Chubb Ltd (NYSE: CB) has reported the adjusted earnings per share of $3.41 in the fourth quarter 2016 ended 31st December, beating the analysts’ estimates for the adjusted earnings per share of $2.42. The company had reported the 67 percent growth in the net premiums written to $6.94 billion, beating the average analyst’ estimates for the net premiums written of $6.63 billion. As a result, CB stock increased 1.1% in the after-hours trade on January 31st, 2017 (Source: Google finance).
Therefore, CB has posted much stronger-than-expected growth in operating earnings and premiums in the last quarter of the year. CB was formed early last year when ACE Ltd. closed on its nearly $30 billion acquisition of Chubb Corp. and had kept the Chubb name. The company is headquartered in Switzerland, but it retains substantial operations in Bermuda. Meanwhile, CB’s catastrophe losses had reached $268 million in the latest quarter, compared with $75 million a year earlier. The damage from Hurricane Matthew, which is a major storm that threatened to hit Florida in early October but stayed offshore to then make landfall in South Carolina, has likely weighed on the Q4 results.
Moreover, CB’s fourth quarter 2016 the net and operating income included a one-time benefit of $73 million after-tax due to the harmonization of the company’s US pension plans. For the fourth quarter, the P&C combined ratio of 87.6 per cent due to the strong performances from the global P&C businesses and the agriculture division. For the full year 2016, CB’s P&C combined ratio was 88 per cent compared to 87.5 per cent prior year.
Additionally, the Book value per share has decreased 0.3 percent and tangible book value per share has increased 0.6 percent from September 30th, 2016 and now stand at $103.60and $60.64, respectively. The net realized and unrealized losses of $1.3 billion in the CB’s investment portfolio, majorly is due from the rising interest rates, which were partially offset by mark-to-market gains in the company’s variable annuity reinsurance portfolio of $275 million, also due to rising interest rates, and the favorable impact related to pension and retiree medical plans of $353 million. In addition, the unfavorable foreign currency movement had negatively impacted the book value by $302 million and tangible book value by $154 million.
CB stock has risen 16.29% in the last one year (source: Google Finance). According to tipranks.com, 5 analysts has covered the stock while recommend a “Hold”. CB has an average price target of $140, which is a further upside of 6.47%.