines business will drive overall earnings growth at Chubb. Earnings will also benefit from a benign catastrophe loss experienced by the company this year. The company’s International segment which has been witnessing premium increases for the past several quarters is also expected to contribute to earnings growth.

The bottom-line at Chubb will benefit from the company’s disciplined share repurchase activity. The positive trend is seen in the trailing four-quarter average surprise of 49.5%.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Aspen Insurance Holdings Ltd. (AHL - Snapshot Report), earnings ESP of 3.57% and a Zacks Rank #1 (Strong Buy).

Aetna Inc. (AET - Analyst Report), earnings ESP of 2.9% and a Zacks Rank #3 (Hold).

Platinum Underwriters Holdings Ltd. (PTP - Snapshot Report), earnings ESP of 10.66% and a Zacks Rank #1 (Strong Buy).

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