Chubb's record $1.79bn investment income blunts catastrophe losses that more than doubled

Chubb's pre-tax net investment income rose 8.6 per cent to a record $1.79 billion in the third quarter, cushioning catastrophe losses that more than doubled. Catastrophe losses reached $705 million, up from $285 million a year earlier. The Royal Gazette Bermuda Re attributed the investment gain to rising interest rates and a favourable fixed-income investment environment at the Swiss-based insurer.

Net income for the three months ended September 30 rose 1.5 per cent to $2.84 billion, or $7.30 a share. Core operating income fell 2.2 per cent to $2.98 billion, while operating earnings per share edged up 0.8 per cent to $7.66.

Property and casualty underwriting income was $2.06 billion on a combined ratio of 84.1 per cent. Excluding catastrophes and prior-year development, current accident year underwriting income rose 3.3 per cent to $2.26 billion at a combined ratio of 82.6 per cent. Favourable revisions to estimates of claims from previous years provided a $511 million benefit, up from $361 million.

P&C net premiums written rose 1.9 per cent to $13.18 billion, as growth overseas, in personal insurance and in agriculture offset a 2.7 per cent contraction in North America commercial premiums. The report attributes that decline to reduced exposures and additional reinsurance purchases.

Evan Greenberg, chairman and chief executive, described commercial property and casualty pricing as increasingly competitive across the board, particularly in the US and London, while saying the substantial majority of the group's underwriting businesses grew, with the balance flat or purposely shrinking where pricing or terms were inadequate. He said he fully expects North America commercial growth to improve in future quarters.

The nine-month numbers ran ahead of the quarter: net income rose 12.9 per cent to a record $8.02 billion, core operating income rose 21 per cent to a record $8.6 billion, and P&C underwriting income rose 33.7 per cent to a record $5.79 billion.