By Tess Stynes
Chubb Corp. (CB) said second-quarter operating earnings rose 15%
on higher premiums, as the insurer paid out a smaller portion of
premiums to cover losses and expenses.
The company said operating earnings totaled $481 million, or
$2.08 a share, up from $418 million, or $1.70 a share, a year
earlier. Operating earnings exclude realized capital gains and
losses on investment portfolios and some other items. Net written
premiums rose 2.7% to $3.31 billion. Excluding currency translation
effects, the increase was 5%.
Analysts polled by Thomson Reuters expected operating earnings
of $1.86 a share and net premiums written of $3.28 billion.
The combined ratio--a measure of the portion of premiums used to
cover claims and expenses--fell to 85.5% from 90%.
New Jersey-based Chubb earlier this month reached a $28.3
billion deal to be acquired by ACE Ltd. (ACE) in a transaction
expected to create one of the biggest property-casualty insurance
companies in the world.
The pending deal comes as property-casualty insurers face
pressure from relatively modest hurricane claims since 2012, the
year of superstorm Sandy. With fewer claims checks being sent to
individuals and businesses, insurers' capital bases are growing,
and their stepped-up competition with each other to put that
capital to work is depressing prices. An influx of new competitors
also is squeezing prices, while low interest rates continue to
pinch insurers' investment income, which accounts for a significant
portion of their profits.
Chubb, a leading provider of homeowners' insurance to wealthy
Americans, reported catastrophe losses of $148 million for the
latest quarter, compared with $146 million a year earlier.
It reported a profit of $494 million, down from $499 million a
year earlier. Per-share earnings rose to $2.14 from $2.03 on fewer
shares outstanding. The latest period included roughly $20 million
in expenses related to the pending acquisition by Ace.
On Tuesday, ACE reported its second-quarter profit rose, helped
by an increase in premiums, though the company said currency issues
left operating earnings slightly lower than a year earlier.
Write to Tess Stynes at tess.stynes@wsj.com
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