News

Chubb Limited CB is expected to register an improvement in its top line but a decline in its bottom line when it reports first-quarter 2025 results on April 22, after the closing bell.

The Zacks Consensus Estimate for CB’s first-quarter revenues is pegged at $14.2 billion, indicating 8.4% growth from the year-ago reported figure.

The consensus estimate for earnings is pegged at $3.26 per share. The Zacks Consensus Estimate for CB’s first-quarter earnings has moved down 2 cents in the past 30 days. The estimate suggests a year-over-year decline of 39.7%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

What the Zacks Model Unveils for CB

Our proven model does not conclusively predict an earnings beat for CB this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But this is not the case as you can see below.

You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Earnings ESP: CB has an Earnings ESP of -3.94%. This is because the Most Accurate Estimate of $3.13 is pegged lower than the Zacks Consensus Estimate of $3.26.

Chubb Limited Price and EPS Surprise

Zacks Rank: CB carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors Likely to Shape Q1 Results

Premiums in the first quarter are likely to have benefited from growth across most product lines, driven by strong premium retention, including rate and exposure increases, and strong new business.

The high net-worth personal lines business is likely to have benefited from strong new business and retention, including positive rates and exposure increases across all lines.

Premiums at International Life Insurance are expected to have gained from strong growth in North Asia, notably Hong Kong and Taiwan, as well as the consolidation of Huatai Group's life business.

The Zacks Consensus Estimate for net premiums earned is pegged at $12.7 billion, indicating an increase of 7.2% from the year-ago reported figure. We expect net premiums earned to be $12.4 billion.

Net investment income is likely to have benefited from strong operating cash flow at higher reinvestment rates on fixed maturities. Chubb expects the quarterly adjusted net investment income to have a run rate between $1.67 billion and $1.75 billion. We expect net investment income to be $1.7 billion in the to-be-reported quarter. The Zacks Consensus Estimate is pegged at $1.7 billion.

CB’s first-quarter results are likely to be weighed down by the California wildfire, affecting underwriting profitability. The Zacks Consensus Estimate for the combined ratio is pegged at 96%, a deterioration of 100 basis points.

Expenses are expected to have increased because of higher losses and loss expenses, policy benefits, policy acquisition costs, administrative expenses and interest expense. We estimate the metric to be $10.7 billion.

Nevertheless, share buybacks in the to-be-reported quarter are likely to have aided the bottom line.

Stocks to Consider

Here are three P&C insurance stocks you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:

Arch Capital Group ACGL has an Earnings ESP of +2.28% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for first-quarter 2025 earnings is pegged at $1.37, indicating a year-over-year decrease of 44.1%

ACGL’s earnings beat estimates in each of the last four reported quarters.

The Allstate Corporation ALL has an Earnings ESP of +6.99% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for first-quarter 2025 earnings is pegged at $3.76, indicating a year-over-year decrease of 26.7%.

ALL’s earnings beat estimates in each of the last four reported quarters.

Cincinnati Financial Corporation CINF has an Earnings ESP of +2.00% and currently carries a Zacks Rank of 3. The Zacks Consensus Estimate for first-quarter 2025 bottom line is pegged at a loss of 50 cents, implying a decrease of 129.1% from the year-ago reported figure.

CINF’s earnings beat estimates in three of the last four reported quarters and missed in one.

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Chubb Limited (CB) : Free Stock Analysis Report

Cincinnati Financial Corporation (CINF) : Free Stock Analysis Report

The Allstate Corporation (ALL) : Free Stock Analysis Report

Arch Capital Group Ltd. (ACGL) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.