Chubb Ltd. weathered claims from major storms in Texas and other U.S. states, Canadian wildfires and earthquakes in Japan and Ecuador in the second quarter to record solid operating results.
Operating income at the giant insurer formed with the merger of ACE Ltd. and Chubb in January was $1.1 billion compared with $788 million for the same quarter last year. Operating income excluding catastrophe losses was $1.4 billion compared with $894 million.
Net income for the quarter came in at $726 million, compared with $942 million for the same quarter last year.
The property/casualty combined ratio for the quarter was 91.2 compared with 87.7 for the prior year second quarter.
“Chubb produced very good operating results in the quarter despite a greater level of industry natural catastrophe losses globally than has occurred in recent years, though industry insured losses appear in line with longer-term historical averages,” Evan G. Greenberg, chairman and chief executive officer of Chubb Limited, commented in prepared remarks.
Greenberg said the ACE-Chubb integration is going well and the company is enjoying the benefits of cross-selling opportunities between legacy Chubb and ACE customers.
“In fact, the strength of the new Chubb, including cross-selling and the introduction of our total product portfolio to an expanded distribution base, is receiving greater attention and, while early, the efforts are beginning to contribute to revenue growth,” Greenberg said.
In a call with analysts, Greenberg, citing high retention rates on legacy ACE and legacy Chubb business, said he is “feeling pretty good” about how the integration is going.
Lower retention on business assumed with ACE’s acquisition of Fireman’s Fund personal lines business is due largely to planned non-renewal of some of the accounts and repricing on Chubb/ACE terms. The lower retention was anticipated and will gradually improve, Greenberg told analysts.
In response to analysts’ questions, the CEO said current political trends favoring protectionism over globalization are “worrisome” and he called for political leaders to speak out on the benefits of global trade to the U.S.
He also criticized attacks on immigration as “misguided populism.”
He said Brexit, Britian’s vote to exit the European Union, should have no short-term effect on Chubb, while its long-term effect will depend on what is negotiated going forward.
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