Yahoo Finance Chubb's (CB) Q4 Earnings Miss Estimates on Higher Cat Loss
Chubb Limited CB reported fourth-quarter 2022 core operating income of $4.05 per share, which missed the Zacks Consensus Estimate by 4%. However, the bottom line improved 6.3% from the year-ago quarter.
Chubb's results reflected higher catastrophe losses, which were partially offset by higher net investment income and higher premiums in the company’s North America businesses.
Chubb Limited Price, Consensus and EPS Surprise
Chubb Limited price-consensus-eps-surprise-chart | Chubb Limited Quote
Quarter in Detail
Net premiums written improved 11.9% year over year to $10.2 billion in the quarter. The figure was higher than our estimate of $10 billion. Net premiums earned rose 13.2% to $10.6 billion. The figure was higher than our estimate of $9.7 billion.
Net investment income was $1 billion, which increased 25%. The figure was higher than our estimate of $0.9 billion.
Property and casualty (P&C) underwriting income was $1.1 billion, down 11.4% from the year-ago quarter. Global P&C underwriting income, excluding Agriculture, was $1.2 billion, up 1.9%.
Chubb incurred an after-tax catastrophe loss of $323 million in the fourth quarter, which increased 31.8% year over year.
The combined ratio deteriorated 250 basis points (bps) on a year-over-year basis to 88% in the quarter under review.
Segmental Update
North America Commercial P&C Insurance: Net premiums written increased 8.9% year over year to $4.4 billion. The figure was lower than our estimate of $4.6 billion. The combined ratio deteriorated 750 bps to 84.3%.
North America Personal P&C Insurance: Net premiums written climbed 5.9% year over year to $1.3 billion. The figure matched our estimate. The combined ratio deteriorated 1700 bps to 89.3%.
North America Agricultural Insurance: Net premiums written climbed 37.9% from the year-ago quarter to $384 million. The figure was higher than our estimate of $353.7 million. The combined ratio deteriorated 2990 bps to 117.2%.
Overseas General Insurance: Net premiums written decreased 1.3% year over year to $2.6 billion. The figure was lower than our estimate of $2.8 billion. The combined ratio improved 140 bps to 79.6%.
Global Reinsurance: Net premiums written decreased 4.6% from the year-ago quarter to $163 million. The figure was lower than our estimate of $211.3 million. The combined ratio of 83.6% improved 4260 bps.
Life Insurance: Net premiums written surged 92% year over year to $1.2 billion. The figure was higher than our estimate of $0.6 billion.
Financial Update
The cash balance of $2 billion, as of Dec 31, 2022, increased 21.3% from the 2021-end level.
Total shareholders’ equity decreased 15.4% from the level at 2021 end to $50.5 billion as of Dec 31, 2022.
Book value per share, as of Dec 31, 2022, was $121.90, down 12.9% from the figure as of Dec 31, 2021.
Core operating return on equity expanded 30 bps year over year to 11.9%.
Operating cash flow was $2.65 billion in the quarter under consideration.
Share Repurchase Update
In the quarter, CB bought back shares worth $199 million.
Full-Year Update
Core operating income for the year came in at $15.24 per share, up 21.3% year over year.
P&C net premiums written were $38.1 billion, up 7.7% year over year.
The combined ratio improved 150 bps on a year-over-year basis to 87.6% in 2022.
Zacks Rank
Chubb currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other P&C Insurers
The Travelers Companies, Inc. TRV reported fourth-quarter 2022 core income of $3.40 per share, which matched the Zacks Consensus Estimate. The bottom line decreased 35% year over year. Total revenues increased 7.5% from the year-ago quarter to about $9.6 billion, primarily driven by higher premiums and fee income. The top-line figure beat the Zacks Consensus Estimate by 0.2%.
Net written premiums increased 10% year over year to $8.8 billion. The figure was higher than our estimate of $8.6 billion. Catastrophe losses totaled $459 million pre-tax, wider than $36 million pre-tax in the prior-year quarter. Travelers witnessed an underwriting gain of $449 million, down 51.5% year over year. The combined ratio deteriorated 650 bps year over year to 94.5.
The Progressive Corporation’s PGR fourth-quarter 2022 earnings per share of $1.50 beat the Zacks Consensus Estimate of $1.49 as well as our estimate of $1.34. The bottom line improved 42.9% year over year.
Net premiums earned grew 11% to $12.9 billion and beat our estimate of $12.3 billion. The combined ratio — the percentage of premiums paid out as claims and expenses — improved 80 bps from the prior-year quarter’s level to 93.9.
RLI Corp. RLI reported fourth-quarter 2022 operating earnings of $1.53 per share, beating the Zacks Consensus Estimate by 41.7%. The bottom line improved 26.4% from the prior-year quarter. Operating revenues for the reported quarter were $329.5 million, up 19.4% year over year. The top line beat the Zacks Consensus Estimate by 0.4%.
Gross premiums written increased 14% year over year to $383.8 million. Underwriting income of $54 million increased 8.7%, primarily driven by higher profitability at its Property segment. The combined ratio deteriorated 140 bps year over year to 82.1.
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