• Core Operating Income: $2.5 billion for Q4 2024, up 9.4% pre-tax, 10.5% per share.
• Global P&C Premium Revenue Growth: 6.7% in Q4 2024.
• Life Insurance Premium Growth: 8.5% in constant dollars for Q4 2024.
• Combined Ratio: 85.7% for Q4 2024.
• Adjusted Net Investment Income: $1.7 billion for Q4 2024, up 13.7%.
• Fixed Income Portfolio Yield: 5% for Q4 2024.
• North America Premium Growth: 6.3% excluding Agriculture for Q4 2024.
• International Retail Business Premium Growth: 7.7% for Q4 2024.
• Global Reinsurance Premium Growth: 20% for Q4 2024.
• Adjusted Operating Cash Flow: $4.2 billion for Q4 2024.
• Capital Returned to Shareholders: $1.1 billion in Q4 2024, including $725 million in share repurchases and $367 million in dividends.
• Core Operating ROE: 14.3% for Q4 2024.
• Core Operating Return on Tangible Equity: 22.0% for Q4 2024.
• Pre-tax Catastrophe Losses: $607 million for Q4 2024.

• Warning! GuruFocus has detected 5 Warning Sign with CB.

Release Date: January 29, 2025

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

Positive Points

• Chubb Ltd (NYSE:CB) reported record P&C underwriting income with a combined ratio of 85.7% for the fourth quarter of 2024.
• The company achieved a 9.4% increase in operating earnings on a pre-tax basis, contributing to a strong year with $9.1 billion in operating income.
• Global P&C premium revenue grew by 6.7% in the quarter, with Life Insurance premiums increasing by 8.5% in constant dollars.
• Chubb Ltd (NYSE:CB) returned $1.1 billion of capital to shareholders in the quarter, including $725 million in share repurchases.
• The company's balance sheet remains strong with book value of $64 billion and total invested assets of $151 billion.

Negative Points

• Chubb Ltd (NYSE:CB) faced a significant financial impact from the California wildfires, estimating a cost of $1.5 billion net pre-tax.
• The company's financial lines, particularly D&O and employment practices liability insurance, are experiencing increased competition, affecting underwriting margins.
• Book value was adversely impacted by unrealized mark-to-market losses on the fixed income portfolio due to interest rate changes.
• The company reported adverse development of $139 million in its corporate runoff portfolio, primarily asbestos-related.
• Chubb Ltd (NYSE:CB) is facing challenges in the California insurance market due to regulatory constraints on pricing and coverage.

Q & A Highlights

Q: Can you provide more details on the $1.5 billion loss estimate from the California wildfires? A: Evan Greenberg, Chairman and CEO, explained that the $1.5 billion is a ground-up estimate based on Chubb's own losses, not industry-wide estimates. It includes an assessment for the FAIR plan but does not account for subrogation.

Q: What are your expectations for organic growth in 2025, and are you considering inorganic growth opportunities? A: Evan Greenberg stated that while they do not provide specific guidance, the logic of expecting mid to high single-digit organic growth seems reasonable. Inorganic growth is considered opportunistic and must align with their organic strategies.

Q: Can you elaborate on the favorable long-tail reserve development in general casualty? A: Evan Greenberg clarified that reserve development varies by portfolio each quarter. The favorable development this quarter was due to the strength of reserves in the specific casualty portfolios reviewed.

Q: How do you view the current competitive environment in financial lines, and what might improve conditions? A: Evan Greenberg noted that while Chubb values financial lines, current pricing is not favorable. He expects conditions to improve as losses emerge and normalize, impacting current accident year margins.

Q: What is Chubb's approach to the California insurance market following the wildfires? A: Evan Greenberg highlighted the challenges in California due to regulatory constraints on pricing. Chubb has been reducing exposure in the state and will not write insurance where they cannot achieve a reasonable risk-adjusted return.

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