Transaction to bring Chubb $200 million pre-tax gain

The Chubb Corporation (NYSE: CB) expects to garner a pre-tax gain of $200 million gaining $168 million in the fourth quarter of 2005 and $32 million deferred from it’s recently completed strategic transaction of the new global reinsurance company Harbor Point Ltd.
Chubb has received from Harbor Point $200 million of 6% convertible notes and warrants, representing in the aggregate approximately 16% of the equity of the new company on a fully converted and diluted basis.
Under arrangements of the transaction as entered into with Harbor Point, Chubb will also receive cash payments over the next two years.
The amounts of these cash payments will be based on the amount of reinsurance business placed through Chubb by Harbor Point during this transition period and the amount of Chubb business renewed by Harbor Point.
Chubb expects to recognize these amounts in income in 2006 and 2007.