Q2-2023 Spotlight: Chubb Q2 Profits Soar 54% on Strong Growth Across Segments
Chubb Limited announced its second quarter 2023 results this week, highlighting double-digit growth in net income, revenues, and earnings per share.
“We had another simply outstanding quarter – in fact, a record, which contributed to a record six months,” said Chairman & CEO Evan Greenberg. “Our financial performance included double-digit premium revenue and earnings growth supported by world-class P&C underwriting results.”
In addition, Chubb achieved strong top-line momentum with double-digit growth in commercial and consumer P&C segments globally. It also benefited from rising investment income as it reinvests cash at higher yields.
High-net worth personal lines continue to shine
In North America, Chubb’s high-net worth personal lines business saw another stellar quarter. “On the consumer side in North America, our high-net-worth personal lines business had another strong quarter, with premiums up almost 11%,” noted Mr. Greenberg, in the insurer’s follow-up earnings call.
Chubb Posts Strong Growth in US; Net Income Jumps 51% in Q2
Property and casualty insurer Chubb reported robust growth in the US along with excellent underwriting results globally in the second quarter, driving a 51% increase in net income. Core operating earnings per share rose 17% to $4.92.
Chubb grew net premiums written in North America by 10.6% as reported and 11% in constant dollars. Commercial P&C rose 11% while consumer lines were up 11%.
The North America combined ratio was 84.2%, benefiting from lower catastrophe losses versus last year.
The P&C business achieved an 85.4% global combined ratio, reflecting solid underwriting margins across regions.
Net investment income increased 29% to $1.14 billion supported by portfolio repositioning amid higher interest rates.
Chubb continues to achieve substantial rate increases in US commercial P&C lines to stay ahead of loss trends.
CEO Evan Greenberg cited the “simply outstanding quarter” driven by “world-class P&C underwriting results.”
Net premiums written up over ten percent
Chubb grew net premiums written by 10.6% in North America in the second quarter, with contributions from both commercial and consumer lines. Commercial P&C net premiums rose 11%, or 14% excluding financial lines which remain competitive.
In its major accounts and excess & surplus divisions, Chubb achieved strong double-digit growth as it leveraged its leadership positions. The insurer grew net premiums written by 5% in middle market commercial lines as well.
Chubb continued to exercise its pricing power in Q2
Chubb continues to secure significant rate increases in US commercial P&C to remain ahead of loss cost trends. In the second quarter, commercial P&C rates rose 8.7% overall and 13% excluding financial lines. Strong pricing gains continue in property and casualty lines.
Combined ratios improved in Q2
The North American combined ratio improved to 84.2% from 80.2% last year, aided by lower catastrophe losses compared to Q2 2022 when they were more severe.
Globally, Chubb achieved a strong 85.4% P&C combined ratio reflecting excellent underwriting margins across regions. Net investment income jumped 29% on portfolio actions.
Chubb focused on growth
The company remains focused on driving growth by leveraging its brand strength and using all available tools to expand consumer market share in a prudent manner.
Chubb continues to actively return capital to shareholders, repurchasing $724 million of stock in Q2 at an average price per share of $197. The company has substantial financial flexibility to keep investing in growth initiatives across its global footprint.
In summary, Chubb maintained its positive momentum with double-digit earnings growth in the second quarter led by excellent P&C underwriting margins and strong premium growth in the US. The company is well-positioned to continue benefiting from commercial rate increases while seeking new opportunities to expand its consumer and life insurance businesses.
