• Core Operating Income: $1.5 billion, down 31%.
• Total Company Premiums Growth: 5.7% in constant dollars.
• Combined Ratio: 95.7% with underwriting income of $441 million.
• Adjusted Net Investment Income: $1.7 billion, up 12.7%.
• Annualized Core Operating Return on Tangible Equity: 13%.
• Book Value: $65.7 billion, $164 per share.
• Adjusted Operating Cash Flow: $2 billion.
• Capital Returned to Shareholders: $751 million, including $385 million in share repurchases and $366 million in dividends.
• Pre-tax Catastrophe Losses: $1.64 billion.
• Prior Period Development: Favorable $268 million pre-tax.
• Core Operating ROE: 8.6%.
• Effective Tax Rate: 19.1%.

• Warning! GuruFocus has detected 6 Warning Sign with CB.

Release Date: April 23, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Chubb Ltd (NYSE:CB) reported $1.5 billion in core operating income, supported by excellent underlying underwriting results and double-digit growth in investment income.
• Total company premiums grew 5.7% in constant dollars, with strong contributions from all regions globally.
• The company announced an acquisition of Liberty Mutual's business in Thailand and Vietnam, expanding its presence in Asia.
• Chubb Ltd (NYSE:CB) achieved a combined ratio of 95.7%, with underwriting income of $441 million despite significant catastrophe losses.
• The company's fixed income portfolio yield is 5%, with new money rates averaging 5.5%, benefiting from higher yields as a predominantly buy-and-hold investor.

Negative Points

• Core operating income was down 31% due to significant catastrophe losses from the California wildfires.
• The strong dollar negatively impacted revenue growth, affecting the headline number.
• There is increased competition in the large account property and casualty insurance market, leading to price softening.
• Chubb Ltd (NYSE:CB) faces uncertainty and potential negative impacts from tariffs and the federal budget deficit on interest rates and asset values.
• Financial lines pricing was down 3.2%, indicating softness in this area.

Q & A Highlights

Q: How is Chubb Ltd approaching growth strategy amid potential recession, inflation, and increased competition in property casualty insurance? A: Evan Greenberg, Chairman and CEO, stated that Chubb's strategy remains unchanged and is enduring. The company sees growth opportunities globally, particularly in middle market and small business segments. Chubb is disciplined in its approach and focuses on areas like E&S in the US, personal lines, and consumer business overseas. The company leverages technology and data to access more customers and improve efficiency.

Q: Can you provide more insight into Chubb's technology investments and their impact? A: Evan Greenberg explained that Chubb invests over $1 billion annually in technology, with about half for maintenance and the rest for development. This includes modernizing legacy systems, enhancing data analytics, AI capabilities, and improving customer and distribution partner connectivity. Technology investments help maintain and potentially lower Chubb's industry-leading expense ratio.

Q: How is Chubb managing catastrophe inflation and weather-related losses? A: Evan Greenberg noted that Chubb uses loss cost trends as a proxy for inflation. The company continuously updates its view on catastrophe risks by peril and geography, ensuring pricing and accumulation appetite align with expectations. Chubb does not provide specific guidance on future catastrophe losses due to inherent volatility.

Q: What is Chubb's approach to capital allocation in politically volatile regions like China? A: Evan Greenberg stated that Chubb is a long-term investor and remains steady in its strategy despite geopolitical volatility. The company is cautious with additional capital investments in China and focuses on growth opportunities in other regions. Chubb participates in the economic and social development of countries where it operates.

Q: How does Chubb view the competitive landscape in the property insurance market, particularly between large account and middle market segments? A: Evan Greenberg highlighted structural differences between large account and middle market segments. Large account business is more competitive and capacity-driven, while middle market requires broad geographic reach and multi-line capabilities. Chubb sees more disciplined pricing in middle market and small commercial insurance, which is less susceptible to the competitive pressures seen in large accounts.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.