Chubb CEO hails ‘robust pricing’ but warns on climate-related cat losses

Global insurer  Chubb posted a second consecutive quarter of double-digit premium growth and record Q3 underwriting income as it crafted 54 percent year-on-year increase in net income, its Q3 financial statements have indicated.

Its property/casualty net premiums written increased by 16.9 percent globally to $9.9 billion, a 15.4 percent gain FX adjusted, an improvement that its management described as the "strongest organic growth since 2004."

Its commercial lines saw 22 percent annual growth in North American and more than 20 percent growth in its international segment. North American agriculture also stood out with growth in net written premiums above 40 percent.

“We continue to capitalize on robust commercial P&C pricing conditions in most regions of the world," Chubb's chairman and chief executive officer Evan Greenberg (pictured) said in an accompanying statement, citing gains in "virtually all" commercial P&C business lines.

That compares favourably to paltry mild gains of 4 percent in retail, only the second consecutive quarter of annual gains in premiums, but where Greenberg noted recovery in some post-pandemic international consumer lines.

Global reinsurance net premiums written rose 22 percent to $221 million, with profitability slipping on a 3.1 percentage points rise in the combined ratio to 121.4 percent, the Q3 statements indicated. Excluding catastrophe losses for the current accident year, mark the combined ratio up 2.7 percentage points to 83.5 percent.

After costs and claims, P&C underwriting income rose 57.5 percent year-on-year to a record $617 million on the revenue gain and despite a rise in catastrophe losses. Rising premiums pushed the combined ratio down by 1.8 percentage points to 93.4 percent or by 0.9 percentage points for the accident year ex-CAT losses, management said in its comment to earnings.

Catastrophe losses net of reinsurance rose 24 percent year-on-year to $1.15 billion pre-tax, including $806 million related to Hurricane Ida.

"The growing impact of climate change globally is evident in industry results," Greenberg said of rising natcat costs. "We are reacting thoughtfully but swiftly to ensure we maintain an adequate risk-adjusted return on the business we write."

On the bottom line, Q3 net income for the group at $1.83 billion is up from $1.19 billion in the prior year period. Net investment income contributed $866 million, a $26 million increase from the prior year period. Management noted a strong contribution from private equity investments.

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