Factors to Consider
Premiums in the fourth quarter are expected to have benefited from new business growth for all commercial lines, strong renewal retention, commercial premium growth, positive growth in both commercial property and casualty (P&C) lines and consumer lines. The Zacks Consensus Estimate for net premiums written is pegged at $8.5 billion, indicating a 9.6% increase from the year-ago reported figure.
Net investment income is likely to have benefited from higher private equity distributions, higher income received from private equity partnerships and higher dividends on public equities, which resulted from a higher allocation to public equity securities. Chubb estimates the adjusted net investment income run rate to be around $900 million in the quarter. The Zacks Consensus Estimate for investment income is pegged at $917 million, indicating an 8.3% increase from the year-ago reported figure.
The Zacks Consensus Estimate for revenues is pegged at $9.9 billion, indicating an increase of 0.5% from the year-ago reported figure.
Total benefits and expenses are likely to have increased mainly due to loss and loss expenses, policy acquisition costs and administrative expenses.
Improved pricing and not so active catastrophe environment are likely to have aided underwriting profitability. The Zacks Consensus Estimate for underwriting income is pegged at $1 billion, indicating a 4.3% increase from the year-ago reported figure.
Continued share buybacks are anticipated to have provided an additional boost to the bottom line.
The Zacks Consensus Estimate for fourth-quarter 2021 earnings of $3.27 per share indicates an increase of 2.8% from the year-ago quarter reported figure.
What the Zacks Model Says
Our proven model does not conclusively predict an earnings beat for Chubb this time around. A stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for an earnings beat. That is not the case below.
Earnings ESP: Chubb has an Earnings ESP of -2.40%. This is because the Most Accurate Estimate of $3.19 is pegged lower than the Zacks Consensus Estimate of $3.27. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Chubb Limited Price and EPS Surprise
Zacks Rank: Chubb currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks to Consider
Some insurance stocks with the right combination of elements to come up with an earnings beat this time around are:
Arch Capital Group ACGL has an Earnings ESP of +1.48% and a Zacks Rank of 2. The Zacks Consensus Estimate for ACGL’s 2022 earnings implies a year-over-year increase of 31.5%.
Arch Capital Group’s earnings surpassed estimates in each of the last four quarters, the average surprise being 32.7%. The Zacks Consensus Estimate for ACGL’s 2022 earnings has moved north by 1.1% in the past 30 days.
Allstate ALL has an Earnings ESP of +2.86% and a Zacks Rank #3. The Zacks Consensus Estimate for ALL’s 2022 earnings has moved north by 0.7% in the past 30 days.
Allstate’s earnings surpassed estimates in three of the last four quarters and missed once, the average surprise being 21%.
CNA Financial CNA has an Earnings ESP of +2.65% and a Zacks Rank of 3. The Zacks Consensus Estimate for CNA’s 2022 earnings implies a year-over-year increase of 10.6%.
CNA Financial’s earnings surpassed estimates in each of the last four quarters, the average surprise being 19.6%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Chubb Limited (CB): Free Stock Analysis Report
The Allstate Corporation (ALL): Free Stock Analysis Report
CNA Financial Corporation (CNA): Free Stock Analysis Report
Arch Capital Group Ltd. (ACGL): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.