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Combined ratio improves 2.2 points, premiums up 3% at Chubb Insurance


January 30, 2015   by Canadian Underwriter


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The Chubb Corp. released Friday its financial results for the quarter ending Dec. 31, reporting a 3% year-over-year increase in Q4 net premiums written, a slight drop in consolidated net income, a 10.9% increase in underwriting income and a 2.2-point improvement in its fourth-quarter combined ratio.

For the full year, net written premiums were $12.592 billion in 2014, up 4% from $12.22 billion in 2013. All figures are in United States dollars.

The Chubb Corp., based in Warren, N.J., is a holding company for the property & casualty insurers referred to informally as the Chubb Group of Insurance Companies. It includes Chubb Insurance Company of Canada.

The Chubb Group of Companies reported property and casualty insurance premiums were up 3% 

Net written premiums for the fourth quarter increased 3% to $3.1 billion in 2014, from $3.0 billion in 2013.

“Premiums were up 4% in the U.S. and were about flat outside the U.S. (up 4% in local currencies),” Chubb said in a press release.

Loss and loss expenses increased slightly from $1.658 billion in Q4 2013 to $1.669 billion in Q4 2014.

Consolidated net income dropped nearly 2%, from $569 million in Q3 2013 to $588 million in 2014. Although Q4 underwriting income increased 10.9% (from $430 million in 2013 to $477 million in 2014), Chubb reported its realized investment gains after income tax dropped from $43 million in Q4 2013 to $14 million in the latest quarter.

“The fourth quarter combined loss and expense ratio was 84.3% in 2014 and 85.5% in 2013,” Chubb stated. “The impact of catastrophes on the fourth quarter combined ratio was 0.8 percentage points in 2014 and 2.1 points in 2013. Excluding the impact of catastrophes, the fourth quarter combined ratio was 83.5% in 2014 and 83.4% in 2013.”

For the full year, Chubb reported net income of $2.1 billion in 2014, down 10.4% from $2.345 billion in 2013.

Underwriting income for the full year had dropped 16.3%, from $1.675 billion in 2013 to $1.402 billion last year.

The combined ratio in 2014 was 88.3%, up from 86.1% in 2013.

“The impact of catastrophes accounted for 3.6 percentage points of the combined ratio in 2014 and 3.4 points in 2013,” Chubb stated. “Excluding the impact of catastrophes, the combined ratio was 84.7% in 2014 and 82.7% in 2013.”

Broken down by line, net written premiums in Q4 2014 were $1.119 billion in personal ($672 million in home, $182 million in auto and $265 million other), $1.318 billion in commercial ($393 million in casualty, $357 million in property and marine, and $284 million each in multiple peril and workers compensation), $628 million in professional liability and $73 million in surety.

During the most recent quarter, Chubb reported combined ratios of 83.9% in personal (95.2% in auto and 76.5% in homeowners), 88.5% in commercial (ranging from 80.2% in workers compensation to 99.8% in casualty) and 88.5% in specialty (80.3% in professional liability and 48.6% in surety).

The line with the largest improvement in fourth-quarter combined ratio was workers compensation (which dropped from 91.5% in Q4 2013 to 80.2% in Q4 2014), while the line with the largest deterioration was commercial multiple peril, which increased 11.9 points, from 73.5% in Q4 2013 to 85.4% in Q4 2014.