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Analyzing Chubb’s Overseas General Insurance Division

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Decline in income

The Overseas General Insurance division of Chubb Limited (CB) saw a substantial decline in income, from $1.16 billion in 9M16 to $756 million in 9M17. This 35.2% fall was mainly because of a decline in underwriting income. Underwriting income in 9M17 stood at $315 million, compared to $742 million in 9M16, which reflects a 57.5% decline.

In 9M17, the overseas general insurance division’s net premiums written stood at $6.1 billion, compared to $6.0 billion in 9M16. This change implies an increase of 2.6% because of the exclusion of production revenues generated from January 1 to January 14, 2016, because an acquisition wrapped up on January 14, 2016.

Chubb’s total debt to enterprise value (EV) ratio stood at 0.16x over the last 12 months. Peers (XLF) CNA Financial Corporation (CNA), Principal Financial Group (PFG), and Hartford Financial Services (HIG) recorded 0.17x, 0.15x, and 0.21x, respectively.

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Regions

In 9M17, the overseas general insurance division’s net premiums written from Europe stood at $2.44 billion, compared to $2.41 billion in 9M16. From Asia, Latin America, and other regions, net premiums written stood at $1.93 billion, $1.51 billion, and $272 million, respectively, in 9M17.

The overseas general insurance division saw pre-tax catastrophe losses of $386 million in 9M17, compared to $111 million in 9M16. Catastrophe losses in 9M17 were mainly due to floods in Latin America and Mexico’s earthquakes. However, Australia’s Cyclone Debbie and hurricanes Irma, Harvey, and Maria were also major drivers.

Notably, the overseas general insurance division’s net investment income stood at $460 million in 9M17, compared to $445 million in 9M16, a 3.4% rise.

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