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Chubb's second quarter income dips

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Chubb Corp. reported net income of $494 million for 2015's second quarter, down slightly from $499 million a year earlier.

However, operating income, which excludes after-tax realized investment gains and losses, was $82 million in the quarter, up 15.1% from the 2014 period, according to the Warren, New Jersey-based company's statement issued Thursday.

The company, which announced its acquisition by Ace Ltd. last month in a $28.3 billion deal, reported a combined ratio of 85.5%, down from 90% for 2014's second quarter. Catastrophes accounted for 4.7 points of the combined ratio in the 2015 period, compared to 4.8 points a year earlier, the statement said.

Net written premiums for the quarter increased 3%, to $3.3 billion, the company said.

For the first six months of 2015, Chubb reported net income of $869 million, down 8.3% from $948 million a year earlier. Operating income for the period was $848 million, up 7.1% from 2014's first half.

The combined ratio for the first half was 89.7%, vs. 91.6% in 2014.

“We continue to view Ace’s acquisition of (Chubb) positively. The combination is big, but in specialty areas where we think there is still significant long-term growth opportunity by line of business and by international geography,” Cliff Gallant, an analyst at Nomura Securities International Inc. in San Francisco, said in a research note.

“The balance sheet is strong and the diversification inherent in the business mix should lead to steady ROEs. Near-term, we also expect there to be material opportunity for cost-savings. Long-term, we think the company is positioned for industry-beating returns and growth rates.”

Shares of Chubb, which announced its results after the close of trading, were up 32 cents, to $123.13, in midday trading on the New York Stock Exchange.