reports
- Brett Horn
- CFA
Chubb Off to a Solid Start in 1Q
Chubb's first-quarter results contained no major surprises. Relatively heavy catastrophe losses dinged underwriting profitability, and unrealized investment losses related to rising interest rates led to a slight decline in book value. However, underlying results remained strong, and we estimate annualized tangible return on equity at 14%, a level that supports our narrow moat rating. We will maintain our $140 per share fair value estimate. On a constant-currency basis, net written premiums were...
- Brett Horn
- CFA
Chubb Sees Modest Pricing Increases in 4Q
Chubb’s fourth-quarter results contained no major surprises. Relatively high catastrophe losses remained as a drag on overall results, but we estimate tangible return on equity at 21% and 14% for the quarter and full year, respectively. In our view, the company's ability to generate excess returns despite the catastrophes that have rocked the industry this year supports our narrow moat rating, and we continue to see Chubb is one of the highest-quality insurance franchises. We will maintain our...
- Brett Horn
The combination of ACE and Chubb created a large, moaty insurer.
Chubb’s fourth-quarter results were solid, with the company generating an annualized 11% ROE and management noting that the integration remains on track. We estimate annualized tangible ROE was 18%, a result that highlights the narrow moat around the business. While premiums declined slightly and the competitive environment is ramping up, Chubb maintained strong underwriting results, which is the key consideration in the long run, in our view. We will maintain our $125 fair value estimate....
- Brett Horn
The combination of ACE and Chubb created a large, moaty insurer.
Donald Trump's unexpected presidential victory in the U.S. has certainly surprised the global financial markets, and we expect a fair amount of volatility in stock, bond, and currency markets (particularly the Mexican peso). While Trump's campaign rhetoric has lacked detail, some common themes provide insight into what kind of financial and economic policies his administration might pursue. Broadly, the potential for both short- and long-term stock, bond, and currency market volatility should be...
- Brett Horn
While Trump Victory May Increase Volatility, There Are Some Long-Term ...
Donald Trump's unexpected presidential victory in the U.S. has certainly surprised the global financial markets, and we expect a fair amount of volatility in stock, bond, and currency markets (particularly the Mexican peso). While Trump's campaign rhetoric has lacked detail, some common themes provide insight into what kind of financial and economic policies his administration might pursue. Broadly, the potential for both short- and long-term stock, bond, and currency market volatility should be...
- Brett Horn
Chubb Delivers Strong Q3; Integration On Track
Chubb’s third-quarter results were impressive. Strong underwriting results generated an annualized return on equity of 11%, or about 21% on a tangible basis. In our view, the company’s performance since the completion of the merger earlier this year highlights the quality of this narrow-moat franchise. Integration efforts remain on track, and management upped its estimate of the ultimate synergies from the deal to $800 million from $750 million. We have been skeptical of the company’s abil...
- Brett Horn
Hurricane Matthew Impact Should Be Manageable for our P&C Insurance Co...
Reports suggest Hurricane Matthew could cause considerable damage in Florida and potentially up along the Eastern coast. While we would expect the P&C insurers we cover to incur material losses if current meteorological predictions play out, we expect the impact to be manageable, and are doubtful that the hurricane would have a material impact on any of our fair value estimates. We would note that our models account for the possibility of large natural catastrophe losses, even though the exa...
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