01—Abstract
Summary
Summary of the 8-K filed January 28, 2025. Cited figures are marked; the original filing is the authoritative source.
Chubb Limited (NYSE: CB) reported fourth quarter and full-year 2024 results on January 28, 2025, posting record full-year net income of $9.27 billiona ($22.70 per share) and record full-year Global P&C net premiums written growth of 9.6%.
Q4 net income was $2.58 billionb ($6.33 per share), but Q4 core operating income of $2.45 billion ($6.02 per share) was down 28.1% year over year because the prior-year quarter included a one-time $1.14 billion Bermuda tax benefit. Excluding that benefit, Q4 core operating income rose 7.7% and per-share core operating income rose 8.7%. Underlying operations were strong: P&C underwriting income reached a record $5.85 billion for the year with a 86.6% combined ratio, current accident year underwriting income excluding catastrophes was a record $7.38 billion, and adjusted net investment income grew 19.3% to $6.38 billion.
The quarter had two notable offsets. Book value per share fell 2.1% in Q4 to $159.77c and tangible book value per share fell 2.2% to $100.38, driven by $2.44 billion of after-tax investment losses and $1.13 billion of foreign currency losses. Pre-tax catastrophe losses were $607 million in Q4, including $309 million from Hurricane Milton, and management disclosed an estimated $1.5 billion net pre-tax cost from the California wildfires, to be recognized in Q1 2025.
Management said it expects to continue growing operating earnings and EPS at a double-digit rate in 2025, though it noted that catastrophe losses and foreign currency movements could affect results. For investors, the key takeaways are the strength of the core insurance franchise and capital returns (about $3.48 billiond returned to shareholders in 2024), balanced against the near-term earnings hit from the California wildfire losses and the sensitivity of book value to interest rates and currency. The results reflect a company that is pricing well and growing, with the main uncertainty for 2025 being the catastrophe load.
02—Key points
Key Highlights
- Record full-year 2024 net income of $9.27 billion ($22.70 per share), up 2.7% reported and 16.8% excluding the prior-year Bermuda tax benefit.
- Q4 2024 core operating income of $2.45 billion ($6.02 per share) fell 28.1% reported, but rose 7.7% (8.7% per share) excluding the $1.14 billion prior-year Bermuda tax benefit.
- Record full-year P&C underwriting income of $5.85 billion, up 7.1%, with a 86.6% combined ratio; current accident year ex-catastrophe combined ratio was a record 83.1%.
- Global P&C net premiums written grew 9.6% for the year (6.7% in Q4), with Life Insurance NPW up 15.7% for the year and total consolidated NPW reaching $51.5 billion.
- Record adjusted net investment income of $6.38 billion for the year, up 19.3%, supporting earnings growth.
- Book value per share fell 2.1% in Q4 to $159.77 and tangible book value per share fell 2.2% to $100.38, due to $2.44 billion of after-tax investment losses and $1.13 billion of FX losses; excluding AOCI, both metrics rose.
- Estimated $1.5 billion net pre-tax cost from the California wildfires, classified as a Q1 2025 event; management expects continued double-digit operating EPS growth in 2025.
03—Questions
Frequently Asked Questions
Why did Chubb's Q4 core operating income fall 28% if the business performed well?
The prior-year Q4 2023 results included a one-time $1.14 billion deferred tax benefit tied to Bermuda's new income tax law. Excluding that benefit, Q4 core operating income rose 7.7% and per-share core operating income rose 8.7%, so the decline reflects a non-recurring comparison rather than weaker operations.
How significant is the California wildfire loss for Chubb?
Management estimates the net pre-tax cost at $1.5 billion, which is material relative to quarterly earnings (roughly 0.6 times Q4 core operating income before tax). It will be recognized in Q1 2025, so it will weigh on first-quarter results, but the company describes the impact as a single event rather than a change in underlying underwriting performance.
Why did book value decline in the fourth quarter?
Book value fell due to after-tax net realized and unrealized investment losses of $2.44 billion, largely from rising interest rates affecting the fixed income portfolio, and $1.13 billion of foreign currency losses. Book value excluding AOCI actually increased 2.9% in the quarter, indicating the decline is mainly mark-to-market and currency driven rather than an operating shortfall.
What did Chubb return to shareholders in 2024?
Chubb returned $3.48 billion to shareholders in 2024, consisting of $2.02 billion in share repurchases at an average price of $269.23 per share and $1.46 billion in dividends. In Q4 alone, it repurchased $725 million of stock at $278.78 per share and paid $367 million in dividends.
What is Chubb's outlook for 2025?
Management said market conditions are favorable, that it sees growth opportunities in more than 80% of its global P&C business and in its life business, and that it is confident in continuing to grow operating earnings and EPS at a double-digit rate in 2025. That outlook is explicitly qualified by catastrophe losses and foreign currency movements, and the California wildfire cost will affect Q1 2025 results.
04—Continue