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Chubb's (CB) Earnings Beat Estimates in Q2, Lower Y/Y – jj

Chubb's (CB) Earnings Beat Estimates in Q2, Lower Y/Y


Chubb Limited CB reported second-quarter 2019 core operating income of $2.60 per share, which outpaced the Zacks Consensus Estimate by 0.8%. The upside was driven by higher premium revenues. However, the bottom line dipped 3% from the year-ago quarter.

Quarter in Detail

Net premiums written improved 4.2% year over year to about $7.7 billion in the quarter. Net premiums earned rose 3% year over year to $7.29 billion.

Net investment income was $859 million, up 3.7% from the comparable quarter last year.

Property and casualty underwriting income was $727 million, down 11.7% from the year-ago period.

Combined ratio expanded 170 basis points (bps) to 90.1%.

Chubb reported after-tax catastrophe loss of $221 million in the reported quarter, wider than the year-ago quarter’s loss of $173 million.

Chubb Limited Price, Consensus and EPS Surprise

Chubb Limited Price, Consensus and EPS Surprise

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

Segment Update

North America Commercial P&C Insurance: Net premiums written increased 6% year over year to about $3.5 billion. Combined ratio expanded 150 bps to 86.5%.

North America Personal P&C Insurance: Net premiums written slipped 2% year over year to $1.3 billion. Combined ratio improved 170 bps to 90.3%.

North America Agricultural Insurance: Net premiums written increased 20.1% year over year to $466 million. The current accident year combined ratio excluding catastrophe losses was 89.6%, up 240 bps.

Overseas General Insurance: Net premiums written rose 2.7% year over year to $2.2 billion. Combined ratio deteriorated 190 bps to 90.8%.

Global Reinsurance: Net premiums written inched up 0.2% year over year. Combined ratio of 87.7% deteriorated 840 bps from the year-ago period.

Life Insurance: Net premiums written were up 2.5% year over year on the back of growth in the Combined Insurance North America supplemental accident and health business and growth in the Asian international life operations.

Financial Update

Cash balance of $1.3 billion as of Jun 30, 2019 increased 1.8% from 2018 end.

Total shareholders’ equity increased 6.9% from 2018-end level to $53.8 billion as of Jun 30, 2019.

Book value per share was $117.97 as of Jun 30, 2019, up 7.7% from the level as of Dec 31, 2018.

Core operating ROE was 9.3%.

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

Share Repurchase Update

In the reported quarter, the company bought back shares worth $376 million.

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

Of the insurance industry players that have reported second-quarter results so far, the bottom-line figures of The Progressive Corporation PGR and RLI Corp. RLI beat the respective Zacks Consensus Estimate for earnings. However, The Travelers Companies, Inc.’s TRV metric missed the mark.

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Chubb Limited (CB) : Free Stock Analysis Report
RLI Corp. (RLI) : Free Stock Analysis Report
The Progressive Corporation (PGR) : Free Stock Analysis Report
The Travelers Companies, Inc. (TRV) : Free Stock Analysis Report
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