Chubb(US:CB)2022-02-02 15:50Financial Data and Key Metrics Changes - Core operating income for Q4 was $1.65 billion or $3.81 per share, up nearly 20% year-over-year [9] - For the full year, net and core operating income reached $8.5 billion and $5.6 billion, respectively, both record results [9] - Underwriting income for Q4 was $1.27 billion, a 31% increase year-over-year, with a combined ratio of 85.5% [10] - Full year P&C underwriting income was a record $3.7 billion, up over 200% despite $2.4 billion in catastrophe losses [11] - Adjusted net investment income for Q4 topped $900 million, with a record $3.7 billion for the year [12] Business Line Data and Key Metrics Changes - P&C premiums in Q4 increased by 9.6%, with commercial premiums up 13% and consumer premiums up 2.2% [15] - For the year, premium revenue grew by 13%, the strongest organic growth since 2003, with commercial up 17.7% and consumer up 2.3% [15] - North America commercial premiums grew over 11%, while international commercial P&C premiums grew 15% [24] - The retail business achieved a 100% retention rate on a premium basis and 89% on an account basis [20] - Net premiums in the North America high net worth personal lines business were up 3.3%, with a 13.5% increase in homeowners portfolio pricing [28] Market Data and Key Metrics Changes - Total premiums in North America grew 8.7%, with commercial up over 11% [18] - Internationally, retail commercial growth varied by region, with premiums up 19% in the U.K. and Europe [24] - In the Asia-focused international life insurance business, net premiums plus deposits were up about 25% in Q4 [29] - Global Re business net premiums were up 37%, though caution remains in most lines due to inadequate rates [30] Company Strategy and Development Direction - The company is focused on strategic investments, including increasing ownership in Huatai Group and integrating the Cigna transaction [14] - The company expects continued growth and margin improvement in 2022, capitalizing on favorable underwriting conditions [31] - Investment income is anticipated to rise as interest rates increase and spreads widen [32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's future, citing strong market conditions and growth opportunities [31] - The company is vigilant in managing inflation and loss costs, with expectations that rates will continue to exceed loss costs [84] - Management noted that consumer lines growth is expected to improve as the pandemic eases [31] Other Important Information - The company returned $1.2 billion to shareholders in Q4, including $905 million in share repurchases [36] - Book value per share increased to an all-time high of $139.99, with a reported ROE of 14.4% for Q4 [38][39] - Pre-tax catastrophe losses for Q4 were $275 million, primarily from weather-related events [41] Q&A Session Summary Question: Impact of tightening terms and conditions on premium pressure - Management clarified that tightening terms and conditions have been a consistent trend and not a new development [45] Question: Reasons for sequential slowdown in commercial lines premiums - Management noted that Q4 was one of the strongest quarters for growth, with seasonal factors influencing premium growth [47] Question: Approach to loss trends and reserve management - Management emphasized a conservative approach to reserves, acknowledging the impact of COVID on claims reporting [49] Question: Update on capital position post-Cigna and Huatai deals - Management indicated that existing cash resources will be used for financing, with no expected impact on dividends or buybacks [54] Question: Insights on inflation and its impact on claims - Management acknowledged wage inflation and its effects on compensation, estimating it in the 3.5% to 4% range [89]