Property and casualty insurer Chubb has reported net income and core operating income for Q3 2023 of $2.04 billion each, up 157.8% and 55.4%, respectively, as its P&C arm delivered a combined ratio of 88.4% with underwriting income of $1.31 billion.
The P&C underwriting result improved significantly from the $710 million gain seen in Q3 2022, when Chubb reported a combined ratio of 93.1%.
In fact, the segment’s current accident year underwriting income excluding catastrophe losses was a record $1.78 billion, with a combined ratio of 84.3%.
Growth was also solid in P&C in Q3 2023, with net premiums written jumping more than 8% year-on-year to $11.7 billion.
Within P&C, Chubb recorded pre-tax and after-tax catastrophe losses, net of reinsurance and including reinstatement premiums, of $670 million and $544 million, respectively, down from $1.16 billion and $949 million, respectively, in Q3 2022.
Additionally, pre-tax and after-tax favorable prior period development totalled $200 million and $116 million, respectively, compared with $222 million and $162 million, respectively, last year.
In the firm’s Global P&C arm, which excludes agriculture, underwriting income was $1.20 billion, up 117.2%, with a combined ratio of 87.6%. Meanwhile, Global P&C’s current accident year underwriting income excluding catastrophe losses was a record $1.66 billion, with a combined ratio of 83%.
Net premiums written in the Global P&C arm rose 12.3% to more than $10.1 billion.
In its Life business, Chubb has reported Q3 2023 income of $288 million, up almost 15% from the $252 million seen a year earlier. The segment also recorded net premiums written growth of 15% to $1.5 billion.
Pre-tax net investment income increased by more than 34% to $1.31 billion in Q3 2023, which is a record.
Evan G. Greenberg, Chairman and Chief Executive Officer of Chubb Limited, commented: “We had another outstanding quarter which contributed to a record nine months. Our performance in the quarter included double-digit Global P&C premium revenue growth, world-class P&C underwriting results, record net investment income, and strong life operating income. Over $2 billion of core operating income led to per-share earnings growth of 58.1% for the quarter and 27.5% for the year. Annualized core operating ROE was 13.5%, with a return on tangible equity of 21.2%. In the quarter, we increased our ownership in Huatai Group, now at 72%, and consolidated results, which were accretive to EPS and ROE.
“P&C underwriting income of $1.3 billion this quarter was up almost 8.4%. Our underwriting results were driven by strong P&C earned premium growth, excellent current accident year underwriting margins inclusive of catastrophe losses, and favourable prior period reserve development in both North America and Overseas General. The published calendar year combined ratio was 88.4% while the Global P&C current accident year combined ratio excluding CATs was 83%.”
“Global P&C premium growth was 12.3%, with commercial lines up 10.3% and consumer lines up 17.6%. In North America commercial, property and casualty premiums were up 10.5% while financial lines were up 1%. Our very large U.S. middle market business had its best growth of the year at 16.3%. Our market-leading high-net-worth personal lines business had another outstanding quarter with growth of 9.6%. Our Overseas General division had a great quarter with premiums up 21.4%, including double-digit growth in Europe, Asia Pacific, and Latin America. Huatai contributed 7.5 percentage points to Overseas General’s growth. In our Asia-focused international life business, premiums were up nearly 20%, including the impact of Huatai.
“In aggregate, rates and price increases in our commercial P&C lines of business remained strong in the quarter globally. Pricing was up 13.9% in North America and 11.7% in our international business. Financial lines pricing was down in North America and up modestly overseas. In North America and Overseas General, P&C pricing exceeded loss cost trends, which were stable in the quarter. We are vigilant and disciplined and are staying on top of loss cost inflation.
“We are confident in our ability to continue growing revenue and operating earnings, which in turn drive EPS, through the three engines of P&C underwriting income, investment income, and life income,” added Greenberg.
