We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is Chubb (CB) Down 2.2% Since Last Earnings Report?
Read MoreHide Full Article
A month has gone by since the last earnings report for Chubb (CB - Free Report) . Shares have lost about 2.2% in that time frame, outperforming 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 its most recent earnings report in order to get a better handle on the important drivers.
Chubb's Q2 Earnings Top Estimates, Premiums Rise Y/Y
Chubb Limited 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.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
At this time, Chubb has a subpar Growth Score of D, a grade with the same score on the momentum front. However, 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Chubb has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is Chubb (CB) Down 2.2% Since Last Earnings Report?
A month has gone by since the last earnings report for Chubb (CB - Free Report) . Shares have lost about 2.2% in that time frame, outperforming 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 its most recent earnings report in order to get a better handle on the important drivers.
Chubb's Q2 Earnings Top Estimates, Premiums Rise Y/Y
Chubb Limited 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.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
At this time, Chubb has a subpar Growth Score of D, a grade with the same score on the momentum front. However, 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Chubb has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.