Chubb Reports Third-Quarter Net Income Rise

On Tuesday, insurer Chubb Corp. announced that its net income in the third quarter of 2007 was $738 million or $1.87 per share, compared to $604 million or $1.43 per share in the third quarter of 2006.  
  
Operating income, which the company defines as net income excluding after-tax realized investment gains and losses, increased to $662 million from $579 million in the third quarter of 2006. Operating income per share increased 23% to a record $1.68 from $1.37.  
  
Total net written premiums for the third quarter declined 2% to $2.9 billion. Net written premiums for the insurance business were flat – down 3% in the U.S. and up 12% outside the U.S. (4% in local currencies). Net written premiums for the reinsurance assumed business declined 65%, reflecting the impact of the Chubb Re-Harbor Point transaction completed in December 2005.   
  
The third quarter combined loss and expense ratio was 81.6% in 2007, compared to 85.5% in 2006. Catastrophe losses accounted for 2.0 percentage points of the combined ratio in the third quarter of 2007 compared to 1.5 points in the third quarter of 2006. The expense ratio for the third quarter was 29.8% in 2007 and 28.6% in 2006.  
  
Property and casualty investment income after taxes for the third quarter increased 10% to $324 million in 2007 from $295 million in 2006.  
  
During the third quarter, Chubb repurchased 10,193,239 shares of its common stock at a total cost of $519 million. As of September 30, 2007, there were 7,926,122 shares of common stock available for repurchase under the current authorization.  
  
Nine-Month Results  
  
For the first nine months of 2007, net income was $2.2 billion or $5.33 per share, compared with $1.9 billion or $4.43 per share for the first nine months of 2006. Operating income for the first nine months of 2007 totaled a record $1.9 billion or $4.81 per share, compared with $1.8 billion or $4.14 per share for the first nine months of 2006.  
  
Total net written premiums for the first nine months declined 2% to $8.9 billion. Net written premiums for the insurance business increased 1% -- down 1% in the U.S. and up 8% outside the U.S. (2% in local currencies). Net written premiums for the reinsurance assumed business declined 70%.   
  
The combined loss and expense ratio for the first nine months was 82.6% in 2007, compared to 84.5% in 2006. The impact of catastrophes accounted for 2.8 percentage points of the combined ratio in the first nine months of 2007 compared to 1.4 points in the first nine months of 2006. The expense ratio for the first nine months was 29.9% in 2007 and 28.7% in 2006.  
  
Property and casualty investment income after taxes for the first nine months increased 9% to $942 million in 2007 from $862 million in 2006.  
  
During the first nine months, Chubb repurchased 31,919,816 shares of its common stock at a total cost of $1.7 billion.