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Can Chubb (CB) Retain Its Beat Streak This Earnings Season?

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Chubb Limited (CB - Free Report) is slated to report second-quarter 2021 results on Jul 27, after market close. The company delivered an earnings surprise in three of the last four quarters and missed in the other one, the average being 5.35%.

Factors to Consider

Premiums in the second quarter are expected to have benefited from positive rate increases, net of exposure declines, strong renewal retention, growth in new business written across a number of retail and wholesale lines, and strong new business growth in Chubb Agribusiness. The Zacks Consensus Estimate for net premiums written is pegged at $9.2 billion.

Sustained low reinvestment rates on new and reinvested assets are expected to weigh on investment results. However, higher dividends on public equities is expected to have limited the downside. Chubb estimates adjusted net investment income run rate to be around $900 million. The Zacks Consensus Estimate for investment income is pegged at $915 million, indicating 10.6% increase from the year-ago reported figure.

The Zacks Consensus Estimate for revenues is pegged at $9 billion, indicating an increase of 2.2% from the year-ago reported figure.

Total benefits and expenses are likely to have increased mainly due to loss and loss expenses, policy acquisition costs and policy benefits and administrative expenses.

A not-so-active catastrophe environment is likely to aid the company’s underwriting results in the to-be-reported quarter. The Zacks Consensus Estimate for underwriting income is pegged at $1 billion.

Continued share buybacks are likely to have provided an additional upside to the bottom line.

The Zacks Consensus Estimate for second-quarter 2021 earnings of $2.96 per share indicates an increase of 628.5% from the year-ago quarter reported figure.

What the Zacks Model Says

Our proven model predicts an earnings beat for Chubb this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Earnings ESP: Chubb has an Earnings ESP of +4.00%. This is because the Most Accurate Estimate of $3.08 is pegged higher than the Zacks Consensus Estimate of $2.96. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Chubb Limited Price and EPS Surprise

Chubb Limited Price and EPS Surprise

Chubb Limited price-eps-surprise | Chubb Limited Quote

Zacks Rank: Chubb currently carries a Zacks Rank #3.

Other Stocks to Consider

Some other insurance stocks with the right combination of elements to come up with an earnings beat this time around are:

The Allstate Corporation (ALL - Free Report) has an Earnings ESP of +1.35% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Arch Capital Group Ltd. (ACGL - Free Report) has an Earnings ESP of +11.11% and a Zacks Rank #3.

NMI Holdings Inc (NMIH - Free Report) has an Earnings ESP of +3.56% and a Zacks Rank of 3.


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