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Chubb reports net income of US$494 million for 2015 Q2, down slightly from 2014 Q2


July 24, 2015   by Canadian Underwriter


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The United States-based Chubb Corporation reported Thursday that consolidated net income for the second quarter of 2015 was US$494 million, down slightly but in line with US$499 million for the same quarter of 2014.

Chubb had US$3,309 million in net premiums written for Q2 2015, up 3% from US$3,223 million for Q2 2014

“Net income for the second quarter of 2015 reflected net realized investments gains of US$20 million before tax,” notes a statement from Chubb, compared to US$125 million before tax in the second quarter of 2014.

The divide was somewhat larger when considering net income for the first halves of 2015 and 2014, with the company reporting net income of US$869 million this year compared to US$948 million last year.

Looking at net premiums written (NPW), Chubb had US$3,309 million in the second quarter of 2015, up 3% from US$3,223 million for 2014 Q2. Specifically, Personal Insurance for the second quarter of 2015 was US$1,231 million compared to US$1,209 million for the second quarter of 2014 (up 2%); Commercial Insurance was US$1,423 million compared to US$1,358 million (up 5%); Specialty Insurance was US$656 million compared to US$655 million; and Reinsurance Assumed was -US$1 million compared to US$1 million.

The half-year results show that NPW was US$6,415 million for 2015, a 2% increase from US$6,285 million in 2014. NPW for Personal Insurance was US$2,267 million for the first six months of 2015 compared to US$2,222 million for the same period in 2014; Commercial Insurance was US$2,872 million compared to US$2,783 million; Specialty Insurance was US$6,416 million compared to US$6,284 million; and Reinsurance Assumed was -US$1 million compared to US$1 million.

The combined loss and expense ratio for the first six months of 2015 compared to the first half of 2014 showed improvement, moving to 89.7% from 91.6%.

Overall, underwriting income was up considerably for the second quarter of 2015, with Chubb reporting US$428 million compared to US$278 million in the same period of 2014. As for the first six months of the year, underwriting income was US$633 million in 2015, up from US$486 million in 2014.

The impact of catastrophes in the second quarter of 2015 was US$148 million before tax compared to US$146 million in the same period of 2014, notes the Chubb statement. The impact of catastrophes accounted for 4.7 percentage points of the combined ratio – which was 85.5% in 2015 Q2, down from 90.0% in 2014 Q2 – compared to 4.8 points, Chubb reports. [click image below to enlarge]

Chubb reported US$428 million for underwriting income in Q2 2015, up US$278 million in Q2 2014

“Excluding the impact of catastrophes, the second quarter combined ratio improved to 80.8% in 2015 from 85.2% in 2014,” the company statement adds.

For the first six months of 2015 and 2014, the impact of catastrophes was US$398 million before tax compared to US$345 million. “The impact of catastrophes in the first half accounted for 6.4 percentage points of the combined ratio in 2015 and 5.7 points in 2014. Excluding the impact of catastrophes, the combined ratio for the first half improved to 83.3% in 2015 from 85.9 in 2014.”

Other results for 2015 Q2 include the following:

• net income per share increased 5% to US$2.14 from US$2.03;

• operating income was US$481 million compared to US$418 million (US$848 million compared to US$792 million for the first six months of 2015 and 2014, respectively); and

• the expense ratio was 30.8% compared to 31.3% (31.3% compared to 31.7% for the first six months of 2015 and 2014, respectively).

In late June, Chubb entered into “an agreement and plan of merger with ACE Limited, under which ACE has agreed to acquire Chubb for US$62.93 in cash and 0.6019 of a share of ACE common stock for each share of Chubb common stock,” the statement notes. Expected to close in 2016 Q1, “completion of the transaction is subject to the satisfaction of a number of closing conditions, including obtaining shareholder and regulatory approvals.”