Canadian Underwriter

Chubb reports increase in Q2 premiums, ‘unusually high’ fire losses

July 29, 2014   by Canadian Underwriter

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The Chubb Corp. recently released its financial results for the three months ending June 30, reporting a 4.3% year-over-year increase in net premiums written and a 12.3% drop in underwriting income.

Warren, N.J.-based Chubb reported net premiums written of $3.233 billion in the second quarter of 2014, up 4.3% from $3.1 billion in Q2 2013. All figures are in U.S. dollars.

Loss and loss expenses were $1.792 billion in Q2 2014, up 5.8% from $1.694 billion in 2013. Underwriting income was $278 million in Q2 2014, down 12.3% from $317 million in the same period in 2013. Second-quarter investment income $336 million this year, down 3.7% from $349 million in 2013. Chubb’s consolidated net income was $499 million in the latest quarter, down 13.8% year-over-year from $579 million.

The total combined ratio in P&C was 90% in the latest quarter, up slightly from 88.8% in Q2 2013.

“Our results benefited from strong premium growth and retention as well as excellent performance in our long-tail lines of business such as Professional Liability, Casualty and Workers’ Compensation,” John D. Finnegan, Chubb’s chairman, president and chief executive officer, said in a press release July 24.

“However, our results this quarter were adversely impacted by catastrophe and non-catastrophe losses related to severe weather in the United States as well as an unusually high level of Homeowners’ and Commercial fire losses.”

During the second quarter of 2014, Chubb reported net premiums written of $1.209 billion in homeowners, $1.358 billion in commercial and $655 million in specialty.

In personal P&C, Chubb reported a loss ratio of 60.0% in Q2 2014, up from 56.4% in Q2 2013. The combined ratio in personal was 92.7% in Q2 2014, up from 89.6% in Q2 2013.

Within personal P&C, Chubb reported net premiums written of $766 million in homeowners, $195 million in auto and $248 million in other personal. In its annual report from 2013, Chubb had reported its largest markets for homeowners and automobile insurance products outside the United States are Canada, Brazil and Europe.

In commercial P&C, the loss ratio was 62.8% in Q2 2014, up from 58.6% in Q2 2013. The combined ratio was 93.3% in Q2 2014, up from 89.9% in Q2 2013. Within commercial P&C, Chubb reported net written premiums of $404 million in commercial casualty, $384 million in commercial property and marine, $285 million in workers’ compensation and $285 million in commercial multiperil. Chubb’s commercial offerings also include primary liability, excess and umbrella liability and auto.

Chubb reported total specialty net written premiums of $655 million in Q2 2014, of which $572 million was from professional liability and $83 million was from surety. Its specialty products “primarily include directors and officers liability insurance, errors and omissions liability insurance, employment practices liability insurance, fiduciary liability insurance and commercial and financial fidelity insurance,” Chubb reported earlier this year in its 2013 annual report.

The Chubb Corp. is a holding company for the P&C carriers “referred to informally as the Chubb Group of Insurance Companies,” Chubb said in an earlier filing with the U.S. Securities & Exchange Commission. The largest insurance subsidiary in its P&C group is Federal Insurance Company.

In addition to the companies using the Chubb name, other U.S. subsidiaries include Pacific Indemnity Company, Executive Risk Indemnity Inc., Executive Risk Specialty Insurance Company, Great Northern Insurance Company and Vigilant Insurance Company. Chubb Group also owns Chubb Insurance Company of Canada.

Of the $3.223 billion in net written premiums worldwide in Q2 2014, Chubb reported $715 million of that was from outside the U.S.

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