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Chubb’s Q4 Net Income Nosedives; Investment Returns Surge, Premium Revenue Grows
Chubb’s 2018 fourth quarter was a mixed bag, with a surge in catastrophe losses, but a growth in premium revenue, better global P/C pricing and record net investment income.
The insurer booked $355 million in net income, or $0.76 per diluted share, compared to more than $1.5 billion in net income, or $3.27 per diluted share over Q4 2017.
While Chubb’s Q4 P/C combined ratio was a healthy 93.1, it compares to a 90.7 combined ratio over the same, year-ago period.
“Chubb performed well in a quarter marked by elevated natural catastrophe losses, on the one hand, and stronger premium revenue growth, improved commercial P&C pricing globally and record net investment income, on the other,” Chubb Chairman and CEO Evan Greenberg said in prepared remarks.
Greenberg also argued that the company’s full-year 2018 results were solid, considering “the natural quarter-to-quarter volatility of the risk business.”
For the year, Chubb booked more than $3.9 billion in net income, up 2.6 percent from the $3.86 billion produced during 2018.
Here are additional highlights of Q4 and full-year 2018 results:
- Q4 after-tax catastrophe losses were $506 million, versus $331 million in Q4 2017.
- Consolidated and P/C net premiums written for the fourth quarter were $7.4 billion and $6.8 billion, respectively, reflecting a 4.2 percent increase for both over the previous year, or a 5.9 percent and 5.8 percent increase, respectively, in constant dollars.
- Net investment income for the quarter reached $848 million pre-tax over the 2017 fourth quarter. Adjusted net income hit a record $903 million pre-tax, reflecting a 3.4 percent increase over the 2017 fourth quarter.
- Global Reinsurance: Net premiums written for the year decreased 2.1 percent or 3.3 percent in constant dollars. The combined ratio for the year was 101.8, compared with 111.2 in 2017.
- Full-year consolidated net premiums written were $30.6 billion, a 4.6 percent increase over 2017, or 4.1 percent in constant dollars. Full-year P/C net premiums written were $28.3 billion, a 4.4 percent increase over 2017, or 4 percent in constant dollars.