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Understanding Chubb’s Life Insurance Division


Jan. 17 2018, Updated 10:30 a.m. ET

Net premiums written

Chubb Limited’s (CB) life insurance division reported net premiums written of $1.58 billion in 9M17, compared to $1.57 billion in 9M16—a marginal 0.6% rise. This rise was due to favorable momentum in Asian international life operations. However, the combined insurance supplemental accident and health business also contributed to the rise.

In 9M17, life deposits stood at $1 billion, compared to $748 million in 9M16. This rise of 40.1% got help from Taiwan. However, the rise was negatively impacted because of unfavorable momentum in Korea. Chubb considers new life deposits as a crucial element, which could help its business grow.

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Division’s income

Chubb’s life insurance division posted income of $178 million in 9M17, compared to $203 million in 9M16, which reflects a 12.3% fall. The division’s underwriting income fell from $213 million in 9M16 to $190 million in 9M17. This 10.8% was because of the variable annuity business. However, the division’s underwriting income was positively impacted by favorable momentum in underwriting income for international life operations.

The life insurance division generated net investment income of $230 million in 9M17, compared to $207 million in 9M16, which reflects a rise of 11.1%. Compared with 9M16, the division’s administrative expenses were unchanged at $226 million in 9M17.

Chubb’s enterprise value to revenue, or EV/Revenue ratio, stood at 2.43x on an LTM (last-12-months) basis. Peers (XLF) Hartford Financial Services (HIG), CNA Financial Corporation (CNA), and Principal Financial Group (PFG) posted 1.31x, 1.78x, and 1.48x, respectively.


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