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Chubb (CB)
NYSE:CB
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Chubb
(NYSE:CB)
78Outperform
Positive Factors
Earnings
4Q24 operating EPS of $6.02 is a beat compared to projection of $4.94 and the higher street consensus of $5.41.
Growth Opportunities
Recent strategic actions, like acquiring Cigna’s Asia-Pacific business and launching new products, are expected to drive growth in emerging markets.
Stock Buyback
Common stock repurchases of $725mn ran ahead of the $500mn expectation.
Negative Factors
Catastrophe Losses
Management expects $1.5bn catastrophe losses in 1Q25E from the Los Angeles wildfires, which is higher than the $1.3bn expectation.
Investment Income
Net investment income came $30mn lower than expected, creating a headwind.
Reserve Transparency
CB shares traded down post call as lack of full disclosure on reserve movement by line more than offset better pricing in the quarter.
Chubb (CB) vs. S&P 500 (SPY)
Market Cap
$120.68B
Dividend Yield1.52%
Average Volume (3M)1.86M
Price to Earnings (P/E)13.3
Beta (1Y)0.26
Revenue Growth11.78%
EPS Growth4.39%
CountryUS
Employees43,000
SectorFinancial
Sector Strength84
IndustryInsurance - Property & Casualty
Share Statistics
EPS (TTM)22.71
Shares Outstanding400,412,080
10 Day Avg. Volume1,717,051
30 Day Avg. Volume1,859,771
Financial Highlights & Ratios
PEG Ratio3.03
Price to Book (P/B)N/A
Price to Sales (P/S)2.09
Price to Cash Flow (P/CF)6.40
P/FCF Ratio6.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$305.75Price Target Upside1.09% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering16
Chubb Business Overview & Revenue Model
Company DescriptionChubb Limited provides insurance and reinsurance products worldwide. The company's North America Commercial P&C Insurance segment offers commercial property, casualty, workers' compensation, package policies, risk management, financial lines, marine, construction, environmental, medical, cyber risk, surety, and excess casualty; and group accident and health insurance to large, middle market, and small commercial businesses. Its North America Personal P&C Insurance segment provides affluent and high net worth individuals and families with homeowners, automobile and collector cars, valuable articles, personal and excess liability, travel insurance, and recreational marine insurance and services. The company's North America Agricultural Insurance segment offers multiple peril crop and crop-hail insurance; and coverage for farm and ranch property, and commercial agriculture products. Its Overseas General Insurance segment provides coverage for traditional commercial property and casualty; specialty categories, such as financial lines, marine, energy, aviation, political risk, and construction risk; and group accident and health, and traditional and specialty personal lines for corporations, middle markets, and small customers through retail brokers, agents, and other channels. The company's Global Reinsurance segment offers traditional and specialty reinsurance under the Chubb Tempest Re brand to property and casualty companies. Its Life Insurance segment provides protection and savings products comprising whole life, endowment plans, individual term life, group term life, medical and health, personal accident, credit life, universal life, and unit linked contracts. The company markets its products primarily through insurance and reinsurance brokers. The company was formerly known as ACE Limited and changed its name to Chubb Limited in January 2016. Chubb Limited was incorporated in 1985 and is headquartered in Zurich, Switzerland.
How the Company Makes MoneyChubb makes money primarily through the underwriting of insurance policies and investment income. The company collects premiums from policyholders, which serves as a significant revenue stream. These premiums are used not only to cover claims but also to be invested in various financial instruments, generating additional income. Chubb's underwriting operations are divided into segments such as North America Commercial P&C Insurance, North America Personal P&C Insurance, and Overseas General Insurance, each contributing to the company's revenue. Additionally, strategic partnerships and joint ventures in different regions enhance its market reach and customer base, further bolstering earnings. The company's disciplined underwriting practices and diversified portfolio help manage risk and ensure profitability.
Chubb Financial Statement Overview
Summary
Chubb exhibits strong financial health with consistent revenue growth and robust cash flow generation. The balance sheet is stable, although rising debt levels require monitoring. Overall, Chubb is well-positioned in the insurance industry, but attention to debt management and potential investment needs is advisable.Income Statement
Chubb has demonstrated strong revenue growth over the years, with a substantial increase from $34.23 billion in 2019 to $49.83 billion in 2023. The gross profit margin is consistently at 100% due to the nature of the insurance business where total revenue equals gross profit. The EBIT and EBITDA margins are solid, reflecting strong operational efficiency. Net profit margin is robust, with a notable increase in net income to $9.27 billion in 2024. However, the 2024 data lacks a total revenue figure, making it challenging to evaluate the latest margins accurately.85
Very Positive
Balance Sheet
Chubb maintains a strong equity position, with stockholders' equity increasing from $55.33 billion in 2019 to $64.02 billion in 2024. The debt-to-equity ratio is manageable, indicating prudent financial leverage. The equity ratio shows a stable balance between assets and liabilities. However, the total debt has increased slightly, which could pose risks if not managed carefully.75
Positive
Cash Flow
Chubb's operating cash flow has shown consistent growth, indicating strong cash generation capabilities. The free cash flow has also increased, supporting healthy financial flexibility. The operating cash flow to net income ratio is favorable, suggesting efficient cash earnings conversion. However, the absence of capital expenditures in recent years raises questions about potential underinvestment.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 56.01B | 49.83B | 43.12B | 40.96B | 35.99B | Gross Profit |
| 56.01B | 49.83B | 43.12B | 40.96B | 35.99B | EBIT |
| 0.00 | 9.39B | 7.14B | 9.82B | 4.16B | EBITDA |
| 0.00 | 10.20B | 7.34B | 10.57B | 4.97B | Net Income Common Stockholders |
| 9.27B | 9.03B | 5.25B | 8.53B | 3.53B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 39.19B | 4.55B | 2.01B | 1.66B | 1.75B | Total Assets |
| 246.55B | 230.68B | 199.02B | 200.05B | 190.77B | Total Debt |
| 15.18B | 14.49B | 14.88B | 16.17B | 14.95B | Net Debt |
| 12.89B | 12.05B | 12.87B | 14.51B | 13.20B | Total Liabilities |
| 178.15B | 166.99B | 148.50B | 140.34B | 131.33B | Stockholders Equity |
| 64.02B | 59.51B | 50.52B | 59.71B | 59.44B |
| Cash Flow | Free Cash Flow | |||
| 16.18B | 12.63B | 11.26B | 11.15B | 9.79B | Operating Cash Flow |
| 16.18B | 12.63B | 11.26B | 11.15B | 9.79B | Investing Cash Flow |
| -13.92B | -7.65B | -5.65B | -6.66B | -7.52B | Financing Cash Flow |
| -2.18B | -4.49B | -5.14B | -4.41B | -2.08B |
Chubb Technical Analysis
Positive
302.46
Price Trends
281.33
Positive
278.81
Positive
276.66
Positive
Market Momentum
5.55
Negative
66.12
Neutral
76.67
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CB, the sentiment is Positive. The current price of 302.46 is above the 20-day moving average (MA) of 294.37, above the 50-day MA of 281.33, and above the 200-day MA of 276.66, indicating a bullish trend. The MACD of 5.55 indicates Negative momentum. The RSI at 66.12 is Neutral, neither overbought nor oversold. The STOCH value of 76.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CB.
Chubb Risk Analysis
Chubb disclosed 37 risk factors in its most recent earnings report. Chubb reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Chubb Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $166.65B | 19.74 | 36.98% | 1.71% | 21.36% | 118.77% | |
78 Outperform | $120.68B | 13.28 | 15.01% | 1.52% | 11.78% | 4.39% | |
77 Outperform | $23.34B | 9.18 | 16.52% | ― | 5.17% | 35.36% | |
76 Outperform | $26.66B | 16.14 | 22.16% | 0.46% | 12.32% | 29.21% | |
75 Outperform | $59.65B | 12.26 | 18.94% | 1.60% | 12.23% | 68.50% | |
72 Outperform | $54.99B | 12.21 | 23.80% | 1.81% | 12.28% | ― | |
63 Neutral | $14.39B | 9.81 | 8.95% | 4.37% | 16.38% | -11.64% |
* Financial Sector Average
Performance Comparison
CB
Chubb
302.46
53.51
21.49%
ALL
Allstate
205.32
37.47
22.32%
MKL
Markel
1,827.46
337.42
22.65%
PGR
Progressive
287.00
81.96
39.97%
TRV
Travelers Companies
263.10
38.58
17.18%
WRB
W. R. Berkley Corporation
70.29
13.94
24.74%
Chubb Earnings Call Summary
Earnings Call Date: Jan 28, 2025 | % Change Since: 11.44% | Next Earnings Date: Apr 22, 2025
Earnings Call Sentiment Positive
Chubb displayed robust performance with record underwriting income, investment growth, and premium increases across most divisions. However, significant costs associated with California wildfires and challenges in financial lines and specific regions like Latin America and the London market present notable concerns.Highlights
Record P&C Underwriting Income
Chubb achieved record P&C underwriting income with a combined ratio of 85.7, contributing to a core operating income of $2.5 billion for the quarter.
Investment Income Growth
Adjusted net investment income increased by 19.3% to $6.4 billion for the year, with a quarterly record of $1.7 billion, up 13.7%.
Global P&C and Life Premium Growth
Global P&C premium revenue grew 9.9% and life premiums increased by 18.5% in constant dollars for the year.
Strong Shareholder Returns
Core operating ROE was approximately 14% and return on tangible equity was 21.6%. Book and tangible book value grew 8.8% and 14.1%, respectively.
Significant Growth in International Life Business
Premiums and deposits in the international life business increased over 26% in constant dollars.
Resilient North America and International Operations
North America P&C premiums grew 6.3% excluding agriculture, while international general insurance operations saw a 7.7% increase in retail business premiums.
Lowlights
Cost of California Wildfires
Estimated financial impact of California wildfires is $1.5 billion net pre-tax, classified as a first quarter 2025 event.
Decline in Financial Lines Premium
North America financial lines premiums declined by 2.9%, with specific challenges in D&O and employment practices liability due to increased competition.
Challenges in Latin America
Latin America premium growth was only 2.5%, impacted by foreign exchange. Adjusted for FX, growth was 11.5% in constant dollars.
London Market Competition
Premiums in the London wholesale business remained flat, with prices down 4% due to increased competition.
Company Guidance
During Chubb Limited's fourth quarter 2024 earnings call, the company provided detailed guidance on various financial metrics and future expectations. Chubb reported a record P&C underwriting income with a combined ratio of 85.7% and core operating income of $2.5 billion for the quarter, marking a 9.4% increase in pre-tax operating earnings and a 10.5% increase per share. The company's global P&C premium revenue grew by 6.7% during the quarter, while life insurance premiums increased by 8.5% in constant dollars. For the full year, Chubb generated $9.1 billion in operating income, reflecting an 11.5% increase adjusted for a one-time tax benefit, and a 13% rise on a per-share basis. The company also highlighted a strong core operating return on equity (ROE) of about 14% and a return on tangible equity of 21.6%. Looking ahead to 2025, Chubb expressed optimism, expecting continued growth in operating earnings and EPS at a double-digit rate, supported by P&C underwriting, investment income, and life income, despite potential influences from catastrophic losses and foreign exchange fluctuations.Chubb Corporate Events
Business Operations and StrategyFinancial Disclosures
Chubb Highlights Strategic Growth in Investor Presentation
Neutral
Dec 9, 2024
Chubb Limited has released an investor presentation available on its website, highlighting the company’s financial performance, business mix, strategic initiatives, and growth opportunities. This presentation is intended for investor meetings from December 9, 2024, and will be accessible for at least 60 days, offering valuable insights for those interested in the financial markets.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.