The Chubb Corp. on Monday reported that net income in the first quarter of 2005 was $470 million, a 30% increase over net income of $361 million in the first quarter of 2004. Net income per share increased 26% to $2.37 from $1.88.
Operating income, which the company defines as net income excluding after-tax realized investment gains and losses, increased 43% to $440 million in the first quarter of 2005 from $308 million in the first quarter of 2004. Operating income per share grew 38% to a record $2.22 from $1.61 a year ago.
Net written premiums for the first quarter increased 1% to $3.1 billion. Premiums for the insurance business grew 3% — up 1% in the
U.S. and 7% outside the U.S. (3% in local currencies). Premiums for the reinsurance assumed business (Chubb Re) were down 12%.
The combined loss and expense ratio for the first quarter was 89.4%,
compared with 92.6% in the corresponding year-earlier quarter. In the first quarter of 2005, catastrophe losses for Chubb were $20 million and accounted for 0.6 points of the combined ratio. In the first quarter of 2004, catastrophe losses were $97 million and accounted for 3.5 points of the combined ratio. Excluding catastrophe losses, the first
quarter combined ratio was 88.8% in 2005 and 89.1% in 2004. The expense ratio for the first quarter was 28.8% in 2005, compared with 30.1% in 2004.
“Chubb had an outstanding quarter, with the best combined ratio in more than 30 years,” said John Finnegan, chairman, president and CEO. “Highlighting the quarter were the continued excellent performance of our commercial insurance lines and ongoing significant improvement in homeowners insurance.
“In a more competitive market environment, we have maintained underwriting discipline and strict expense vigilance in order to protect and enhance our profitability,” said Finnegan. “This core strategy will continue to guide the company forward.
“Our first-quarter results put us on the path to achieving or exceeding
our operating earnings guidance of $7.60 to $8.00 per share for 2005,” said Finnegan. Operating earnings guidance continues to assume 3 points of catastrophe losses for the year and to exclude results from the non-insurance business of Chubb Financial Solutions. “We are maintaining this outlook, as we have completed only one quarter, and we will revisit it when we have six months of operations behind us,” added Finnegan.
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