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Chubb Limited Reported a Net Loss in 3Q17

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Significant catastrophe losses

Chubb Limited (CB), a major player in the insurance industry, reported its 3Q17 earnings on October 26, 2017. The insurance giant reported a loss of $0.13 per share in 3Q17.

During the same period, the company witnessed catastrophe losses of $1.9 billion on a pretax basis.

Hurricane Irma caused Chubb a pretax loss of $891.0 million while Hurricane Harvey caused the company a pretax loss of $650.0 million in 3Q17. However, because of Hurricane Maria, the company witnessed a pretax loss of $220.0 million in 3Q17.

The company witnessed a pretax loss of $25.0 million due to Mexico earthquakes while other pretax catastrophe losses stood at $107.0 million in 3Q17.

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Net loss

Chubb witnessed a net loss of $70.0 million in 3Q17 while in 3Q16, the company reported net income of $1.4 billion. This substantial year-over-year decline occurred primarily because of the rise in total expenses from $6.9 billion in 3Q16 to $8.8 billion in 3Q17.

Chubb reported an operating loss of $60.0 million in 3Q17 while in 3Q16, it reported operating income of $1.4 billion. The company’s adjusted net investment income rose from $830.0 million in 3Q16 to $893.0 million in 3Q17, reflecting a 7.5% increase.

Chubb has a price-to-cash-flow ratio of ~14.4x generated over the last 12 months, or on an LTM basis. Its peers (XLF) CNA Financial Corporation (CNA), Travelers Companies (TRV), and Aspen Insurance Holdings (AHL) reported price-to-cash-flow ratios of ~12.4x, ~8.4x, and ~20.4x, respectively, on an LTM basis.

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