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Category: Chubb (CB)
Date: 28 April 2021 Stock Price of Chubb (CB): $166.60 Market Capital of Chubb (CB): $74.9 billion We take a look at the 1st quarter earnings report of their 2021 fiscal year of Chubb (CB), the world's largest publicly traded property and casualty insurance company. With operations in 54 countries and territories. The group reported net income of $2.3 billion for the 1st quarter of their 2021 fiscal year.
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- Evan G. Greenberg, Chairman and Chief Executive Officer of Chubb Limited - Chubb had another very good quarter with excellent commercial premium revenue growth globally, double-digit renewal rate change in our commercial P&C businesses, and further expansion of our underwriting margins"
More About Chubb (CB)
Chubb is the world's largest publicly traded property and casualty insurance company. With operations in 54 countries and territories, Chubb provides commercial and personal property and casualty insurance, personal accident and supplemental health insurance, reinsurance and life insurance to a diverse group of clients. As an underwriting company, we assess, assume and manage risk with insight and discipline. We service and pay our claims fairly and promptly. The company is also defined by its extensive product and service offerings, broad distribution capabilities, exceptional financial strength and local operations globally. Parent company Chubb Limited is listed on the New York Stock Exchange (NYSE: CB) and is a component of the S&P 500 index. Chubb maintains executive offices in Zurich, New York, London, Paris and other locations, and employs approximately 31,000 people worldwide
Overview of Chubb's 1st quarter 2021 earnings report
First Quarter 2021 Highlights
- Net income was $2.30 billion versus $252 million prior year, and core operating income was $1.14 billion versus $1.22 billion prior year.
- P&C net premiums written were up 9.7% globally, comprising 15.6% positive growth in commercial P&C lines and 2.5% negative growth in consumer lines. Foreign exchange had a positive impact on P&C net premiums written growth of 1.6 percentage points in the quarter.
- The P&C combined ratio was 91.8% compared with 89.1% prior year. P&C current accident year underwriting income excluding catastrophe losses was up 26.1%, leading to a P&C current accident year combined ratio excluding catastrophe losses of 85.2% compared with 87.5% prior year. The 2.3 percentage points of margin improvement comprised 1.0 percentage point in the loss ratio and 1.3 percentage points in the expense ratio.
- Pre-tax and after-tax P&C catastrophe losses, net of reinsurance and including reinstatement premiums, were $700 million and $570 million, respectively, compared with $237 million and $199 million, respectively, prior year. The current quarter included $657 million pre-tax of storm losses in the U.S. There was no change to the previously reported aggregate P&C COVID-19 losses, the majority of which remains as incurred but not reported (IBNR).
- Pre-tax net investment income was $863 million compared with $861 million prior year, and adjusted net investment income was $930 million compared with $917 million prior year.
- Annualized return on equity (ROE) and core operating ROE were 15.5% and 8.2%, respectively. Annualized core operating return on tangible equity was 12.8%.
Chubb (CB) management commentary on their 1st quarter 2021 earnings report
ZURICH, April 27, 2021 /PRNewswire/ -- Chubb Limited (NYSE: CB) today reported net income for the quarter ended March 31, 2021 of $2.30 billion, or $5.07 per share, compared with $252 million, or $0.55 per share, for the same quarter last year. Core operating income was $1.14 billion, or $2.52 per share, compared with $1.22 billion, or $2.68 per share, for the same quarter last year. Book and tangible book value per share decreased 0.4% and 0.6%, respectively, from December 31, 2020 and now stand at $131.37 and $87.16, respectively. Book value was unfavorably impacted by total after-tax net realized and unrealized losses of $737 million, including a $1.1 billion loss in the investment portfolio, principally due to rising interest rates, partially offset by a gain of $275 million in the company's variable annuity reinsurance portfolio.
Evan G. Greenberg, Chairman and Chief Executive Officer of Chubb Limited, commented: "Chubb had another very good quarter with excellent commercial premium revenue growth globally, double-digit renewal rate change in our commercial P&C businesses, and further expansion of our underwriting margins. Core operating income was $2.52 per share and net income per share was $5.07. Though it was an active quarter for natural catastrophes, we published an excellent combined ratio of 91.8%, while excluding catastrophes, current accident year underwriting income was up over 26%, leading to a world-class combined ratio of 85.2%. Margin improvement from both the loss and expense ratios was broad based.
Evan G. Greenberg, Chairman and Chief Executive Officer of Chubb Limited, commented: "Chubb had another very good quarter with excellent commercial premium revenue growth globally, double-digit renewal rate change in our commercial P&C businesses, and further expansion of our underwriting margins. Core operating income was $2.52 per share and net income per share was $5.07. Though it was an active quarter for natural catastrophes, we published an excellent combined ratio of 91.8%, while excluding catastrophes, current accident year underwriting income was up over 26%, leading to a world-class combined ratio of 85.2%. Margin improvement from both the loss and expense ratios was broad based.
"Our commercial P&C businesses globally continued to capitalize on favorable underwriting conditions. P&C net premiums were up 9.7% globally, with commercial lines up over 15.5%. Foreign exchange contributed 1.6 points to this outstanding result. Rates continued to increase and varied by line, averaging about 14.5% globally. From what we can see, I am confident these market conditions will endure. Frankly, they are a continued and rational response to the loss environment and years of industry underpricing.
"Our consumer lines globally remain impacted by the pandemic's effects on travel and other business and consumer-related activity, with net premiums down 2.5%. We see early signs of recovery and, in fact, our personal lines division globally reported modest growth in the quarter. We expect growth to improve as the year goes along.
"Our organization is focused, energized and mission-driven. We are leaning into the current favorable underwriting conditions, growing exposure and expanding margins. We have all of the capabilities in place to grow our company profitably while increasing shareholder value."
"Our consumer lines globally remain impacted by the pandemic's effects on travel and other business and consumer-related activity, with net premiums down 2.5%. We see early signs of recovery and, in fact, our personal lines division globally reported modest growth in the quarter. We expect growth to improve as the year goes along.
"Our organization is focused, energized and mission-driven. We are leaning into the current favorable underwriting conditions, growing exposure and expanding margins. We have all of the capabilities in place to grow our company profitably while increasing shareholder value."
Chubb (CB) stock price chart over the last 5 years
The image below shows the stock price history of Chubb (CB) over the last 5 years. And it's been a okay time for Chubb stockholders. Over the last 5 years the stock of Chubb has increased by 32.4%. No investor would say no to those type of returns.
The stock of Chubb is trading at closer to its 52 week high than it is to its 52 week low which is a clear indication that the short term sentiment and momentum of Chubb's stock is positive at this point in time.
The stock of Chubb is trading at closer to its 52 week high than it is to its 52 week low which is a clear indication that the short term sentiment and momentum of Chubb's stock is positive at this point in time.
Chubb (CB) latest stock valuation
So what is Chubb (CB) stock worth based on the release of their latest earnings report? Based on Chubb's latest earnings report our valuation models provide a target price (full value) price for Chubb's stock at $168 a stock. Therefore we believe the stock of Chubb is fully valued at its current price of $166.60
We usually recommend that long term fundamental or value investors look to enter the stock at 10% below our target price (full value price) which in this case is $166.60, so a good entry point into Chubb's stock would be at $150 or below.
We expect the stock of Chubb to trade in a narrow range around its current price in coming weeks and months as it is close to our target price (full value price). Since the stock of Turning Point Brands is trading at close to our suggested entry price we rate the stock of Chubb a hold
We usually recommend that long term fundamental or value investors look to enter the stock at 10% below our target price (full value price) which in this case is $166.60, so a good entry point into Chubb's stock would be at $150 or below.
We expect the stock of Chubb to trade in a narrow range around its current price in coming weeks and months as it is close to our target price (full value price). Since the stock of Turning Point Brands is trading at close to our suggested entry price we rate the stock of Chubb a hold
Next earnings release date for Chubb (CB)
It is expected that Chubb (CB) will release their 2nd quarter 2021 earnings report will be released in late July 2021