A month has gone by since the last earnings report for Chubb (CB Quick QuoteCB - Free Report) . Shares have lost about 2.2% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Chubb due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Chubb's Q1 Earnings Surpass Estimates on Higher Premium

Chubb Limited reported first-quarter 2023 core operating income of $4.41 per share, which outpaced the Zacks Consensus Estimate by 0.9%. This outperformance was driven by higher premium revenues and improved net investment income. The bottom line improved 15.1% from the year-ago quarter.

Chubb's results reflected higher premium revenue growth across all the segments, partly offset by higher catastrophe loss.

Quarter in Detail

Net premiums written improved 16.6% year over year to $10.7 billion in the quarter. The figure was higher than our estimate of $10.1 billion. Net premiums earned rose 16.1% to $10.1 billion. The figure was higher than our estimate of $9.4 billion. Net investment income was $1.11 billion, up 34.7%. The figure was higher than our estimate of $957.3 million.

Property and casualty (P&C) underwriting income was $1.21 billion, down 5.5% from the year-ago quarter. Global P&C underwriting income, excluding Agriculture, was $1.2 billion, down 1.6%.

Chubb incurred an after-tax catastrophe loss of $382 million, wider than the year-ago catastrophe loss of $290 million. The combined ratio deteriorated 200 basis points (bps) on a year-over-year basis to 86.3% in the quarter under review.

Segmental Update

North America Commercial P&C Insurance: Net premiums written increased 6.2% year over year to $4.3 billion. The figure was lower than our estimate of $4.4 billion. The combined ratio deteriorated 210 bps to 83.2%.

North America Personal P&C Insurance: Net premiums written climbed 9.9% year over year to $1.3 billion. The figure was higher than our estimate of $1.2 billion. The combined ratio deteriorated 1040 bps to 93.9%.

North America Agricultural Insurance: Net premiums written surged more than four-fold from the year-ago quarter to $293 million. Combined ratio was 99.2%.

Overseas General Insurance: Net premiums written rose 6% year over year to $3.3 billion. The figure was lower than our estimate of $3.4 billion. The combined ratio improved 490 bps to 84%.

Life Insurance: Net premiums written increased more than two-fold year over year to $1.29 billion. The increase was driven by growth in Asia and the acquisition of the Cigna Asian business. The figure was higher than our estimate of $589.8 million.

Life Insurance segment income was $244 million, up 102%.

Financial Update

The cash balance of $2.3 billion, as of Mar 31, 2023, increased 13.7% from the 2022-end level. Total shareholders’ equity increased 4.9% from the level at 2022 end to $52.9 billion as of Mar 31, 2023.

Book value per share, as of Mar 31, 2023, was $127.94, up 4.9% from the figure as of Dec 31, 2022. Core operating return on tangible equity expanded 230 bps year over year to 19.4%. Operating cash flow was $2.2 billion in the quarter under consideration.

Capital Deployment

In the quarter, Chubb bought back shares worth $428 million and paid $344 million in dividends.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month.

VGM Scores

At this time, Chubb has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Chubb has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.