10-QPeriod: Q3 FY2022

Chubb Ltd Quarterly Report for Q3 Ended Sep 30, 2022

Filed October 28, 2022For Securities:CB

Summary

Chubb Limited reported a net income of $812 million for the three months ended September 30, 2022, a decrease from $1.83 billion in the same period last year. This decline was primarily attributed to significant mark-to-market losses on private equity investments, which were $231 million after-tax in the current quarter compared to gains of $705 million in the prior year. Despite the net income decrease, the company demonstrated strong underlying performance with a 14.4% increase in consolidated net premiums written to $12.0 billion and a 15.3% increase in net premiums earned to $11.5 billion, driven by the acquisition of Cigna's Asian business and positive rate increases across most lines of business. The P&C combined ratio improved slightly to 93.1% from 93.4% in the prior year, indicating solid underwriting performance, although impacted by $1.2 billion in catastrophe losses, notably from Hurricane Ian. Shareholders' equity saw a decline of $4.0 billion during the quarter, largely due to the net unrealized losses on investments ($2.9 billion after-tax) resulting from rising interest rates and foreign currency translation effects ($1.0 billion), combined with capital returned to shareholders through share repurchases ($685 million) and dividends ($346 million). The company's financial position remains robust, with total assets of $198 billion and shareholders' equity of $48 billion as of September 30, 2022. Chubb also continues to return capital to shareholders, with $1.8 billion remaining under its current share repurchase authorization.

Financial Highlights

36 data points
Beta

Revenue

$12.12B

Net Income

$792.00M

6.5% Net Margin

EPS (Diluted)

$1.89

Total Assets

$198.11B

Cash & Equivalents

$2.13B

Free Cash Flow

$3.43B

Financial Statements
Beta
Revenue$12.12B
Interest Expense$150.00M
Net Income$792.00M
EPS (Basic)$1.90
EPS (Diluted)$1.89
Shares Outstanding (Basic)416.54M
Shares Outstanding (Diluted)419.62M

Key Highlights

  • 1Net income for Q3 2022 was $812 million, down from $1.83 billion in Q3 2021, primarily due to mark-to-market losses on private equity.
  • 2Net premiums written increased by 14.4% to $12.0 billion in Q3 2022, driven by organic growth and the acquisition of Cigna's Asian business.
  • 3Net premiums earned rose by 15.3% to $11.5 billion in Q3 2022.
  • 4The P&C combined ratio improved slightly to 93.1% in Q3 2022 from 93.4% in Q3 2021.
  • 5Catastrophe losses were $1.2 billion in Q3 2022, primarily due to Hurricane Ian.
  • 6Shareholders' equity decreased by $4.0 billion in Q3 2022, impacted by unrealized investment losses and capital returns to shareholders.
  • 7Chubb repurchased $685 million of its common shares and paid $346 million in dividends during the quarter.

Frequently Asked Questions

The decrease in net income from $1.83 billion in Q3 2021 to $812 million in Q3 2022 was primarily due to significant mark-to-market losses on private equity investments, which amounted to $231 million after-tax in the current quarter, compared to gains of $705 million in the prior year period.

The acquisition of Cigna's Asian business, completed on July 1, 2022, contributed to the growth in net premiums written (adding 7.1 percentage points) and net premiums earned (adding 7.3 percentage points) in the third quarter of 2022. It also contributed $159 million to the Life Insurance segment's underwriting income increase.

Chubb experienced catastrophe losses of $1.2 billion in the third quarter of 2022, primarily driven by Hurricane Ian ($975 million pre-tax), which impacted the P&C combined ratio by 11.3 percentage points.

During the third quarter of 2022, Chubb returned $1.0 billion to shareholders through share repurchases ($685 million) and dividends ($346 million). The company also has $1.8 billion remaining under its current share repurchase authorization, which is valid through June 30, 2023.