Did Chubb's first quarter 2024 earnings beat the prior year, and how strong was growth?

Yes. Net income rose 13.3% to $2.14 billion, and diluted EPS rose 15.5% to $5.23. Core operating income, which excludes realized gains and losses and other non-core items, grew 20.3% to $2.22 billion, with core EPS up 22.7% to $5.41. Premium growth was also strong, with consolidated net premiums written up 14.1%.

Are the reported earnings inflated by one-time items?

Only slightly. The quarter included a $55 million incremental deferred tax benefit related to Bermuda tax law, which added about $0.14 per share, and a $30 million Chubb Charitable Foundation contribution that reduced earnings by about $0.06 per share. Net of these, the effect was modest and partially offsetting. Management stated that excluding both items, core operating income grew more than 18.5% and operating EPS was $5.33.

Why did book value decline relative to the strong earnings?

Book value per share still increased 1.5%, but it was held back by $622 million of after-tax net realized and unrealized investment losses. These were driven mainly by mark-to-market declines in the fixed-income portfolio as interest rates moved, which affect accumulated other comprehensive income. Excluding AOCI, book value per share grew 2.2% to $167.28, and tangible book value per share excluding AOCI grew 2.9% to $105.75.

How healthy is the underwriting performance outlook?

Underwriting remained solid. The P&C combined ratio was 86.0%, and the current accident year ratio excluding catastrophes was 83.7%. Management said North American pricing exceeded loss costs at the best levels in four to five quarters, particularly in large-account casualty. Catastrophe losses were $435 million, or 4.4 points of the combined ratio, compared with $458 million a year earlier. Prior period reserve development was favorable by $207 million.

What drove growth across the business segments?

Growth was broad. Overseas General premiums rose 17.5%, helped by the consolidation of Huatai; excluding Huatai, growth was 9.3%. Asia was a standout, with consumer premiums up 46% and commercial up 23%. North America Commercial rose 9.4% and North America Personal rose 12.3%. Life Insurance premiums rose 26.3%, and Life premiums plus deposits rose 39.4%, driven by Asia. North America Agriculture premiums fell 15.0%, reflecting a government risk-sharing return of premium.

CB 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed April 23, 2024. Cited figures are marked; the original filing is the authoritative source.

Chubb Limited (NYSE: CB) reported strong first quarter 2024 results on April 23, 2024, with net income of $2.14 billion^a ($5.23 per diluted share, up 15.5%) and core operating income of $2.22 billion ($5.41 per share, up 22.7%).

Growth was broad-based: consolidated net premiums written rose 14.1% to $12.2 billion^b, P&C net premiums written grew 12.4%, and Life Insurance net premiums written jumped 26.3%. The P&C combined ratio improved modestly to 86.0% from 86.3%, and the current accident year combined ratio excluding catastrophe losses was 83.7%. Management highlighted that North American pricing exceeded loss costs at the best levels seen in four to five quarters, and that Asia was a standout in Overseas General.

Earnings were modestly flattered by two offsetting one-time items: a $55 million^c incremental deferred tax benefit tied to Bermuda tax legislation and a $30 million contribution to the Chubb Charitable Foundation. Excluding these, core operating income grew about 18.6% and core EPS was $5.33, up roughly 21%. Investment income was also a meaningful driver, with pre-tax net investment income up 25.7% to $1.39 billion and adjusted net investment income up 23.5% to $1.48 billion.

The main offset was balance sheet and capital market sensitivity. Book value per share rose 1.5% to $149.09^d and tangible book value per share rose 1.8% to $89.55, but both were held back by $622 million of after-tax net realized and unrealized investment losses, mainly mark-to-market declines in the fixed-income portfolio.

Excluding AOCI, book value per share grew 2.2% and tangible book value per share grew 2.9%. Chubb returned $666 million to shareholders during the quarter and continued to increase its ownership of Huatai Group, now about 85.5%.

02—Key points

Key Highlights

Core operating income of $2.22 billion ($5.41 per share), up 20.3% ($ up 22.7% per share); excluding one-time items, core EPS was $5.33, up roughly 21%.
Consolidated net premiums written of $12.2 billion, up 14.1% (14.2% in constant dollars), with P&C up 12.4% and Life Insurance up 26.3%.
P&C combined ratio of 86.0% versus 86.3% a year ago; current accident year combined ratio excluding catastrophes improved to 83.7% from 83.4%, with a 4.4-point catastrophe impact.
Pre-tax net investment income rose 25.7% to $1.39 billion, and adjusted net investment income rose 23.5% to $1.48 billion.
Book value per share of $149.09 (up 1.5%) and tangible book value per share of $89.55 (up 1.8%) were reduced by $622 million of after-tax investment losses, mainly fixed-income mark-to-market.
Two one-time items partially offset each other: a $55 million Bermuda tax law deferred tax benefit and a $30 million Chubb Charitable Foundation contribution ($24 million after-tax).
Capital return of $666 million in the quarter, including $316 million of buybacks at an average price of $258.75 per share and $350 million of dividends.

03—Questions

Frequently Asked Questions

Did Chubb's first quarter 2024 earnings beat the prior year, and how strong was growth?
Yes. Net income rose 13.3% to $2.14 billion, and diluted EPS rose 15.5% to $5.23. Core operating income, which excludes realized gains and losses and other non-core items, grew 20.3% to $2.22 billion, with core EPS up 22.7% to $5.41. Premium growth was also strong, with consolidated net premiums written up 14.1%.
Are the reported earnings inflated by one-time items?
Only slightly. The quarter included a $55 million incremental deferred tax benefit related to Bermuda tax law, which added about $0.14 per share, and a $30 million Chubb Charitable Foundation contribution that reduced earnings by about $0.06 per share. Net of these, the effect was modest and partially offsetting. Management stated that excluding both items, core operating income grew more than 18.5% and operating EPS was $5.33.
Why did book value decline relative to the strong earnings?
Book value per share still increased 1.5%, but it was held back by $622 million of after-tax net realized and unrealized investment losses. These were driven mainly by mark-to-market declines in the fixed-income portfolio as interest rates moved, which affect accumulated other comprehensive income. Excluding AOCI, book value per share grew 2.2% to $167.28, and tangible book value per share excluding AOCI grew 2.9% to $105.75.
How healthy is the underwriting performance outlook?
Underwriting remained solid. The P&C combined ratio was 86.0%, and the current accident year ratio excluding catastrophes was 83.7%. Management said North American pricing exceeded loss costs at the best levels in four to five quarters, particularly in large-account casualty. Catastrophe losses were $435 million, or 4.4 points of the combined ratio, compared with $458 million a year earlier. Prior period reserve development was favorable by $207 million.
What drove growth across the business segments?
Growth was broad. Overseas General premiums rose 17.5%, helped by the consolidation of Huatai; excluding Huatai, growth was 9.3%. Asia was a standout, with consumer premiums up 46% and commercial up 23%. North America Commercial rose 9.4% and North America Personal rose 12.3%. Life Insurance premiums rose 26.3%, and Life premiums plus deposits rose 39.4%, driven by Asia. North America Agriculture premiums fell 15.0%, reflecting a government risk-sharing return of premium.

04—Continue

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