Chubb (CB, Financial) Limited achieved notable success in its second quarter, driven by diversified operations across global markets. The company reported a record $2.5 billion in core operating income, marking a nearly 13% increase from the previous year. This growth was driven by strong underwriting results and investment income, alongside a significant rise in life income. Operating earnings per share (EPS) also saw a 14% uptick.
The company's tangible book value per share surged by 23.7% year-over-year, and its annualized core operating return on tangible equity reached 21% for the quarter. Underwriting income rose 15% to $1.6 billion, contributing to a combined ratio of 85.6%, enhanced by a 1.5-point improvement in the loss ratio for current accidents. Adjusted investment income rose nearly 8% to almost $1.7 billion.
Chubb's global property and casualty (P&C) premiums climbed 5.8%, or 6.4% when adjusted for currency fluctuations. North American premiums increased by 5.3%, excluding agriculture, with personal insurance and commercial segments growing 9.1% and 4.1%, respectively. The Overseas General division saw premiums rise 10.2% in constant dollars, with significant growth in both commercial and consumer lines. Regional performances were strong, with Asia, Latin America, and Europe posting robust gains.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 18 analysts, the average target price for Chubb Ltd (CB, Financial) is $306.18 with a high estimate of $340.00 and a low estimate of $245.22. The average target implies an upside of 9.85% from the current price of $278.73. More detailed estimate data can be found on the Chubb Ltd (CB) Forecast page.
Based on the consensus recommendation from 23 brokerage firms, Chubb Ltd's (CB, Financial) average brokerage recommendation is currently 2.5, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Chubb Ltd (CB, Financial) in one year is $250.95, suggesting a downside of 9.97% from the current price of $278.73. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Chubb Ltd (CB) Summary page.
CB Key Business Developments
Release Date: April 23, 2025
- Core Operating Income: $1.5 billion, down 31%.
- Total Company Premiums Growth: 5.7% in constant dollars.
- Combined Ratio: 95.7% with underwriting income of $441 million.
- Adjusted Net Investment Income: $1.7 billion, up 12.7%.
- Annualized Core Operating Return on Tangible Equity: 13%.
- Book Value: $65.7 billion, $164 per share.
- Adjusted Operating Cash Flow: $2 billion.
- Capital Returned to Shareholders: $751 million, including $385 million in share repurchases and $366 million in dividends.
- Pre-tax Catastrophe Losses: $1.64 billion.
- Prior Period Development: Favorable $268 million pre-tax.
- Core Operating ROE: 8.6%.
- Effective Tax Rate: 19.1%.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Chubb Ltd (CB, Financial) reported $1.5 billion in core operating income, supported by excellent underlying underwriting results and double-digit growth in investment income.
- Total company premiums grew 5.7% in constant dollars, with strong contributions from all regions globally.
- The company announced an acquisition of Liberty Mutual's business in Thailand and Vietnam, expanding its presence in Asia.
- Chubb Ltd (CB) achieved a combined ratio of 95.7%, with underwriting income of $441 million despite significant catastrophe losses.
- The company's fixed income portfolio yield is 5%, with new money rates averaging 5.5%, benefiting from higher yields as a predominantly buy-and-hold investor.
Negative Points
- Core operating income was down 31% due to significant catastrophe losses from the California wildfires.
- The strong dollar negatively impacted revenue growth, affecting the headline number.
- There is increased competition in the large account property and casualty insurance market, leading to price softening.
- Chubb Ltd (CB) faces uncertainty and potential negative impacts from tariffs and the federal budget deficit on interest rates and asset values.
- Financial lines pricing was down 3.2%, indicating softness in this area.
