Chubb: 1st Quarter Profit Up 6%

April 24, 2007

The Chubb Corp. reported that net income in the first quarter of 2007 was $710 million or $1.71 per share, compared to $672 million or $1.58 per share in the first quarter of 2006.

Operating income, which the company defines as net income excluding after- tax realized investment gains and losses, increased 5% to $634 million from $603 million in the first quarter of 2006. Operating income per share increased 8% to a record $1.53 from $1.42.

Net written premiums for the first quarter declined 2% to $2.9 billion. Premiums for the insurance business increased 1%; they decreased 1% in the U.S. and increased 7% outside the U.S. (1% in local currencies). Premiums for the reinsurance assumed business declined 69%, reflecting the impact of the Chubb Re-Harbor Point transaction completed in December 2005.

The first quarter combined loss and expense ratio was 83.4% in 2007, compared to 82.9% in 2006. The impact of catastrophes accounted for 2.5 percentage points of the combined ratio in the first quarter of 2007, compared to an impact of 0.1 percentage points in the first quarter of 2006. Excluding the impact of catastrophes, the first quarter combined ratio was 80.9% in 2007 and 82.8% in 2006. The expense ratio for the first quarter was 30.4% in 2007 and 29.1% in 2006.

Property and casualty investment income after taxes for the first quarter increased 9% to $305 million in 2007 from $279 million in 2006.

“All three business units made substantial contributions to first quarter earnings,” said John D. Finnegan, chairman, president and chief executive officer.

First Quarter Operations Review
Chubb Personal Insurance (CPI) net written premiums grew 6% in the first quarter to $840 million. CPI’s combined ratio for the quarter was 79.3%, compared to 79.7% in the first quarter of 2006. Catastrophe losses for the quarter were 1.3 percentage points in 2007 and 3.6 points in 2006. Excluding catastrophe losses, CPI’s first quarter combined ratio was 78.0% in 2007 and 76.1% in 2006.

Net written premiums for homeowners grew 7%, and the combined ratio was 71.1%. Personal automobile net written premiums declined 5%, and the combined ratio was 95.4%. Other personal lines grew 16% and had a combined ratio of 93.1%.

Chubb Commercial Insurance (CCI) net written premiums declined 1% in the first quarter to $1.3 billion. The combined ratio for the quarter was 88.0% in 2007 and 78.8% in 2006. Catastrophe losses accounted for 5.0 percentage points in the first quarter of 2007. In the first quarter of 2006, there was a 2.0 percentage point favorable impact of catastrophes due to a reduction in previously accrued reinsurance reinstatement premium costs related to Hurricane Katrina. Excluding the impact of catastrophes, CCI’s first quarter combined ratio was 83.0% in 2007 and 80.8% in 2006.

Average first quarter renewal rates in the U.S. were down 2% for CCI, which retained 84% of the U.S. premiums that came up for renewal. In the U.S., the ratio of new to lost business was 1.1 to 1.

Chubb Specialty Insurance (CSI) net written premiums were flat in the first quarter at $681 million. The combined ratio was 83.1%, compared to 90.7% in the first quarter of 2006.

Professional Liability (PL) net written premiums declined 3%, and the business had a combined ratio of 89.0%. Average first quarter renewal rates in the U.S. were down 4% for PL, which retained 87% of the U.S. premiums that came up for renewal. In the U.S., the ratio of new to lost business was 1.4 to 1.

Surety net written premiums were up 29%, and the combined ratio was 31.4%.

Chubb’s senior management will discuss the company’s first quarter performance with investors and analysts today, April 23, at 5 p.m. EDT. The conference call will be webcast live on the Internet at http://www.chubb.com/ and archived later in the day for replay.

Source: Chubb Corp.

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