Chubb says $1.3B in Q2 new business sets record

Chubb Ltd. secured a record $1.3 billion in new business during the second quarter, Chairman and CEO Evan G. Greenberg said Wednesday during a call with analysts.

Net income increased 24.3% to $2.23 billion. Core operating income for the quarter was $2.2 billion, bringing Chubb’s year-to-date core operating earnings to $4.4 billion, a 13.5% increase. The insurer released its earnings Tuesday after markets closed.

Mr. Greenberg said during the call that Chubb’s underwriting results “were simply excellent” and that investment income grew $1.5 billion, up more than 25%.

Total net premiums increased 11.8%, with global property/casualty up 11.2%. Premiums in North America rose 8%. 

Property/casualty underwriting income of $1.4 billion was essentially flat due to higher catastrophe losses globally, Mr. Greenberg said.

Casualty losses totaled $580 million, up from $400 million in the year-earlier period but in line with modeled expectations, he said.

Property pricing for the quarter grew 5.3%, with rates up 1.1% and an exposure change of 4.2%. Casualty pricing rose 11.7 %, with rates increasing 9.9% and exposure change up 1.6%.

Loss costs for property/casualty, excluding financial lines and excess and surplus, were 7.3%.  

Overall conditions remain favorable in the current commercial rate environment for property, which is becoming more competitive as more capital has entered the market. Casualty rates are firming, a trend that will continue, Mr. Greenberg said.

Income from excess and surplus lines grew 8.5%.

Workers compensation pricing, which includes primary and large account risk management comp, was up 4.2%, with rates up 1.6% and exposure up 2.6%.

Chubb reported net premiums for financial lines fell 3%, while agricultural lines saw a 1.2% decline.

“When it comes to financial lines, the underwriting environment in a number of classes is simply not smart,” Mr. Greenberg said.

Chubb’s renewal retention rate was 90%, he said.

The company reported a property/casualty combined ratio of 86.8% for the second quarter, compared with 85.3% for year-earlier period.

Chubb said its property/casualty current accident year underwriting income, excluding catastrophe losses, was a record $1.81 billion, up 11.1%, with a record low combined ratio of 83.2%.