Zurich – Chubb Limited (NYSE: CB) recently reported net income for the quarter ended March 31, 2023 of $1.89 billion, or $4.53 per share, and core operating income of $1.84 billion, or $4.41 per share. The P&C combined ratio was 86.3% compared to 84.3% prior year, and the current accident year P&C combined ratio excluding catastrophe losses was 83.4% compared to 83.5% prior year.
Book value per share and tangible book value per share increased 5.0% and 8.7%, respectively, from December 31, 2022. Book value was favorably impacted by after-tax net realized and unrealized gains of $1.70 billion in the company’s investment portfolio. In addition, the change in valuation of the long-duration contracts and market risk benefits, including required updates from Long-Duration Targeted Improvements (LDTI), resulted in realized and unrealized losses of $248 million after-tax. Book value per share and tangible book value per share now stand at $127.94 and $78.84, respectively.
- Net income was $1.89 billion versus $1.95 billion prior year and core operating income was a record $1.84 billion, up 11.8%.
- P&C net premiums written were up 9.3%, or 11.0% in constant dollars, with commercial lines up 11.5% and consumer/personal lines up 9.4%. North America was up 11.3%, with growth of 11.7% in commercial lines and 9.9% in personal lines. Overseas General was up 6.0%, or 10.0% in constant dollars, with growth of 10.8% in commercial lines and 8.6% in consumer lines; Asia was up 18.6% and Europe was up 10.1%.
- P&C underwriting income was $1.21 billion with a combined ratio of 86.3% compared with 84.3% prior year. P&C current accident year underwriting income excluding catastrophe losses was $1.48 billion, up 7.2%, leading to a record combined ratio of 83.4% compared with 83.5% prior year.
- Pre-tax and after-tax catastrophe losses were $458 million and $382 million, respectively, compared with $333 million and $290 million, respectively, last year.
- Life Insurance net premiums written increased 124.4%, or 128.7% in constant dollars, to $1.29 billion driven substantially by growth in Asia and the acquisition of the Cigna Asian business. Life Insurance segment income was $244 million, up 102%.
Pre-tax net investment income was $1.11 billion, up 34.7%, and adjusted net investment income was $1.20 billion, up 33.2%. Both were records.
- Annualized return on equity (ROE) was 14.6% and annualized core operating ROE was 12.6%. Annualized core operating return on tangible equity (ROTE) was 19.4%.
Evan G. Greenberg, Chairman and Chief Executive Officer of Chubb Limited, commented: “We began the year with a record quarter that included double-digit core operating earnings growth, broad-based double-digit premium revenue growth globally, an 86.3% published combined ratio, net investment income up more than 30%, and life insurance segment income that more than doubled, driven by our Asia life operations. In this period of economic uncertainty and financial market volatility, Chubb’s business model, capabilities, and ability to deliver provide both a safe haven and long-term growth opportunity for shareholders.
“We grew per share operating earnings 15% on the back of record core operating income. With $1.2 billion in underwriting income and a world-class combined ratio, our P&C underwriting performance was simply excellent in what was an active quarter for natural catastrophes. Excluding CATs, our underlying current accident year combined ratio was a record 83.4%. On the investment side, adjusted net investment income was a record $1.2 billion, up $300 million from prior year. Our investment income continues to grow steadily and contribute to our earning power.
“Total company net written premiums increased 16.6%, or 18.3% in constant dollars, which included growth of 11% in our P&C business and 129% in our life division. Growth was balanced and broad-based with double-digit results in North America, Europe and Asia. By example, commercial P&C premiums in North America and Europe were both up about 12% in constant dollars, and total P&C in Asia grew about 18.5%. In North America, both P&C rate and price increases re-accelerated in the quarter with commercial P&C pricing increasing 11.2%. In our retail international operations, pricing was up about 8%.
“In sum, we had a strong start to the year with good momentum heading into the second quarter. Overall, the fundamentals for our business are excellent. Looking forward, we are confident in our ability to continue growing revenue and operating earnings, which in turn drive EPS, through the three engines of P&C underwriting income, investment income, and life income.”
The complete results release is available here: Chubb First Quarter 2023 Results