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Chubb Limited (CB) Q3 Earnings: Is a Beat in the Cards?

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We expect property and casualty insurer Chubb Limited (CB - Free Report) to beat expectations when it reports third-quarter results on Oct 25, after the market closes.

Why a Likely Positive Surprise?

Our proven model shows that Chubb has the right combination of two key ingredients to beat estimates this quarter.

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +1.52%. This is because the Most Accurate estimate of $2.68 is pegged higher than the Zacks Consensus Estimate of $2.64 per share. The positive ESP is a meaningful and leading indicator of a likely earnings beat.

Zacks Rank: Chubb carries a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank of #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating on earnings. The combination of Chubb’s Zacks Rank #3 and +1.52% Earnings ESP makes us reasonably confident of an earnings beat.

Conversely, the Sell-rated stocks (Zacks Rank #4 and 5) should never be considered going into an earnings announcement.

What is Driving the Better-Than-Expected Earnings?

Chubb has likely witnessed a rise in net premiums written owing to strategic initiatives undertaken by it in the to-be-reported quarter. Also, the property and casualty (P&C) insurer is likely to witness increased net premiums earned in the third quarter.

Moreover, the company has likely experienced growth in new business written for its middle market business in the third quarter.

We expect the company to report improved net investment income in the to-be-reported quarter.

However, Assurant has likely witnessed an increase in expenses, mainly due to higher loss and loss expenses, policy acquisition costs, administrative expenses and policy benefits.

With respect to earnings trend, the company delivered positive surprises in two of the last four quarters, with an average beat of 1.79%.

CHUBB LTD Price and EPS Surprise

 

CHUBB LTD Price and EPS Surprise | CHUBB LTD Quote

Stocks to Consider

Here are some companies from the insurance industry that you may want to consider as these have the right combination of elements to post an earnings beat this quarter:

CNA Financial Corporation (CNA - Free Report) , which is slated to report third-quarter earnings on Oct 31, has an Earnings ESP of +2.38% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

RenaissanceRe Holdings Ltd. (RNR - Free Report) has an Earnings ESP of +3.59% and a Zacks Rank #3. The company is set to report third-quarter earnings on Nov 1.

The Allstate Corporation (ALL - Free Report) has an Earnings ESP of +1.61% and a Zacks Rank #3. The company is slated to report third-quarter earnings on Nov 2.

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