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Chubb's (CB) Earnings Beat Estimates in Q4, Increase Y/Y

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Chubb Limited (CB - Free Report) reported fourth-quarter 2019 core operating income of $2.28 per share, which outpaced the Zacks Consensus Estimate by 8.6%. This upside was driven by higher premium revenues. The bottom line also improved 12.9% from the year-ago quarter.

Quarter in Detail

Net premiums written improved 9% year over year to $7.9 billion in the quarter. Net premiums earned rose 6.3% to $7.9 billion.

Net investment income was $858 million, up 1.2%.

Property and casualty (P&C) underwriting income was $533 million, up 12% from the year-ago quarter. Global P&C underwriting income excluding Agriculture was $556 million, up 76.3%.

Chubb incurred after-tax catastrophe loss of $353 million in the fourth quarter, plunging 30.2% year over year.

Chubb Limited Price, Consensus and EPS Surprise

Chubb Limited Price, Consensus and EPS Surprise

Chubb Limited price-consensus-eps-surprise-chart | Chubb Limited Quote

 

Segmental Update  
 
North America Commercial P&C Insurance: Net premiums written increased 9.4% year over year to $3.4 billion. Combined ratio contracted 870 bps to 82.6%.

North America Personal P&C Insurance: Net premiums written climbed 9.2% year over year to $1.1 billion. Combined ratio expanded 580 bps to 99.6%.

North America Agricultural Insurance: Net premiums written improved 40.4% from the year-ago quarter to $276 million. Combined ratio expanded 5590 bps to 105.4%.

Overseas General Insurance: Net premiums written rose 6.3% year over year to $2.3 billion. Combined ratio expanded 100 bps to 93.1%.

Global Reinsurance: Net premiums written declined 6% from the year-ago quarter to $109 million. Combined ratio of 94.6% contracted 7230 bps.

Life Insurance: Net premiums written were up 6.9% year over year to $622 million on the back of growth in the Asian international life operations.

Financial Update

Cash balance of $1.5 billion as of Dec 31, 2019 augmented 23.3% from the 2018-end level.

Total shareholders’ equity increased 10% from the level at 2018 end to $55.3 billion as of Dec 31, 2019.

Book value per share as of Dec 31, 2019 was up 11.7% from the figure as of Dec 31, 2018.

Core operating ROE was 7.9%.

Operating cash flow was $1.4 billion in the quarter under consideration.

Share Repurchase Update

In the quarter, the company bought back shares worth $310 million.

Full-Year Update

Core operating income of the year came in at $10.11 for 2019, up 7.1% year over year.

P&C net premiums written were $29.9 billion, up 5.6% year over year.

Zacks Rank

Chubb carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Insurers

Among other players from the insurance industry having reported fourth-quarter earnings so far, the bottom-line results of Brown & Brown, Inc. (BRO - Free Report) and RLI Corp. (RLI - Free Report) beat estimates while that of Principal Financial (PFG - Free Report) came in line.

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