Yahoo Finance Chubb's (CB) Q1 Earnings Top Estimates, Premiums Rise Y/Y
Chubb Limited CB reported first-quarter 2024 core operating income of $5.41 per share, which outpaced the Zacks Consensus Estimate by 2.3%. The bottom line increased 22.7% year over year.
Chubb's results reflected solid underwriting income, lower catastrophe loss and improved combined ratio across most of the segments. The insurer witnessed double-digit premium revenue growth from across the globe with strong results in commercial and consumer P&C and Asia life businesses.
Quarter in Detail
Net premiums written improved 14.1% year over year to $12.2 billion in the quarter. Our estimate was $11.4 billion, while the Zacks Consensus Estimate was pegged at $13 billion.
Net investment income was $1.4 billion, up 25.7% year over year. The Zacks Consensus Estimate was pegged at $1.3 billion, while our estimate for the same was $1.4 billion.
Property and casualty (P&C) underwriting income was $1.4 billion, up 16.7% year over year. Global P&C underwriting income, excluding Agriculture, was $1.3 billion, up 10.9%.
Chubb incurred a pre-tax P&C catastrophe loss, net of reinsurance and including reinstatement premiums of $347 million, which was narrower than the year-ago catastrophe loss of $382 million.
The P&C combined ratio improved 30 basis points (bps) on a year-over-year basis to 86% in the quarter under review. The Zacks Consensus Estimate for combined ratio was pegged at 86.3, while our estimate was 81.7.
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 $4.7 billion. Our estimate was $5.9 billion. The Zacks Consensus Estimate was pegged at $5.6 billion. The combined ratio deteriorated 272 bps to 86%. Our estimate was 80.
North America Personal P&C Insurance: Net premiums written climbed 12.3% year over year to $1.5 billion. Our estimate was $1.6 billion. The combined ratio improved 650 bps to 87.4%. Our estimate was 87.7.
North America Agricultural Insurance: Net premiums written decreased 15% from the year-ago quarter to $249 million. Our estimate was $415.6 million. The combined ratio improved 4,620 bps to 56.6%.
Overseas General Insurance: Net premiums written jumped 17.5% year over year to $3.8 billion. Our estimate was $4.2 billion. The combined ratio improved 20 bps to 85.8%. Our estimate was 86.2.
Life Insurance: Net premiums written soared 26.3% year over year to $1.6 billion, in line with our estimate.
The Life Insurance segment income was $268 million, up 9.8%. The increase was principally driven by higher earnings from Huatai.
Financial Update
The cash balance of $2.7 billion, as of Mar 31, 2024, increased 1.1% from the 2023-end level. Total shareholders’ equity grew 1.2% from the level at 2023 end to $64.4 billion as of Mar 31, 2024. Book value per share, as of Mar 31, 2024, was $149.09, up 1.5% from the figure as of Dec 31, 2023.
Core operating return on tangible equity expanded 110 bps year over year to 13.7%. Operating cash flow was $3.2 billion in the quarter under consideration, while adjusted operating cash flow was $3.6 billion.
Capital Deployment
In the quarter, Chubb bought back shares worth $316 million and paid $350 million in dividends.
Acquisition Update
During the quarter, CB increased its ownership in Huatai Group by 9%, bringing its stake to 85.5% as of Mar 31, 2024.
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 Other Insurers
The Travelers Companies TRV reported first-quarter 2024 core income of $4.69 per share, which missed the Zacks Consensus Estimate of $4.75 on higher-than-expected catastrophe loss. The bottom line increased 14.1% year over year, driven by higher underlying underwriting gain and higher net investment income, partially offset by higher catastrophe losses. Travelers’ total revenues increased 15.3% from the year-ago quarter to $11.2 billion, primarily driven by higher premiums. The top-line figure beat the Zacks Consensus Estimate by 0.1%.
Net written premiums increased 8% year over year to about $10.2 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $9.9 billion. Travelers witnessed an underwriting gain of $1.4 billion, up 57.3% year over year, driven by higher business volumes.
Consolidated underlying combined ratio of 87.7 improved 290 bps year over year. The combined ratio improved 150 bps year over year to 93.9 due to an improvement in the underlying combined ratio, partially offset by higher catastrophe losses and lower net favorable prior-year reserve development. The Zacks Consensus Estimate was pegged at 94.
Progressive Corporation’s PGR first-quarter 2024 earnings per share of $3.83 beat the Zacks Consensus Estimate of $3.20. The bottom line improved nearly eight times year over year. Operating revenues of $17.1 billion beat the Zacks Consensus Estimate by 2.4% and increased 20.1% year over year.
Net premiums earned grew 19% to $16 billion and beat our estimate of $14.4 billion. Combined ratio — the percentage of premiums paid out as claims and expenses — improved 1290 bps from the prior-year quarter’s level to 86.1.
RLI Corp. RLI reported first-quarter 2024 operating earnings of $1.89 per share, beating the Zacks Consensus Estimate as well as the year-ago number by 16%. The quarterly results reflected continued premium growth across all product segments. Operating revenues for the reported quarter were $394 million, up 17.6% year over year, driven by 17% higher net premiums earned and 21.3% higher net investment income. The top line, however, missed the Zacks Consensus Estimate by 0.1%.
Gross premiums written increased 13% year over year to $468 million. This uptick can be attributed to the solid performance of the Casualty (up 12.6%), Property (up 13.5%) and Surety (up 12.1%) segments. Our estimate was $511 million. Underwriting income of $77.7 million increased 16%. Combined ratio deteriorated 60 bps year over year to 78.5. The Zacks Consensus Estimate for the metric was pegged at 85, while our estimate was 77.7.
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