Chubb reports $925m Q3 cat losses but bullish on pricing momentum
Property/casualty insurer Chubb "performed well despite a challenging environment" characterised by the global COVID-19 pandemic and elevated natural catastrophe losses in the third quarter of 2020. Chief executive Evan Greenberg highlighted "strong and improving" pricing momentum in the commercial P&C market.
The insurer reported net profit of $1.19 billion in Q3 2020, up from $1.09 billion in the same period of 2019.
Catastrophe losses, net of reinsurance and including reinstatement premiums, were $925 million pre-tax, up significantly from $232 million in Q3 2019.
The combined ratio for the property and casualty business was 95.2 percent, compared with 90.2 percent in Q3 2019. Net written premiums for the business were $8.5 billion, up 6.4 percent in constant dollars compared with the previous year.
The company said that it continued to experience "strong and improving commercial P&C underwriting conditions" in most regions, with rate increases averaging 15 percent in North America and 16 percent in Overseas General Insurance.
Greenberg said: “We experienced our share of the CATs with $925 million in net pre-tax losses. Yet, we still published a 95 percent combined ratio, supported by significant underlying underwriting margin improvement.”
"[...] New business growth was up briskly, and we retained our renewal business at very high levels. The global pandemic continues to depress consumer activity and, as a result, premiums declined in our global A&H and international personal lines divisions. We expect both to begin to recover sometime in 2021. On the other hand, our North America high net worth personal lines business is benefiting from a flight to quality and grew about 3% in the quarter."
Greenberg added that the current commercial P&C market is responding to prolonged industry underpricing of risk and the loss cost and interest rate environment.
“I believe the favorable trend will endure,” he said. “Where we can get paid adequately to assume the risk and volatility, we are growing our exposures across the portfolio while achieving rates that exceed loss costs, and that means margin improvement.”
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