Chubb net income up, after lower losses in year following Sandy

The Chubb Corp. has reported a net income of $569 million for the fourth quarter of 2013, up from $102 million in the last quarter of 2012.

For the full year, net income was $2.3 billion, compared to $1.5 billion for the year ended  Dec. 31, 2012.  Operating income totaled $2.1 billion in 2013 and $1.4 billion in 2012.

The company’s 2012 results for Q4 were adversely affected by losses from Hurricane Sandy, which hit the eastern United States and Canada in late October of that year.

Net written premiums for the fourth quarter increased 4% to $3.0 billion in 2013 from $2.9 billion in 2012. Premiums were up 7% in the U.S. and down 3% outside the U.S. (up 1% in local currencies).  

The negative 1% effect of foreign currency translation on fourth quarter premium growth was offset by the impact of reinsurance reinstatement premiums related to Storm Sandy, which reduced net written premiums in the year-ago fourth quarter, the company noted.

The combined loss and expense ratio was 85.5% in Q4 2013 and 111.2% in 2012. Excluding the impact of catastrophes, the fourth quarter combined ratio was 83.4% in 2013 and 81.5% in 2012.

“Chubb had an excellent fourth quarter and an outstanding 2013,” John D. Finnegan, chairman, president and chief executive officer of Chubb commented in its earnings release.

“During the fourth quarter, the market tone in the U.S. remained firm, and we achieved mid- to high-single-digit changes in our rate increase metrics in all of our business units.”

The combined ratio in 2013 was 86.1%, compared to 95.3% in 2012. Excluding the impact of catastrophes, the combined ratio was 82.7% in 2013 and 85.7% in 2012.

“Our excellent results in 2013, and our consistent financial performance over time, demonstrate the successful execution of our business and underwriting strategies,” Finnegan said. “We remain committed to our long-standing strategy of focusing on underwriting discipline and superior claims handling, combined with best-in-class producer relationships, a strong balance sheet and active capital management.”

Chubb Personal Insurance (CPI) net written premiums increased 6% in the fourth quarter of 2013 to $1.1 billion, Chubb Commercial Insurance (CCI) net written premiums for the fourth quarter of 2013 increased 4% to $1.3 billion, and Chubb Specialty Insurance (CSI) net written premiums increased 2% in the fourth quarter to $705 million.

Chubb noted that its first quarter 2014 results will be impacted by losses related to the severe winter weather that has occurred during the month of January in the United States.

Chubb’s preliminary estimate of the losses from freezing and winter storms that occurred between Jan. 3 and 8 in 19 states is in the range of $150 million to $200 million before tax. That estimate does not include an estimate for any other January weather related losses.