Property and casualty insurer
) reported second quarter operating earnings of $1.37 per share,
significantly ahead of the Zacks Consensus Estimate of $1.15 per
Better-than-expected earnings stemmed primarily from lower
catastrophe losses coupled with modestly higher premiums written
and a lower share count, partly offset by higher operating costs.
Earnings also compared favorably with $1.27 per share reported
during the prior-year quarter.
The insurer reported net written premiums of $3.1 billion, up 1%
year over year.
Second-quarter combined ratio (a measure of an insurer's
profitability, the lower the better) improved 110 basis points year
over year to 93.8%. Excluding catastrophe losses, combined ratio
was 86.3% compared with 83.6% in the year-ago quarter.
Property and casualty investment income after tax was down 5.0%
year over year to $303 million.
Catastrophe losses were $223 million in the quarter compared
with $329 million in the prior-year quarter.
Adjusted book value per share, a measure of net worth, increased
3.9% year over year to $52.34 as of June 30, 2012.
(CCI) segment, net written premiums climbed 3% year over year to
$1.4 billion during the reported quarter led by rate increase and
strong retention levels.
(CSI) net written premiums were down 6% year over year to $638
million due to lower premiums written in the professional liability
and surety lines.
(CPI) segment's net written premiums went up 4% year over year to
$1.1 billion. This represented the tenth consecutive quarter of
During the quarter, Chubb repurchased around 4.3 million shares
at a total cost of $305 million.
On the back of strong results achieved in the first half of
2012, Chubb upped its fiscal 2012 earnings guidance to the range of
$5.70-$5.95 per share from the previously issued guidance range of
$5.30-$5.70 per share.
The company expects net premium to increase by 1%-3% while
investment income is likely to decline 4%-6%. The company also
expects a combined ratio of 93%-94% along with 271 million shares
Chubb has registered an impressive performance in the first half
of 2012 by posting better-than-expected earnings.
Based on a high retention rate, pricing gains, positive renewal
rate changes, favorable prior-year reserve development, prudent
underwriting practice and a strong capital position, Chubb is
poised to perform better going forward.
However, exposure to significant catastrophic events remains a
concern as it impacted results at Personal Insurance. Also, the
prevailing low interest rate environment acts as a headwind.
Nevertheless, in our view, Chubb's strong capital position will
enable it to return capital to shareholders and take advantage of
opportunities to grow profitably. Moreover, Chubb's superior
underwriting, customer loyalty and conservative investment approach
gives it a competitive edge over its peers,
The Travelers Companies, Inc.
XL Group Plc.
The Allstate Corp.
W.R. Berkley Corp.
) and others to generate solid returns for its shareholders.
ALLSTATE CORP (ALL): Free Stock Analysis Report
CHUBB CORP (CB): Free Stock Analysis Report
TRAVELERS COS (TRV): Free Stock Analysis Report
BERKLEY (WR) CP (WRB): Free Stock Analysis
XL GROUP PLC (XL): Free Stock Analysis Report
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