Chubb Limited (NYSE:CB) Q3 2019 Earnings Conference Call - Final Transcript

Oct 30, 2019 • 08:30 am ET

Previous

Chubb Limited (NYSE:CB) Q3 2019 Earnings Conference Call - Final Transcript

Share
Close

Loading Event

Loading Transcript

Presentation
Operator
Operator

Good day, everyone and welcome to the Chubb Limited Third Quarter 2019 Earnings Conference Call. Today's call is being recorded. Later, we will conduct a question-and-answer session. [Operator Instructions]

And now for opening remarks and introductions, I would like to turn the call over to Karen Beyer, Senior Vice President, Investor Relations. Please go ahead ma'am.

Executive
Karen Beyer

Thank you, and good morning everyone. Welcome to Chubb's September 30th, 2019 third quarter earnings conference call. Our report today will contain forward-looking statements, including statements relating to Company performance and growth opportunities, pricing and business mix, and economic and market conditions, which are subject to risks and uncertainties, and actual results may differ materially.

Please see our recent SEC filings, earnings release and financial supplement, which are available on our website at investors.chubb.com for more information on factors that could affect these matters.

We will also refer today to non-GAAP financial measures, reconciliations of which to the most direct comparable GAAP measures and related details are provided in our earnings press release and financial supplement.

Now it's my pleasure to introduce our speakers this morning. First, we have Evan Greenberg, Chairman and Chief Executive Officer; followed by Phil Bancroft, our Chief Financial Officer. We'll then take your questions.

Also with us to assist you with your questions are several members of our management team. And now, I'll turn the call over to Evan.

Executive
Evan G. Greenberg

Good morning. We had a strong third quarter with core operating earnings up double-digit and excellent premium revenue growth globally. Growth benefited from a continuously improving pricing and underwriting environment where insurance rates and terms continued to firm quarter-over-quarter in major areas of our business.

Our growth is also benefiting from our many product, customer and distribution-related growth initiatives around the globe, particularly in the U.S., Asia and Latin America.

Core operating income was $2.70 per share, up 12%. The balance of our earnings between underwriting and investment income was very good with underwriting income of $754 million, up 12.5% and adjusted net investment income of $910 million, up 3%.

Global P&C underwriting income, which excludes agriculture, was up 27.7%. The combined ratio was 90.2% and benefited from lower year-on-year cats offset partially by higher crop losses, another cat-like risk.

On a current accident year basis excluding cats, the combined ratio was 89.5%, and excluding ag, it was 88.3%, up modestly, like 0.4% from prior year. Book and tangible book value per share were up 2% and 3.3% respectively in the quarter and are up 9.8% and 15.7% since December 31, driven by a combination of strong income and the mark from falling interest rates. While benefiting temporarily, our Company's book value growth, prolonged low interest rates, a result of over reliance on monetary policy, have penalized savers and led to misallocation of capital and overvaluation of assets without substantially supporting business investment and economic growth.

Annualized core operating return on equity for the quarter was 9.5%. Phil will have more to say about investment income, book value, cats and prior