Chubb Ltd. has estimated it will see more than $1 billion in third-quarter losses stemming from hurricanes Harvey and Irma, a substantial hit for the insurer and reinsurer.
The loss estimate is preliminary. Further details will likely be known when Chubb releases its full 2017 third-quarter earnings on Oct. 26 after the market closes. Both hurricanes caused many deaths and massive damage in Texas, Florida, other southeastern states and the Caribbean.
Chubb’s preliminary insured loss estimates for Hurricane Harvey are at $650 million pre-tax, or $520 million after-tax. For Irma, the number comes in at $800 million to $950 million pre-tax, or $640 million to $760 million after-tax.
Chubb noted that the Q3 hurricane loss estimates are net of reinsurance and include reinstatement premiums. They consist of losses generated from the company’s commercial and personal property/casualty business as well as its reinsurance arm.
Evan Greenberg, Chubb’s chairman and CEO, said in prepared remarks that both events, as well as the recent Hurricane Maria and the earthquakes in Mexico, “have been significant events, causing both a tragic loss of life and considerable property and casualty damage.”
Greenberg shifted the focus from Chubb’s losses, however, pointing out that the insurer’s primary focus is to help customers, business partners and employees affected by the collective disasters.
“Our first job at Chubb is to support them in their time of need, and we are bringing to bear all of the resources of our organization to do that,” Greenberg said.
After Chubb released its 2017 second-quarter earnings, Greenberg referred to the carrier as “a revenue machine.” Q2 net income surpassed $1.3 billion compared to $726 million for the 2016 period. Operating income nearly reached $1.2 billion versus just over $1 billion in the 2016 second quarter.
Chubb’s Q2 property/casualty combined ratio was 88 for the quarter, two points better than the same period in 2016.
On Sept. 12, The Travelers Companies estimated that its catastrophe losses relating to just Hurricane Harvey, including estimated recoveries from reinsurance, would be in the range of $375 million to $750 million pre-tax ($245 million to $490 million after-tax).
Lloyd’s of London expects net losses of $4.5 billion from hurricanes Harvey and Irma.
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