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What's in the Cards for Chubb (CB) This Earnings Season?
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Chubb Limited (CB - Free Report) is slated to report second-quarter 2023 earnings on Jul 25, after market close. The insurer delivered an earnings surprise in three of the last four quarters and missed in one, the average beat being 4.71%.
Factors to Consider
Premiums in the second quarter are expected to have benefited from growth in property and casualty (P&C) business globally, strong renewal retention, positive rate increases, new business, growth in life premiums and Cigna's business in Asia. The Zacks Consensus Estimate for net premiums earned is pegged at $10.7 billion, indicating an increase of 12.7% from the year-ago reported figure. We expect net premiums earned to increase 3.3% to $9.8 billion.
The interest rate environment has started to improve. Insurers, being the direct beneficiaries of an improving rate environment, are likely to have gained.
Net investment income is likely to have benefited from higher reinvestment rates. In the second quarter, Chubb projects adjusted net investment income on a recurring basis to rise from the first quarter's 1.165 to 1.2 to 1.22. We expect net investment income to increase 16.8% to $1 billion.
The Zacks Consensus Estimate for investment income is pegged at $1 billion, indicating a 16.8% increase from the year-ago reported figure.
The top line is likely to have benefited from improved premium revenues, solid results in commercial and consumer P&C businesses and International Life business as well as higher investment income. The Zacks Consensus Estimate for revenues is pegged at $11.6 billion, indicating an increase of 11.1% from the year-ago reported figure.
Chubb is expected to have gained from better pricing and increased exposure, which are likely to have aided underwriting profitability. The Zacks Consensus Estimate for combined ratio is pegged at 87, indicating a deterioration of 300 basis points from the year-ago reported figure. We estimate the combined ratio to be 9.3.
Expenses are likely to have increased because of higher losses and loss expenses, policy benefits, policy acquisition costs, administrative expenses, interest expense, amortization of purchased intangibles and Cigna integration expenses.
The continued share buybacks are anticipated to have provided an additional boost to the bottom line.
The Zacks Consensus Estimate for second-quarter 2023 earnings of $4.41 per share indicates an increase of 5% from the year-ago quarter’s reported figure.
What the Zacks Model Says
Our proven model does not predict an earnings beat for Chubb this time around. This is because a stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) that increases the odds of an earnings beat. This is not the case as you can see below.
Earnings ESP: Chubb has an Earnings ESP of -0.17%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
ACGL’s earnings beat estimates in each of the last four reported quarters.
Everest Group, Ltd. (EG - Free Report) has an Earnings ESP of +1.27% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for second-quarter 2023 earnings is pegged at $11.10, indicating a year-over-year increase of 13.3%.
EG’s earnings beat estimates in three of the last four quarters and missed in the other one.
Goosehead Insurance (GSHD - Free Report) has an Earnings ESP of +20.81% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for second-quarter 2023 earnings is pegged at 30 cents, indicating a year-over-year increase of 87.5%.
GSHD’s earnings beat estimates in two of the last four quarters and missed in the other two.
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What's in the Cards for Chubb (CB) This Earnings Season?
Chubb Limited (CB - Free Report) is slated to report second-quarter 2023 earnings on Jul 25, after market close. The insurer delivered an earnings surprise in three of the last four quarters and missed in one, the average beat being 4.71%.
Factors to Consider
Premiums in the second quarter are expected to have benefited from growth in property and casualty (P&C) business globally, strong renewal retention, positive rate increases, new business, growth in life premiums and Cigna's business in Asia. The Zacks Consensus Estimate for net premiums earned is pegged at $10.7 billion, indicating an increase of 12.7% from the year-ago reported figure. We expect net premiums earned to increase 3.3% to $9.8 billion.
The interest rate environment has started to improve. Insurers, being the direct beneficiaries of an improving rate environment, are likely to have gained.
Net investment income is likely to have benefited from higher reinvestment rates. In the second quarter, Chubb projects adjusted net investment income on a recurring basis to rise from the first quarter's 1.165 to 1.2 to 1.22. We expect net investment income to increase 16.8% to $1 billion.
The Zacks Consensus Estimate for investment income is pegged at $1 billion, indicating a 16.8% increase from the year-ago reported figure.
The top line is likely to have benefited from improved premium revenues, solid results in commercial and consumer P&C businesses and International Life business as well as higher investment income. The Zacks Consensus Estimate for revenues is pegged at $11.6 billion, indicating an increase of 11.1% from the year-ago reported figure.
Chubb is expected to have gained from better pricing and increased exposure, which are likely to have aided underwriting profitability. The Zacks Consensus Estimate for combined ratio is pegged at 87, indicating a deterioration of 300 basis points from the year-ago reported figure. We estimate the combined ratio to be 9.3.
Expenses are likely to have increased because of higher losses and loss expenses, policy benefits, policy acquisition costs, administrative expenses, interest expense, amortization of purchased intangibles and Cigna integration expenses.
The continued share buybacks are anticipated to have provided an additional boost to the bottom line.
The Zacks Consensus Estimate for second-quarter 2023 earnings of $4.41 per share indicates an increase of 5% from the year-ago quarter’s reported figure.
What the Zacks Model Says
Our proven model does not predict an earnings beat for Chubb this time around. This is because a stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) that increases the odds of an earnings beat. This is not the case as you can see below.
Earnings ESP: Chubb has an Earnings ESP of -0.17%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Chubb Limited Price and EPS Surprise
Chubb Limited price-eps-surprise | Chubb Limited Quote
Zacks Rank: Chubb currently carries a Zacks Rank #3.
Stocks to Consider
Some insurance stocks with the right combination of elements to deliver an earnings beat this time around are:
Arch Capital Group Ltd. (ACGL - Free Report) has an Earnings ESP of +1.57% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for second-quarter 2023 earnings is pegged at $1.65, indicating a year-over-year increase of 23.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.
ACGL’s earnings beat estimates in each of the last four reported quarters.
Everest Group, Ltd. (EG - Free Report) has an Earnings ESP of +1.27% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for second-quarter 2023 earnings is pegged at $11.10, indicating a year-over-year increase of 13.3%.
EG’s earnings beat estimates in three of the last four quarters and missed in the other one.
Goosehead Insurance (GSHD - Free Report) has an Earnings ESP of +20.81% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for second-quarter 2023 earnings is pegged at 30 cents, indicating a year-over-year increase of 87.5%.
GSHD’s earnings beat estimates in two of the last four quarters and missed in the other two.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.