Back to top

Image: Bigstock

Chubb's (CB) Q4 Earnings Beat Estimates, Premiums Rise Y/Y

Read MoreHide Full Article

Chubb Limited (CB - Free Report) reported fourth-quarter 2021 core operating income of $3.81 per share, which outpaced the Zacks Consensus Estimate by 16.5%. This outperformance was driven by higher premium revenues. The bottom line also improved 19.8% from the year-ago quarter.

Chubb's results reflected lower catastrophe losses and an 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 and EPS Surprise

Chubb Limited price-consensus-eps-surprise-chart | Chubb Limited Quote

Quarter in Detail

Net premiums written improved 8.8% year over year to $9.1 billion in the quarter. Net premiums earned rose 10.6% to $9.3 billion.

Net investment income was $843 million, down 0.5%.

Property and casualty (P&C) underwriting income was $1.27 billion, up 30.7% from the year-ago quarter. Global P&C underwriting income, excluding Agriculture, was $1.2 billion, up 29.2%.

Chubb incurred an after-tax catastrophe loss of $245 million in the fourth quarter, down 5% year over year.

The combined ratio improved 210 basis points (bps) on a year-over-year basis to 85.5% in the quarter under review.

Segmental Update 

North America Commercial P&C Insurance: Net premiums written increased 10% year over year to $4.1 billion. The combined ratio improved 100 bps to 76.8%.

North America Personal P&C Insurance: Net premiums written climbed 3.3% year over year to $1.2 billion. The combined ratio improved 1630 bps to 72.3%.

North America Agricultural Insurance: Net premiums written climbed 14.6% from the year-ago quarter to $278 million. The combined ratio improved 320 bps to 87.3%.

Overseas General Insurance: Net premiums written rose 10.2% year over year to $2.7 billion. The combined ratio improved 1140 bps to 81%.

Global Reinsurance: Net premiums written increased 36.9% from the year-ago quarter to $171 million. The combined ratio of 126.2% deteriorated 2660 bps.

Life Insurance: Net premiums written were down 1.1% year over year to $633 million.

Financial Update

The cash balance of $1.6 billion, as of Dec 31, 2021, decreased 5% from the 2020-end level.

Total shareholders’ equity increased 0.4% from the level at 2020 end to $59.7 billion as of Dec 31, 2021.

Book value per share, as of Dec 31, 2021, was $139.99, up 6.1% from the figure as of Dec 31, 2020.

Core operating return on equity expanded 90 bps year over year to 11.6%.

Operating cash flow was $2.60 billion in the quarter under consideration.

Share Repurchase Update

In the quarter, CB bought back shares worth $905 million.

Full-Year Update

Core operating income for the year came in at $12.56 per share, up 71.8% year over year.

P&C net premiums written were $35.4 billion, up 13% year over year.

The combined ratio improved 700 bps on a year-over-year basis to 89.1% in 2021.

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 Some P&C Insurers

Of the insurance industry players who have reported fourth-quarter results so far, The Travelers Companies (TRV - Free Report) , RenaissanceRe Holdings Ltd. (RNR - Free Report) and The Progressive Corporation (PGR - Free Report) beat the Zacks Consensus Estimate for earnings.

Travelers’ core income of $5.20 per share surpassed the Zacks Consensus Estimate of $3.86 and increased 6% year over year. Total revenues rose 7% to about $9 billion and beat the Zacks Consensus Estimate of $8.7 billion.

Travelers’ net written premiums increased 10% year over year to a record $8 billion. The combined ratio deteriorated 130 bps year over year to 88.

RenaissanceRe’s operating earnings per share (EPS) of $4.71 surpassed the Zacks Consensus Estimate by 27% and rebounded from the year-ago loss of $1.59. Total revenues of $1.39 billion dipped 0.1% year over year.

RenaissanceRe’s gross premiums written surged 40.4% year over year to $1.3 billion. The combined ratio improved 3530 bps year over year to 79.4.

Progressive’s EPS of $1.05 beat the Zacks Consensus Estimate of 99 cents but declined 43.2% from the year-ago quarter.

Progressive’s net premiums written were $10.7 billion in the quarter, up 13% from $9.5 billion a year ago. The combined ratio deteriorated 630 bps from the prior-year quarter to 94.7.