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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 2023 core operating income of $4.92 per share, which outpaced the Zacks Consensus Estimate by 11.6%. This outperformance was driven by higher premium revenues and improved net investment income. The bottom line improved 17.1% from the year-ago quarter.
Chubb's results reflected higher premium revenue growth across all the segments, partly offset by higher catastrophe loss.
Net premiums written improved 9.8% year over year to $10.7 billion in the quarter. The Zacks Consensus Estimate was pegged at $11.7 billion while our estimate was $11.6 billion.
Net premiums earned rose 15.2% to $11 billion. Our estimate was $9.9 billion.
Net investment income was $1.1 billion, up 28.9%. Both the Zacks Consensus estimate as well as our estimate were pegged at $1 billion.
Property and casualty (P&C) underwriting income was $1.4 billion, down 5.5% from the year-ago quarter. Global P&C underwriting income, excluding Agriculture, was $1.3 billion, down 3%.
Chubb incurred a catastrophe loss of $319 million, wider than the year-ago catastrophe loss of $241 million. The combined ratio deteriorated 140 basis points (bps) on a year-over-year basis to 85.4% in the quarter under review. The Zacks Consensus Estimate for combined ratio was pegged at 87 while our estimate was 85.
Segmental Update
North America Commercial P&C Insurance: Net premiums written increased 10.5% year over year to $5.2 billion, in line with the Zacks Consensus Estimate. Our estimate was $5.5 billion. The combined ratio deteriorated 560 bps to 82.5%. The Zacks Consensus Estimate was pegged at 81.
North America Personal P&C Insurance: Net premiums written climbed 10.8% year over year to $1.6 billion. Our estimate was $1.5 billion. The combined ratio deteriorated 200 bps to 88.9%.
North America Agricultural Insurance: Net premiums written increased 4% from the year-ago quarter to $767 million. Our estimate was $900.6 million, while the Zacks Consensus Estimate was pegged at $809 million. Combined ratio improved 290 basis points to 86.2%. The Zacks Consensus Estimate was pegged at 90.
Overseas General Insurance: Net premiums written rose 9.3% year over year to $2.9 billion. Our estimate was $2.8 billion. The combined ratio deteriorated 240 bps to 84%.
Life Insurance: Net premiums written increased 126.1% year over year to $1.3 billion. Our estimate was $0.5 billion.
Life Insurance segment income was $254 million, up 140.3%, driven substantially by International Life insurance as a result of the acquisition of the Cigna Asian business and Huatai, which had higher investment income.
Financial Update
The cash balance of $2.3 billion, as of Jun 30, 2023, increased 13.6% from the 2022-end level. Total shareholders’ equity increased 4.7% from the level at 2022 end to $52.9 billion as of Jun 30, 2023.
Book value per share, as of Jun 30, 2023, was $128.75, up 5.8% from the figure as of Dec 31, 2022.
Core operating return on tangible equity expanded 240 bps year over year to 21%.
Operating cash flow was $2.52 billion in the quarter under consideration.
Capital Deployment
In the quarter, Chubb bought back shares worth $7224 million and paid $354 million in dividends.
The Travelers Companies (TRV - Free Report) reported second-quarter 2023 core income of 6 cents per share, which missed the Zacks Consensus Estimate of $2.27. The bottom line decreased 97.7% year over year, primarily attributable to higher-than-expected catastrophe loss.
Travelers’ total revenues increased 9.8% from the year-ago quarter to $10.1 billion, primarily driven by higher premiums. The top-line figure was almost in line with the Zacks Consensus Estimate.
Net written premiums increased 14% year over year to a record $10.3 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $9.1 billion.
Travelers witnessed an underwriting gain of $781 million, up 38% year over year, driven by record net earned premiums of $9.2 billion and a consolidated underlying combined ratio, which improved 170 basis points. The combined ratio deteriorated 820 basis points year over year to 106.5 due to higher catastrophe losses and lower net favorable prior-year reserve development, partially offset by a lower underlying combined ratio.
The Progressive Corporation’s (PGR - Free Report) second-quarter 2023 earnings per share of 50 cents missed the Zacks Consensus Estimate of 88 cents. The bottom line declined 47.4% year over year.
Net premiums earned grew 19% to $14.5 billion and beat our estimate of $12.9 billion as well as the Zacks Consensus Estimate of $14.3 billion. The combined ratio deteriorated 480 bps from the prior-year quarter’s level to 104.
Policies in force were solid in the Personal Auto segment, increasing 17% from the year-ago month’s figure to 19.7 million. Special Lines improved 7% to 5.8 million.
W.R. Berkley Corporation’s (WRB - Free Report) second-quarter 2023 operating income of $1.14 per share beat the Zacks Consensus Estimate by 6.5%. The bottom line increased 1.8% year over year.
Operating revenues came in at $2.9 billion, down 57.4% year over year, on the back of higher net premiums earned as well as higher net investment income. The top line missed the consensus estimate by 1.2%.
W.R. Berkley’s net premiums written were a record $2.8 billion, up 8.7% year over year, as market conditions remained favorable for most lines of business. Our estimate for the same was $2.7 billion.
Catastrophe losses totaled $53.5 million in the quarter. The consolidated combined ratio (a measure of underwriting profitability) deteriorated 100 basis points to 89.6, in line with the Zacks Consensus Estimate. Our estimate for the combined ratio was 91.3.
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Chubb's (CB) Q2 Earnings Top Estimates, Premiums Rise Y/Y
Chubb Limited (CB - Free Report) reported second-quarter 2023 core operating income of $4.92 per share, which outpaced the Zacks Consensus Estimate by 11.6%. This outperformance was driven by higher premium revenues and improved net investment income. The bottom line improved 17.1% from the year-ago quarter.
Chubb's results reflected higher premium revenue growth across all the segments, partly offset by higher catastrophe loss.
Chubb Limited Price, Consensus and EPS Surprise
Chubb Limited price-consensus-eps-surprise-chart | Chubb Limited Quote
Quarter in Detail
Net premiums written improved 9.8% year over year to $10.7 billion in the quarter. The Zacks Consensus Estimate was pegged at $11.7 billion while our estimate was $11.6 billion.
Net premiums earned rose 15.2% to $11 billion. Our estimate was $9.9 billion.
Net investment income was $1.1 billion, up 28.9%. Both the Zacks Consensus estimate as well as our estimate were pegged at $1 billion.
Property and casualty (P&C) underwriting income was $1.4 billion, down 5.5% from the year-ago quarter. Global P&C underwriting income, excluding Agriculture, was $1.3 billion, down 3%.
Chubb incurred a catastrophe loss of $319 million, wider than the year-ago catastrophe loss of $241 million. The combined ratio deteriorated 140 basis points (bps) on a year-over-year basis to 85.4% in the quarter under review. The Zacks Consensus Estimate for combined ratio was pegged at 87 while our estimate was 85.
Segmental Update
North America Commercial P&C Insurance: Net premiums written increased 10.5% year over year to $5.2 billion, in line with the Zacks Consensus Estimate. Our estimate was $5.5 billion. The combined ratio deteriorated 560 bps to 82.5%. The Zacks Consensus Estimate was pegged at 81.
North America Personal P&C Insurance: Net premiums written climbed 10.8% year over year to $1.6 billion. Our estimate was $1.5 billion. The combined ratio deteriorated 200 bps to 88.9%.
North America Agricultural Insurance: Net premiums written increased 4% from the year-ago quarter to $767 million. Our estimate was $900.6 million, while the Zacks Consensus Estimate was pegged at $809 million. Combined ratio improved 290 basis points to 86.2%. The Zacks Consensus Estimate was pegged at 90.
Overseas General Insurance: Net premiums written rose 9.3% year over year to $2.9 billion. Our estimate was $2.8 billion. The combined ratio deteriorated 240 bps to 84%.
Life Insurance: Net premiums written increased 126.1% year over year to $1.3 billion. Our estimate was $0.5 billion.
Life Insurance segment income was $254 million, up 140.3%, driven substantially by International Life insurance as a result of the acquisition of the Cigna Asian business and Huatai, which had higher investment income.
Financial Update
The cash balance of $2.3 billion, as of Jun 30, 2023, increased 13.6% from the 2022-end level. Total shareholders’ equity increased 4.7% from the level at 2022 end to $52.9 billion as of Jun 30, 2023.
Book value per share, as of Jun 30, 2023, was $128.75, up 5.8% from the figure as of Dec 31, 2022.
Core operating return on tangible equity expanded 240 bps year over year to 21%.
Operating cash flow was $2.52 billion in the quarter under consideration.
Capital Deployment
In the quarter, Chubb bought back shares worth $7224 million and paid $354 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 Other Insurers
The Travelers Companies (TRV - Free Report) reported second-quarter 2023 core income of 6 cents per share, which missed the Zacks Consensus Estimate of $2.27. The bottom line decreased 97.7% year over year, primarily attributable to higher-than-expected catastrophe loss.
Travelers’ total revenues increased 9.8% from the year-ago quarter to $10.1 billion, primarily driven by higher premiums. The top-line figure was almost in line with the Zacks Consensus Estimate.
Net written premiums increased 14% year over year to a record $10.3 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $9.1 billion.
Travelers witnessed an underwriting gain of $781 million, up 38% year over year, driven by record net earned premiums of $9.2 billion and a consolidated underlying combined ratio, which improved 170 basis points. The combined ratio deteriorated 820 basis points year over year to 106.5 due to higher catastrophe losses and lower net favorable prior-year reserve development, partially offset by a lower underlying combined ratio.
The Progressive Corporation’s (PGR - Free Report) second-quarter 2023 earnings per share of 50 cents missed the Zacks Consensus Estimate of 88 cents. The bottom line declined 47.4% year over year.
Net premiums earned grew 19% to $14.5 billion and beat our estimate of $12.9 billion as well as the Zacks Consensus Estimate of $14.3 billion. The combined ratio deteriorated 480 bps from the prior-year quarter’s level to 104.
Policies in force were solid in the Personal Auto segment, increasing 17% from the year-ago month’s figure to 19.7 million. Special Lines improved 7% to 5.8 million.
W.R. Berkley Corporation’s (WRB - Free Report) second-quarter 2023 operating income of $1.14 per share beat the Zacks Consensus Estimate by 6.5%. The bottom line increased 1.8% year over year.
Operating revenues came in at $2.9 billion, down 57.4% year over year, on the back of higher net premiums earned as well as higher net investment income. The top line missed the consensus estimate by 1.2%.
W.R. Berkley’s net premiums written were a record $2.8 billion, up 8.7% year over year, as market conditions remained favorable for most lines of business. Our estimate for the same was $2.7 billion.
Catastrophe losses totaled $53.5 million in the quarter. The consolidated combined ratio (a measure of underwriting profitability) deteriorated 100 basis points to 89.6, in line with the Zacks Consensus Estimate. Our estimate for the combined ratio was 91.3.