Chubb, one of the world’s biggest property-casualty insurers, is setting a high bar for the industry’s first-quarter results: the company said rate increases and other premium growth more than offset a 38% jump in catastrophe losses.
The results released late Tuesday signaled to businesses around the world that pricing conditions generally still favor insurers.
Chubb’s shares were up more than 1% in morning trading.
The company’s closely watched “core operating income,” net of tax, which excludes non-recurring items, jumped 12% to $1.84 billion.
Total company net written premiums—an industry benchmark for revenue growth— rose nearly 17%.
Net income slipped 3.2% to $1.89 billion, partly because of a mark-to-market adjustment on a discontinued block of reinsurance.
Catastrophe costs surged to $458 million pretax from $333 million in the year-ago period. A lot of the catastrophe damage industrywide in the quarter is from severe storms in March, analysts said.
Chubb CEO Evan Greenberg said it was a record quarter with double-digit core operating earnings in a “period of economic uncertainty.”
In a note to clients, Evercore ISI said “we suspect most of the price uplift was from rate increases” in the company’s big North American commercial business. The firm said the increase “bodes well for margins going forward.”
Chubb is one of the first major property-casualty insurers to post earnings. Its customers include multinationals and small businesses. It insures farmers’ crops as well as the personal property of wealthy customers, and provides accident and supplemental health insurance for customers around the world.