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Winter weather cools Chubb's first-quarter results

Winter weather cools Chubb's first-quarter results

Harsh winter weather contributed to a downturn in Chubb Corp.'s first-quarter profit for 2015, the Warren, New Jersey-based insurer said.

Chubb reported $3.10 billion in net written premiums for the quarter ended March 31, up 1.4% from the first quarter of 2014. Net income for the insurer declined 16.5% year-over-year to $1.50 billion in for the first three months of 2015.

Winter weather and freeze events in the United States contributed largely to catastrophe losses of $250 million for Chubb in the first quarter of 2015, compared with $199 million in catastrophe losses for the same period last year, the insurer said Thursday in a statement.

Paul Krump, Chubb executive vice president and president of personal lines and claims, said in a conference call Thursday that the catastrophe losses stemmed from nine U.S. winter storms during the first quarter that affected 29 states and Washington.

“The majority of our losses were from burst pipes and ice damming, most of which occurred in February,” Mr. Krump said. “While the damage was widespread across much of the eastern section of the United States, our New York and New England customers were the most affected.”

Despite adverse catastrophe loss development, Chubb's combined ratio deteriorated slightly to 93.9% for the first quarter of 2015, up from 93.2% for the first quarter of 2014. Catastrophes contributed to 8.1 percentage points of Chubb's combined ratio for the recent quarter, up from 6.6 percentage points a year ago.

“Although catastrophe losses alone had an adverse impact of $0.69 per share in the quarter, we still generated operating income of $1.57 per share, reflecting a strong combined ratio of 85.8% excluding catastrophes,” Chubb Chairman, President and CEO John D. Finnegan said in the statement.

Workers compensation insurance was a bright spot for Chubb's quarterly earnings. Dino Robusto, Chubb executive vice president and president of the insurer's commercial and specialty lines, said on Thursday's conference call that workers comp performance for the first quarter of 2015 was “outstanding.”

Combined ratios for the comp segment were 84.1% for the first quarter of this year, compared with 84% in the first quarter of 2014. Mr. Robusto noted that workers comp net written premiums increased 11% year-over-year during Chubb's recent quarter.

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