Stephen Simpson, CFA
Zero Gravitas • 97 Comments
Fri, Jan. 15, 9:29 AM
Thu, Jan. 14, 6:25 PM
- As expected, ACE Limited (ACE -0.2%; +1.8% after hours) has closed on its acquisition of Chubb (NYSE:CB), for $29.5B in cash and stock, and now takes on Chubb's name as its own.
- ACE will begin trading tomorrow on NYSE using the CB symbol as well.
- The move creates the world's largest publicly traded property and casualty insurer, with (pro forma) market cap of $51.2B, total assets of about $150B, and annual gross written premiums of $37B.
- The two have been in extensive integration planning since their July announcement, ACE says, and it expects annual pretax expense savings of about $650M by 2018. The deal should be immediately accretive to EPS and book value, and to be accretive to ROE (and to EPS on a double-digit basis) by year three.
- Its new name of Chubb Limited will be official in a few days with publication from the Swiss Commercial Register.
- Previously: EXR, USCR, WWE up in late trading on S&P index changes (Jan. 13 2016)
Thu, Jan. 14, 5:40 PM
Wed, Jan. 13, 5:54 PM
- Self-storage REIT Extra Space Storage (NYSE:EXR) is up 2% after hours as it's set to join the S&P 500 after the close of trading Friday.
- The company is replacing Chubb (CB -0.7%), which is being acquired by ACE Ltd. (already in S&P 500) in a deal expected to close tomorrow. Ace will change its name to Chubb and take over the CB ticker symbol after that closure.
- EPR Properties (NYSE:EPR) will replace Extra Space Storage in the S&P MidCap 400, and U.S. Concrete (NASDAQ:USCR) is replacing EPR in the SmallCap 600 after Friday's close. USCR is up 4.1% after hours.
- With Wausau Paper (NYSE:WPP) set to be acquired by SCA around Jan. 20, World Wrestling Entertainment (NYSE:WWE), up 4.1% after hours, is replacing Wausau in the SmallCap 600 after the close that day.
Jul. 1, 2015, 12:30 PM
- "This changes almost everything" in P&C, says KBW's Meyer Shields. "Ace (ACE +2%) is a very experienced and successful acquirer." The deal should help Ace better compete with rivals like AIG (AIG +1%) and Berkshire Hathaway (BRK.A, BRK.B).
- Merger presentation slides
- Unlike some other insurers focused on buybacks - including the acquired Chubb (CB +29%) - Ace and its CEO Hank Greenberg have been using capital for purchases, building scale and diversifying risk.
- Chubb CEO John Finnegan - previously set to retire at the end of 2016 - could be in for a nine-digit golden parachute should he be let go prior to that or resigns for reasons such as a reduction in responsibility or pay. Greenberg is set to lead the combined company.
- Previously: P&C stocks on the move after Chubb sale (July 1)
- Previously: ACE buying Chubb in cash and stock deal for $28.3B (July 1)
Jul. 1, 2015, 9:39 AM
- ACE's (ACE +7.7%) purchase of Chubb (CB +34.8%) for $28.3B in stock and cash has the property & casualty names higher in early action.
- Travelers (TRV +3.9%), Allstate (ALL +2.4%), Cincinnati Financial (CINF +2.2%), W.R. Berkley (WRB +3.1%), Progressive (PGR +2.3%), United Insurance (UIHC +2.2%), Hartford FInancial (HIG +3.3%).
- Previously: ACE buying Chubb in cash and stock deal for $28.3B (July 1)
Jul. 1, 2015, 9:18 AM
Jul. 1, 2015, 7:12 AM
- Chubb (NYSE:CB) owners will receive $62.93 per share in cash and 0.6019 shares of ACE stock for each share of Chubb they own - $124.13 per share based on ACE's closing price last night. Chubb closed at $95.14 - the stock's higher by 31.4% premarket to $125. ACE is ahead by 5.2% to $107.
- ACE expects the purchase to be immediately accretive to EPS and book value, and by year three be accretive to EPS on a double-digit basis and accretive to ROE. The ROI should exceed ACE's cost of capital within two years, and tangible book value per share will return to its current level in three years.
- A conference call is set for 8:30 ET.
Oct. 23, 2014, 4:10 PM
- Chubb (NYSE:CB): Q3 EPS of $2.17 beats by $0.22.
- Revenue of $3.17B (+4.6% Y/Y) beats by $60M.
- Shares +3.9%.
Sep. 17, 2014, 3:16 PM
- Leading markets higher as the reality of higher interest rates gets nearer is the financial sector (XLF +0.9%). Whether its banks, brokerages, or insurers, a higher benchmark rate for some time has been considered a key bullish catalyst. An especially large move is being seen in the online brokerage names who have been forced to forego money market fees for years thanks to ZIRP: E*Trade (ETFC +3%), Schwab(SCHW +3.2%), Ameritrade (AMTD +2%).
- Morgan Stanley (MS +1.8%), Bank of America (BAC +1.2%), JPMorgan (JPM +0.9%)
- U.S. Bancorp (USB +1.1%), Regions Financial (RF +2%), New York Community Bank (NYCB +0.8%), Huntington Bancshares (HBAN +1.3%), KeyCorp (KEY +1.3%)
- MetLife (MET +0.6%), Voya Financial (VOYA +0.7%).
- Chubb(CB +0.4%), AIG (AIG +1.1%), Hartford (HIG +0.8%)
- Financial sector ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, KIE, IAT, SEF, IYG, IAK, FXO, KBWB, FNCL, RKH, QABA, FINU, KRU, KBWR, RWW, KBWP, RYF, KBWI, KRS, FINZ
Apr. 28, 2014, 10:52 AM
- Property & casualty insurers are bouncing from a tough Friday session which was led by declines in Chubb and Cincinnati Financial after tough Q1 results. Today's biggest gainer is United Insurance Holdings (UIHC +4.8%) - continuing a big run after being initiated with an Outperform rating at Wells Fargo.
- Aren't insurers supposed to be bought after a tough quarter for catastrophes as it means they can raise rates?
- Others: HCI Group (HCI +3.1%), Universal Insurance (UVE +3.5%), W.R. Berkley (WRB +1.2%), Travelers (TRV +1.6%), Allstate (ALL +1.3%), Chubb (CB +1.3%), and Cincinnati Financial (CINF +0.9%).
- ETFs: KIE, IAK, KBWP, KBWI
Apr. 25, 2014, 12:11 PM
- Chubb (CB -2.3%) and Cincinnati Financial (CINF -2.8%) are leading a weak P&C insurance sector today after reporting claims from the severe winter weather worse than most had anticipated.
- Sandler O'Neill's Paul Newsome finds the poor underwriting performance at Chubb "interesting" considering the strong results posted by Travelers earlier this week.
- The KBW Insurance Index is off 0.65% today, -3.7% YTD. Chubb is down 7.2% on the year, and Cincinnati Financial -7.7%.
- Previously: Winter weather takes bite out of Chubb's Q1 profit
- Previously: Winter weather hits Cincinnati Financial Q1 profits
Jan. 7, 2014, 8:08 AM| Jan. 7, 2014, 8:08 AM
Jul. 25, 2013, 4:37 PM
More on Chubb (CB) Q2 earnings: Operating income per share of $1.77 up 29% Y/Y. Catastrophe losses of $237M vs. $223M a year ago. Combined ratio falls (a good thing) to 88.8% from 93.8%, excluding catastrophes, it fell to 80.9% from 86.3%. Net written premiums of $3.1B flat Y/Y. P&C investment income of $286M off 6%. 3.7M shares repurchased at average of $87.28/share. $758 buyback authorization remains. FY13 EPS guidance is upped to $7.30-$7.50 from $6.40-$6.80 even as catastrophe loss assumption is raised to 4.6% from 4%. Shares +2.4% AH. CC at 5 ET. (PR)| Jul. 25, 2013, 4:37 PM
Oct. 19, 2011, 3:37 PM
Investors prefer to focus on Travelers' (TRV +5.9%) plan to pursue targeted pricing and changes in terms and conditions rather than its 67% Y/Y profit drop, boosting shares. A multiyear streak of outsized losses from severe weather is the top factor in providing an impetus to raise rates across all its operating segments. Insurance peers: CB +2.1%, ACE +3.4%, WRB +2.6%.| Oct. 19, 2011, 3:37 PM | 1 Comment
Sep. 29, 2011, 1:19 PM
Chubb (CB +2.1%) is higher today, after the company says its Q3 pretax catastrophe losses would range between $400M - $475M, in line with projections. The the bulk of those losses, around $300M - $375M, were due to Hurricane Irene.| Sep. 29, 2011, 1:19 PM