Chubb Q3 profits surge

Chubb reported Q3 net income more than doubled to $596m from $264m in the third quarter of 2008 on lower catastrophe payouts, despite a fall in premium written.

Q3 financial highlights (Q3 2008 in brackets)

• Net premiums written $2,705m ($2,900m)
• Premiums earned $2,836m ($2,964m)
• Underwriting income $423m ($69m)
• Property and casualty income $801m ($484m)
• Operating income before tax $740m ($431m)
• Net income $596m ($264m)
• Combined ratio 85.4% (98.1%)

Chubb said the effect of catastrophes on its combined ratio was down to just 0.8% from 13.6% in 2008.

Premiums were down 7% in the US and down 7% outside the US (up 1% in local currencies).

Focus on the bottom line

John Finnegan, chairman, president and chief executive officer, said: “While the difficult economic environment continued to adversely affect premium growth, we remained focused on bottom-line earnings and increasing shareholder value through disciplined underwriting, our conservative investment strategy and active capital management.

“Successful execution has enabled us to deliver consistent profits, excellent returns on equity and robust growth in book value. Results for the third quarter also benefited from a benign hurricane season.”

“We were pleased by continued renewal rate increases for commercial and specialty insurance in the third quarter in what is a very competitive marketplace.

Share repurchase

“Finally, our strong capital position allowed us to repurchase 8.7 million shares in the third quarter, and we expect to complete the repurchase of all remaining seven million shares under our current authorisation by the end of 2009.”