On June 10, we issued an updated research report on
property and casualty insurer
The Chubb Corp.
). The company's first-quarter 2014 earnings of $1.50 per share
were in line with the Zacks Consensus Estimate. Earnings, however,
declined 30% year over year due to catastrophe losses of $199
million incurred during the quarter. In the year-ago quarter, the
company had incurred a cat loss of only $18 million.
Excluding the last reported quarter, the company has been
delivering positive earnings surprise over the last several
quarters. Chubb boasts a diversified product profile and has a
niche presence in the property and casualty industry.
Chubb's Commercial insurance segment has consistently impressed
with its earnings. The segment has been witnessing low single-digit
increase in average renewal rates for the past several quarters.
Retention ratio stands at a stable level.
Chubb's Personal Insurance is also witnessing a gradual market
improvement. Net premium written in this segment has been
increasing over past several quarters, led by strong premium
increases from international business.
Chubb's international business is also performing strongly and is
an arsenal for its future growth.
Strong capital management witnessed by regular share repurchases
and continuous dividend increase over several years makes the stock
a favorite among investors.
However, exposure to cat losses and low interest rate environment
are some of the headwinds. The company's underperforming Specialty
business has been a drag on its overall growth.
Chubb has been also witnessing rising earnings estimates. Over the
last 60 days, the Zacks Consensus Estimate for 2014 moved up 1.4%
to $7.31 as 9 of the 13 estimates moved north. For 2015 6 of 13
estimates moved up, pushing the Zacks Consensus Estimate by a
slight 0.3%. The expected long-term earnings growth is 9.7%.
Other Stocks to Consider
While Chubb carries a Zacks Rank # 3 (Hold), better-ranked stocks
Allied World Assurance Company Holdings, AG
AmTrust Financial Services, Inc.
Aspen Insurance Holdings Ltd.
). All these stocks sport a Zacks Rank #1 (Strong Buy).
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CHUBB CORP (CB): Free Stock Analysis Report
AMTRUST FIN SVC (AFSI): Free Stock Analysis
ALLIED WORLD AS (AWH): Free Stock Analysis
ASPEN INS HLDGS (AHL): Free Stock Analysis
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