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Chubb reports gains in Q3 profit, net premium written

Evan Greenberg

Chubb Ltd. benefited from a continuously improving commercial property/casualty pricing environment in the third quarter, Chairman and CEO Evan G. Greenberg told analysts Wednesday after the insurer reported higher profit and growth in net premium written.

Rate increases averaged 15% in North America commercial property/casualty and 16% in the insurer’s international general insurance operations.

Chubb reported net income of $1.19 billion, up 9.4% from $1.09 billion in the same period last year, despite the pandemic and higher catastrophe losses, the insurer said in a statement late Tuesday.

“The quarter was marked by continued insurance market hardening, an economy struggling to reopen globally and a very active period for catastrophes,” Mr. Greenberg said during the call.

Net catastrophe losses were $797 million after tax, compared with $191 million in the prior-year period, and were mainly due to severe weather-related events globally and the California wildfires, Chubb said.

Its property/casualty combined ratio deteriorated to 95.2% from 90.2% in the prior-year third quarter, Chubb said.

However, there were “no changes” to previously reported aggregate COVID-19 losses from June 30, the insurer said.

Chubb tracked more than 40 separate catastrophe events globally in the third quarter, a “very high frequency,” Mr. Greenberg said.

“Where we can get paid adequately for volatility and uncertainty we will maintain and even grow our exposures; where we cannot we shrink. And, in either case, we shape our portfolio according to our risk appetite,” he said.

Net premiums written in the third quarter were $9.08 billion, up 5.3% from the prior-year period, while property/casualty net premiums written were $8.47 billion, up 5.7%, Chubb said.

North America commercial property/casualty net premiums written grew over 11% in the quarter, even including a 5-point reduction in growth due to reduced exposures from the decline in economic activity, Mr. Greenberg said.

Chubb continued to experience a strong pricing environment in the quarter.

In North American commercial property/casualty, major accounts, risk management and casualty rates were up 6.5%, Mr. Greenberg said. General casualty was up 31%, property rates were up 22% and financial lines were up about 23%, he said.

In excess and surplus wholesale business, property rates were up 21%, casualty up almost 32% and financial lines up about 25.5%, he said.

In Chubb’s middle-market U.S. business, property rates were up 16%, casualty was up over 11% — excluding workers compensation,  which was down 1.2% — and financial lines rates were up over 17%, he said.

In Chubb’s international general insurance operations rates were up 15% in international retail and 32% in London wholesale, he said.

“We are in a hard market or firming market for commercial property/casualty depending on where you are in the world, cohort of business, and it is spreading,” Mr. Greenberg said.

Mr. Greenberg declined to comment on mergers and acquisitions in response to an analyst’s question during the call citing American International Group Inc.’s recently announced decision to spin off its life insurance business.

“I’m not commenting on M&A and Chubb’s appetite and whether we’re entertaining this or that,” Mr. Greenberg said.

For the nine months ended Sept. 30, Chubb’s net income fell 66% to $1.12 billion, compared with $3.28 billion for the same period last year. The property/casualty combined ratio was 98.9%, compared with 89.9% for the first nine months of 2019.