U.S. property and casualty insurer
) fears that catastrophe losses will cut into its second quarter
earnings by approximately $240 million before tax. On an after
tax basis, the loss will come down to $156 million or 60 cents
Out of the total pre-tax loss estimate, $175 million stems
from the severe storms in the central states that occurred in May
and June this year. The company also incurred $65 million from
storms and flooding in southern Alberta, Canada.
Chubb's estimated pre-tax cat loss in second quarter of 2013
exceeds pre-tax cat loss of $223 million (53 cents per share
after tax) incurred in the prior year quarter but remains way
below $329 million before tax (72 cents per share after tax)
incurred in the second quarter of 2011. Cat loss in the prior
year quarter largely stemmed from severe hail and wind storms
from 13 catastrophe events in the United States.
Aon Benfield estimates total economic losses were estimated
around $3.8 billion. A preliminary insured loss estimate
anticipated payouts to be at least $1.0 billion. While June
economic cost of severe thunderstorms was expected to be more
than $1.0 billion, with insured losses in excess of $500
Despite being subjected to cat loss volatility the company has
been able to produce profitable results. Chubb's
better-than-average underwriting performance has shielded its
In the last reported quarter, Chubb's earnings per share
breezed past the Zacks Consensus Estimate by 23% and improved 26%
year over year. However, the second quarter will likely face the
brunt of catastrophes, which would weigh on its underwriting
results as well as the bottom line. The Zacks Consensus Estimate
for the second quarter is pegged at $1.59.
XL Group plc
), another property and casualty insurer, expects pretax loss
from catastrophes in the second quarter of 2013, net of
reinsurance and reinstatement premiums, likely to be
approximately $135 million.
Chubb carries a Zacks Rank #4 (Sell).
State Auto Financial Corp.
), among others, with Zacks Rank #1 (Strong Buy) look
CHUBB CORP (CB): Free Stock Analysis Report
STATE AUTO FINL (STFC): Free Stock Analysis
XL GROUP PLC (XL): Free Stock Analysis Report
ALLEGHANY CORP (Y): Free Stock Analysis
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