Chubb Limited Earnings - Q4 2025 Analysis & Highlights
Chubb Ltd.'s Q4 2025 earnings call highlighted a record year with strong financial performance across all business segments, driven by significant increases in underwriting and life income, and record investment income. The company discussed its diversified global operations, strategic investments in digital transformation, and its approach to capital allocation, while also addressing industry trends, competitive dynamics, and macroeconomic factors like inflation and foreign exchange volatility.
Key Financial Results
Core operating income for the quarter was nearly $3 billion, or $7.52 per share, representing an increase of about 22% and 25%, respectively.
Total company net premiums grew almost 9%, with P&C up 7.7% and life up about 17%.
P&C underwriting income was $2.2 billion, up 40%, with a record low combined ratio of 81.2%.
Underlying current accident year combined ratio was 80.4%, nearly 2 points better than the prior year and a record low.
Global P&C current accident year combined ratio, excluding agriculture, was 80.9%, almost a full point better than the prior year and a record result.
Adjusted net investment income was a record $1.8 billion, up 7.3%.
Fixed income portfolio yield is 5.1%.
Invested assets stand at $169 billion, up from $151 billion a year ago.
Full year operating income was just shy of $10 billion, or $24.79 per share, up about 9% and 11%, respectively, over the prior year.
P&C underwriting income for the full year was $6.5 billion, up 11.6%, with a record low combined ratio of 85.7%.
Adjusted net investment income for the full year rose 9% to almost $7 billion.
Life insurance income for the full year was $1.2 billion, up over 13%.
Total company premiums grew over 6.5% for the year, with P&C up about 5.5% and life up over 15%.
Per share tangible book value grew 25.7% last year.
Pre-tax catastrophe losses were $365 million for the quarter and $2.9 billion for the year.
Pre-tax prior period development in active companies was favorable $430 million.
Corporate runoff portfolio had adverse development of $162 million.
Core operating effective tax rate was 18.7% for the quarter and 19.4% for the year.
Business Segment Results
International P&C premiums in Overseas General were up 10.8% or over 8% in constant dollar.
Global retail premiums were up 12.5%, with consumer premiums up 18.7% and commercial lines up almost 7.5%.
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.
Europe grew over 7%.
International retail commercial P&C rates were down 3.6%, and financial lines rates were down almost 9%.
London wholesale business premiums were down about 1%.
North America total P&C premiums were up over 6.5%.
Agriculture was up over 45%.
Excluding agriculture, North America premiums were up 4.7%, including over 6% in personal lines and 4.3% in commercial.
Middle market and small commercial premiums grew over 6%, with P&C up 7.5% and financial lines up 1.5%.
New business for middle market and small was up more than 17%.
Major accounts and specialty premiums grew 3%, with large account business up 0.5% and Westchester (E&S) up over 7.5%.
North America commercial property and casualty pricing (excluding fin lines and comp) was up 4.3%.
Property pricing was down 1.5%.
Property pricing was down over 13.5% in large account business and E&S, and up 3.7% in middle market and small commercial.
North America casualty pricing was up 8.5%.
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 premiums grew over 6%, and homeowners pricing was up over 8.5%.
International life insurance premiums were up almost 18% in constant dollar.
North America Chubb worksite benefits premiums were up over 16.5%.
Life division produced $322 million of pre-tax income, up just shy of 20%.
Capital Allocation
Returned $1.5 billion of capital to shareholders in the quarter, contributing to a total of $4.9 billion for the year.
Share repurchases amounted to $3.4 billion at an average price of $282.57 per share.
Dividends totaled $1.5 billion.
Book and tangible book value per share, excluding AOCI, grew 3.4% and 4.8% for the quarter, and 11% and 15.5% for the year, respectively.
Industry Trends and Dynamics
The commercial P&C underwriting environment is in transition and becoming incrementally more competitive, particularly in large account property, admitted and E&S, and upper middle market.
Casualty pricing continues to firm in areas requiring rate, while price increases have slowed in others.
Financial lines remain soft, with some signs of firming in discrete classes.
Loss costs remained steady.
Annual industry cat losses approached $129 billion.
Homeowners loss costs are rising around 7.5% to 8%.
Liability inflation is roughly 7% to 9%.
Data centers present a global opportunity, with Chubb providing broad capabilities in builders risk operations, primary property, engineering, marine, surety, liability, and professional lines.
There are headwinds for data center construction, including availability and affordability of energy, pushback on locations, and questions around labor and supply chains.
Competitive Landscape
The market globally is in transition and growing incrementally more competitive, particularly in large account property, admitted and E&S, and upper middle market.
London open market conditions are more competitive across the board: property, marine, aviation, and professional lines.
In Asia, it is very hard for new entrants to compete due to the diverse cultures, economic differences, and the need for broad local capabilities.
Macroeconomic Environment
Foreign exchange volatility is managed by matching assets and liabilities in currency, so they move together.
A weakening US dollar is a tailwind for growth and income, while a strengthening dollar has the opposite effect.
The company does not hedge revenue or income, only large remittances.
GDP growth that is overly concentrated is more vulnerable and potentially more volatile.
Broader-based growth is more stable and creates more widespread prosperity.
Growth Opportunities and Strategies
The company is broadly diversified by geography, product, commercial and consumer segments, and distribution channels.
International P&C and US agriculture business had particularly strong growth.
Strong growth was also seen in US personal lines and commercial US middle market and E&S businesses.
In Latin America, growth is primarily in consumer businesses through partnerships with banks like Banco de Chile and Nubank, and digitally distributed insurance.
In Asia, growth came fundamentally from consumer lines, with a focus on small and middle market commercial.
The company is investing in digital transformation to improve its competitive profile.
Digital transformation is expected to yield about 150 basis points of combined ratio improvement over the next three to four years, primarily from the expense side (OpEx and cost of claims).
The company is focused on 9 or 10 discrete projects across various geographies, involving technology, data, AI, analytics, and operations.
The company is targeting to raise private investments from 12% to 15% of its total investments over the medium term.
Financial Guidance and Outlook
The company is confident in its ability to generate strong growth in operating earnings and double-digit growth in EPS and tangible book value for 2026, through P&C underwriting, investment income, and life, excluding cats and FX.
Adjusted net investment income in Q1 2026 is expected to be between $1.81 billion to $1.84 billion.
The annual core operating effective tax rate for 2026 is expected to be in the range of 19.5% to 20%.
