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Chubb Limited (CB) Q3 Loss Narrower Than Expected, Down Y/Y
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Chubb Limited (CB - Free Report) reported third-quarter 2017 operating loss of 13 cents per share, narrower than the Zacks Consensus Estimate of a loss of 26 cents. Loss compared unfavorably with earnings of $2.88 in the year-ago quarter.
The quarter largely suffered due to three consecutive hurricanes and two successive earthquakes, having induced the company to incur loss. Catastrophe losses were $1.5 billion or $3.27 per share in the quarter.
Including one-time integration and merger-related expenses of 8 cents, amortization of fair value adjustment of acquired invested assets of 11 cents and net realized gains of 17 cents, net loss of 15 cents per share compared unfavorably with $2.88 per share earned in the year-ago quarter.
Quarter in Detail
Net premiums written improved 4.3% year over year to about $7.9 million in the quarter. Net premiums earned increased 1.3% to $7.8 million. Premiums benefited from one-time unearned premium reserve (UPR) transfer in 2016 were partially offset by merger-related underwriting actions.
Net investment income was $893 million, up 7.5% from a year ago.
Property and casualty underwriting loss was $784 million compared with underwriting income of $1 billion in the year-ago quarter. This loss is attributable to huge catastrophe loss incurred in the quarter. Combined ratio deteriorated 2480 basis points (bps) to 110.8%.
Segment Update
North America Commercial P&C Insurance: Net premiums written declined 0.7% year over year to $3.1 billion. Combined ratio deteriorated 2340 bps to 109.6%.
North America Personal P&C Insurance: Net premiums written increased 18.1% year over year to $1.2 billion. Combined ratio deteriorated 3640 bps to 120.8%.
Overseas General Insurance: Net premiums written increased 1.2% year over year to $2 billion. Combined ratio deteriorated 2040 bps to 101.6%.
North America Agricultural Insurance: Net premiums written increased 9.1% year over year to $926 million. Combined ratio deteriorated 150 bps to 90.4%.
Global Reinsurance: Net premiums written surged 45.8% year over year to $191 million. Combined ratio of 187.4% deteriorated from 66.3% in the year-ago quarter.
Life Insurance: Net premiums written increased 1.3% year over year to $539 million.
Financial Update
Cash balance was $1.1 billion as of Sep 30 2017, up approximately 13.6% from the end of 2016. Total shareholders’ equity grew about 4.6% to $50.4 million as of Sep 30, 2017.
Book value per share was $108.74 as of Sep 30, 2017, up nearly 5% from year-end 2016.
Operating cash flow was $1.8 billion in the quarter.
Share Repurchase Update
Chubb spent $232 million to buy back 1.6 million shares in the quarter.
Among other players from the insurance industry that have reported third-quarter earnings so far, the bottom line at The Progressive Corporation (PGR - Free Report) , The Travelers Companies, Inc. (TRV - Free Report) and RLI Corp. (RLI - Free Report) beat their respective Zacks Consensus Estimate.
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Chubb Limited (CB) Q3 Loss Narrower Than Expected, Down Y/Y
Chubb Limited (CB - Free Report) reported third-quarter 2017 operating loss of 13 cents per share, narrower than the Zacks Consensus Estimate of a loss of 26 cents. Loss compared unfavorably with earnings of $2.88 in the year-ago quarter.
The quarter largely suffered due to three consecutive hurricanes and two successive earthquakes, having induced the company to incur loss. Catastrophe losses were $1.5 billion or $3.27 per share in the quarter.
Including one-time integration and merger-related expenses of 8 cents, amortization of fair value adjustment of acquired invested assets of 11 cents and net realized gains of 17 cents, net loss of 15 cents per share compared unfavorably with $2.88 per share earned in the year-ago quarter.
Quarter in Detail
Net premiums written improved 4.3% year over year to about $7.9 million in the quarter. Net premiums earned increased 1.3% to $7.8 million. Premiums benefited from one-time unearned premium reserve (UPR) transfer in 2016 were partially offset by merger-related underwriting actions.
Net investment income was $893 million, up 7.5% from a year ago.
Property and casualty underwriting loss was $784 million compared with underwriting income of $1 billion in the year-ago quarter. This loss is attributable to huge catastrophe loss incurred in the quarter. Combined ratio deteriorated 2480 basis points (bps) to 110.8%.
Segment Update
North America Commercial P&C Insurance: Net premiums written declined 0.7% year over year to $3.1 billion. Combined ratio deteriorated 2340 bps to 109.6%.
North America Personal P&C Insurance: Net premiums written increased 18.1% year over year to $1.2 billion. Combined ratio deteriorated 3640 bps to 120.8%.
Overseas General Insurance: Net premiums written increased 1.2% year over year to $2 billion. Combined ratio deteriorated 2040 bps to 101.6%.
North America Agricultural Insurance: Net premiums written increased 9.1% year over year to $926 million. Combined ratio deteriorated 150 bps to 90.4%.
Global Reinsurance: Net premiums written surged 45.8% year over year to $191 million. Combined ratio of 187.4% deteriorated from 66.3% in the year-ago quarter.
Life Insurance: Net premiums written increased 1.3% year over year to $539 million.
Financial Update
Cash balance was $1.1 billion as of Sep 30 2017, up approximately 13.6% from the end of 2016. Total shareholders’ equity grew about 4.6% to $50.4 million as of Sep 30, 2017.
Book value per share was $108.74 as of Sep 30, 2017, up nearly 5% from year-end 2016.
Operating cash flow was $1.8 billion in the quarter.
Share Repurchase Update
Chubb spent $232 million to buy back 1.6 million shares in the quarter.
Zacks Rank
Chubb currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Among other players from the insurance industry that have reported third-quarter earnings so far, the bottom line at The Progressive Corporation (PGR - Free Report) , The Travelers Companies, Inc. (TRV - Free Report) and RLI Corp. (RLI - Free Report) beat their respective Zacks Consensus Estimate.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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