Moody's ratings action follows a review initiated last week. The “Aa2” insurance financial strength ratings for Chubb's operating units is unaffected by this action, Moody's said. But following this rating action, the outlook for the insurance financial strength ratings as well as debt and commercial paper ratings for Chubb and its rated subsidiaries is “negative.”
The New York-based ratings agency said its “negative” outlook for Chubb ratings reflects its concerns over both past and potential future volatility from the company's professional-liability lines and the potential for sustained drag from asbestos losses.
In the 2003 fourth-quarter, Chubb took a $250 million charge, pretax, to boost its asbestos and environmental reserves, but still managed to improve its quarterly net earnings by 28 percent to $72.3 million, from $56.6 million reported during the 2002 fourth quarter.
Chubb, based in Warren, N.J., reported net income of $808.8 million for full-year 2003. Chubb is one of the largest insurers in the U.S. directors and officers liability market and is a major insurer of high-value homes and valuable articles, such as fine arts and jewelry.