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Chubb's (CB) Q4 Earnings Beat Estimates, Premiums Up Y/Y
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Chubb Limited (CB - Free Report) reported fourth-quarter 2020 core operating income of $3.18 per share, which outpaced the Zacks Consensus Estimate by 10.8%. This outperformance was driven by higher premium revenues. The bottom line also improved 39.5% from the year-ago quarter.
The company’s results reflect lower catastrophe losses and improvement in premiums in the company’s North America and international businesses, which were partially offset by lower net investment income.
Net premiums written improved 5.2% year over year to $8.4 billion in the quarter. Net premiums earned rose 6.2% to $8.4 billion.
Net investment income was $847 million, down 1.3%.
Property and casualty (P&C) underwriting income was $969 million, up 81.8% from the year-ago quarter. Global P&C underwriting income excluding Agriculture was $933 million, up 67.8%.
Chubb incurred after-tax catastrophe loss of $271 million in the fourth quarter, plunging 23.2% year over year.
Combined ratio improved 510 basis points (bps) on a year-over-year basis to 87.6% in the quarter under review.
Segmental Update
North America Commercial P&C Insurance: Net premiums written increased 8.3% year over year to $3.7 billion. Combined ratio improved 480 bps to 77.8%. North America Personal P&C Insurance: Net premiums written climbed 2.5% year over year to $1.2 billion. Combined ratio improved 1100 bps to 88.6%.
North America Agricultural Insurance: Net premiums written declined 12.2% from the year-ago quarter to $242 million. Combined ratio improved 1490 bps to 90.5%.
Overseas General Insurance: Net premiums written rose 4.1% year over year to $2.4 billion. Combined ratio improved 70 bps to 92.4%.
Global Reinsurance: Net premiums written increased 14.4% from the year-ago quarter to $125 million. Combined ratio of 99.6% deteriorated 500 bps.
Life Insurance: Net premiums written were up 3% year over year to $640 million.
Financial Update
Cash balance of $1.7 billion as of Dec 31, 2020 increased 13.7% from the 2019-end level.
Total shareholders’ equity increased 7.4% from the level at 2019 end to $59.4 billion as of Dec 31, 2020.
Book value per share as of Dec 31, 2020 was $131.88, up 7.7% from the figure as of Dec 31, 2019.
Core operating ROE was 10.7%.
Operating cash flow was $2.54 billion in the quarter under consideration.
Share Repurchase Update
In the quarter, the company bought back shares worth $190 million.
Full-Year Update
Core operating income for the year came in at $7.31 per share, down 27.7% year over year.
P&C net premiums written were $31.3 billion, up 4.8% year over year. Combined ratio
Fourth-quarter earnings of The Progressive Corporation (PGR - Free Report) , W.R. Berkley Corporation (WRB - Free Report) , and Brown & Brown (BRO - Free Report) beat the respective Zacks Consensus Estimate.
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Chubb's (CB) Q4 Earnings Beat Estimates, Premiums Up Y/Y
Chubb Limited (CB - Free Report) reported fourth-quarter 2020 core operating income of $3.18 per share, which outpaced the Zacks Consensus Estimate by 10.8%. This outperformance was driven by higher premium revenues. The bottom line also improved 39.5% from the year-ago quarter.
The company’s results reflect lower catastrophe losses and improvement in premiums in the company’s North America and international businesses, which were partially offset by lower net investment income.
Chubb Limited Price, Consensus and EPS Surprise
Chubb Limited price-consensus-eps-surprise-chart | Chubb Limited Quote
Quarter in Detail
Net premiums written improved 5.2% year over year to $8.4 billion in the quarter. Net premiums earned rose 6.2% to $8.4 billion.
Net investment income was $847 million, down 1.3%.
Property and casualty (P&C) underwriting income was $969 million, up 81.8% from the year-ago quarter. Global P&C underwriting income excluding Agriculture was $933 million, up 67.8%.
Chubb incurred after-tax catastrophe loss of $271 million in the fourth quarter, plunging 23.2% year over year.
Combined ratio improved 510 basis points (bps) on a year-over-year basis to 87.6% in the quarter under review.
Segmental Update
North America Commercial P&C Insurance: Net premiums written increased 8.3% year over year to $3.7 billion. Combined ratio improved 480 bps to 77.8%. North America Personal P&C Insurance: Net premiums written climbed 2.5% year over year to $1.2 billion. Combined ratio improved 1100 bps to 88.6%.
North America Agricultural Insurance: Net premiums written declined 12.2% from the year-ago quarter to $242 million. Combined ratio improved 1490 bps to 90.5%.
Overseas General Insurance: Net premiums written rose 4.1% year over year to $2.4 billion. Combined ratio improved 70 bps to 92.4%.
Global Reinsurance: Net premiums written increased 14.4% from the year-ago quarter to $125 million. Combined ratio of 99.6% deteriorated 500 bps.
Life Insurance: Net premiums written were up 3% year over year to $640 million.
Financial Update
Cash balance of $1.7 billion as of Dec 31, 2020 increased 13.7% from the 2019-end level.
Total shareholders’ equity increased 7.4% from the level at 2019 end to $59.4 billion as of Dec 31, 2020.
Book value per share as of Dec 31, 2020 was $131.88, up 7.7% from the figure as of Dec 31, 2019.
Core operating ROE was 10.7%.
Operating cash flow was $2.54 billion in the quarter under consideration.
Share Repurchase Update
In the quarter, the company bought back shares worth $190 million.
Full-Year Update
Core operating income for the year came in at $7.31 per share, down 27.7% year over year.
P&C net premiums written were $31.3 billion, up 4.8% year over year. Combined ratio
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
Fourth-quarter earnings of The Progressive Corporation (PGR - Free Report) , W.R. Berkley Corporation (WRB - Free Report) , and Brown & Brown (BRO - Free Report) beat the respective Zacks Consensus Estimate.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>