Chubb Corp.'s earning of $2.17 per share surpassed the Zacks
Consensus Estimate by 11.3% and was up 5% year over year. The solid
results were led by strong underwriting performance from all the
business segments, along with low catastrophe losses. We expect
strong earnings over the long term given Chubb's superior franchise
network and a significant presence in its niche market. Its
Commercial insurance segment has consistently reported impressive
earnings led by a renewal rate that has increased over several
quarters. The retention ratio stands at a stable level. Chubb's
Personal Insurance segment is also witnessing gradual market
improvement. Moreover, international business has been performing
strongly and is the key to its future growth. Chubb's disciplined
capital management strategy which includes regular share buyback
and dividend payment will drive the bottom line. However exposure
to interest rates and low interest rates are some headwinds. We
thus maintain our Neutral 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 NJ 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 insurance.
The Chubb Commercial Insurance (CCI) segment (represented 42% of
net premiums written in 2013) 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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