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Chubb (CB) to Report Q1 Earnings: Is a Beat in the Cards?
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Chubb Limited (CB - Free Report) is set to report first-quarter 2020 earnings on Apr 21 after market close. In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 8.57%, driven by higher premium revenues.
Factors at Play
Chubb’s first-quarter results are likely to benefit from premium growth, higher average invested asset and a solid market presence.
Premiums in the to-be-reported quarter are likely to have benefited from improved pricing and underwriting environment, new business written, strong retention and rate and exposure increases across most lines.
Strong operating cash flow and higher average invested asset base are likely to have aided net investment income in the to-be reported quarter. These, however, are likely to have been offset to some extent by low investment yields. The company estimates quarterly pre-tax net investment income in the range of $852 million to $862 million.
Continued focus on capitalizing on growth opportunities in its North American business along with prudent management of risk is likely to have aided the business.
Overseas General Insurance segment is likely to have gained from improved performances across property & other short-tail lines, casualty and personal lines of business.
The top line is likely to have benefited from improved premium revenues from North America Commercial and Personal P&C businesses as well as North America Agricultural Insurance business. The Zacks Consensus Estimate for revenues is currently pegged at $8.5 billion, indicating 6.3% increase from the year-ago period reported figure.
The company’s auto insurance business is likely to have gained from a decline in claim costs due to fewer road accidents, with most Americans staying at home as a precautionary measure in view of the COVID-19 pandemic. A benign catastrophe environment is likely to have aided combined ratio and underwriting profitability.
Sustained buyback is likely to have provided additional boost to the bottom line. Expenses are expected to have increased due to higher policy benefits, higher losses and loss expenses, administrative expenses and policy acquisition costs.
The Zacks Consensus Estimate for first-quarter earnings per share is pegged at $2.61, implying an increase of 2.7% from the year-ago reported figure.
Earnings Surprise History
The company boasts an attractive earnings surprise history, having surpassed estimates in each of the trailing four quarters, the positive surprise being 3.41%, on average. This is depicted in the chart below:
Our proven model predicts an earnings beat for Chubb in the soon-to-be-reported quarter because it has the right combination of two key ingredients. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of positive surprise.
Earnings ESP: Chubb has an Earnings ESP of +0.59%. This is because the Zacks Consensus Estimate of $2.62 is higher than the Most Accurate Estimate of $2.61. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Chubb carries a Zacks Rank #3.
Other Stocks to Consider
Some other stocks from the insurance industry with the apt combination of elements to surpass estimates this reporting cycle are as follows:
W.R. Berkley Corporation (WRB - Free Report) has an Earnings ESP of +0.12% and is a Zacks #3 Ranked player. The company is slated to announce first-quarter earnings on Apr 21.
Cincinnati Financial Corporation (CINF - Free Report) has an Earnings ESP of +1.67% and a Zacks Rank of 3. The company is set to release first-quarter earnings on Apr 27.
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Chubb (CB) to Report Q1 Earnings: Is a Beat in the Cards?
Chubb Limited (CB - Free Report) is set to report first-quarter 2020 earnings on Apr 21 after market close. In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 8.57%, driven by higher premium revenues.
Factors at Play
Chubb’s first-quarter results are likely to benefit from premium growth, higher average invested asset and a solid market presence.
Premiums in the to-be-reported quarter are likely to have benefited from improved pricing and underwriting environment, new business written, strong retention and rate and exposure increases across most lines.
Strong operating cash flow and higher average invested asset base are likely to have aided net investment income in the to-be reported quarter. These, however, are likely to have been offset to some extent by low investment yields. The company estimates quarterly pre-tax net investment income in the range of $852 million to $862 million.
Continued focus on capitalizing on growth opportunities in its North American business along with prudent management of risk is likely to have aided the business.
Overseas General Insurance segment is likely to have gained from improved performances across property & other short-tail lines, casualty and personal lines of business.
The top line is likely to have benefited from improved premium revenues from North America Commercial and Personal P&C businesses as well as North America Agricultural Insurance business. The Zacks Consensus Estimate for revenues is currently pegged at $8.5 billion, indicating 6.3% increase from the year-ago period reported figure.
The company’s auto insurance business is likely to have gained from a decline in claim costs due to fewer road accidents, with most Americans staying at home as a precautionary measure in view of the COVID-19 pandemic.
A benign catastrophe environment is likely to have aided combined ratio and underwriting profitability.
Sustained buyback is likely to have provided additional boost to the bottom line.
Expenses are expected to have increased due to higher policy benefits, higher losses and loss expenses, administrative expenses and policy acquisition costs.
The Zacks Consensus Estimate for first-quarter earnings per share is pegged at $2.61, implying an increase of 2.7% from the year-ago reported figure.
Earnings Surprise History
The company boasts an attractive earnings surprise history, having surpassed estimates in each of the trailing four quarters, the positive surprise being 3.41%, on average. This is depicted in the chart below:
Chubb Limited Price and EPS Surprise
Chubb Limited price-eps-surprise | Chubb Limited Quote
What Our Quantitative Model States
Our proven model predicts an earnings beat for Chubb in the soon-to-be-reported quarter because it has the right combination of two key ingredients. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of positive surprise.
Earnings ESP: Chubb has an Earnings ESP of +0.59%. This is because the Zacks Consensus Estimate of $2.62 is higher than the Most Accurate Estimate of $2.61. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Chubb carries a Zacks Rank #3.
Other Stocks to Consider
Some other stocks from the insurance industry with the apt combination of elements to surpass estimates this reporting cycle are as follows:
The Travelers Companies, Inc. (TRV - Free Report) is set to report first-quarter earnings on Apr 21. It has an Earnings ESP of +1.69% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
W.R. Berkley Corporation (WRB - Free Report) has an Earnings ESP of +0.12% and is a Zacks #3 Ranked player. The company is slated to announce first-quarter earnings on Apr 21.
Cincinnati Financial Corporation (CINF - Free Report) has an Earnings ESP of +1.67% and a Zacks Rank of 3. The company is set to release first-quarter earnings on Apr 27.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>