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Chubb (CB) Q4 Earnings Beat Estimates on Underwriting Strength
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Chubb Limited (CB - Free Report) reported fourth-quarter 2023 core operating income of $8.30 per share, which outpaced the Zacks Consensus Estimate by 63.7%. The bottom line doubled year over year.
Chubb's results reflected record underwriting income, lower catastrophe loss, improved combined ratio across most of the segments and higher premium growth across all the segments.
Net premiums written improved 13.4% year over year to $11.6 billion in the quarter, in line with our estimate. The Zacks Consensus Estimate for the metric was pegged at $11.4 billion.
Net premiums earned rose 12.8% to $11.9 billion. Our estimate for the same was pinned at $10.8 billion.
Net investment income was $1.37 billion, up 30.2% year over year. The Zacks Consensus Estimate was pegged at $1.3 billion for the metric, while our estimate was pinned at $1.2 billion.
Property and casualty (P&C) underwriting income totaled $1.52 billion, up 35.2% from the year-ago quarter's level. Global P&C underwriting income, excluding Agriculture, amounted to $1.5 billion, up 27.4% year over year.
Chubb incurred a pre-tax P&C catastrophe loss, net of reinsurance and including reinstatement premiums, of $300 million, narrower than the year-ago quarter's catastrophe loss of $400 million. The P&C combined ratio improved 250 basis points (bps) on a year-over-year basis to 85.5% in the quarter under review. The Zacks Consensus Estimate for the combined ratio was pegged at 86%, while our estimate for the same was pinned at 81.7%.
Segmental Update
North America Commercial P&C Insurance: Net premiums written increased 4.4% year over year to $4.7 billion, which met our estimate. The Zacks Consensus Estimate was pegged at $4.8 million. The combined ratio improved 790 bps to 76.4%. The Zacks Consensus Estimate for the metric was pegged at 83%.
North America Personal P&C Insurance: Net premiums written climbed 12.1% year over year to $1.5 billion. Our estimate for the same was pinned at $1.4 billion. The combined ratio improved 310 bps year over year to 86.2%. The Zacks Consensus Estimate for the metric was pegged at 87%.
North America Agricultural Insurance: Net premiums written increased 58.2% from the year-ago quarter to $607 million. Our estimate was $418.4 million, while the Zacks Consensus Estimate was pegged at $386 million. The combined ratio improved 1,140 bps to 105.8%. The Zacks Consensus Estimate for the metric was pegged at 94%.
Overseas General Insurance: Net premiums written jumped 19.3% year over year to $3.2 billion, which matched our estimate. The combined ratio deteriorated 630 bps to 85.9%, representing lower favorable prior period development and higher catastrophe losses.
Life Insurance: Net premiums written soared 20.3% year over year to $1.45 billion. Our estimate was pinned at $1.6 billion.
The Life Insurance segment income totaled $263 million, up 43.5% year over year. The increase was principally driven by growth in International life, which grew $102 million, representing earnings from Huatai and higher net investment income.
Financial Update
The cash balance of $2.6 billion, as of Dec 31, 2023, increased 23.2% from the 2022-end level. Total shareholders’ equity grew 26% from the 2022-end level to $63.7 billion as of Dec 31, 2023.
Book value per share, as of Dec 31, 2023, was $146.83, up 20.5% from the figure as of Dec 31, 2022.
Core operating return on tangible equity expanded 1,710 bps year over year to 35.3%.
Operating cash flow totaled $3.19 billion in the quarter under consideration.
Capital Deployment
In the quarter, Chubb bought back shares worth $720 million and paid $351 million in dividends.
Full-Year Update
Core operating income for the year came in at $22.54 per share, up 48.5% year over year.
P&C net premiums written amounted to $41.8 billion, up 9.9% year over year.
The combined ratio improved 110 bps on a year-over-year basis to 86.5% in 2023.
The Travelers Companies (TRV - Free Report) reported fourth-quarter 2023 core income of $7.01 per share, which beat the Zacks Consensus Estimate of $5.04. The bottom line more than doubled year over year, driven by higher underlying underwriting gain, lower catastrophe losses and higher net investment income. Travelers’ total revenues increased 13.5% from the year-ago quarter's level to $10.9 billion, primarily driven by higher premiums. The top line beat the Zacks Consensus Estimate by 0.2%.
Net written premiums increased 13% year over year to about $10 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $9.7 billion. TRV witnessed an underwriting gain of $1.4 billion, up more than three-fold year over year, driven by higher business volumes. The combined ratio improved 870 bps year over year to 85.8, driven by a lower underlying combined ratio and lower catastrophe losses.
The Progressive Corporation’s (PGR - Free Report) fourth-quarter 2023 earnings per share of $2.96 beat the Zacks Consensus Estimate of $2.38. The bottom line improved 97.3% year over year. Operating revenues of $16.6 billion beat the Zacks Consensus Estimate by 3% and increased 23.2% year over year.
Net premiums written were $15.1 billion in the quarter, up 21% from $12.5 billion a year ago. Premiums beat our estimate of $14 billion. Net premiums earned grew 22% to $15.8 billion and beat our estimate of $14.8 billion. The combined ratio — the percentage of premiums paid out as claims and expenses — improved 520 bps from the prior-year quarter’s level to 88.7.
W.R. Berkley Corporation’s (WRB - Free Report) fourth-quarter 2023 operating income of $1.45 per share beat the Zacks Consensus Estimate of $1.35 by 7.4%. The bottom line improved 25% year over year. Operating revenues came in at $3.2 billion, up 9.3% year over year, on the back of higher net premiums earned as well as improved net investment income. The top line beat the consensus estimate by 1.3%.
W.R. Berkley’s net premiums written amounted to $2.7 billion, up 12% year over year. The figure was lower than our estimate of $2.8 billion. Pre-tax underwriting income increased 8.2% to $315.9 million. The consolidated combined ratio remained flat year over year at 88.4.
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Chubb (CB) Q4 Earnings Beat Estimates on Underwriting Strength
Chubb Limited (CB - Free Report) reported fourth-quarter 2023 core operating income of $8.30 per share, which outpaced the Zacks Consensus Estimate by 63.7%. The bottom line doubled year over year.
Chubb's results reflected record underwriting income, lower catastrophe loss, improved combined ratio across most of the segments and higher premium growth across all the segments.
Chubb Limited Price, Consensus and EPS Surprise
Chubb Limited price-consensus-eps-surprise-chart | Chubb Limited Quote
Quarter in Detail
Net premiums written improved 13.4% year over year to $11.6 billion in the quarter, in line with our estimate. The Zacks Consensus Estimate for the metric was pegged at $11.4 billion.
Net premiums earned rose 12.8% to $11.9 billion. Our estimate for the same was pinned at $10.8 billion.
Net investment income was $1.37 billion, up 30.2% year over year. The Zacks Consensus Estimate was pegged at $1.3 billion for the metric, while our estimate was pinned at $1.2 billion.
Property and casualty (P&C) underwriting income totaled $1.52 billion, up 35.2% from the year-ago quarter's level. Global P&C underwriting income, excluding Agriculture, amounted to $1.5 billion, up 27.4% year over year.
Chubb incurred a pre-tax P&C catastrophe loss, net of reinsurance and including reinstatement premiums, of $300 million, narrower than the year-ago quarter's catastrophe loss of $400 million. The P&C combined ratio improved 250 basis points (bps) on a year-over-year basis to 85.5% in the quarter under review. The Zacks Consensus Estimate for the combined ratio was pegged at 86%, while our estimate for the same was pinned at 81.7%.
Segmental Update
North America Commercial P&C Insurance: Net premiums written increased 4.4% year over year to $4.7 billion, which met our estimate. The Zacks Consensus Estimate was pegged at $4.8 million. The combined ratio improved 790 bps to 76.4%. The Zacks Consensus Estimate for the metric was pegged at 83%.
North America Personal P&C Insurance: Net premiums written climbed 12.1% year over year to $1.5 billion. Our estimate for the same was pinned at $1.4 billion. The combined ratio improved 310 bps year over year to 86.2%. The Zacks Consensus Estimate for the metric was pegged at 87%.
North America Agricultural Insurance: Net premiums written increased 58.2% from the year-ago quarter to $607 million. Our estimate was $418.4 million, while the Zacks Consensus Estimate was pegged at $386 million. The combined ratio improved 1,140 bps to 105.8%. The Zacks Consensus Estimate for the metric was pegged at 94%.
Overseas General Insurance: Net premiums written jumped 19.3% year over year to $3.2 billion, which matched our estimate. The combined ratio deteriorated 630 bps to 85.9%, representing lower favorable prior period development and higher catastrophe losses.
Life Insurance: Net premiums written soared 20.3% year over year to $1.45 billion. Our estimate was pinned at $1.6 billion.
The Life Insurance segment income totaled $263 million, up 43.5% year over year. The increase was principally driven by growth in International life, which grew $102 million, representing earnings from Huatai and higher net investment income.
Financial Update
The cash balance of $2.6 billion, as of Dec 31, 2023, increased 23.2% from the 2022-end level. Total shareholders’ equity grew 26% from the 2022-end level to $63.7 billion as of Dec 31, 2023.
Book value per share, as of Dec 31, 2023, was $146.83, up 20.5% from the figure as of Dec 31, 2022.
Core operating return on tangible equity expanded 1,710 bps year over year to 35.3%.
Operating cash flow totaled $3.19 billion in the quarter under consideration.
Capital Deployment
In the quarter, Chubb bought back shares worth $720 million and paid $351 million in dividends.
Full-Year Update
Core operating income for the year came in at $22.54 per share, up 48.5% year over year.
P&C net premiums written amounted to $41.8 billion, up 9.9% year over year.
The combined ratio improved 110 bps on a year-over-year basis to 86.5% in 2023.
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 P&C Insurers
The Travelers Companies (TRV - Free Report) reported fourth-quarter 2023 core income of $7.01 per share, which beat the Zacks Consensus Estimate of $5.04. The bottom line more than doubled year over year, driven by higher underlying underwriting gain, lower catastrophe losses and higher net investment income. Travelers’ total revenues increased 13.5% from the year-ago quarter's level to $10.9 billion, primarily driven by higher premiums. The top line beat the Zacks Consensus Estimate by 0.2%.
Net written premiums increased 13% year over year to about $10 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $9.7 billion. TRV witnessed an underwriting gain of $1.4 billion, up more than three-fold year over year, driven by higher business volumes. The combined ratio improved 870 bps year over year to 85.8, driven by a lower underlying combined ratio and lower catastrophe losses.
The Progressive Corporation’s (PGR - Free Report) fourth-quarter 2023 earnings per share of $2.96 beat the Zacks Consensus Estimate of $2.38. The bottom line improved 97.3% year over year. Operating revenues of $16.6 billion beat the Zacks Consensus Estimate by 3% and increased 23.2% year over year.
Net premiums written were $15.1 billion in the quarter, up 21% from $12.5 billion a year ago. Premiums beat our estimate of $14 billion. Net premiums earned grew 22% to $15.8 billion and beat our estimate of $14.8 billion. The combined ratio — the percentage of premiums paid out as claims and expenses — improved 520 bps from the prior-year quarter’s level to 88.7.
W.R. Berkley Corporation’s (WRB - Free Report) fourth-quarter 2023 operating income of $1.45 per share beat the Zacks Consensus Estimate of $1.35 by 7.4%. The bottom line improved 25% year over year. Operating revenues came in at $3.2 billion, up 9.3% year over year, on the back of higher net premiums earned as well as improved net investment income. The top line beat the consensus estimate by 1.3%.
W.R. Berkley’s net premiums written amounted to $2.7 billion, up 12% year over year. The figure was lower than our estimate of $2.8 billion. Pre-tax underwriting income increased 8.2% to $315.9 million. The consolidated combined ratio remained flat year over year at 88.4.