Chubb Reports First Quarter Net Income per Share of $1.60; Operating Income per Share Is $1.57; Combined Ratio of 93.9% Includes 8.1 Point Impact of…

Chubb Reports First Quarter Net Income per Share of $1.60; Operating Income per Share Is $1.57; Combined Ratio of 93.9% Includes 8.1 Point Impact of Catastrophes

By a News Reporter-Staff News Editor at Real Estate Weekly News -- The Chubb Corporation (NYSE: CB) reported that net income in the first quarter of 2015 was $375 million, compared to $449 million in the first quarter of 2014. First quarter net income per share was $1.60 in 2015 and $1.80 in 2014.

Operating income, which the company defines as net income excluding after-tax realized investment gains and losses, was $367 million in the first quarter of 2015 and $374 million in the first quarter of 2014. First quarter operating income per share was $1.57 in 2015 and $1.50 in 2014.

Average diluted shares outstanding for the first quarter were 234.2 million in 2015 and 249.2 million in 2014.

The impact of catastrophes in the first quarter of 2015 was $250 million before tax ($0.69 per share after tax), primarily related to severe winter weather and freeze events in the United States. In the first quarter of 2014, the impact of catastrophes was $199 million before tax ($0.52 per share after tax).

The first quarter combined loss and expense ratio was 93.9% in 2015 and 93.2% in 2014. The impact of catastrophes on the first quarter combined ratio was 8.1 percentage points in 2015 and 6.6 points in 2014. Excluding the impact of catastrophes, the first quarter combined ratio was 85.8% in 2015 and 86.6% in 2014. The expense ratio for the first quarter was 31.9% in 2015 and 32.1% in 2014.

Net written premiums for the first quarter of 2015 increased 1% to $3.1 billion. Excluding the effect of foreign currency translation, premiums increased approximately 4%. Premiums were up 4% in the U.S. and down 5% outside the U.S. (up 6% in local currencies).

Property and casualty investment income after taxes for the first quarter declined 5% to $264 million in 2015 from $277 million in 2014.

"Chubb produced solid results in the first quarter of 2015," said John D. Finnegan, Chairman, President and Chief Executive Officer. "Results were adversely impacted by catastrophe and non-catastrophe losses related to severe winter weather in the United States. 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.

"We are pleased that in the first quarter we continued to achieve renewal rate increases while maintaining high retention levels in all of our businesses," said Mr. Finnegan.

Net income for the first quarter of 2015 reflected net realized investment gains of $11 million before tax ($0.03 per share after tax). Net income for the first quarter of 2014 reflected net realized investment gains of $116 million before tax ($0.30 per share after tax).

During the first quarter of 2015, Chubb repurchased approximately 3.2 million shares of its common stock at a total cost of $326 million (an average cost per share of $100.77). As of March 31, 2015, there was $1.0 billion available for share repurchases under the current authorization.

Book value per share was $70.33 at March 31, 2015, compared to $66.36 at March 31, 2014 and $70.12 at December 31, 2014.

First Quarter Operations Review

Chubb Personal Insurance (CPI) net written premiums increased 2% in the first quarter to $1.0 billion. CPI's combined ratio for the quarter was 105.1%, compared to 101.8% in the first quarter of 2014. The first quarter impact of catastrophes accounted for 18.4 percentage points of the combined ratio in 2015 and 11.2 points in 2014. Excluding the impact of catastrophes, CPI's first quarter combined ratio was 86.7% in 2015 and 90.6% in 2014.

Net written premiums for Homeowners increased 1%, and the combined ratio was 112.7%. The impact of catastrophes in the first quarter accounted for 30.0 percentage points of the Homeowners combined ratio. Excluding the impact of catastrophes, the combined ratio for Homeowners was 82.7%. Personal Automobile premiums increased 2%, and the combined ratio was 92.9%. For Other Personal lines, premiums increased 5% and the combined ratio was 92.3%.

Chubb Commercial Insurance (CCI) net written premiums increased 2% in the first quarter to $1.4 billion. The combined ratio for the quarter was 90.8% in 2015 and 88.5% in 2014. The impact of catastrophes on the CCI combined ratio in the first quarter was 3.4 percentage points in 2015 and 6.1 points in 2014. Excluding the impact of catastrophes, CCI's first quarter combined ratio was 87.4% in 2015 and 82.4% in 2014.

In the United States, average first quarter CCI renewal rates increased 1%, renewal premium retention was 87% and the ratio of new to lost business was 1.4 to 1.

Chubb Specialty Insurance (CSI) net written premiums were flat at $621 million. The combined ratio for CSI was 81.9%, compared to 88.9% in the first quarter of 2014.

Professional Liability (PL) net written premiums declined 1%, and the combined ratio was 85.2%. In the United States, average first quarter renewal rates for PL increased 4%, renewal premium retention was 87% and the ratio of new to lost business was 1.2 to 1.

Surety net written premiums were up 6%, and the combined ratio was 54.8%.

Webcast Conference Call to be Held Today at 5 P.M.

Chubb's senior management will discuss the company's first quarter performance with investors and analysts today, April 23rd, at 5 P.M. Eastern Time. The conference call will be webcast live on the Chubb website at www.chubb.com and archived later in the day for replay.

Keywords for this news article include: Homeowners, Real Estate, Chubb Corporation.

Our reports deliver fact-based news of research and discoveries from around the world. Copyright 2015, NewsRx LLC