Yahoo Finance Will Chubb's (CB) Beat Streak Continue This Earnings Season?
Chubb Limited CB is slated to report first-quarter 2023 earnings on Apr 25, after market close. The insurer delivered an earnings surprise in three of the last four quarters and missed in one, the average beat being 6.61%.
Factors to Consider
Premiums in the first quarter are expected to have benefited from strong premium retention, including both rate and exposure increases, solid new business in the P&C business and increased exposure. The acquisition of Cigna's business in Asia and a growing Life Insurance segment with the addition of the Cigna Asian business are also likely to have added to the upside. The Zacks Consensus Estimate for net premiums earned is pegged at $10 billion, indicating an increase of 14.8% from the year-ago reported figure. We expect net premiums earned to be $9.4 billion.
The interest rate environment has started to improve. Insurers, being the direct beneficiaries of an improving rate environment, are likely to have gained.
Net investment income is likely to have benefited from higher reinvestment rates on fixed maturities. The upside is likely to have been partially offset by lower income from equity securities and private equities. For the first quarter, Chubb projects adjusted net investment income in the range of $1.135 billion to $1.155 billion. We expect net investment income to be $957.3 million.
The Zacks Consensus Estimate for investment income is pegged at $957 million, indicating a 16.4% increase from the year-ago reported figure.
The top line is likely to have benefited from improved premium revenues as well as higher investment income. The Zacks Consensus Estimate for revenues is pegged at $10.9 billion, indicating an increase of 13.1% from the year-ago reported figure. We expect total revenues to be $10.5 billion.
Higher-than-expected cat losses are likely to have weighed on underwriting profitability and thus, combined ratio. The Zacks Consensus Estimate for combined ratio is pegged at 86, indicating a deterioration of 200 basis points from the year-ago reported figure.
Expenses are likely to have increased because of higher loss and loss expenses, policy benefits, policy acquisition costs, administrative expenses, interest expense, other expense, amortization of purchased intangible and Cigna integration expenses.
The continued share buybacks are anticipated to have provided an additional boost to the bottom line.
The Zacks Consensus Estimate for first-quarter 2023 earnings of $4.37 per share indicates an increase of 14.4% from the year-ago quarter’s reported figure. We expect the bottom line to be $4.40 per share for the to-be-reported quarter.
What the Zacks Model Says
Our proven model predicts an earnings beat for Chubb this time around. This is because the stock has the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).
Earnings ESP: Chubb has an Earnings ESP of +0.69%. This is because the Most Accurate Estimate of $4.40 is pegged higher than the Zacks Consensus Estimate of $4.37. 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
Chubb Limited price-eps-surprise | Chubb Limited Quote
Zacks Rank: Chubb currently carries a Zacks Rank #3.
Other Stocks to Consider
Some other insurance stocks with the right combination of elements to deliver an earnings beat this time around are:
Kinsale Capital Group KNSL has an Earnings ESP of +3.34% and a Zacks Rank of 1 at present. The Zacks Consensus Estimate for first-quarter 2023 earnings is pegged at $2.25, indicating an increase of 38% from the year-ago reported figure. You can see the complete list of today’s Zacks #1 Rank stocks here.
KNSL’s earnings beat estimates in the last four reported quarters.
Arch Capital Group Ltd. ACGL has an Earnings ESP of +3.92% and a Zacks Rank of 2. The Zacks Consensus Estimate for first-quarter 2023 earnings is pegged at $1.51, indicating an increase of 37.2% from the year-ago reported figure.
ACGL’s earnings beat estimates in three of the last four quarters and missed in the other one.
Everest Re Group, Ltd. RE has an Earnings ESP of +3.43% and a Zacks Rank of 2. The Zacks Consensus Estimate for first-quarter 2023 earnings is pegged at $12.01, indicating an increase of 16.4% from the year-ago reported figure.
RE’s earnings beat estimates in the last four reported quarters.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Chubb Limited (CB) : Free Stock Analysis Report
Everest Re Group, Ltd. (RE) : Free Stock Analysis Report
Arch Capital Group Ltd. (ACGL) : Free Stock Analysis Report
Kinsale Capital Group, Inc. (KNSL) : Free Stock Analysis Report
