) first-quarter 2014 earnings came in at $1.50 per share in line
with the Zacks Consensus Estimate. Earnings, however, declined
30% year over year due to catastrophe losses of $199 million
incurred during the reported quarter. In the year-ago quarter,
the company incurred a low cat loss of $18 million.
Net written premium for the reported quarter remained
unchanged year over year at $3.1 billion. While the company
registered 3% growth in premium from its U.S business, it was
offset by a 6% decline in premium in the international
Property and casualty investment income after tax was down 4%
year over year to $277 million.
Chubb's underwriting income of $208 million suffered a 57%
decline during the quarter, primarily due to the incidence of cat
Combined ratio for the quarter deteriorated by 860 basis
points (bps) year over year to 93.2% reflecting loss incurred
Book value per share, a measure of net worth, was $66.36, up
7.4% year over year.
segment, net written premium decreased 1% year over year to $1.4
billion during the reported quarter. The combined ratio
deteriorated by 660 bps year over year to 88.5% due to cat
's net written premiums declined 1% year over year to $624
million due to decline in premium written in the surety lines.
The combined ratio deteriorated 150 bps year over year to
segment's net written premiums rose 3% year over year to $1.0
billion, primarily driven by higher premium in the Personal lines
business followed by Homeowners, partly offset by premium decline
in Personal Auto. Due to catastrophe-related losses incurred
during the reported quarter, combined ratio deteriorated by 1480
bps year over year to 101.8%.
During the quarter, Chubb repurchased 4.7 million shares of
its common stock at a total cost of $409 million.
Tight-lipped on 2014 Guidance
The company did not give out any update on its 2014 earnings
guidance. However, during the fourth quarter 2013 earnings
release, management expressed its expectation of the company
producing $7.10 to $7.40 in earnings per share, along with 2% to
4% premium growth, combined ratio in the range of 89% to 90% and
a 4% to 6% decline in net investment income. Moreover, cat losses
might create a 5% adverse impact on 2014 combined ratio, 1%
higher than the 2013 impact.
Despite facing cat loss during the reported quarter, Chubb did
not disappoint investors with its earnings, and managed to report
in line with the estimates. We expect the company to deliver
strong earnings in the upcoming quarters given improving business
conditions such as rate increases as well as an increase in
Moreover, the company's disciplined capital management
strategy which includes regular share buyback and dividend
payment will aid the bottom line earnings.
Among other players -
W.R. Berkley Corp.
The Travelers Companies, Inc.
), all reported their first-quarter 2014 earnings ahead of the
respective Zacks Consensus Estimate
ASSURANT INC (AIZ): Free Stock Analysis
CHUBB CORP (CB): Free Stock Analysis Report
TRAVELERS COS (TRV): Free Stock Analysis
BERKLEY (WR) CP (WRB): Free Stock Analysis
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