Two key words for Chubb’s 2020 fourth quarter turned out to be “significantly higher.”
Chubb’s net income grew significantly higher, as did its net premiums written, which expanded by double digits for commercial property/casualty lines in particular. P/C underwriting income grew nearly 82 percent, and there was also a value gain in Chubb’s investment portfolio.
“Chubb had an excellent fourth quarter finish to the year, highlighted by very strong earnings, resulting from continued underwriting margin improvement and double-digit commercial lines premium growth globally,” Chubb Chairman and CEO Evan Greenberg said in prepared remarks.
He added that the pricing environment during the quarter “was the strongest we’ve seen since rates in certain classes” started rising about three years ago.
For the full year, however, Chubb’s net income of $3.5 billion was down more than 20 percent compared to 2019.
The global property/casualty insurer booked more than $2.4 billion in net income for the quarter, or $5.34 per share. That compares to nearly $1.2 billion, or $2.57 per share, for the same period in 2019.
Chubb reported Q4 after-tax realized and unrealized gains of $2 billion, including a $1.63 billion gain in the investment portfolio, favorable foreign exchange of $348 million, and a $146 million gain in its variable annuity reinsurance portfolio.
Commercial P/C rate increases averaged a stunning 16.5 percent in Chubb’s North America Insurance arm during Q4, and 18.5 percent in its Overseas General Insurance unit.
Fourth-quarter P/C net premium written grew 5.4 percent, and jumped 6 percent (excluding agriculture) globally. Broken down further, the numbers reflect an 11.3 percent positive growth in commercial P/C lines globally and just under 4 percent negative growth in consumer lines, mostly outside of North America.
Adjusted net investment income hit $924 million, versus $917 million in Q4 2019.
Here are other result highlights:
- Q4 pre-tax and after-tax catastrophe losses were $314 million and $271 million, respectively, versus $430 million and $353 million in Q4 2019. Chubb said there were no changes to previously reported aggregate P/C COVID-19 incurred loss charges.
- Chubb’s P/C net premiums written reached nearly $7.8 billion during the quarter versus just under $7.4 billion the year before.
- P/C Underwriting income landed at $969 million, 81.8 percent more than the $533 million produced in the 2019 fourth quarter.
- The P/C combined ratio for Q4 was 87.6, better than the 92.7 generated a year ago.
- Chubb conducted $190 million in share repurchases during Q4, with an average price of $144.3 per share.