- Core Operating EPS Growth: Over 15.5%.
- Global P&C Premium Revenue Growth: 7.6%, or 8.5% in constant dollars.
- Core Operating Income: $2.3 billion, up 14.3%.
- Net and Operating Income Growth: 16.9% and 13.8%, respectively.
- Combined Ratio: 87.7%.
- P&C Underwriting Income: $1.5 billion, up over 11.5%.
- Ex-Cat Current Accident Year Underwriting Income: $2 billion, up 11.5%.
- Invested Assets: $151 billion.
- Adjusted Net Investment Income: $1.6 billion, up 15.9%.
- Fixed Income Portfolio Yield: 4.9%.
- Life Insurance Segment Income: $284 million.
- Annualized Core Operating ROE: 13.9%.
- Return on Intangible Equity: 21.7%.
- Global P&C Net Premiums Growth: 7.6%, or 8.5% in constant dollars.
- Commercial Premiums Growth: 8.1%.
- Consumer Premiums Growth: 9.4%.
- Life Premiums Growth: 10.6% in constant dollar.
- North America Premiums Growth (Excluding Agriculture): 7.8%.
- New Business Written: $1.2 billion, up over 18%.
- Renewal Retention Rate: 89.6%.
- Adjusted Operating Cash Flow: $4.6 billion for the quarter, $11.7 billion year-to-date.
- Capital Returned to Shareholders: $782 million for the quarter, $2.4 billion year-to-date.
- Book Value: Nearly $66 billion.
- Book Value Per Share Growth (Excluding AOCI): 2.7% for the quarter, 7.7% year-to-date.
- Tangible Book Value Per Share Growth (Excluding AOCI): 4.3% for the quarter, 10.6% year-to-date.
- Core Operating ROE Year-to-Date: 13.6%.
- Return on Tangible Equity Year-to-Date: 21.5%.
- Pretax Catastrophe Losses: $765 million.
- Favorable Prior Period Development: $299 million pretax.
- Core Effective Tax Rate: 17.7% for the quarter.
Release Date: October 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Chubb Ltd (CB, Financial) reported strong double-digit growth in both P&C underwriting and investment income, leading to core operating EPS growth of over 15.5%.
- Global P&C premium revenue grew 7.6%, or 8.5% in constant dollars, reflecting the company's broad and diversified nature.
- Core operating income for the quarter was $2.3 billion, up 14.3%, with record levels of net and operating income for the year.
- The company's combined ratio for the quarter was 87.7%, with P&C underwriting income of $1.5 billion, despite an active quarter for natural catastrophes.
- Adjusted net investment income topped $1.6 billion, up 15.9%, with a fixed income portfolio yield of 4.9% and a new money rate averaging 5.5%.
Negative Points
- The London wholesale market is becoming more competitive, which could impact underwriting prosperity over time.
- Financial lines in North America saw a decline, with premiums down about 5% and pricing down 3.2%.
- The international wholesale market, particularly in London, is exhibiting competitive behavior that may affect future performance.
- The quarter included pretax catastrophe losses of $765 million, impacting overall profitability.
- There was $59 million of unfavorable development in long-tail lines, primarily from general casualty.
Q & A Highlights
Q: In North America commercial, given the strong pricing and growth, should we expect growth to accelerate from here?
A: Evan Greenberg, CEO: We don't provide forward guidance, but we are in a healthy market and confident in Chubb's ability to continue growing above trend over time.
Q: Regarding the international business, is the growth mainly driven by Asia and elsewhere due to increased competition in London?
A: Evan Greenberg, CEO: Our London wholesale business is only about 10% of our international business. Growth is broad-based across Europe, Latin America, and Asia. The London market is showing classic competitive behavior, but it doesn't significantly impact our overall international growth.
Q: With recent hurricane activity and elevated catastrophe losses, what are your expectations for property lines as we approach renewals?
A: Evan Greenberg, CEO: In primary markets, pricing remains firm due to active weather events. In shared and layered markets, there's rate pressure due to increased competition, particularly from London, but overall, the market remains robust.
Q: Can you elaborate on the $59 million adverse development in North America general casualty?
A: Evan Greenberg, CEO: It was related to accident years 2019-2022, primarily in excess casualty. There were both positive and negative results across various long-tail classes.
Q: How do you view the competitive environment in London wholesale and its impact on your business?
A: Evan Greenberg, CEO: The London market is showing typical competitive behavior, which may not be sustainable long-term. However, this is specific to London and doesn't broadly impact our international operations.
Q: Given the strong results, do you have any changes in your views on capital management, particularly regarding share repurchases versus special dividends?
A: Evan Greenberg, CEO: No changes. We continue to return a healthy amount of capital to shareholders while investing in opportunities that exceed our cost of capital.
Q: With casualty pricing accelerating to 12%, why is this happening despite a higher interest rate environment?
A: Evan Greenberg, CEO: Our portfolio requires different levels of rate increases to achieve adequate returns. The majority of our portfolio is adequately priced, but some areas need higher rates to reach price adequacy.
Q: Can you provide guidance on investment income for the fourth quarter?
A: Peter Enns, CFO: We expect to be at the high end of our previous guidance on a recurring basis for the fourth quarter, excluding unpredictable factors like private equity income.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
