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Chubb net income falls to $499M in second quarter

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Chubb Corp.’s net income for the 2014 second quarter decreased to $499 million, a 13.8% decrease from the same period last year, the insurer announced Thursday.

Chubb attributed the lower results to weather-related losses and an “unusually high level” of homeowners and commercial fire losses in its earnings release.

The Warren, New Jersey-based company’s second-quarter net written premiums rose 3.9% to $3.22 billion.

Its second-quarter combined ratio deteriorated to 90.0% from 88.8% during the same period in 2013. The impact of catastrophes in the second quarter was $146 million before tax in 2014 compared with $237 million before tax in 2013, Chubb said in a statement.

Net income for the second quarter reflected net realized investment gains of $125 million before tax, compared with $179 million before tax in the second quarter of 2013.

For the first six months of 2014, net income decreased 23.2% over the same period last year to $948 million. Midyear net written premiums rose 1.8% to $6.29 billion, while Chubb’s combined ratio for the first six months was 91.6% compared with 86.7% in 2013.

“Chubb produced solid results in the second quarter of 2014, with operating income of $1.70 per share and net income of $2.03,” said Chubb Chairman, President and CEO John D. Finnegan in the statement. “Our results benefited from strong premium growth and retention as well as excellent performance in our long-tail lines of business such as professional liability, casualty and workers compensation,” he said. “However, our results this quarter were adversely impacted by catastrophe and noncatastrophe losses related to severe weather in the United States as well as an unusually high level of homeowners’ and commercial fire losses.”

“We remain encouraged by the mid-single-digit increases in our U.S. rate change metrics that we achieved in all of our businesses during the second quarter, while also attaining our highest overall level of retention in three years,” Mr. Finnegan said.

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