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Chubb (CB) Q2 Earnings Top on Higher Premiums, Better Pricing

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Chubb Limited (CB - Free Report) reported second-quarter 2021 core operating income of $3.62 per share, which surpassed the Zacks Consensus Estimate by 22.3% on the back of improved premium revenues. The bottom line rebounded from the year-ago loss of 52 cents per share.

The company’s results benefited from highest organic P&C growth in over 15 years, driven by commercial P&C businesses and supported by continued robust commercial P&C pricing. The quarter marked record core operating earnings and underwriting results.

Chubb Limited Price, Consensus and EPS Surprise

Quarter in Detail

Net premiums written climbed 14.3% year over year to $9.5 billion in the quarter. Net premiums earned improved 8.4% to $8.8 billion.

Net investment income amounted to $884 million, increased 6.9% year over year.

In the second quarter, P&C underwriting income was $1.2 billion, rebounding from the year-ago loss of $0.9 billion.

Chubb incurred $226 million of after-tax catastrophe losses, net of reinsurance and including reinstatement premiums in the second quarter, narrower than the year-ago loss of $1.5 billion.

Combined ratio improved 2680 basis points (bps) year over year to 85.5 in the quarter under review.

Segmental Update

North America Commercial P&C Insurance: Net premiums written increased 15.2% from the prior-year quarter to $4.3 billion. Combined ratio improved 3420 bps to 83.1.

North America Personal P&C Insurance: Net premiums written increased 2.6% from the prior-year quarter to $1.4 billion. Combined ratio improved 40 bps to 79.2.

North America Agricultural Insurance: Net premiums written improved 11% year over year to $512 million. Combined ratio improved 310 bps to 90.9.

Overseas General Insurance: Net premiums written advanced 23.6% from the year-ago quarter to $2.5 billion. Combined ratio improved 230 bps to 88.7.

Global Reinsurance: Net premiums written increased 32.4% year over year to $274 million. Combined ratio deteriorated 1000 bps to 86.6

Life Insurance: Net premiums written dipped 0.7% year over year to $615 million.

Financial Update

As of Jun 30, 2021, cash balance of $1.8 billion improved 5.5% from the figure at 2020 end.

Total shareholders’ equity increased about 1% from the level at 2020 end to $60.1 billion as of Jun 30, 2021.

Book value per share as of Jun 30, 2021 was $136.90, up 3.8% from the figure as of Dec 31, 2020.

Core operating return on equity (ROE) came in at 11.5% in the quarter under consideration.

During the quarter, operating cash flow totaled $3.1 billion.

Capital Deployment

In the quarter, the company bought back shares worth $2.27 billion including share repurchases of $1.92 billion and dividends of $352 million.

Zacks Rank

Chubb currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Insurers

Among other insurers that have already reported their second-quarter results, the bottom line at The Progressive Corporation (PGR - Free Report) , The Travelers Companies’ (TRV - Free Report) and RLI Corp (RLI - Free Report) beat the respective Zacks Consensus Estimate.