Chubb in record $1.58bn Q4 P&C UW gain as it discloses $1.5bn Q1 LA wildfire estimate

By James Thaler

Jan 28 - (The Insurer) - Chubb’s underwriting gain grew by 3.8 percent to a record $1.58bn in Q4 2024, driven by net earned premiums that increased by 8.1 percent and an improved core loss ratio as well as higher reserve releases, which helped offset pre-tax cat losses that doubled to $607mn.

The insurer also said Tuesday it expects to record $1.5bn in pre-tax losses in its Q1 2025 results tied to the ongoing California wildfires, which Chubb chairman and CEO Evan Greenberg described as “a disaster”.

In a statement alongside the insurer’s results, Greenberg said that the California wildfires are a “terrible tragedy that is still unfolding”.

For Q4 2024, the insurance giant generated $6.02 in core operating income per share, which easily beat analysts’ $5.44 consensus estimate, but marked a 27.5 percent drop off from the $8.30 per share the firm earned in the prior-year period.

Core operating income grew by 7.7 percent to $2.45bn from $2.28bn

Chubb’s P&C reported combined ratio was essentially flat at 85.7 percent versus 85.5 percent in Q4:23, while its underlying combined ratio improved to 82.2 percent from 84.3 percent.

P&C net premiums written (NPW) in the quarter grew by 3.5 percent to $10.50bn. Pre-tax cat losses contributed 550 basis points (bps) to Chubb’s combined ratio in the quarter, compared with 290bps a year ago, when the insurer absorbed $300mn in pre-tax cat losses.

Pret-tax favourable development on prior-year claims increased to $213mn from $177mn in Q4:23.

Overall, the North America P&C insurance combined ratio – which includes commercial and personal lines P&C and agricultural lines – improved to 80.7 percent from 81.9 percent.

In North America commercial lines, the combined ratio weakened to 80.6 percent from 76.4 percent, while the same figure for North America personal lines improved to 82.6 percent from 86.2 percent.

The overseas general insurance combined ratio worsened to 87.6 percent from 85.9 percent and deteriorated for global reinsurance to 99.9 percent from 76.1 percent.

Overall, the North America P&C underlying combined ratio improved to 79.5 percent from 82.5 percent, and in North America personal lines improved to 77.4 percent from 80.4 percent.

The North America commercial lines underlying combined ratio was flat at 79.0 percent.

Total North America NPW grew by only 1.4 percent to $6.84bn, led by 10.0 percent growth in North America personal lines NPW to $1.62bn, while North America commercial lines NPW grew by 5.1 percent to $4.90bn.

Within North America commercial lines, major accounts retail and E&S wholesale NPW picked up by 4.6 percent to $2.92bn, while NPW in middle market and small commercial grew by 5.9 percent to $1.98bn.

Global reinsurance NPW was up by 19.9 percent in the quarter to $224mn.

Chubb returned $1.09bn in total capital to shareholders in the quarter, made up of $725mn in share repurchases at an average purchase price of $278.78 per share and dividends of $367mn.

Greenberg: Chubb had “a simply outstanding year”

The Chubb CEO called the firm’s fourth quarter results “great” and said the company had “a simply outstanding year”.

"Our full-year performance was the best in our company's history. Core operating income was $9.1bn, up 11.5 percent adjusted for the one-time tax benefit, and 13 percent on a per-share basis,” Greenberg noted.

“All three major sources of income for our company produced record results last year: P&C underwriting income of $5.9bn was up over 7 percent with a published combined ratio of 86.6 percent. Adjusted net investment income grew 19.3 percent to $6.4bn,” he continued.

He also noted that life insurance income topped $1bn while global P&C net premiums grew 9.9 percent and life insurance premiums were up 18.5 percent in constant dollars, and for the quarter and year, core operating ROE was 14.3 percent and 13.9 percent, respectively.

For the year, Chubb’s per-share book and tangible book value grew 8.8 percent and 14.1 percent, respectively.

"Overall market conditions are quite favorable, and we see really good growth opportunity for over 80 percent of our global P&C business, commercial and consumer, as well as our life business,” Greenberg continued.

“We have very good momentum as we enter '25 and are optimistic about the year ahead, both top- and bottom-line, CAT losses and foreign currency movement notwithstanding,” he added.

“We are confident in our ability to continue growing operating earnings and EPS at a double-digit rate, driven by our three major sources: P&C underwriting, investment income, and life income," the Chubb CEO said.

Commenting on the ongoing California wildfires, he added: “Our colleagues have been on the ground from the beginning, endeavoring to assist our policyholders who have lost property, been displaced from their homes and businesses, and had their lives severely disrupted,” Greenberg commented.

“While it doesn't erase the enormous difficulty they have and will continue to experience, we are doing all we can, in small and big ways, to ease their burden. Our thoughts are with those who have suffered, and our gratitude goes to those firefighters and emergency workers who have served tirelessly,” Greenberg said.