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Chubb's (CB) Q2 Earnings Top Estimates, Premiums Rise Y/Y
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Chubb Limited (CB - Free Report) reported second-quarter 2022 core operating income of $2.40 per share, which outpaced the Zacks Consensus Estimate by about 17%. The bottom line also improved 16% from the year-ago quarter.
Chubb's results reflected record operating earnings, underwriting and investment results, and double-digit premium revenue growth in constant dollars.
Net premiums written improved 7.9% year over year to $10.3 billion in the quarter. Net premiums earned rose 8.4% to $9.6 billion. Adjusted net investment income was a record $950 million, up 0.5%.
Property and casualty (P&C) underwriting income was a record $1.4 billion, up 21.1% from the year-ago quarter. Chubb incurred an after-tax catastrophe loss of $241 million, up 6.6% year over year.
The combined ratio improved 150 basis points (bps) on a year-over-year basis to a record 84% in the quarter under review.
Segmental Update
North America Commercial P&C Insurance: Net premiums written increased 8.9% year over year to $4.7 billion. The combined ratio improved 620 bps to 76.9%.
North America Personal P&C Insurance: Net premiums written climbed 4.6% year over year to $1.4 billion. The combined ratio deteriorated 620 bps to 86.9%
North America Agricultural Insurance: Net premiums written increased 44% from the year-ago quarter to $7.8 million. The combined ratio deteriorated 100 bps to 89.1%.
Overseas General Insurance: Net premiums written rose 5.7% year over year to $2.6 billion. The combined ratio improved 230 bps to 81.6%.
Global Reinsurance: Net premiums written decreased 4% from the year-ago quarter to $262 million. The combined ratio of 92.8% deteriorated 620 bps.
Life Insurance: Net premiums written were down 7.2% year over year to $571 million.
Financial Update
The cash balance of $7.1 billion, as of Jun 30, 2022, increased more than fourfold from the 2021-end level. Total shareholders’ equity decreased 13.5% from the level at 2021 end to $51.7 billion as of Jun 30, 2022.
Book value per share, as of Jun 30, 2022, was $123.46, down 11.8% from the figure as of Dec 31, 2021. Core operating return on equity expanded 90 bps year over year to 12.4%.
Operating cash flow was $2.7 billion in the quarter under consideration.
Capital Deployment
In the quarter, CB bought back shares worth $1.13 billion and paid $348 million in dividends. It returned $1.48 billion in capital to shareholders.
Of the insurance industry players that have reported second-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) met the mark.
Travelers’ core income of $2.57 per share beat the Zacks Consensus Estimate by 28.5% but decreased 26% year over year. Total revenues increased 7% year over year, primarily due to higher premiums and beat the consensus estimate by 1.8%. Net written premiums increased 11%, driven by strong retention rates and positive renewal premium changes across all the segments. Underwriting gain of $113 million decreased 65% year over year in the reported quarter.
Travelers’ combined ratio deteriorated 300 bps year over year to 98.3 due to higher catastrophe losses and a higher underlying combined ratio.
RLI’s operating earnings of $1.49 per share beat the Zacks Consensus Estimate by 6.1% and improved 36.7% from the prior-year quarter. Operating revenues were $301.3 million, up 16.9% year over year, driven by 17.3% higher net premiums earned and 10.5% higher net investment income. The top line beat the Zacks Consensus Estimate of $276 million by 0.9%.
RLI’s underwriting income of $56 million increased 53%, primarily due to the strong performance of the Property and Surety segments. The combined ratio improved 460 bps year over year to 80.2.
Progressive’s earnings per share of 95 cents came in line with the Zacks Consensus Estimate. The bottom line declined 37.1% year over year. Net premiums written were $12.4 billion in the quarter, up 8% from $11.7 billion a year ago.
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Chubb's (CB) Q2 Earnings Top Estimates, Premiums Rise Y/Y
Chubb Limited (CB - Free Report) reported second-quarter 2022 core operating income of $2.40 per share, which outpaced the Zacks Consensus Estimate by about 17%. The bottom line also improved 16% from the year-ago quarter.
Chubb's results reflected record operating earnings, underwriting and investment results, and double-digit premium revenue growth in constant dollars.
Chubb Limited Price, Consensus and EPS Surprise
Chubb Limited price-consensus-eps-surprise-chart | Chubb Limited Quote
Quarter in Detail
Net premiums written improved 7.9% year over year to $10.3 billion in the quarter. Net premiums earned rose 8.4% to $9.6 billion. Adjusted net investment income was a record $950 million, up 0.5%.
Property and casualty (P&C) underwriting income was a record $1.4 billion, up 21.1% from the year-ago quarter. Chubb incurred an after-tax catastrophe loss of $241 million, up 6.6% year over year.
The combined ratio improved 150 basis points (bps) on a year-over-year basis to a record 84% in the quarter under review.
Segmental Update
North America Commercial P&C Insurance: Net premiums written increased 8.9% year over year to $4.7 billion. The combined ratio improved 620 bps to 76.9%.
North America Personal P&C Insurance: Net premiums written climbed 4.6% year over year to $1.4 billion. The combined ratio deteriorated 620 bps to 86.9%
North America Agricultural Insurance: Net premiums written increased 44% from the year-ago quarter to $7.8 million. The combined ratio deteriorated 100 bps to 89.1%.
Overseas General Insurance: Net premiums written rose 5.7% year over year to $2.6 billion. The combined ratio improved 230 bps to 81.6%.
Global Reinsurance: Net premiums written decreased 4% from the year-ago quarter to $262 million. The combined ratio of 92.8% deteriorated 620 bps.
Life Insurance: Net premiums written were down 7.2% year over year to $571 million.
Financial Update
The cash balance of $7.1 billion, as of Jun 30, 2022, increased more than fourfold from the 2021-end level. Total shareholders’ equity decreased 13.5% from the level at 2021 end to $51.7 billion as of Jun 30, 2022.
Book value per share, as of Jun 30, 2022, was $123.46, down 11.8% from the figure as of Dec 31, 2021. Core operating return on equity expanded 90 bps year over year to 12.4%.
Operating cash flow was $2.7 billion in the quarter under consideration.
Capital Deployment
In the quarter, CB bought back shares worth $1.13 billion and paid $348 million in dividends. It returned $1.48 billion in capital to shareholders.
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 second-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) met the mark.
Travelers’ core income of $2.57 per share beat the Zacks Consensus Estimate by 28.5% but decreased 26% year over year. Total revenues increased 7% year over year, primarily due to higher premiums and beat the consensus estimate by 1.8%. Net written premiums increased 11%, driven by strong retention rates and positive renewal premium changes across all the segments. Underwriting gain of $113 million decreased 65% year over year in the reported quarter.
Travelers’ combined ratio deteriorated 300 bps year over year to 98.3 due to higher catastrophe losses and a higher underlying combined ratio.
RLI’s operating earnings of $1.49 per share beat the Zacks Consensus Estimate by 6.1% and improved 36.7% from the prior-year quarter. Operating revenues were $301.3 million, up 16.9% year over year, driven by 17.3% higher net premiums earned and 10.5% higher net investment income. The top line beat the Zacks Consensus Estimate of $276 million by 0.9%.
RLI’s underwriting income of $56 million increased 53%, primarily due to the strong performance of the Property and Surety segments. The combined ratio improved 460 bps year over year to 80.2.
Progressive’s earnings per share of 95 cents came in line with the Zacks Consensus Estimate. The bottom line declined 37.1% year over year. Net premiums written were $12.4 billion in the quarter, up 8% from $11.7 billion a year ago.