Chubb Q4 FY25 earnings call CB

Chubb delivered record earnings for both the fourth quarter and the full year 2025. Core operating income reached nearly $3 billion or $7.52 per share in Q4, representing increases of 22% and 25% respectively. For the full year, core operating income was just shy of $10 billion or $24.79 per share, up 9% and 11% respectively, driven by strong contributions from P&C underwriting, life income, and record investment income.

The company achieved an outstanding P&C underwriting income of $2.2 billion in Q4, a 40% increase, with a record low combined ratio of 81.2%. The underlying current accident year combined ratio, excluding agriculture, was 80.9%, almost a full point better than the prior year, demonstrating strong performance across global P&C businesses. This was achieved despite full-year catastrophe losses being higher than the prior year.

Adjusted net investment income reached a record $1.8 billion in Q4, up 7.3%, and totaled almost $7 billion for the full year, a 9% increase. The fixed income portfolio yield stands at 5.1%, with current new money rates averaging slightly above that. Invested assets grew significantly to $169 billion from $151 billion a year ago, reflecting strong operating cash flow and positive marks to market.

Total company net premiums grew almost 9% in Q4, with P&C up 7.7% and life up 17%. International P&C and U.S. agriculture businesses showed particularly strong growth, with premiums up nearly 11% and over 45% respectively. Consumer premiums in global retail, especially in Latin America and Asia, were key drivers, growing 18.7% overall, with Asia consumer up 25% and Latin America consumer up almost 18%.

The commercial P&C market is transitioning and becoming incrementally more competitive, particularly in large account property and upper middle market. While casualty pricing continues to firm in necessary areas, property pricing was down 1.5% overall, with large account and E&S property pricing down over 13.5%. Financial lines remained soft but showed some signs of firming in discrete classes, while international retail commercial P&C rates were down 3.6%.

Chubb is actively investing in digital transformation, focusing on 9-10 discrete projects across various geographies including North America, UK, Europe, Asia, and Latin America. The company anticipates a 150 basis points combined ratio improvement over the next 3-4 years, primarily driven by efficiencies in operating expenses and claims costs, reflecting a cultural willingness to adapt and leverage technology.

The company returned $1.5 billion of capital to shareholders in Q4, contributing to a total of $4.9 billion for the full year, which represents about half of its core operating income. This included $3.4 billion in share repurchases at an average price of $282.57 per share and $1.5 billion in dividends, underscoring strong operating cash flows and a healthy balance sheet.