Chubb Exceeds Third Quarter Earnings Estimates on Underwriting Strength

Financial Performance Exceeds Expectations in Q3 2025

Chubb Limited (NYSE: CB) announced robust financial results for the third quarter of 2025, with core operating earnings per share (EPS) of $7.49, significantly surpassing the average analyst estimate of $6.15 by $1.34. This performance represents a substantial 30.9% increase from the prior year. Net income per share also rose to $6.99, marking a 22.6% increase year-over-year.

The global insurer reported total net income of $2.80 billion, while core operating income reached a record $3.00 billion, an increase of 28.7%. Consolidated net premiums written grew by 7.5% to $14.9 billion, with Property and Casualty (P&C) net premiums written specifically increasing by 5.3% to $12.93 billion.

Underwriting Discipline and Investment Income Drive Profitability

A key highlight of Chubb's quarter was its exceptional underwriting performance, evidenced by a record P&C combined ratio of 81.8%. This figure represents a notable improvement from 87.7% in Q3 2024 and underscores the company's stringent underwriting discipline. P&C underwriting income surged by 55.0% to a record $2.26 billion. Current accident year underwriting income, excluding catastrophe losses, reached $2.18 billion, up 10.3%.

Furthermore, the company benefited from favorable catastrophe loss experience, with light pre-tax catastrophe losses totaling $285 million, a substantial reduction from $765 million in the prior year. Adjusted net investment income also reached a new record of $1.8 billion, an 8.3% increase, reflecting the positive impact of current financial market conditions on the insurer's investment portfolio.

Capital Management and Shareholder Returns

Chubb demonstrated prudent capital management by returning $1.62 billion to shareholders during the quarter. This included $1.23 billion in share repurchases at an average price of $277.67 per share and $385 million in dividends. The company also reported a rise in book value per share to $182.22, a 4.7% increase, and tangible book value per share grew by 6.6% to $120.13.

The core operating return on equity (ROE) improved to 16.3%, exceeding last year's 13.9% and surpassing the analyst estimate of 13.5%. Management indicated that the company increased its pace of share buybacks due to the stock trading "well below intrinsic value," signaling confidence in future performance and value creation.

Broader Implications for the Insurance Sector

These strong results from Chubb underscore the resilience and profitability attainable within the property and casualty insurance sector, particularly for companies with effective underwriting and diversified global operations. The record investment income also highlights the positive influence of prevailing interest rates on insurers' portfolios.

Chairman and CEO Evan G. Greenberg attributed the quarter's success to both underwriting and investment income, stating:

"We had a very strong third quarter, with excellent operating results across the board."

He emphasized the company's solid premium growth and improved underwriting margins across all business segments and global regions, including a 4.4% increase in North America P&C net premiums written and a 9.7% increase in Overseas General.

Outlook and Future Considerations

Looking ahead, Chubb management expressed confidence in sustaining superior earnings growth, including double-digit growth in EPS, book value, and tangible book value. The company has a medium-term target of a core operating ROE of 14% or higher. Analysts project normalized EPS power of $25–27 and a fair value of $300–320 for the stock, indicating potential upside opportunity for long-term investors.

While the company's strong Q3 performance aims to dispel prior concerns regarding pricing pressure and potential margin reduction, ongoing factors to watch include competitive pressures in large account property insurance, potential softening in property insurance prices, and economic uncertainties in emerging markets. However, Chubb's diversified business model and strong balance sheet position it for continued success.