Chubb reports higher first-quarter profit one year after merger

Chubb Ltd. reported a sharp increase in first-quarter profit Tuesday, a year after the insurer was created through the merger of Ace Ltd. and Chubb Corp.

The Zurich-based insurer reported net income of $1.09 billion for the first quarter of 2017, a 149.2% increase over the same period last year. The 2016 period began two weeks prior to the merger.

The first-quarter results were affected by various merger-related factors, including certain underwriting actions, the purchase of additional reinsurance and integration savings. In addition, the insurer incurred a $41 million charge related to the change in the U.K.’s discount rate for liability reserves, known as the Ogden rate.

Net premiums written increased 11.9% in the quarter to $6.71 billion.

Net premiums written for its North America commercial property/casualty sector increased 19.1% in the first quarter to $2.74 billion, but on an “as if” basis — including the merged operations for the whole of the 2016 first quarter — net written premiums slipped 2.8%, a Chubb statement said.

Globally, the premium growth met expectations, said Evan Greenberg, chairman and CEO of Chubb.

“The market is soft, and companies are chasing volume in spite of a difficult underwriting environment. Our premium revenue growth was in line with our expectations and benefited from strong business retentions and growth in new business over prior year, which was constrained nonetheless due to competitive (property/casualty) conditions globally,” he said in a statement.

Chubb reported $206 million in pretax catastrophe losses for the first quarter of 2017, compared with $258 million in the 2016 period.

The insurer’s combined ratio improved to 87.5% in the first quarter, compared with 90.0% in the 2016 period.