Chubb Took $500M Hit from Catastrophes in Q4 But Saw Better Pricing, Investments

February 6, 2019

In 2018 fourth quarter, global insurer Chubb saw a surge in catastrophe losses, along with growth in premium revenue, better global property/casualty pricing and record net investment income.

The insurer booked $355 million in net income compared to more than $1.5 billion in net income over Q4 2017.

While Chubb’s Q4 P/C combined ratio was a healthy 93.1, it compares to a 90.7 combined ratio over the same period a year ago.

“Chubb performed well in a quarter marked by elevated natural catastrophe losses, on the one hand, and stronger premium revenue growth, improved commercial P&C pricing globally and record net investment income, on the other,” Chubb Chairman and CEO Evan Greenberg said in prepared remarks.

“Globally, this was our best quarter of the year – and for some of our businesses the best in several years – in terms of the pace and broad-based nature of price change and improved underwriting conditions,” the CEO said.

For the year, Chubb booked more than $3.9 billion in net income, up 2.6 percent from the $3.86 billion produced during 2018.

Here are additional Q4 and full-year 2018 results as reported by Chubb:

  • Q4 after-tax catastrophe losses were $506 million, versus $331 million in Q4 2017.
  • Consolidated and P/C net premiums written for the fourth quarter were $7.4 billion and $6.8 billion, respectively, reflecting a 4.2 percent increase for both over the previous year, or a 5.9 percent and 5.8 percent increase, respectively, in constant dollars.
  • Net investment income for the quarter reached $848 million pre-tax over the 2017 fourth quarter. Adjusted net income hit a record $903 million pre-tax, reflecting a 3.4 percent increase over the 2017 fourth quarter.
  • Global reinsurance net premiums written for the year decreased 2.1 percent or 3.3 percent in constant dollars. The combined ratio for the year was 101.8, compared with 111.2 in 2017.
  • Full-year consolidated net premiums written were $30.6 billion, a 4.6 percent increase over 2017, or 4.1 percent in constant dollars. Full-year P/C net premiums written were $28.3 billion, a 4.4 percent increase over 2017, or 4 percent in constant dollars.
  • Fourth quarter P&C combined ratio was 93.1 compared with 90.7 prior year. The P&C current accident year combined ratio excluding catastrophe losses was 88.3 compared with 86.4 prior year. The current quarter was impacted by high loss activity in North American commercial property lines (1.4 percentage points) and elevated homeowners loss activity.

“We have good momentum as we execute on our business initiatives across the globe and take advantage of an improving price and underwriting environment that the industry needs. Our organization is optimistic about the year ahead and we are off to a good start,” said Greenberg.

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