Australia floods could cost Chubb $100m

US insurance group Chubb expects its losses from the flooding in Australia to be between $75m and $100m before tax, according to preliminary estimates.

The losses will be included in the company's first-quarter results.

However, Chubb chief executive John Finnegan estimates that ctastrophes will have a 3.5 percentage point impact on the company's combined ratio in 2011, compared with 5.7 points in 2010.

The estimate is based on Chubb’s long-term average annual catastrophe losses of 3 percentage points adjusted upward by 0.5 percentage points to take into account anticipated higher than usual catastrophe losses in the first quarter of 2011 largely resulting from the January floods in Australia.

Finnegan predicts a combined ratio of between 91% and 93% for the full 2011 year and operating income per share of between $5.35 and $5.75. He expects net written premiums to be flat or up by 2%.

The estimates were announced along with Chubb's full-year and fourth-quarter results for 2010. The insurer made a full-year profit of $2.17bn, down slightly on the $2.18bn it made in 2009. Fourth quarter net income was down 11% to $620m in 2010 from $695m in 2009.

Chubb's full year combined ratio increased to 89.3% in 2010 from 86%. Excluding the impact of catastrophes, the combined ratio was 83.6% in 2010 and 85.2% in 2009.