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Chubb's (CB) Q1 Earnings Beat Estimates on Lower Cat Loss
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Chubb Limited (CB - Free Report) reported first-quarter 2022 core operating income of $3.82 per share, which outpaced the Zacks Consensus Estimate by 8.5%. This outperformance was driven by higher premium revenues and lower catastrophe loss. The bottom line also improved 51.6% from the year-ago quarter.
Chubb's results reflected record operating earnings and underwriting results, double-digit commercial premium growth, rate increases in excess of loss cost, and growing momentum in the consumer businesses globally.
Net premiums written improved 6.2% year over year to $9.1 billion in the quarter. Net premiums earned rose 6.4% to $8.7 billion. Net investment income was $822 million, down 4.8%.
Property and casualty (P&C) underwriting income was a record $1.3 billion, up 106.2% from the year-ago quarter. Global P&C underwriting income, excluding Agriculture, was $1.2 billion, up 101%. Chubb incurred an after-tax catastrophe loss of $290 million, down 49% year over year.
The combined ratio improved 250 basis points (bps) on a year-over-year basis to a record 84.3% in the quarter under review.
Segmental Update
North America Commercial P&C Insurance: Net premiums written increased 10.2% year over year to $4 billion. The combined ratio improved 950 bps to 81.1%.
North America Personal P&C Insurance: Net premiums written climbed 7.4% year over year to $1.2 billion. The combined ratio improved 1160 bps to 83.5%
North America Agricultural Insurance: Net premiums written dropped 65.9% from the year-ago quarter to $62 million.
Overseas General Insurance: Net premiums written rose 6.5% year over year to $3.1 billion. The combined ratio deteriorated 80 bps to 88.9%.
Global Reinsurance: Net premiums written increased 22% from the year-ago quarter to $253 million. The combined ratio of 79% improved 1740 bps.
Life Insurance: Net premiums written were down 5.5% year over year to $586 million.
Financial Update
The cash balance of $1.7 billion, as of Mar 31, 2022, increased 4.5% from the 2021-end level. Total shareholders’ equity decreased 5.1% from the level at 2021 end to $56.7 billion as of Dec 31, 2021.
Book value per share, as of Mar 31, 2022, was $139.99, down 4.4% from the figure as of Dec 31, 2021. Core operating return on equity expanded 310 bps year over year to 11.3%.
Operating cash flow was $2.4 billion in the quarter under consideration.
Capital Deployment
In the quarter, CB bought back shares worth $1 billion and paid $34 million in dividends.
Of the insurance industry players that have reported first-quarter results so far, The Travelers Companies (TRV - Free Report) and RLI Corporation (RLI - Free Report) beat the respective Zacks Consensus Estimate for earnings, while The Progressive Corporation (PGR - Free Report) missed the mark.
Travelers reported first-quarter 2022 core income of $4.22 per share, which beat the Zacks Consensus Estimate by 14% and increased 54.6% year over year. Total revenues increased 6.8% from the year-ago quarter to $8.8 billion, primarily due to higher premiums and fee income but missed the consensus estimate. Travelers’ combined ratio deteriorated 530 bps year over year to 91.3.
RLI Corp.’s first-quarter 2022 operating earnings of $1.43 per share beat the Zacks Consensus Estimate by 40.2% and improved 64.4% from the prior-year quarter. Operating revenues were $287 million, up 17.1% year over year and beat the Zacks Consensus Estimate by 0.8%. Gross premiums written increased 22% year over year to $359.2 million. The combined ratio improved 900 bps year over year to 77.9.
Progressive’s first-quarter 2022 earnings per share of $1.12 missed the Zacks Consensus Estimate of $1.24 and declined 34.9% from the year-ago quarter. Net premiums written were $13.2 billion in the quarter, up 12% from $11.7 billion a year ago. Progressive’s combined ratio deteriorated 520 bps from the prior-year quarter to 94.7.
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Chubb's (CB) Q1 Earnings Beat Estimates on Lower Cat Loss
Chubb Limited (CB - Free Report) reported first-quarter 2022 core operating income of $3.82 per share, which outpaced the Zacks Consensus Estimate by 8.5%. This outperformance was driven by higher premium revenues and lower catastrophe loss. The bottom line also improved 51.6% from the year-ago quarter.
Chubb's results reflected record operating earnings and underwriting results, double-digit commercial premium growth, rate increases in excess of loss cost, and growing momentum in the consumer businesses globally.
Chubb Limited Price, Consensus and EPS Surprise
Chubb Limited price-consensus-eps-surprise-chart | Chubb Limited Quote
Quarter in Detail
Net premiums written improved 6.2% year over year to $9.1 billion in the quarter. Net premiums earned rose 6.4% to $8.7 billion. Net investment income was $822 million, down 4.8%.
Property and casualty (P&C) underwriting income was a record $1.3 billion, up 106.2% from the year-ago quarter. Global P&C underwriting income, excluding Agriculture, was $1.2 billion, up 101%. Chubb incurred an after-tax catastrophe loss of $290 million, down 49% year over year.
The combined ratio improved 250 basis points (bps) on a year-over-year basis to a record 84.3% in the quarter under review.
Segmental Update
North America Commercial P&C Insurance: Net premiums written increased 10.2% year over year to $4 billion. The combined ratio improved 950 bps to 81.1%.
North America Personal P&C Insurance: Net premiums written climbed 7.4% year over year to $1.2 billion. The combined ratio improved 1160 bps to 83.5%
North America Agricultural Insurance: Net premiums written dropped 65.9% from the year-ago quarter to $62 million.
Overseas General Insurance: Net premiums written rose 6.5% year over year to $3.1 billion. The combined ratio deteriorated 80 bps to 88.9%.
Global Reinsurance: Net premiums written increased 22% from the year-ago quarter to $253 million. The combined ratio of 79% improved 1740 bps.
Life Insurance: Net premiums written were down 5.5% year over year to $586 million.
Financial Update
The cash balance of $1.7 billion, as of Mar 31, 2022, increased 4.5% from the 2021-end level. Total shareholders’ equity decreased 5.1% from the level at 2021 end to $56.7 billion as of Dec 31, 2021.
Book value per share, as of Mar 31, 2022, was $139.99, down 4.4% from the figure as of Dec 31, 2021. Core operating return on equity expanded 310 bps year over year to 11.3%.
Operating cash flow was $2.4 billion in the quarter under consideration.
Capital Deployment
In the quarter, CB bought back shares worth $1 billion and paid $34 million in dividends.
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 Other P&C Insurers
Of the insurance industry players that have reported first-quarter results so far, The Travelers Companies (TRV - Free Report) and RLI Corporation (RLI - Free Report) beat the respective Zacks Consensus Estimate for earnings, while The Progressive Corporation (PGR - Free Report) missed the mark.
Travelers reported first-quarter 2022 core income of $4.22 per share, which beat the Zacks Consensus Estimate by 14% and increased 54.6% year over year. Total revenues increased 6.8% from the year-ago quarter to $8.8 billion, primarily due to higher premiums and fee income but missed the consensus estimate. Travelers’ combined ratio deteriorated 530 bps year over year to 91.3.
RLI Corp.’s first-quarter 2022 operating earnings of $1.43 per share beat the Zacks Consensus Estimate by 40.2% and improved 64.4% from the prior-year quarter. Operating revenues were $287 million, up 17.1% year over year and beat the Zacks Consensus Estimate by 0.8%. Gross premiums written increased 22% year over year to $359.2 million. The combined ratio improved 900 bps year over year to 77.9.
Progressive’s first-quarter 2022 earnings per share of $1.12 missed the Zacks Consensus Estimate of $1.24 and declined 34.9% from the year-ago quarter. Net premiums written were $13.2 billion in the quarter, up 12% from $11.7 billion a year ago. Progressive’s combined ratio deteriorated 520 bps from the prior-year quarter to 94.7.