The Chubb Corp. reported that net income in the fourth quarter of 2007 was $650 million or $1.68 per share, compared to $654 million or $1.56 per share in the fourth quarter of 2006.
Operating income increased to $620 million from $614 million in the fourth quarter of 2006. Operating income per share increased 10 percent to $1.60 from $1.46.
Net written premiums for the fourth quarter increased 1 percent to $3.0 billion. Premiums for the insurance business increased 2 percent; they were down 2 percent in the U.S. and were up 15 percent outside the U.S. (6 percent in local currencies).
Premiums for the reinsurance assumed business declined 39 percent, reflecting the impact of the Chubb Re-Harbor Point transaction completed in December 2005.
The fourth quarter combined loss and expense ratio was 83.8 percent in 2007 and 83.1 percent in 2006. The impact of catastrophes in the fourth quarter of 2007 accounted for 3.8 percentage points of the combined ratio, compared to 0.9 points in the fourth quarter of 2006. Excluding the impact of catastrophes, the combined ratio improved 2.2 percentage points to 80.0 percent from 82.2 percent. The expense ratio for the fourth quarter was 30.5 percent in 2007 and 29.9 percent
Property and casualty investment income after taxes for the fourth quarter increased 9 percent to $331 million in 2007 from $304 million in 2006.
During the fourth quarter of 2007, Chubb repurchased 9.8 million shares of its common stock at a total cost of $525 million.
“We continued to produce consistent, outstanding underwriting results in the fourth quarter,” said John D. Finnegan, chairman, president and chief executive officer. “Thanks to significant contributions from all three business units throughout 2007, Chubb attained its fifth consecutive year of record income.”
Full Year Results
For the year ended December 31, 2007, net income was $2.8 billion or $7.01 per share, compared to $2.5 billion or $5.98 per share for the year ended December 31, 2006.
Net written premiums in 2007 declined 1 percent to $11.9 billion. Premiums for the insurance business increased 1 percent; they were down 1 percent in the U.S. and up 10 percent outside the U.S. (3 percent in local currencies). Premiums for the reinsurance assumed business declined 65%.
The combined ratio in 2007 was 82.9 percent, compared to 84.2 percent in 2006. The impact of catastrophes accounted for 3.0 percentage points of the combined ratio in 2007 and 1.4 points in 2006. Excluding the impact of catastrophes, the combined ratio improved 2.9 percentage points to 79.9 percent from 82.8 percent. The expense ratio for the year was 30.1 percent in 2007 and 29.0 percent in 2006.
Property and casualty investment income after taxes increased 9 percent to $1.3 billion in 2007 from $1.2 billion in 2006.
During 2007, Chubb repurchased 41.7 million shares of its common stock at a total cost of $2.2 billion.
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2007 Operations Review
For the year ended December 31, 2007, Chubb Personal Insurance net written premiums grew 5 percent to $3.7 billion. CPI’s combined ratio was 84.8 percent in 2007 and 81.7 percent in 2006. The impact of catastrophes accounted for 6.3 percentage points of the combined ratio in 2007 and 3.7 points in 2006.
The Homeowners line grew 7 percent and had a combined ratio of 80.2 percent. Personal Automobile premiums declined 7 percent, and the combined ratio was 89.8 percent. Other personal lines grew 15 percent and had a combined ratio of 96.4 percent.
Chubb Commercial Insurance net written premiums declined 1 percent in 2007 to $5.1 billion. The combined ratio was 85.8 percent in 2007 and 83.1 percent in 2006. The impact of catastrophes accounted for 2.6 percentage points of the combined ratio in 2007 and 0.6 points in 2006.
Average 2007 renewal rates in the U.S. were down 4 percent for CCI, which retained 83 percent of the U.S. premiums that came up for renewal. In the U.S., the ratio of new to lost business was 1 to 1.
Chubb Specialty Insurance net written premiums were flat at $2.9 billion. The combined ratio improved to 77.4 percent in 2007 from 87.5 percent in 2006.
Professional Liability had a 1 percent decline in premiums and a combined ratio of 82.4 percent. In the U.S., average 2007 renewal rates for Professional liability were down 5 percent, renewal retention was 88 percent and the ratio of new to lost business was 1.4 to 1.
Surety had net written premium growth of 13 percent and a combined ratio of 35.4 percent.
2008 Operating Income Guidance
Finnegan said that based on its current outlook, Chubb believes it can achieve 2008 operating income per share in the range of $5.70 to $6.10.
Source: Chubb
www.chubb.com
Topics Trends USA Profit Loss Pricing Trends Chubb
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