Chubb profits plummet 14% in Q1 but CEO remains ‘optimistic and confident’
Global property/casualty insurer Chubb’s first quarter profit fell by 14.2% compared to the previous year, but its chief executive hailed an “excellent start to the year” citing improvements in underwriting results and commercial premiums.
Evan Greenberg, chairman and CEO of Chubb, said the company achieved “record operating earnings and underwriting results”, double-digit commercial premium growth accompanied by rate increases in excess-of-loss cost, as well as growing momentum in its consumer businesses globally.
Chubb's net profit decreased by 14.2% to $1.97 billion in Q1 2022, versus $2.3 billion in the prior year.
However, its net premiums written were up 6.2%, and global P&C net premiums written, which exclude Agriculture, were up 8.8%, driven by growth in commercial lines of 11.9% and consumer lines of 7.9%.
Agriculture premiums were down in the quarter “simply because of a return in premium to the government based on profitability last year and how revenue and losses are shared – a formulaic process,” Greenberg said.
The overall P&C combined ratio was 84.3%, an improvement from 91.8% in the same period the previous year.
The carrier admitted that its book value was “unfavourably impacted” by after-tax net realised and unrealised losses of $3.57 billion in its investment portfolio, principally due to the mark-to-market impact from rising interest rates in our fixed income portfolio.
Growth is “steadily recovering” in Chubb’s international consumer lines, Greenberg said, with personal lines premiums up 10% and personal accident and supplemental health premiums up nearly 9% in “constant dollars”. Its US high net worth personal lines business had an “excellent” quarter, he added, with growth of over 7%.
On the asset side, adjusted net investment income was slightly more than $900 million for the quarter and, given rising interest rates and widening spreads, Chubb expects this result to "increase from there", Greenberg said.
“We are off to a great start to the year, and I remain optimistic and confident in our ability to outperform,” he concluded.
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