Chubb Q3 Earnings Surpass Expectations on Solid Underwriting

Chubb Limited CB reported third-quarter 2024 core operating income of $5.72 per share, which beat the Zacks Consensus Estimate by 16%. The bottom line increased 15.6% year over year.Chubb's results reflect strong performance in North America P&C, Overseas General and Life Insurance divisions, solid underwriting income and improved investment income, partially offset by a higher level of catastrophe.Chubb Limited Price, Consensus and EPS Surprise Chubb Limited price-consensus-eps-surprise-chart | Chubb Limited QuoteQuarter in DetailNet premiums written improved 5.5% year over year to $13.8 billion in the quarter. Our estimate and the Zacks Consensus Estimate were both pegged at $14.3 billion. Pre-tax net investment income was $1.5 billion, up 14.7% year over year. The figure matched both the Zacks Consensus Estimate as well as our estimate. Revenues of $15 billion missed the consensus estimate by 1.5% and improved 6.5% year over year.Property and casualty (P&C) underwriting income was $1.4 billion, up 11.7% year over year. The Zacks Consensus Estimate was pegged at $1.1 billion. Global P&C underwriting income, excluding Agriculture, was $1.3 billion, up 10.2%.Chubb incurred a pre-tax P&C catastrophe loss, net of reinsurance and including reinstatement premiums of $765 million, which was wider than the year-ago catastrophe loss of $670 million. The pre-tax P&C catastrophe loss included $250 million from Hurricane Helene.The P&C combined ratio improved 70 basis points (bps) on a year-over-year basis to 87.7% in the quarter under review. The Zacks Consensus Estimate for the combined ratio was pegged at 90.Segmental UpdateNorth America Commercial P&C Insurance: Net premiums written increased 7.2% year over year to $5.5 billion. Our estimate was $5.3 billion. The combined ratio deteriorated 230 bps to 86.5%, reflecting due to higher catastrophe losses and lower favorable prior period development, partially offset by a better current accident year excluding catastrophe losses results. Our estimate was 87.9.North America Personal P&C Insurance: Net premiums written climbed 10% year over year to $1.6 billion. Our estimate was $1.6 billion. The combined ratio improved 900 bps to 81.3%, reflecting lower catastrophe losses, higher favorable prior period development, and better current accident year excluding catastrophe losses results. Our estimate was 96.2.North America Agricultural Insurance: Net premiums written decreased 9.3% from the year-ago quarter to $1.4 billion, primarily due to lower commodity prices. Our estimate was $1.5 billion. The combined ratio improved 280 bps to 90.4%. Our estimate was 75.2%. Overseas General Insurance: Net premiums written jumped 4.9% year over year to $3.3 billion. Our estimate and the Zacks Consensus Estimate were both pegged at $3.5 billion. The combined ratio improved 100 bps to 86% due to lower catastrophe losses and higher favorable prior period development. Our estimate was 88.3.Global Reinsurance: Net premiums written jumped 34.8% year over year to $352 million. Our estimate was $293.6 million. The combined ratio deteriorated 1,310 bps to 94.4%. Our estimate was 116.9.Life Insurance: Net premiums written increased 6.8% year over year to $1.6 billion. Our estimate was $2 billion. The Life Insurance segment income was $284 million, up 2.3% in constant dollars, with International Life up 9.1%. The Zacks Consensus Estimate was pegged at $312 million.Financial UpdateThe cash balance of $2.6 billion, as of Sept. 30, 2024, increased 2.1% from the 2023-end level. Total shareholders’ equity grew 10% from the level at 2023-end to $70.1 billion as of Sept. 30, 2024. Book value per share, as of Sept. 30, 2024, was $163.16, up 11.1% from the figure as of Dec. 31, 2023.Core operating return on tangible equity expanded 50 bps year over year to 21.7%. Operating cash flow was $4.32 billion in the quarter under consideration, while adjusted operating cash flow was $4.55 billion.Capital DeploymentIn the quarter, Chubb bought back shares worth $413 million and paid $369 million in dividends.Zacks RankChubb 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 InsurersRLI Corp. RLI reported third-quarter 2024 operating earnings of $1.31 per share, beating the Zacks Consensus Estimate by 33.7%. The bottom line more than doubled year over year. Operating revenues for the reported quarter were $426 million, up 1.4% year over year. The top line beat the Zacks Consensus Estimate of $420 million.Gross premiums written increased 13% year over year to $563.4 million. This uptick can be attributed to the solid performance of the Casualty (up 15.7%), Property (up 9.6%) and Surety segments (up 9%). Our estimate was $572.3 million. Underwriting income increased to $40.7 million from $4.2 million in the year-ago quarter. The combined ratio improved 910 bps year over year to 89.6. The Zacks Consensus Estimate for the metric was pegged at 96, while our estimate was 103.1.Kinsale Capital Group KNSL delivered third-quarter 2024 net operating earnings of $4.20 per share, which outpaced the Zacks Consensus Estimate by 13.5%. The bottom line increased 26.9% year over year. Operating revenues jumped 33.1% year over year to $418 million. The growth can primarily be attributed to a rise in premiums, fee income, higher net investment income and other income. Revenues beat the consensus estimate by 4.2%. Gross written premiums of $448.6 million rose 18.8% year over year. Our estimate was $475.1 million. Net written premiums climbed 18.9% year over year to $349.9 million in the quarter. Our estimate was pegged at $370.2 million. Net investment income increased 46.4% year over year to $39.6 million in the quarter and beat our estimate of $38.6 million. The Zacks Consensus Estimate was pegged at $37.7 million.Selective Insurance Group, Inc. SIGI reported third-quarter 2024 operating income of $1.40 per share, which missed the Zacks Consensus Estimate by 17.1%. The bottom line decreased 7% from the year-ago quarter. Total revenues of $1.2 billion increased 13.9% from the year-ago quarter’s figure. However, the top line missed the Zacks Consensus Estimate by 0.4%.On a year-over-year basis, net premiums written increased 9% to $1.15 billion. The figure was higher than our estimate of $1.2 billion.Net investment income earned, before-tax, increased 17% year over year to $117.8 million. The figure was higher than our estimate of $117.3 million. The Zacks Consensus Estimate was pegged at $114 million. After-tax net underwriting income was $4.1 million, which plunged 83% year over year. Pre-tax catastrophe losses more than doubled year over year to $148.8 million. Non-catastrophe property loss and loss expenses of $146.7 million decreased 15.1% year over year.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report RLI Corp. (RLI): Free Stock Analysis Report Chubb Limited (CB): Free Stock Analysis Report Selective Insurance Group, Inc. (SIGI): Free Stock Analysis Report Kinsale Capital Group, Inc. (KNSL): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks