Chubb Limited Earnings - Q4 2025 Analysis & Highlights
Chubb Ltd. delivered record full-year and quarterly earnings driven by exceptional underwriting performance across all business segments, strong investment income growth, and strategic expansion in international markets, while navigating a transitioning competitive environment and preparing for digital transformation initiatives.
Key Financial Results
Core operating income reached nearly $10 billion for the full year, or $24.79 per share, up approximately 9% and 11%, respectively, over the prior year.
Quarterly core operating income was nearly $3 billion, or $7.52 per share, up about 22% and 25%, respectively.
Total company net premiums grew almost 9% for the quarter, with P&C up 7.7% and life up about 17%.
Full-year total company premiums grew over 6.5%, with P&C up about 5.5% and life up over 15%.
Per share tangible book value grew 25.7% for the full year.
Adjusted net investment income was $1.8 billion in the quarter, up 7.3%, and $6.9 billion for the full year, up 9%.
Book and tangible book value per share, excluding AOCI, grew 3.4% and 4.8%, respectively, for the quarter, and 11% and 15.5%, respectively, for the year.
Business Segment Results
P&C underwriting income was $2.2 billion in the quarter, up 40%, with a record low combined ratio of 81.2%.
Full-year P&C underwriting income of $6.5 billion was up 11.6%, with a record low combined ratio for the year of 85.7%.
Current accident year combined ratio (excluding agriculture) was 80.9%, almost a full point better than prior year and a record result.
Overseas General premiums were up 10.8% or over 8% in constant dollar, with global retail premiums up 12.5%.
Latin America grew 14.7% with consumer up almost 18% and commercial up 10.5%.
Asia grew 13%, with consumer up 25% and commercial flat.
North America P&C premiums were up over 6.5%, with agriculture up over 45% and excluding agriculture, premiums up 4.7%.
Life division produced $322 million of pre-tax income in the quarter, up just shy of 20%.
International life insurance premiums were up almost 18% in constant dollar.
North America worksite benefits premiums were up over 16.5%.
Capital Allocation
Share repurchases totaled $3.4 billion at an average price of $282.57 per share for the year.
Dividends paid were $1.5 billion in the quarter and $1.5 billion for the year.
Total capital returned to shareholders was $1.5 billion in the quarter and $4.9 billion for the year, representing about half of core operating income.
Adjusted operating cash flows were $4.2 billion in the quarter and $13.9 billion for the year.
Industry Trends and Dynamics
Annual industry catastrophe losses approached $129 billion, with US and worldwide hurricane and typhoon seasons being unusually light.
Full-year catastrophe losses for Chubb were $2.9 billion versus $2.4 billion in the prior year, substantially driven by California wildfires in the first quarter.
Commercial P&C underwriting environment is in transition and growing incrementally more competitive quarter by quarter, particularly in large account property, admitted and E&S, and upper middle market.
Casualty pricing overall in large account, E&S and middle market continues to firm in areas that require rate, while price increases have slowed in areas that don't.
Financial lines remain soft, with some signs of firming in discrete classes.
Loss costs in homeowners are rising around 7.5% to 8%, with liability costs in the US overall rising approximately 7% to 9%.
Competitive Landscape
International retail commercial business experienced P&C rate declines of 3.6% and financial lines rate declines of almost 9%.
London wholesale business premiums were down about 1%, given more competitive London open market conditions across property, marine, aviation and professional lines.
Major account business growth was impacted by property pricing declines of over 13.5% in large account business and E&S.
Middle market and small commercial showed stronger pricing with property pricing up 3.7%.
Asia commercial lines were flat, mostly in large account business in Australia, Singapore and Hong Kong where the environment is more competitive.
Management emphasized that competing in Asia's small and middle market commercial and consumer segments requires years of hard work to establish local franchises and broad capability distributed through countries.
Macroeconomic Environment
Management noted that broader-based economic growth is more stable and creates more broad-based prosperity impacting both commercial and consumer segments, compared to growth concentrated in specific areas like AI infrastructure.
Foreign exchange volatility impacts reported results, with assets and liabilities matched in currency so they move together, and the company does not hedge revenue or income.
Current prognostication suggests the US dollar may weaken as you look forward, though sentiment bounces around based on financial conditions, economic factors and geopolitical considerations.
Growth Opportunities and Strategies
Digital transformation initiative targets approximately 150 basis points of combined ratio improvement over the next three to four years, primarily on the expense side through both OpEx and cost of claims.
Management is focused on 9 or 10 discrete digital transformation projects across North America, UK, Europe, and larger markets in Asia and Latin America.
Data center insurance opportunity is significant, with Chubb writing primary property, engineering services, marine, surety, liability and professional lines globally for data center construction and operations.
International expansion continues with strong growth in Latin America through partnerships with major banks including Banco de Chile, Nubank in Brazil, Banco Guayaquil in Ecuador, and Banamex in Mexico.
Asia market opportunity is pursued through small and middle market commercial and consumer lines via agency, digital and direct-to-consumer channels, leveraging Chubb's position as the number one direct marketer in Asia for A&H business.
Management is investing to improve competitive profile while pursuing opportunities in multiple directions to earn adequate risk-adjusted returns on growth.
Financial Guidance and Outlook
Management is confident in the ability to generate strong growth in operating earnings and double-digit growth in EPS and tangible book value through the three sources of income (P&C underwriting, investment income and life), though cats and FX aside.
First quarter 2026 adjusted net investment income is expected to be between $1.81 billion to $1.84 billion.
Annual core operating effective tax rate for 2026 is expected to be in the range of 19.5% to 20%.
Management stated they are off to a good start in 2026 with more favorable January 1 renewal conditions than expected, particularly in large account business in the US, Europe and UK.
Management does not provide forward guidance on specific combined ratios or margins but expresses confidence in underwriting income growth contributing to EPS growth.
Underwriting Performance and Risk Management
Prior period reserve development in active companies was favorable $430 million in the quarter, split 64% short-tail lines and 36% long-tail lines.
Corporate runoff portfolio had adverse development of $162 million, primarily related to asbestos review.
Paid-to-incurred ratio was 105% for the quarter and 91% for the year; excluding cats, PPD and agriculture, it was 94% and 88%, respectively.
Invested assets increased to $169 billion from $151 billion a year ago, with the A-rated portfolio increasing about $2.7 billion from the prior quarter and $18.1 billion from the prior year.
Fixed income portfolio yield is 5.1% with current new money rate average slightly above that.
Core operating return on tangible equity and core operating ROE in the quarter were 23.5% and 15.9%, respectively.
Pricing and Rate Environment
Commercial P&C pricing for property and casualty, excluding financial lines and comp, was up 4.3% with rates up 2.5% and exposure change of 1.8%.
Property pricing was down 1.5%, with rates down 4.6%, partially offset by exposure of 3.3%.
Casualty pricing in North America was up 8.5%, with rates up 7.6% and exposure up 0.8%.
Financial lines pricing was down 1.5% and comp middle market pricing was down just under 1%.
Large account risk management pricing was up 6.5%.
North America high net worth personal lines grew over 6% and homeowners pricing was up over 8.5%.
Middle market and small commercial grew over 6%, with P&C up 7.5% and financial lines up 1.5%, with new business up more than 17% versus prior year.
Westchester E&S company premiums were up over 7.5%.
