Year-on-year, Q4 net income actually fell by 11.5% from the prior year period, as core operating income increased by 14.5% to $1.65 billion.
For the full year 2021, Chubb has reported net income of $8.54 billion and core operating income of $5.57 billion, compared with $3.53 billion and $3.3 billion in 2020, respectively.
During the quarter, Chubb’s P&C underwriting income swelled by almost 31% to a record $1.27 billion, as the combined ratio strengthened from 87.6% in Q4 2020 to 85.5% in Q4 2021.
In Q4 2021, Chubb has reported pre-tax catastrophe losses of $275 million, or 3.2 percentage points of the combined ratio.
Across the group, consolidated net premiums written increased by 8.8%. Within P&C, net premiums written jumped by 9.6%, year-on-year, to $8.5 billion in Q4 2021. P&C net premiums earned increased by almost 12%, comprising of growth in commercial and consumer lines of 16.8% and 1%, respectively.
The quarter also included total pre-tax favorable prior period development of $145 million, compared with $206 million a year earlier.
For the full year 2021, re/insurer Chubb has reported record P&C underwriting income of $3.7 billion, which is up more than 205% on the $1.2 billion reported a year earlier.
Total pre-tax catastrophe losses for the year reached $2.4 billion, or 7.1 percentage points of the combined ratio, compared with $3.26 billion a year earlier.
Full year P&C premiums written were up by 13% to $35.4 billion, which the insurer says is the strongest organic growth in over 15 years, driven by commercial lines growth of 17.7%.
2021 also included total pre-tax favorable prior period development of $926 million, compared with $395 million a year earlier.
Overall, Chubb has reported a P&C combined ratio of 89.1% for 2021, which is an improvement on the 96.1% reported a year earlier.
Evan Greenberg, Chairman and Chief Executive Officer of Chubb, commented: “With double-digit commercial premium growth and continued underwriting margin expansion, Chubb finished the year with record quarterly earnings and underwriting results, which contributed to one of the best years in our company’s history. Core operating income per share of $3.81 for the quarter was a record and up nearly 20%, with full-year net and core operating earnings of $8.54 billion and $5.57 billion, respectively, also records. Record underwriting results in the quarter included P&C underwriting income of $1.3 billion, up 31%, with a P&C combined ratio of 85.5%.
“P&C premiums in the quarter increased 9.6%, with commercial up 13% and consumer up over 2% as we continue to experience the impact of the pandemic. Commercial premiums increased 11% in North America and 15% in our international operations with strong contributions across our businesses. Commercial P&C rates increased 10.5% and 13%, respectively, in North America and Overseas General and we expect rates to continue to exceed loss costs for some time to come. In our international consumer lines, growth is slowly recovering and gaining momentum. For example, premiums in our international A&H division increased over 5.5% in constant dollars, the third consecutive quarter of growth and the best since the beginning of the pandemic.
“On the asset side of the balance sheet, adjusted net investment income topped $900 million for the quarter and contributed to a record $3.7 billion for the year. With the Fed finally accepting that inflation is a reality that is not going away, interest rates are rising and will continue to rise, and spreads should begin to widen, particularly if the Fed begins to shrink their balance sheet as they should. That will begin to benefit our fixed income investment portfolio, which has a four-year duration. Every 100 basis points of portfolio yield for us produces about $1.2 billion of additional investment income.
“As I look forward, beyond continued strong organic performance, we will benefit from greater revenue and earnings, in the short and long term, from the acquisition of Cigna’s Asia business and increased ownership of Huatai Group in China when approved by the regulator.
“In sum, we are in a period of strong wealth creation, and ’22 should be a good year in terms of growth and margin improvement.”