Chubb Limited CB is slated to report fourth-quarter 2024 earnings on Jan. 28, after market close. CB delivered an earnings surprise in each of the last four quarters, the average beat being 22.19%. 

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Factors to Consider

Premiums in the fourth quarter are likely to have benefited from growth across most product lines, driven by strong premium retention, including rate and exposure increases, and strong new business.

The high net-worth personal lines business is likely to have benefited from strong new business and retention, including positive rate and exposure increases across all lines.

Premiums at International Life Insurance are expected to have gained from strong growth in North Asia, notably Hong Kong and Taiwan as well as consolidation of Huatai Group's life business.

The Zacks Consensus Estimate for net premiums earned is pegged at $12.7 billion, indicating an increase of 7.4% from the year-ago reported figure. We expect net premiums earned to be $12.7 billion.

Strong operating cash flow at higher reinvestment rates on fixed maturities is likely to have aided net investment income. We expect net investment income to increase 16.6% to $1.6 billion.

The Zacks Consensus Estimate for revenues is pegged at $14.5 billion, indicating a rise of 8.2% from the year-ago reported figure.

The Zacks Consensus Estimate for the combined ratio is pegged at 88, indicating a deterioration of 200 basis points from the year-ago reported figure. We estimate underwriting income to be $336.7 million and the combined ratio to be 89.3.

Expenses are expected to have increased because of higher losses and loss expenses, policy benefits, policy acquisition costs, administrative expenses, interest expense, amortization of purchased intangibles and Cigna integration expenses. We estimate the metric to be $12.2 billion.

Nevertheless, share buybacks in the to-be-reported quarter are anticipated to have provided a boost to the bottom line.

The Zacks Consensus Estimate for fourth-quarter earnings per share is pegged at $5.50, indicating a decrease of 33.7% from the year-ago quarter’s reported figure.

What the Zacks Model Unveils

Our proven model does not predict an earnings beat for CB this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here, as you can see below.

Earnings ESP: Chubb Limited has an Earnings ESP of -1.05%. This is because the Most Accurate Estimate of $5.45 is pegged lower than the Zacks Consensus Estimate of $5.50. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: Chubb Limited currently carries a Zacks Rank of 3.

Stocks to Consider

Here are three P&C insurance stocks you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:

Palomar Holdings, Inc. PLMR has an Earnings ESP of +0.27% and a Zacks Rank #2 at present. The Zacks Consensus Estimate for fourth-quarter 2024 earnings is pegged at $1.24, indicating a year-over-year increase of 11.7%. You can see the complete list of today’s Zacks #1 Rank stocks here.

PLMR’s earnings beat estimates in each of the last four reported quarters.

RenaissanceRe Holdings Ltd. RNR has an Earnings ESP of +9.14% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for fourth-quarter 2024 earnings is pegged at $7.39, indicating a year-over-year decrease of 37.2%.

RNR’s earnings beat estimates in each of the last four reported quarters.

The Allstate Corporation ALL has an Earnings ESP of +5.58% and carries a Zacks Rank of 3 at present. The Zacks Consensus Estimate for fourth-quarter 2024 earnings is pegged at $6.08 per share, implying an increase of 4.5% from the year-ago reported figure.

ALL’s earnings beat estimates in each of the last four reported quarters.

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Chubb Limited (CB) : Free Stock Analysis Report

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