Chubb Notches Solid Q3 Profit with Lower Catastrophe Losses

October 24, 2018

Chubb reported solid profit, increases in net premiums written and a healthy property/casualty combined ratio in its 2018 third quarter.

The insurer booked $1.2 billion in net income during Q3 versus a $70 million net loss over the same period a year ago. Property/casualty underwriting income reached $669 million during Q3 versus a $784 million loss in the 2017 third quarter. P/C current accident year underwriting income excluding catastrophe losses was $876 million, up 4.3 percent.

Its property/casualty combined ratio was 90.9 compared to 110.8 in the 2017 third quarter, a period that dealt insurers an onslaught of natural catastrophe losses from hurricanes and other storms.

Pre-tax catastrophe losses during Q3 were in line with earlier projections at $450 million, a large number but well below the $1.9 billion reported in the prior year.

Net investment income reached $883 million in Q3.

Chubb said its P/C net premiums written were $7.5 billion during the quarter, up 2.5 percent from a year ago.

Core operating income was $1.1 billion compared with a loss of $60 million prior year.

“Commercial P&C pricing for the business we wrote was consistent with the prior quarter. Given market conditions, we are trading some growth for an underwriting profit – a proven strategy that requires discipline. We’re confident and optimistic about our ability to outperform the balance of the year and beyond,” Chubb Chairman and CEO Evan Greenberg said in prepared remarks.

Greenberg said that the insurer saw solid growth in its U.S. commercial P/C divisions and “simply excelled” in its international P/C business.

Greenberg cited the advantages Chubb has of being global. “As a global insurer with operations in 54 countries, we experienced an active quarter for natural catastrophes around the world, and Chubb’s underwriting excellence once gain distinguished the company,” he said.

He said Chubb’s global capabilities have also allowed the insurer to “take advantage of growth opportunities in many areas without sacrificing underwriting standards.”

Other third quarter results:

  • North America Commercial P/C Insurance: Net premiums written in the middle market and small commercial divisions increased 3.6 percent. This growth reflects a 5.2 percent increase in P/C lines and an increase of 0.2 percent in financial lines. Net premiums written in the small commercial division increased 29.8 percent.
  • North America Personal P/C Insurance: The current accident year combined ratio excluding catastrophe losses was 83.2 compared with 77.5, principally reflecting increasing frequency and severity of homeowners losses, primarily non-catastrophe water and fire losses.
  • Global Reinsurance: Net premiums written decreased 14.3 percent, principally due to higher reinstatement premiums collected in the prior year relating to the 2017 natural catastrophes. The combined ratio was 86.7 compared with 187.4. The current accident year combined ratio excluding catastrophe losses was 82.8, compared with 82.2.

Source: Chubb

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