US insurer Chubb reported net income and core operating income for the quarter ended September 30, 2023 of $2.04 billion each, or $4.95 per share. Book value per share and tangible book value per share decreased 0.3% and 10.2%, respectively, from June 30, 2023, and now stand at $128.37 and $70.89, respectively.
P&C underwriting income of $1.3 billion this quarter was up almost 84%. Chubb underwriting results were driven by strong P&C earned premium growth, current accident year underwriting margins inclusive of catastrophe losses, and favorable prior period reserve development in both North America and Overseas General.
The published calendar year combined ratio was 88.4% while the Global P&C current accident year combined ratio excluding CATs was 83%.
Book value benefited from a one-time after-tax net realized and unrealized gain of $727 million, principally reflecting the discontinuation of the equity method of accounting upon the consolidation of Huatai.
Book value was unfavorably impacted by after-tax net realized and unrealized losses of $2.18 billion in the company’s investment portfolio, principally due to the mark-to-market impact of rising interest rates in the fixed income portfolio.
Over $2 bn of core operating income led to per-share earnings growth of 58.1% for the quarter and 27.5% for the year. Annualized core operating ROE was 13.5%, with a return on tangible equity of 21.2%.Evan G. Greenberg, Chairman and Chief Executive Officer of Chubb
“In the quarter, we increased our ownership in Huatai Group, now at 72%, and consolidated results, which were accretive to EPS and ROE.
- Net income and core operating income were each $2.04 billion, up 157.8% and 55.4%, respectively. For the nine months, net income was $5.73 billion, up 45.5%, and core operating income was a record $5.93 billion, up 24.7%.
- P&C net premiums written in the quarter were up 8.4%. Global P&C, which excludes Agriculture, was up 12.3%, with commercial insurance up 10.3% and consumer insurance up 17.6%. North America was up
- 8.9%, including growth of 9.6% in personal insurance and 8.7% in commercial insurance with P&C lines up 10.5% and financial lines up 1.1%. Overseas General was up 21.4%, with growth of 28.4% in consumer insurance and 17.0% in commercial insurance. The consolidation of Huatai P&C contributed 2.2 percentage points and 7.5 percentage points to Global P&C and Overseas General net premiums written growth, respectively.
- Agriculture net premiums written declined 11.7%, primarily reflecting the timing of premium recognition this year versus last year. For the nine months, Agriculture net premiums written increased 2.3%.
- P&C underwriting income in the quarter was $1.31 billion, up 83.8%, with a combined ratio of 88.4%. P&C current accident year underwriting income excluding catastrophe losses was a record $1.78 billion, with a combined ratio of 84.3%.
- Global P&C underwriting income, which excludes Agriculture, was $1.20 billion, up 117.2%, with a combined ratio of 87.6%. Global P&C current accident year underwriting income excluding catastrophe losses was a record $1.66 billion, with a combined ratio of 83.0%.
- Agriculture underwriting income was $105 million, with a combined ratio of 93.2% in the quarter, bringing the year-to-date combined ratio to 91.7%. The combined ratio in the quarter increased 2.6 percentage points, as the company trued up its loss estimates to reflect its projected profit and loss for the current crop year. Estimated development for the current crop year was recognized this quarter compared to the fourth quarter in the prior year.
- Life Insurance net premiums written increased 14.9%. International life insurance net premiums written were $1.21 billion, up 19.7%. Life Insurance segment income was $288 million. The consolidation of Huatai Life contributed 14.8 percentage points growth to International Life net premiums written.
- Pre-tax net investment income in the quarter was $1.31 billion, up 34.2%, and adjusted net investment income was $1.41 billion, up 34.2%. Both were records.
- Annualized return on equity (ROE) was 15.5% and annualized core operating ROE was 13.5%. Annualized core operating return on tangible equity (ROTE) was 21.2%.
3Q 2023 Summary (in millions of U.S. dollars)
For the 9 months ended September 30, 2023, net income was $5.73 billion, or $13.79 per share, and core operating income was $5.93 billion, or $14.27 per share. Book value per share increased 5.4% and tangible book value per share decreased 2.2% from December 31, 2022.
9M 2023 Summary (in millions of U.S. dollars)
Book value was unfavorably impacted by after-tax net realized and unrealized losses of $1.7 billion in the company’s investment portfolio. In addition, tangible book value included the adverse impact of $3.17 billion after tax for Chubb’s portion of goodwill and other intangible assets related to the consolidation of Huatai.
Book value per share and tangible book value per share excluding AOCI increased 7% and increased 2%, respectively, from December 31, 2022.