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Chubb (CB) Q3 Earnings Top on Solid Underwriting, Premiums Up
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Chubb Limited (CB - Free Report) reported third-quarter 2018 core operating income of $2.41 per share, which outpaced the Zacks Consensus Estimate of $2.33 by 3.4%. Moreover, the bottom line rebounded from the year-ago loss of 13 cents.
The company witnessed premium growth in U.S. commercial P&C divisions and outstanding growth in international P&C business. Solid growth was reported at Overseas General operations.
Including one-time integration and merger-related expenses of 3 cents, amortization of fair value adjustment of acquired invested assets, a long-term debt of 9 cents and a net realized gain of 35 cents, net income of $2.64 per share reversed the prior-year net loss of 15 cents.
Quarter in Detail
Net premiums written improved 2.6% year over year to about $8.1 billion in the quarter under review. Net premiums earned inched up 1.3% to $7.9 billion.
Net investment income was $820 million, up 1.2% from the prior-year quarter.
Property and casualty underwriting income was $669 million, bouncing back from the year-earlier loss of $784 million. Combined ratio improved 2270 basis points (bps) to 90.9%.
Chubb reported after-tax catastrophe loss of $372 million in the quarter under review, narrower than the loss of $1,525 million a year ago.
Segment Update
North America Commercial P&C Insurance: Net premiums written increased 3.7% year over year to $3.2 billion, benefiting from higher premiums in the middle market and small commercial divisions. Combined ratio improved 2380 bps to 85.6%.
North America Personal P&C Insurance: Net premiums written grew 2% year over year to $1.2 billion. Combined ratio improved 2100 bps to 99.8%.
Overseas General Insurance: Net premiums written rose 5.8% year over year to $2.1 billion. Combined ratio improved 1130 bps to 90.3%.
North America Agricultural Insurance: Net premiums written decreased 4.5% year over year to $884 million. Combined ratio deteriorated 30 bps to 80.7%.
Global Reinsurance: Net premiums written declined 14.1% year over year to $164 million on higher reinstatement premiums collected in the prior year in relation with the 2017 natural catastrophes. Combined ratio of 86.7% improved from 187.4% in the year-ago period.
Life Insurance: Net premiums written slid 0.5% year over year to $956 million.
Financial Update
Cash balance of $1 billion as of Sep 30, 2018 improved 44.6% from 2017 end. Total shareholders’ equity slipped 0.5% to $50.9 million as of Sep 30, 2018.
Book value per share was $110.46 as of Sep 30, 2018, up 0.1% from the level as of Dec 31, 2017.
Core operating ROE was 8.7% in the quarter under consideration while operating cash flow was $1.7 billion.
Share Repurchase Update
In the reported quarter, the company bought back 2.8 million shares worth $379 million.
Among other players from the insurance industry having reported third-quarter earnings so far, the bottom line of The Progressive Corporation (PGR - Free Report) and MGIC Investment Corporation (MTG - Free Report) beat the respective Zacks Consensus Estimate while that of RLI Corp. (RLI - Free Report) lagged the same.
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Chubb (CB) Q3 Earnings Top on Solid Underwriting, Premiums Up
Chubb Limited (CB - Free Report) reported third-quarter 2018 core operating income of $2.41 per share, which outpaced the Zacks Consensus Estimate of $2.33 by 3.4%. Moreover, the bottom line rebounded from the year-ago loss of 13 cents.
Chubb Limited Price, Consensus and EPS Surprise
Chubb Limited Price, Consensus and EPS Surprise | Chubb Limited Quote
The company witnessed premium growth in U.S. commercial P&C divisions and outstanding growth in international P&C business. Solid growth was reported at Overseas General operations.
Including one-time integration and merger-related expenses of 3 cents, amortization of fair value adjustment of acquired invested assets, a long-term debt of 9 cents and a net realized gain of 35 cents, net income of $2.64 per share reversed the prior-year net loss of 15 cents.
Quarter in Detail
Net premiums written improved 2.6% year over year to about $8.1 billion in the quarter under review. Net premiums earned inched up 1.3% to $7.9 billion.
Net investment income was $820 million, up 1.2% from the prior-year quarter.
Property and casualty underwriting income was $669 million, bouncing back from the year-earlier loss of $784 million. Combined ratio improved 2270 basis points (bps) to 90.9%.
Chubb reported after-tax catastrophe loss of $372 million in the quarter under review, narrower than the loss of $1,525 million a year ago.
Segment Update
North America Commercial P&C Insurance: Net premiums written increased 3.7% year over year to $3.2 billion, benefiting from higher premiums in the middle market and small commercial divisions. Combined ratio improved 2380 bps to 85.6%.
North America Personal P&C Insurance: Net premiums written grew 2% year over year to $1.2 billion. Combined ratio improved 2100 bps to 99.8%.
Overseas General Insurance: Net premiums written rose 5.8% year over year to $2.1 billion. Combined ratio improved 1130 bps to 90.3%.
North America Agricultural Insurance: Net premiums written decreased 4.5% year over year to $884 million. Combined ratio deteriorated 30 bps to 80.7%.
Global Reinsurance: Net premiums written declined 14.1% year over year to $164 million on higher reinstatement premiums collected in the prior year in relation with the 2017 natural catastrophes. Combined ratio of 86.7% improved from 187.4% in the year-ago period.
Life Insurance: Net premiums written slid 0.5% year over year to $956 million.
Financial Update
Cash balance of $1 billion as of Sep 30, 2018 improved 44.6% from 2017 end. Total shareholders’ equity slipped 0.5% to $50.9 million as of Sep 30, 2018.
Book value per share was $110.46 as of Sep 30, 2018, up 0.1% from the level as of Dec 31, 2017.
Core operating ROE was 8.7% in the quarter under consideration while operating cash flow was $1.7 billion.
Share Repurchase Update
In the reported quarter, the company bought back 2.8 million shares worth $379 million.
Zacks Rank
Chubb carries a Zacks Rank #4 (Hold).
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 having reported third-quarter earnings so far, the bottom line of The Progressive Corporation (PGR - Free Report) and MGIC Investment Corporation (MTG - Free Report) beat the respective Zacks Consensus Estimate while that of RLI Corp. (RLI - Free Report) lagged the same.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics.
Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
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