Chubb Reports First Quarter Net Income

April 26, 2018

Chubb Limited reported net income for the quarter ended March 31, 2018 of $1,082 million, or $2.30 per share, compared with $1,093 million, or $2.31 per share, for the same quarter last year.

Core operating income was $1,097 million, or $2.34 per share, compared with $1,175 million, or $2.48 per share, for the same quarter last year. The property and casualty [P&C] combined ratio was 90.1%. Book value and tangible book value per share decreased 0.2% and 0.3%, respectively, from December 31, 2017 and now stand at $110.10 and $65.65, respectively.

Book value and tangible book value per share growth was negatively impacted by realized and unrealized losses of $938 million, after-tax, in the company’s investment portfolio, driven by rising interest rates. Foreign currency movement favorably impacted book value by $310 million after-tax and tangible book value by $136 million after-tax.

Evan G. Greenberg, Chairman and Chief Executive Officer of Chubb Limited, commented: “We had a very good quarter though it was impacted by a higher level of catastrophe losses. We produced world-class ex-CAT underwriting results, strong net investment income and good premium revenue growth while achieving better commercial P&C pricing in many of our businesses globally, which improved as the quarter went along, particularly in the U.S. Core operating income per share excluding CATs was up over 5%.

“Concentrated in two areas where we have meaningful presence – Montecito, California with the mudslides and the Northeast U.S. – the catastrophe losses this quarter were up $175 million pre-tax over prior year and contributed 5.8 points to our published P&C combined ratio of 90.1%. The current accident year combined ratio excluding CATs was 87.6% compared to 88.0% prior year. Adjusted net investment income was up 5%, and we expect the positive trend to continue due to our strong growth in invested assets and the rising yield environment.

“P&C net premium growth for the company was 5.8%. P&C premiums were up over 5% in our North America insurance business while internationally premium revenue was up 8.5% and benefited from a weaker dollar. I expect our growth to accelerate as the year goes along, particularly outside the U.S.

“Commercial P&C pricing for the business we wrote in the quarter continued to improve in the U.S. and a number of territories outside the U.S. We achieved some of the best pricing in quite some time, and it improved as we moved through the quarter. In some classes, customer segments and territories we are observing a clear direction in price firming; in others it’s more chaotic.”

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