Chubb moves past failed Hartford bids; reports higher profit
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Chubb Ltd. has moved on from its three rejected bids for rival Hartford Financial Services Inc. and has “lots of optionality” with other deals, the insurer’s top executive said Wednesday while discussing the company’s first-quarter results.
Last week, Hartford rejected a $25 billion takeover offer from Chubb, which was the highest of three offers that Chubb had made over the previous month.
Speaking on Chubb’s company earnings call with analysts, Evan G. Greenberg, chairman and CEO of Chubb, said “the chapter with the Hartford has closed; we have moved along.” Chubb looks at many deals every year, Mr. Greenberg said. “The money is not burning a hole in our pocket.”
Chubb on Tuesday reported net income for the first quarter of $2.3 billion, compared with $252 million for the same quarter last year, on the back of new business and a hardening market. Last year’s first-quarter profit was hit by more than $900 million in adjusted net realized losses.
First-quarter net premiums written increased 8.6% to $8.62 billion. Commercial property/casualty net premiums written increased 13.9% to $5.71 billion.
“We continue to see a very strong commercial property/casualty pricing environment. Based on what I can see, today, I’m confident these conditions will endure,” Mr. Greenberg said.
New business was up 21.7% and renewal retentions stood at 95% on a premium basis, he said.
Chubb’s North American major accounts and specialty business saw net premium growth of 17.5% and middle-market premium grew more than, Mr. Greenberg said.
Chubb’s first-quarter combined ratio worsened to 91.8% from 89.1% in the year-ago quarter. The ratio included 9.1% of catastrophe losses, Mr. Greenberg said.
Pre-tax and after-tax catastrophe losses, net of reinsurance and including reinstatement premiums, were $700 million and $570 million, respectively, compared with $237 million and $199 million, respectively, prior year. The quarter included $657 million pre-tax of storm losses in the U.S.
