It has been about a month since the last earnings report for Chubb (CB Quick QuoteCB - Free Report) . Shares have lost about 1.6% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Chubb due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Chubb's Q4 Earnings Beat Estimates, Premiums Rise Y/Y

Chubb Limited reported fourth-quarter 2021 core operating income of $3.81 per share, which outpaced the Zacks Consensus Estimate by 16.5%. This outperformance was driven by higher premium revenues. The bottom line also improved 19.8% from the year-ago quarter.

Chubb's results reflected lower catastrophe losses and an improvement in premiums in the company’s North America and international businesses, which were partially offset by lower net investment income.

Quarter in Detail

Net premiums written improved 8.8% year over year to $9.1 billion in the quarter. Net premiums earned rose 10.6% to $9.3 billion. Net investment income was $843 million, down 0.5%.

Property and casualty (P&C) underwriting income was $1.27 billion, up 30.7% from the year-ago quarter. Global P&C underwriting income, excluding Agriculture, was $1.2 billion, up 29.2%.BChubb incurred an after-tax catastrophe loss of $245 million in the fourth quarter, down 5% year over year.

The combined ratio improved 210 basis points (bps) on a year-over-year basis to 85.5% in the quarter under review.

Segmental Update 

North America Commercial P&C Insurance: Net premiums written increased 10% year over year to $4.1 billion. The combined ratio improved 100 bps to 76.8%.

North America Personal P&C Insurance: Net premiums written climbed 3.3% year over year to $1.2 billion. The combined ratio improved 1630 bps to 72.3%.

North America Agricultural Insurance: Net premiums written climbed 14.6% from the year-ago quarter to $278 million. The combined ratio improved 320 bps to 87.3%.

Overseas General Insurance: Net premiums written rose 10.2% year over year to $2.7 billion. The combined ratio improved 1140 bps to 81%.

Global Reinsurance: Net premiums written increased 36.9% from the year-ago quarter to $171 million. The combined ratio of 126.2% deteriorated 2660 bps.

Life Insurance: Net premiums written were down 1.1% year over year to $633 million.

Financial Update

The cash balance of $1.6 billion, as of Dec 31, 2021, decreased 5% from the 2020-end level. Total shareholders’ equity increased 0.4% from the level at 2020 end to $59.7 billion as of Dec 31, 2021.

Book value per share, as of Dec 31, 2021, was $139.99, up 6.1% from the figure as of Dec 31, 2020. Core operating return on equity expanded 90 bps year over year to 11.6%. Operating cash flow was $2.60 billion in the quarter under consideration.

Share Repurchase Update

In the quarter, CB bought back shares worth $905 million.

Full-Year Update

Core operating income for the year came in at $12.56 per share, up 71.8% year over year. P&C net premiums written were $35.4 billion, up 13% year over year.
The combined ratio improved 700 bps on a year-over-year basis to 89.1% in 2021.

How Have Estimates Been Moving Since Then?

It turns out, estimates review flatlined during the past month.

VGM Scores

At this time, Chubb has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Chubb has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.