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Analyst Blog

The Chubb Corporation (CB - Analyst Report) reported a record high first-quarter operating earnings of $566 million or $2.14 per share, significantly ahead of the Zacks Consensus Estimate of $1.74 per share. Earnings also increased 26% year over year from $469 million or $1.70 per share in the first quarter of 2012.

Including after-tax realized investment gains of $138 million or 34 cents per share, net income amounted to $656 million or $2.48 per share, up 36% from $506 million or $1.83 per share in the year-ago quarter.

Net written premium for the quarter was up 4% year over year to $3.1 billion.  

Property and casualty investment income after tax slumped 6% year over year to $288 million.

Combined ratio for the quarter was 84.6% compared with 90.2% last year. Excluding catastrophe losses, combined ratio was 84%, improving from 89.4% last year.

Book value per share, a measure of net worth, was $61.79 compared with $60.45 at Dec 31, 2012.

Segment Update

At Chubb Commercial Insurance segment, net written premium increased 2% year over year to $1.4 billion during the reported quarter. The combined ratio was 81.9% in the reported quarter, compared to 93.3% in the year-ago quarter.

Chubb Specialty Insurance’s net written premiums went up 5% year over year to $632 million due to higher premiums written in the professional liability lines. The combined ratio was 87.4% in the reported quarter, compared with 93.6% in the year-ago quarter.

Chubb Personal Insurance segment’s net written premiums was up by 5% year over year to $987 million. The increase was driven by higher premium from Homeowners, Personal Automobile as well as Other Personal lines. Combined ratio was 87% in the reported quarter, compared to 85.5% in the year-ago quarter.

Capital Management

During the quarter Chubb repurchased 3.9 million shares of its common stock at a total cost of $326 million. The company had remaining authorization worth $1.1 billion as of Mar 31, 2013.

Zacks Rank

Chubb carries a Zacks Rank #2 (Buy). Other property and casualty insurers worth considering are Aspen Insurance Holdings Ltd. (AHL - Snapshot Report), Everest Re Group Ltd. (RE - Analyst Report) and Global Indemnity plc . All these companies carry a Zacks Rank #1 (Strong Buy).

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