Chubb Limited (CB) 2024 Q2 Earnings Call Summary

Optimistic Highlights

• Strong Quarter Performance: Chubb Limited reported core operating EPS of $5.38, up 9.3%, with premium revenue growth reflecting strong results globally. The combined ratio was an excellent 86.8%.
• Investment Income Growth: Investment income increased by more than 25%, with a record $1.5 billion reported, benefiting from a higher reinvestment rate.
• Life Segment and International Growth: Life segment income rose by 8.7%, with International Life up double-digit. International operations saw net premiums up over 16.5% in constant dollars.
• Record New Business: Chubb wrote over $1.3 billion of new business, a record, with a renewal retention rate on a policy count basis of 90%.
• Strong Underwriting Results: Published a combined ratio of 86.8% despite higher cat losses globally, with an ex-cat current accident year basis underwriting income of $1.8 billion, up over 11%.

Pessimistic Highlights

• Higher Catastrophe Losses: Reported losses of $580 million compared with $400 million in the prior year, attributed to an active quarter for the industry.
• Financial Lines Underwriting Environment: Described as not smart, with the company trading growth for a reasonable underwriting margin in some classes.

Company Outlook

• Growth and Earnings Confidence: Chubb is confident in its ability to continue growing its operating earnings at a superior rate through P&C revenue growth, underwriting margins, investment income, and life income.
• Investment Income Forecast: Quarterly adjusted net investment income is expected to average approximately $1.57 billion to $1.63 billion for the remainder of the year.

Q & A Highlights

• Q: Clarification on North America P&C long-tail ex-comp loss trend. (Michael Zaremski, BMO Capital Markets)

  A: No change in loss-cost trend, which remains steady with expectations. (Evan Greenberg)

• Q: Growth in casualty lines and pricing versus premium growth. (Brian Meredith, UBS)

  A: Casualty is growing in areas deemed appropriate, with some restructuring in large account areas. (Evan Greenberg)

• Q: Additional IBNR for recent accident year casualty reserves. (Brian Meredith, UBS)

  A: Chubb has already raised loss picks reflecting higher loss-cost trends, with no additional adjustments this year. (Evan Greenberg)

• Q: Drivers of growth in North America personal lines. (Bob Huang, Morgan Stanley)

  A: Growth driven by broad-based geographic expansion, sophisticated pricing, and demand for Chubb's high net-worth personal lines services. (Evan Greenberg)

• Q: Opportunities in accident and health and personal lines globally. (Bob Huang, Morgan Stanley)

  A: Growth opportunities across the globe, particularly in Asia Pacific and Europe, through various distribution channels including digital platforms. (Evan Greenberg)

• Q: Update on agricultural business outlook. (Gregory Peters, Raymond James)

  A: Good growing season so far for core crops, with base price only off 10% from last year, within deductible averages. (Evan Greenberg and Unidentified Company Representative)