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Chubb Counts Losses from Hurricane Maria, Mexican Tremors
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After providing loss estimates from the impact of Hurricanes Harvey and Irma, Chubb Limited (CB - Free Report) has come up with loss estimates due to Hurricane Maria and two Mexican earthquakes. The insurer projects $220 million pre-tax or $200 million post-tax losses from Maria.
These losses are net of reinsurance, including reinstatement premiums. Pre-tax losses of $152 million or $135 million after-tax will drag Chubb’s commercial and personal property as well as casualty insurance operations. Reinsurance businesses will be hurt by $53 million loss. Despite the deficit, the estimated reinstatement premiums are pegged at an extra $15 million pre-tax.
With respect to Mexican earthquakes that struck in September, the company expects to incur insured losses of $25 million pre-tax or $24 million post-tax, plus net of reinsurance and inclusion of reinstatement premiums.
Chubb also anticipates to have incurred a catastrophe loss of about $107 million pre-tax or $86 million after-tax from all other damages for which, it had not yet provided any estimates.
Recently, Chubb has calculated losses amounting to $650 million pre-tax or $520 million post- tax from Harvey, while the same from Irma is expected to be between $800 million and $950 million pre-tax or $640 million and $760 million after-tax. Per Moody’s Analytics, economic losses from Irma are estimated at $58-$83 billion while the same from Harvey could be as high as $108 billion.
Being an insurer, Chubb could not escape the vagaries of natural disasters inducing volatility in underwriting results. Despite catastrophe losses, expense efficiencies from the merger and impressive combined ratios helped Chubb generate strong underwriting profitability through the last two reported quarters.
Shares of Chubb have lost 1.9% in the third quarter, underperforming the industry’s increase of 5.9%. The stock has seen the Zacks Consensus Estimate for current-year earnings being revised downward 21.7% while the same for 2018 has slid 0.4% in the last 30 days. Calamities affecting underwriting results will possibly be an overhang on the share price. Chubb carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank stocks here..
Insurers are hit hard by a number of natural disasters in the third quarter. This will be a drag on underwriting profitability. Due to a not-so-active catastrophe environment, insurers could strengthen reserves, though pricing was hurt.
Assurant Inc. (AIZ - Free Report) has estimated between $134 million and $140 million pre-tax of reportable catastrophe losses from Harvey and expects gross losses from Irma to exceed its retention of $125 million pre-tax. The Travelers Companies, Inc. (TRV - Free Report) counts pre-tax catastrophe loss from Harvey between $375 million and $750 million or $245 million and $490 million after-tax. HCI Group, Inc. (HCI - Free Report) projects loss between $100 million and $300 million from Irma.
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Chubb Counts Losses from Hurricane Maria, Mexican Tremors
After providing loss estimates from the impact of Hurricanes Harvey and Irma, Chubb Limited (CB - Free Report) has come up with loss estimates due to Hurricane Maria and two Mexican earthquakes. The insurer projects $220 million pre-tax or $200 million post-tax losses from Maria.
These losses are net of reinsurance, including reinstatement premiums. Pre-tax losses of $152 million or $135 million after-tax will drag Chubb’s commercial and personal property as well as casualty insurance operations. Reinsurance businesses will be hurt by $53 million loss. Despite the deficit, the estimated reinstatement premiums are pegged at an extra $15 million pre-tax.
With respect to Mexican earthquakes that struck in September, the company expects to incur insured losses of $25 million pre-tax or $24 million post-tax, plus net of reinsurance and inclusion of reinstatement premiums.
Chubb also anticipates to have incurred a catastrophe loss of about $107 million pre-tax or $86 million after-tax from all other damages for which, it had not yet provided any estimates.
Recently, Chubb has calculated losses amounting to $650 million pre-tax or $520 million post- tax from Harvey, while the same from Irma is expected to be between $800 million and $950 million pre-tax or $640 million and $760 million after-tax. Per Moody’s Analytics, economic losses from Irma are estimated at $58-$83 billion while the same from Harvey could be as high as $108 billion.
Being an insurer, Chubb could not escape the vagaries of natural disasters inducing volatility in underwriting results. Despite catastrophe losses, expense efficiencies from the merger and impressive combined ratios helped Chubb generate strong underwriting profitability through the last two reported quarters.
Shares of Chubb have lost 1.9% in the third quarter, underperforming the industry’s increase of 5.9%. The stock has seen the Zacks Consensus Estimate for current-year earnings being revised downward 21.7% while the same for 2018 has slid 0.4% in the last 30 days. Calamities affecting underwriting results will possibly be an overhang on the share price. Chubb carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank stocks here..
Insurers are hit hard by a number of natural disasters in the third quarter. This will be a drag on underwriting profitability. Due to a not-so-active catastrophe environment, insurers could strengthen reserves, though pricing was hurt.
Assurant Inc. (AIZ - Free Report) has estimated between $134 million and $140 million pre-tax of reportable catastrophe losses from Harvey and expects gross losses from Irma to exceed its retention of $125 million pre-tax. The Travelers Companies, Inc. (TRV - Free Report) counts pre-tax catastrophe loss from Harvey between $375 million and $750 million or $245 million and $490 million after-tax. HCI Group, Inc. (HCI - Free Report) projects loss between $100 million and $300 million from Irma.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research. It's not the one you think. See This Ticker Free >>