Chubb’s net income grew by 9 percent in the 2020 third quarter, something that Chair and CEO Evan Greenberg credited to rate hikes and improving underwriting conditions despite a tough environment shaped by the COVID-19 pandemic. Still, the insurer’s pre-tax catastrophe losses came close to $1 billion, driven by wildfires and other global weather catastrophes.
Chubb’s Q3 2020 income came in just under $1.2 billion, with $907 million in core operating income. That compares to $1 billion in net income a year ago and more than $1.2 billion in core operating income.
Chubb’s P/C combined ratio reached 95.2 for Q3 2020 compared to 90.2 in the 2019 third quarter.
“In the third quarter, Chubb performed well despite a challenging environment that included the continued struggle by many nations to address the impact, both health and economic, of the COVID-19 pandemic, as well as a record number of natural catastrophes for the insurance industry globally,” Greenberg said in prepared remarks.
Greenberg noted that the company produced a 95.2 combined ratio even with $925 million in net pre-tax catastrophe losses, thanks to “significant underlying underwriting margin improvement.”
Greenberg explained that Chubb experienced “strong and continuously improving underwriting conditions” in most global regions during the quarter, with P/C net premiums growing 6.5 percent. That included 10.8 percent growth in commercial P/C net premiums but a 3.3 percent decline in consumer lines.
Commercial P/C revenue grew 11 percent in North America and 12 percent in Chubb’s International business.
Greenberg asserted that Chubb has seen a brisk uptick in new business growth through the quarter and said the insurer kept its renewal business “at very high levels.”
At the same time, Greenberg said, Chubb’s global A&H and international personal lines divisions saw premium declines as the pandemic continued to depress consumer activity. He added that both lines should start recovering in 2021.
Chubb said there were no changes to its previously reported aggregate COVID-19 losses of $1.15 billion after tax on June 30, 2020.
Here are other Q3 result highlights:
- P/C Net premiums written landed at more than $8.4 billion, up from $8 billion in the 2019 third quarter. P/C net underwriting income was at $392 million compared to $754 million a year ago.
- Consolidated net investment income reached $840 million compared to $873 million in the 2019 third quarter.
- Commercial P/C underwriting rate increases averaged 15 percent in North America and 16 percent in Overseas General Insurance.
- Chubb’s North America high-net-worth personal lines business grew about 3 percent in the quarter, a trend Greenberg asserted was due to “a flight to quality.”