Chubb Ltd Earnings - Q3 2025 Analysis & Highlights
Key Takeaways
Chubb Ltd.'s Q3 2025 earnings call highlighted record earnings driven by strong underwriting and investment results, with growth across diverse business segments and geographies. The company is navigating a transitioning commercial P&C market, focusing on disciplined underwriting and leveraging digital and AI for future growth. Management expressed confidence in sustaining superior earnings growth and increasing return on equity.
Key Financial Results
Core operating income was $3 billion, up 29%.
EPS reached $7.49 per share, a 31% increase year-over-year.
Record underwriting income was achieved on both a published and current accident year ex-cat basis.
Published underwriting income increased by 55% to $2.3 billion, with a record combined ratio of 81.8%.
Adjusted net investment income reached a record $1.8 billion, up 8.3%.
Operating cash flow was strong at $4.5 billion.
Tangible book value growth was 17% per share year-over-year and 6.6% from the previous quarter.
Annualized core operating return on tangible equity was 24.5%.
Business Segment Results
Total company premiums grew by 7.5%, with consumer up almost 16% and commercial up 3.3%.
Overseas General division premiums increased by 9.7% (or nearly 7.5% in constant dollars), with consumer up 15.5% and commercial lines up nearly 6%.
North America P&C premiums were up 4.4%, including over 8% in personal lines and 3.5% in commercial.
North America high net worth personal lines business generated more than $1.8 billion in net written premium.
Middle market business premiums in North America grew 4.1% to $2.1 billion.
Premiums in major accounts and specialty grew 2.5%, with major up 3.2% and E&S up 6.6%.
International life insurance premiums were up 26.5%.
North America combined insurance company premiums were up 18%.
Life division produced $324 million of pre-tax income, up over 14%.
Capital Allocation
Returned $1.6 billion of capital to shareholders, including $385 million in dividends and $1.2 billion in share repurchases.
Issued approximately $2.2 billion of debt at a weighted average cost of 4% and an average term of about 12 years.
Increased share buybacks due to the stock trading below intrinsic value.
Industry Trends and Dynamics
The commercial P&C market is in transition globally.
Competition is growing, especially in large account-related short-tail business, both admitted and E&S.
More capital is chasing the property business, leading to softening prices, while terms and conditions remain steady.
Middle market and small commercial property is more disciplined, though greater competition is beginning to show.
Casualty pricing overall is slowing, though it continues to firm in areas that require rate.
Financial lines remain soft, but there are signs of firming in discrete classes.
Competitive Landscape
Chubb is the second-largest writer in the US middle market.
Chubb's diversification provides a wide range of opportunities and supports its ability to manage the commercial P&C cycle with discipline.
Chubb is leveraging digital and AI efforts to contribute to growth and transform the company.
Macroeconomic Environment
Current fiscal, financial, and economic conditions favor attractive fixed income and alternative asset portfolio returns.
Federal budget deficits, inflation, and rotation from the dollar support a steeper yield curve, which should support reinvestment rates and future investment income growth.
Growth Opportunities and Strategies
Chubb expects to continue generating superior margin and earnings growth and increase its return on shareholders' equity.
The company estimates that 70% to 80% of its businesses present attractive growth opportunities.
Chubb is focused on organic growth opportunities across consumer, small, and mid-sized commercial businesses in various countries.
The company is building capabilities and leveraging technology to support its growth.
International retail and E&S business illustrates the power of Chubb's diversification.
Financial Guidance and Outlook
Chubb aims to maintain superior earnings growth, including double-digit growth in EPS, intangible book value, and core operating ROE increasing to 14%-plus percent over the medium-term.
Adjusted net investment income in the fourth quarter is expected to be between $1.775 billion and $1.1 billion.
The core operating effective tax rate for the full year is expected to be in the range of 19.5% to 20%.
