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Chubb (CB) Estimates Q2 Catastrophe Loss of $1.8 Billion
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Chubb Limited (CB - Free Report) released its global net catastrophe loss estimate of $1.807 billion pretax or $1.15 billion after tax, net of reinsurance including reinstatement premiums. The loss can be attributed to the COVID-19 pandemic, severe weather-related events in the United States, as well as civil unrest-related losses in the United States.
While COVID-19 pandemic losses are expected to amount to $1.365 billion pre-tax ($1.157 billion after tax), natural catastrophe losses amount to $312 million pre-tax ($249 million after-tax). Civil unrest-related losses are expected to be $130 million pre-tax ($104 million after tax).
The Zacks Consensus Estimate for Chubb’s second-quarter earnings is currently pegged at $2.00, indicating a decline of 28.1% from the year-ago quarter reported figure. We expect estimates to move further south once analysts start incorporating loss estimates into their numbers.
The losses stemming from the pandemic include short-tail losses of $605 million from entertainment and commercial property-related business interruption and accident and health products including travel insurance products apart from losses of $553 million related to liability insurance products, including professional liability (directors and officers, employment practices, professional liability), workers' compensation and other liability-related product. The loss estimate also includes $107 million related to insurance credit exposure including surety, political risk and trade credit.
North America Commercial P&C Insurance will account for about 71% of the COVID-19 estimated losses while the Overseas General Insurance segment will constitute 28%.
Given the operational challenges due to the coronavirus pandemic, Chubb estimates net written premiums to reduce by about $184 million due to exposure adjustments on its in-force policies.
Concurrently, as part of its second-quarter review of legacy exposures for molestation, Chubb expects to recognize unfavorable prior period development for U.S. child molestation including reviver statute-related claims of $259 million pre-tax, or $205 million after tax.
Being a property and casualty insurer, Chubb has a substantial exposure to loss from natural disasters, man-made catastrophes and other catastrophic events, which has been inducing volatility in its underwriting results. Catastrophe loss for the first quarter of 2020 was $199 million, lower than $201 million incurred in the year-ago quarter. In fact, first-quarter loss included $13 million pre-tax related to the COVID-19 pandemic. Chubb estimates the COVID 19 pandemic and its impact on economic growth to weigh on its operating income and revenues in the second quarter.
Shares of this Zacks Rank #3 (Hold) P&C insurer have lost 18.2% year to date compared with the industry’s decrease of 21%. Compelling product portfolio, underwriting excellence, strategic growth initiatives global presence, and effective capital deployment should help shares bounce back.
Stocks to Consider
Some better-ranked companies in the insurance industry are Old Republic International Corporation (ORI - Free Report) , Fidelity National Financial, Inc. (FNF - Free Report) and Horace Mann Educators Corporation (HMN - Free Report) ,
Old Republic engages in the insurance underwriting and related services business primarily in the United States and Canada. The company delivered average four-quarter positive surprise of 31.72%. It sports Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Fidelity National provides various insurance products in the United States. The company delivered average four-quarter positive surprise of 10.93%. It sports a Zacks Rank #1.
Horace Mann operates as a multiline insurance company in the United States. The company delivered average four-quarter positive surprise of 11.03%. It carries a Zacks Rank #2 (Buy).
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From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
This young company’s gigantic growth was hidden by low-volume trading, then cut short by the coronavirus. But its digital products stand out in a region where the internet economy has tripled since 2015 and looks to triple again by 2025.
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Chubb (CB) Estimates Q2 Catastrophe Loss of $1.8 Billion
Chubb Limited (CB - Free Report) released its global net catastrophe loss estimate of $1.807 billion pretax or $1.15 billion after tax, net of reinsurance including reinstatement premiums. The loss can be attributed to the COVID-19 pandemic, severe weather-related events in the United States, as well as civil unrest-related losses in the United States.
While COVID-19 pandemic losses are expected to amount to $1.365 billion pre-tax ($1.157 billion after tax), natural catastrophe losses amount to $312 million pre-tax ($249 million after-tax). Civil unrest-related losses are expected to be $130 million pre-tax ($104 million after tax).
The Zacks Consensus Estimate for Chubb’s second-quarter earnings is currently pegged at $2.00, indicating a decline of 28.1% from the year-ago quarter reported figure. We expect estimates to move further south once analysts start incorporating loss estimates into their numbers.
The losses stemming from the pandemic include short-tail losses of $605 million from entertainment and commercial property-related business interruption and accident and health products including travel insurance products apart from losses of $553 million related to liability insurance products, including professional liability (directors and officers, employment practices, professional liability), workers' compensation and other liability-related product. The loss estimate also includes $107 million related to insurance credit exposure including surety, political risk and trade credit.
North America Commercial P&C Insurance will account for about 71% of the COVID-19 estimated losses while the Overseas General Insurance segment will constitute 28%.
Given the operational challenges due to the coronavirus pandemic, Chubb estimates net written premiums to reduce by about $184 million due to exposure adjustments on its in-force policies.
Concurrently, as part of its second-quarter review of legacy exposures for molestation, Chubb expects to recognize unfavorable prior period development for U.S. child molestation including reviver statute-related claims of $259 million pre-tax, or $205 million after tax.
Being a property and casualty insurer, Chubb has a substantial exposure to loss from natural disasters, man-made catastrophes and other catastrophic events, which has been inducing volatility in its underwriting results. Catastrophe loss for the first quarter of 2020 was $199 million, lower than $201 million incurred in the year-ago quarter. In fact, first-quarter loss included $13 million pre-tax related to the COVID-19 pandemic. Chubb estimates the COVID 19 pandemic and its impact on economic growth to weigh on its operating income and revenues in the second quarter.
Shares of this Zacks Rank #3 (Hold) P&C insurer have lost 18.2% year to date compared with the industry’s decrease of 21%. Compelling product portfolio, underwriting excellence, strategic growth initiatives global presence, and effective capital deployment should help shares bounce back.
Stocks to Consider
Some better-ranked companies in the insurance industry are Old Republic International Corporation (ORI - Free Report) , Fidelity National Financial, Inc. (FNF - Free Report) and Horace Mann Educators Corporation (HMN - Free Report) ,
Old Republic engages in the insurance underwriting and related services business primarily in the United States and Canada. The company delivered average four-quarter positive surprise of 31.72%. It sports Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Fidelity National provides various insurance products in the United States. The company delivered average four-quarter positive surprise of 10.93%. It sports a Zacks Rank #1.
Horace Mann operates as a multiline insurance company in the United States. The company delivered average four-quarter positive surprise of 11.03%. It carries a Zacks Rank #2 (Buy).
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
This young company’s gigantic growth was hidden by low-volume trading, then cut short by the coronavirus. But its digital products stand out in a region where the internet economy has tripled since 2015 and looks to triple again by 2025.
Its stock price is already starting to resume its upward arc. The sky’s the limit! And the earlier you get in, the greater your potential gain.
Click Here, See It Free >>