Chubb records net income of $533 million in 2012 Q3

A marked reduction in catastrophes losses brought Chubb Corporation’s financial results for 2012 Q3 to new heights, with the company reporting record operating earnings per share and an approximately 79% increase in net income over the same quarter in 2011.

Net income for the third quarter of 2012 was $533 million compared with $298 million in 2011 Q3, notes a statement from the company.

“Chubb’s third-quarter operating earnings per share of $1.98 were the highest of any quarter in Chubb’s history,” says John Finnegan, the company’s chairman, president and CEO. “This record result reflected strong underlying underwriting performance as well as unusually low catastrophe losses,” Finnegan notes, adding that all three of the company’s business units made significant contributions to the positive results.

The impact of catastrophes before tax was $17 million in the quarter ended Sept. 30, 2012 while it was $420 million for 2011 Q3, Chubb reports in a statement. The impact of catastrophes on third quarter net income and operating income per share was $0.04 in 2012 and $0.95 in 2011.

Comparing Q3s from 2011 and 2012, Chubb reports that operating income increased from $252 million to $533 million; net income per share rose 90% from $1.04 to $1.98; operating income per share increased 125% from $0.88 to $1.98; expense ratio increased marginally from 32.4% to 32.5%; and combined loss and expense ratio decreased from 102.6% to 86.3%.

“The impact of catastrophes accounted for 0.6 percentage points of the combined ratio in the third quarter of 2012, compared to 14.4 percentage points in the third quarter of 2011. Excluding the impact of catastrophes, the third quarter combined ratio improved to 85.7% in 2012 from 88.2% in 2011,” the company statement adds.

With regard to net written premiums, these increased 1% to $2.9 billion in the third quarter of 2012. Excluding the effect of foreign currency translation, premiums were up approximately 3%, with premiums increasing 4% in the United States and declining 6% outside of the U.S.

For the first nine months of 2012, net income was $1.4 billion, or $5.29 per share, compared with $1.2 billion, or $4.16 per share, for the corresponding period in 2011. Operating income also increased from $1.0 billion, or $350 per share, to $1.4 billion, or $5.04 per share.

Again, there was a marked decrease in the impact of catastrophes. For the first nine months of 2012, it was $264 million before tax compared with $1 billion before tax for the same period in 2011.

As for the combined ratio for the first nine months of 2012, it was 90.1% in 2012 compared to 97.1% in 2011. “The impact of catastrophes in the first nine months accounted for 3.0 percentage points of the combined ratio in 2012 and 11.7 points in 2011,” the company statement adds.