Chubb Corp.'s fourth quarter earnings came in ahead of the Zacks
Consensus Estimate and was up 13 times year over year. Earnings
benefited from low claims paid during the quarter, growth in
premium, and a lower share count. Chubb has been performing
favorably for the past many quarters, and we expect the trend to
continue given its superior franchise and a significant presence in
its niche market. Chubb's Commercial insurance segment has been
consistently reporting favorable earnings results led by renewal
rate increase for the past several quarters. The retention ratio
stands at a stable level. Chubb's Personal Insurance segment is
also witnessing a gradual market improvement. Chubb's international
business has been performing strongly and remains key to its future
growth. Strong capital management witnessed by regular share
repurchases and a continuous dividend increase for the past several
years makes the stock a favorite among investors. We thus reiterate
our Outperform recommendation on the stock.
Chubb is the one of the largest writers in the U.S., with
diverse, profitable operations in commercial and personal lines and
several specialty market segments. It was incorporated in the State
of New Jersey in 1967. Chubb is a holding company for a family of
property and casualty insurance companies known informally as the
Chubb Group of Insurance Companies (the P&C Group). Since 1882,
the P&C Group has provided property and casualty insurance to
businesses and individuals around the world. The P&C Group
underwrites most lines of property and casualty insurance.
Underwriting operations consist of three separate business units:
personal insurance, commercial insurance and specialty
The Chubb Commercial Insurance (CCI) segment (represented 42% of
net premiums written in 2012) provides multiple peril, casualty,
workers' compensation, property, and marine insurance. It also
writes insurance products for niche businesses.
The Chubb Specialty Insurance (CSI) segment (24%) offers various
professional liability products for privately and publicly owned
companies, financial institutions, professional firms, health care
organizations, as well as the surety business.
The Chubb Personal Insurance (CPI) segment (34%) offers
insurance products related to automobiles, homeowners, and other
personal coverage products for individuals with homes and
Chubb provides its products and services through independent
insurance agents and brokers in the United States, Canada, Europe,
Australia, Latin America and Asia.
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