Yahoo Finance Chubb's (CB) Q1 Earnings Surpass Estimates on Higher Premium
Chubb Limited CB reported first-quarter 2023 core operating income of $4.41 per share, which outpaced the Zacks Consensus Estimate by 0.9%. This outperformance was driven by higher premium revenues and improved net investment income. The bottom line improved 15.1% from the year-ago quarter.
Chubb's results reflected higher premium revenue growth across all the segments, partly offset by higher catastrophe loss.
Chubb Limited Price, Consensus and EPS Surprise
Chubb Limited price-consensus-eps-surprise-chart | Chubb Limited Quote
Quarter in Detail
Net premiums written improved 16.6% year over year to $10.7 billion in the quarter. The figure was higher than our estimate of $10.1 billion. Net premiums earned rose 16.1% to $10.1 billion. The figure was higher than our estimate of $9.4 billion. Net investment income was $1.11 billion, up 34.7%. The figure was higher than our estimate of $957.3 million.
Property and casualty (P&C) underwriting income was $1.21 billion, down 5.5% from the year-ago quarter. Global P&C underwriting income, excluding Agriculture, was $1.2 billion, down 1.6%.
Chubb incurred an after-tax catastrophe loss of $382 million, wider than the year-ago catastrophe loss of $290 million.
The combined ratio deteriorated 200 basis points (bps) on a year-over-year basis to 86.3% in the quarter under review.
Segmental Update
North America Commercial P&C Insurance: Net premiums written increased 6.2% year over year to $4.3 billion. The figure was lower than our estimate of $4.4 billion. The combined ratio deteriorated 210 bps to 83.2%.
North America Personal P&C Insurance: Net premiums written climbed 9.9% year over year to $1.3 billion. The figure was higher than our estimate of $1.2 billion. The combined ratio deteriorated 1040 bps to 93.9%.
North America Agricultural Insurance: Net premiums written surged more than four-fold from the year-ago quarter to $293 million. Combined ratio was 99.2%.
Overseas General Insurance: Net premiums written rose 6% year over year to $3.3 billion. The figure was lower than our estimate of $3.4 billion. The combined ratio improved 490 bps to 84%.
Life Insurance: Net premiums written increased more than two-fold year over year to $1.29 billion. The increase was driven by growth in Asia and the acquisition of the Cigna Asian business. The figure was higher than our estimate of $589.8 million.
Life Insurance segment income was $244 million, up 102%.
Financial Update
The cash balance of $2.3 billion, as of Mar 31, 2023, increased 13.7% from the 2022-end level. Total shareholders’ equity increased 4.9% from the level at 2022 end to $52.9 billion as of Mar 31, 2023.
Book value per share, as of Mar 31, 2023, was $127.94, up 4.9% from the figure as of Dec 31, 2022. Core operating return on tangible equity expanded 230 bps year over year to 19.4%.
Operating cash flow was $2.2 billion in the quarter under consideration.
Capital Deployment
In the quarter, Chubb bought back shares worth $428 million and paid $344 million in dividends.
Zacks Rank
Chubb currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Some Other P&C Insurers
The Travelers Companies TRV reported first-quarter 2023 core income of $4.11 per share, which beat the Zacks Consensus Estimate of $3.64 and our estimate of $3.41. However, the bottom line decreased 2.6% year over year. Travelers’ total revenues increased 10% from the year-ago quarter to $9.7 billion, primarily driven by higher premiums. The top-line figure missed the Zacks Consensus Estimate of $9.8 billion.
Net written premiums increased 12% year over year to $9.4 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $8.9 billion.
Catastrophe losses totaled $422 million, wider than $36 million pre-tax in the prior-year quarter. Catastrophe losses primarily resulted from severe wind and hail storms in multiple states. Travelers witnessed an underwriting gain of $501 million, down 12.9% year over year. The combined ratio deteriorated 410 bps year over year to 95.4.
The Progressive Corporation’s PGR first-quarter 2023 earnings per share of 65 cents missed the Zacks Consensus Estimate of $1.44 as well as our estimate of $1.50. The bottom line declined 20.7% year over year.
Operating revenues were about $14.2 billion, up 15.8% year over year. This improvement was driven by a 15% increase in premiums, 18.5% higher fees and other revenues, a 7.1% increase in service revenues and 73.2% higher investment income. The top line exceeded the Zacks Consensus Estimate of $14.1 billion and our estimate of $13.1 billion.
Net premiums earned grew 15% to $13.5 billion and beat our estimate of $12.6 billion. The combined ratio — the percentage of premiums paid out as claims and expenses — deteriorated 450 bps from the prior-year quarter’s level to 99.
RLI Corp. RLI reported first-quarter 2023 operating earnings of $1.63 per share, beating the Zacks Consensus Estimate by 34.7%. The bottom line improved 14% from the prior-year quarter. Operating revenues for the reported quarter were $335 million, up 19.4% year over year, driven by 14.3% higher net premiums earned and 51.5% higher net investment income. The top line however missed the Zacks Consensus Estimate by 2.2%.
Gross premiums written increased 15.6% year over year to $415 million. This uptick can be attributed to the solid performance of the Casualty (up 1%), Property (up 45%) and Surety segments (up 13.6%). Underwriting income of $67.9 million increased 14.1%, primarily due to higher profitability in its Property and Casualty segment. Combined ratio remained flat year over year at 77.9.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
RLI Corp. (RLI) : Free Stock Analysis Report
The Travelers Companies, Inc. (TRV) : Free Stock Analysis Report
Chubb Limited (CB) : Free Stock Analysis Report
The Progressive Corporation (PGR) : Free Stock Analysis Report
