25 April 2014 Insurance

Chubb posts poor results as profits hit by US winter weather

Chubb has posted a poor set of results for the first quarter, as profits are hit by severe winter weather in the US.

Chubb’s net income in the first quarter was $449 million, compared to $656 million in the first quarter of 2013.  First quarter net income per share was $1.80 in 2014 and $2.48 in 2013.

The US insurer reported operating profits of $374 million, a major decrease compared with $566 million in the same period the year before.

The company explained that its results were adversely affected by catastrophe losses of $199 million before tax related mostly to severe winter weather in the United States. In the first quarter of 2013, the adverse impact of catastrophes was $18 million before tax.

Combined ratio for the period was 93.2 percent in 2014 compared to 84.6 percent in the same quarter the year before. The impact of catastrophes on the first quarter combined ratio was 6.6 percentage points in 2014 and 0.6 points in 2013.

Excluding the impact of catastrophes, Chubb said the first quarter combined ratio was 86.6 percent in 2014 and 84.0 percent in 2013.

Net written premiums for the first quarter of 2014 were $3.1 billion, flat compared to the first quarter of 2013 of $3.1 billion.

John Finnegan, chairman, president and chief executive officer, said: “Chubb produced solid results in the first quarter of 2014.Results were adversely impacted by several factors, including catastrophe and non-catastrophe losses related to severe winter weather in the United States.

“Chubb also suffered an unusually high level of Homeowners fire losses after many quarters with relatively benign loss experience.  Although catastrophe losses alone had an adverse impact of $0.52 per share in the first quarter, we still generated operating income of $1.50 per share and net income of $1.80 per share, reflecting a combined ratio of 86.6 percent excluding catastrophes.

"We remain encouraged by the mid-to-high-single-digit increases in our rate change metrics that we achieved in all of our business units during the first quarter, while enjoying an overall increase in renewal retention.”

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