A month has gone by since the last earnings report for Chubb (CB Quick QuoteCB - Free Report) . Shares have added about 4.6% in that time frame, outperforming the S&P 500.

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

Chubb's Q2 Earnings Top Estimates on Higher Premiums

Chubb Limited reported second-quarter 2024 core operating income of $5.38 per share, which outpaced the Zacks Consensus Estimate by 6.8%. The bottom line increased 9.3% year over year.

Chubb's results reflect double-digit premium revenue growth, with strong results in North America P&C, International P&C and Life Insurance divisions, solid underwriting margins and sturdy investment income, partially offset by a higher level of catastrophe.

Quarter in Detail

Net premiums written improved 11.8% year over year to $13.4 billion in the quarter. Our estimate and the Zacks Consensus Estimate were both pegged at $13.2 billion.  Net investment income was $1.5 billion, up 28.3% year over year. The Zacks Consensus Estimate was pegged at $1.5 billion, while our estimate for the same was $1.4 billion. 

Revenues of $13.9 billion beat the consensus estimate by 1.2% and improved 3.2% year over year.

Property and casualty (P&C) underwriting income was $1.4 billion, down 0.5% year over year. Global P&C underwriting income, excluding Agriculture, was $1.38 billion, up 3.4%.

Chubb incurred a pre-tax P&C catastrophe loss, net of reinsurance and including reinstatement premiums of $580 million, which was wider than the year-ago catastrophe loss of $400 million. 

The P&C combined ratio deteriorated 140 basis points (bps) on a year-over-year basis to 86.8% in the quarter under review. The Zacks Consensus Estimate for combined ratio was pegged at 88, while our estimate was 84.

Segmental Update

North America Commercial P&C Insurance: Net premiums written increased 6.7% year over year to $5.5 billion. Our estimate was $5.8 billion. The combined ratio deteriorated 40 bps to 82.9%, reflecting higher catastrophe losses. Our estimate was 81.8.

North America Personal P&C Insurance: Net premiums written climbed 12.3% year over year to $1.8 billion due to new business and renewal retention, as well as increases in both rate and exposure. Our estimate was $1.6 billion. The Zacks Consensus Estimate was pegged at $1.7 billion The combined ratio improved 540 bps to 83.5%, reflecting higher favorable prior period development and lower catastrophe losses. Our estimate was 84.8.

North America Agricultural Insurance: Net premiums written decreased 1.2% from the year-ago quarter to $758 million, primarily due to lower commodity prices. Our estimate was $774.9 million. The combined ratio deteriorated 820 bps to 94.4%, reflecting higher catastrophe losses and lower favorable prior period development. 

Overseas General Insurance: Net premiums written jumped 15.6% year over year to $3.3 billion, benefiting from the consolidation of Huatai. Our estimate was $4.2 billion. The Zacks Consensus Estimate was pegged at $3.3 billion. The combined ratio deteriorated 420 bps to 88.2% due to higher catastrophe losses.  Our estimate was 87.8.

Global Reinsurance: Net premiums written jumped 40.3% year over year to $411 million. Our estimate was $287.8 million. The Zacks Consensus Estimate was pegged at $328 million. The combined ratio deteriorated 310 bps to 72.7%. Our estimate was 83.1.

Life Insurance: Net premiums written soared 24.5% year over year to $1.6 billion with growth of 31.7% in International Life and 12.0% in Combined Insurance North America. Our estimate was $1.7 billion. The Zacks Consensus Estimate was pegged at $1.5 billion. The Life Insurance segment income was $276 million, up 8.7%. 

Financial Update

The cash balance of $2.6 billion, as of Jun 30, 2024, decreased 2% from the 2023-end level. Total shareholders’ equity grew 1.4% from the level at 2023 end to $64.6 billion as of Jun 30, 2024. Book value per share, as of Jun 30, 2024, was $151.05, up 2.9% from the figure as of Dec 31, 2023.  Core operating return on tangible equity expanded 10 bps year over year to 21.1%. Operating cash flow was $4.1 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 $570 million and paid $369 million in dividends.

How Have Estimates Been Moving Since Then?

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

VGM Scores

Currently, Chubb has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

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

Outlook

Chubb has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Chubb belongs to the Zacks Insurance - Property and Casualty industry. Another stock from the same industry, Selective Insurance (SIGI Quick QuoteSIGI - Free Report) , has gained 1.5% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.

Selective Insurance reported revenues of $1.19 billion in the last reported quarter, representing a year-over-year change of +14.2%. EPS of -$1.10 for the same period compares with $0.99 a year ago.

For the current quarter, Selective Insurance is expected to post earnings of $1.68 per share, indicating a change of +11.3% from the year-ago quarter. The Zacks Consensus Estimate has changed -3.4% over the last 30 days.

Selective Insurance has a Zacks Rank #5 (Strong Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.