Chubb (CB) Provides Q4 Catastrophe Loss Estimate Of $430M
Zacks Investment Research | Jan 15, 2020 09:03PM ET
Chubb Limited (NYSE:CB) estimates net catastrophe pre-tax loss of $430 million or $353 million after tax, primarily due to extreme weather-related events around the globe, which include tornadoes in Texas, wildfires in California, and Typhoon Hagibis in Japan, as well as civil unrest in Hong Kong and Chile.
The estimated losses comprise net of reinsurance, including reinstatement premiums and covers losses generated from the company's commercial and personal property and casualty insurance businesses as well as its reinsurance operations globally.
Additionally, Chubb estimates fourth-quarter underwriting loss of $23 million pre-tax, or $18 million after tax for North America Agricultural Insurance. These losses are due to crop yield shortfalls resulting from poor growing conditions.
While catastrophe risk modelling specialist, RMS, estimates industry losses between $7 billion and $11 billion owing to typhoon Hagibis, catastrophe risk modeling firm AIR Worldwide expects loss in the range of $8 billion to $16 billion.
The Zacks Consensus Estimate for Chubb’s fourth-quarter earnings is currently pegged at $2.53, indicating an improvement of 25.2% from the year-ago quarter reported figure. However, we expect estimates to move south once analysts start incorporating loss estimates into their numbers.
Being a property and casualty insurer, Chubb’s exposure to natural disasters, man-made catastrophes and other catastrophic events induces volatility in underwriting results
However, the company’s cat loss in the first nine months of 2019 was $759 million, down 27% year over year, given a not-so-active cat environment. But its exposure to catastrophic events will always remain a concern as natural disasters can increase the company’s losses, keeping the combined ratio under pressure.
Recently another insurer, AXIS Capital Holdings Ltd. (NYSE:AXS) also estimated fourth-quarter preliminary pre-tax loss between $90 million and $110 million, primarily due to Japanese typhoon Hagibis. The estimated loss comprises net of reinsurance recoveries, retrocessional covers and estimated reinstatement premiums.
Shares of this Zacks Rank #3 (Hold) property and casualty insurer underperformed the Original post
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.