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Why Is Chubb (CB) Up 10.1% Since Last Earnings Report?
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It has been about a month since the last earnings report for Chubb (CB - Free Report) . Shares have added about 10.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Chubb due for a pullback? 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 catalysts.
Chubb's Q1 Earnings Top Estimates, Premiums Rise Y/Y
Chubb reported first-quarter 2024 core operating income of $5.41 per share, which outpaced the Zacks Consensus Estimate by 2.3%. The bottom line increased 22.7% year over year.
Chubb's results reflected solid underwriting income, lower catastrophe loss and improved combined ratio across most of the segments. The insurer witnessed double-digit premium revenue growth from across the globe with strong results in commercial and consumer P&C and Asia life businesses.
Quarter in Detail
Net premiums written improved 14.1% year over year to $12.2 billion in the quarter. Our estimate was $11.4 billion, while the Zacks Consensus Estimate was pegged at $13 billion.
Net investment income was $1.4 billion, up 25.7% year over year. The Zacks Consensus Estimate was pegged at $1.3 billion, while our estimate for the same was $1.4 billion.
Property and casualty (P&C) underwriting income was $1.4 billion, up 16.7% year over year. Global P&C underwriting income, excluding Agriculture, was $1.3 billion, up 10.9%.
Chubb incurred a pre-tax P&C catastrophe loss, net of reinsurance and including reinstatement premiums of $347 million, which was narrower than the year-ago catastrophe loss of $382 million.
The P&C combined ratio improved 30 basis points (bps) on a year-over-year basis to 86% in the quarter under review. The Zacks Consensus Estimate for combined ratio was pegged at 86.3, while our estimate was 81.7.
Segmental Update
North America Commercial P&C Insurance: Net premiums written increased 9.4% year over year to $4.7 billion. Our estimate was $5.9 billion. The Zacks Consensus Estimate was pegged at $5.6 billion. The combined ratio deteriorated 272 bps to 86%. Our estimate was 80.
North America Personal P&C Insurance: Net premiums written climbed 12.3% year over year to $1.5 billion. Our estimate was $1.6 billion. The combined ratio improved 650 bps to 87.4%. Our estimate was 87.7.
North America Agricultural Insurance: Net premiums written decreased 15% from the year-ago quarter to $249 million. Our estimate was $415.6 million. The combined ratio improved 4,620 bps to 56.6%.
Overseas General Insurance: Net premiums written jumped 17.5% year over year to $3.8 billion. Our estimate was $4.2 billion. The combined ratio improved 20 bps to 85.8%. Our estimate was 86.2.
Life Insurance: Net premiums written soared 26.3% year over year to $1.6 billion, in line with our estimate.
The Life Insurance segment income was $268 million, up 9.8%. The increase was principally driven by higher earnings from Huatai.
Financial Update
The cash balance of $2.7 billion, as of Mar 31, 2024, increased 1.1% from the 2023-end level. Total shareholders’ equity grew 1.2% from the level at 2023 end to $64.4 billion as of Mar 31, 2024. Book value per share, as of Mar 31, 2024, was $149.09, up 1.5% from the figure as of Dec 31, 2023.
Core operating return on tangible equity expanded 110 bps year over year to 13.7%. Operating cash flow was $3.2 billion in the quarter under consideration, while adjusted operating cash flow was $3.6 billion.
Capital Deployment
In the quarter, Chubb bought back shares worth $316 million and paid $350 million in dividends.
Acquisition Update
During the quarter, CB increased its ownership in Huatai Group by 9%, bringing its stake to 85.5% as of Mar 31, 2024.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Chubb has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Chubb has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Chubb is part of the Zacks Insurance - Property and Casualty industry. Over the past month, Travelers (TRV - Free Report) , a stock from the same industry, has gained 1.5%. The company reported its results for the quarter ended March 2024 more than a month ago.
Travelers reported revenues of $11.19 billion in the last reported quarter, representing a year-over-year change of +15.4%. EPS of $4.69 for the same period compares with $4.11 a year ago.
Travelers is expected to post earnings of $3.24 per share for the current quarter, representing a year-over-year change of +5300%. Over the last 30 days, the Zacks Consensus Estimate has changed +1.2%.
Travelers has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.
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Why Is Chubb (CB) Up 10.1% Since Last Earnings Report?
It has been about a month since the last earnings report for Chubb (CB - Free Report) . Shares have added about 10.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Chubb due for a pullback? 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 catalysts.
Chubb's Q1 Earnings Top Estimates, Premiums Rise Y/Y
Chubb reported first-quarter 2024 core operating income of $5.41 per share, which outpaced the Zacks Consensus Estimate by 2.3%. The bottom line increased 22.7% year over year.
Chubb's results reflected solid underwriting income, lower catastrophe loss and improved combined ratio across most of the segments. The insurer witnessed double-digit premium revenue growth from across the globe with strong results in commercial and consumer P&C and Asia life businesses.
Quarter in Detail
Net premiums written improved 14.1% year over year to $12.2 billion in the quarter. Our estimate was $11.4 billion, while the Zacks Consensus Estimate was pegged at $13 billion.
Net investment income was $1.4 billion, up 25.7% year over year. The Zacks Consensus Estimate was pegged at $1.3 billion, while our estimate for the same was $1.4 billion.
Property and casualty (P&C) underwriting income was $1.4 billion, up 16.7% year over year. Global P&C underwriting income, excluding Agriculture, was $1.3 billion, up 10.9%.
Chubb incurred a pre-tax P&C catastrophe loss, net of reinsurance and including reinstatement premiums of $347 million, which was narrower than the year-ago catastrophe loss of $382 million.
The P&C combined ratio improved 30 basis points (bps) on a year-over-year basis to 86% in the quarter under review. The Zacks Consensus Estimate for combined ratio was pegged at 86.3, while our estimate was 81.7.
Segmental Update
North America Commercial P&C Insurance: Net premiums written increased 9.4% year over year to $4.7 billion. Our estimate was $5.9 billion. The Zacks Consensus Estimate was pegged at $5.6 billion. The combined ratio deteriorated 272 bps to 86%. Our estimate was 80.
North America Personal P&C Insurance: Net premiums written climbed 12.3% year over year to $1.5 billion. Our estimate was $1.6 billion. The combined ratio improved 650 bps to 87.4%. Our estimate was 87.7.
North America Agricultural Insurance: Net premiums written decreased 15% from the year-ago quarter to $249 million. Our estimate was $415.6 million. The combined ratio improved 4,620 bps to 56.6%.
Overseas General Insurance: Net premiums written jumped 17.5% year over year to $3.8 billion. Our estimate was $4.2 billion. The combined ratio improved 20 bps to 85.8%. Our estimate was 86.2.
Life Insurance: Net premiums written soared 26.3% year over year to $1.6 billion, in line with our estimate.
The Life Insurance segment income was $268 million, up 9.8%. The increase was principally driven by higher earnings from Huatai.
Financial Update
The cash balance of $2.7 billion, as of Mar 31, 2024, increased 1.1% from the 2023-end level. Total shareholders’ equity grew 1.2% from the level at 2023 end to $64.4 billion as of Mar 31, 2024. Book value per share, as of Mar 31, 2024, was $149.09, up 1.5% from the figure as of Dec 31, 2023.
Core operating return on tangible equity expanded 110 bps year over year to 13.7%. Operating cash flow was $3.2 billion in the quarter under consideration, while adjusted operating cash flow was $3.6 billion.
Capital Deployment
In the quarter, Chubb bought back shares worth $316 million and paid $350 million in dividends.
Acquisition Update
During the quarter, CB increased its ownership in Huatai Group by 9%, bringing its stake to 85.5% as of Mar 31, 2024.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Chubb has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Chubb has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Chubb is part of the Zacks Insurance - Property and Casualty industry. Over the past month, Travelers (TRV - Free Report) , a stock from the same industry, has gained 1.5%. The company reported its results for the quarter ended March 2024 more than a month ago.
Travelers reported revenues of $11.19 billion in the last reported quarter, representing a year-over-year change of +15.4%. EPS of $4.69 for the same period compares with $4.11 a year ago.
Travelers is expected to post earnings of $3.24 per share for the current quarter, representing a year-over-year change of +5300%. Over the last 30 days, the Zacks Consensus Estimate has changed +1.2%.
Travelers has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.