Chubb is reporting that its net income in Q3 2022 was $812m, down from $1.83bn in Q3 2021.
The firm is also reporting that net income between the two periods fell from $6.4bn to $4bn. It said that net income in the quarter was adversely impacted by realized losses of $502m after tax, principally due to the mark-to-market impact on derivatives and private equities as well as from sales in fixed income securities.
The firm also said in a statement that book value was unfavourably impacted by after-tax net realized and unrealised losses of $3.59bn in the company’s investment portfolio, principally due to the mark-to-market impact from rising interest rates in the fixed income portfolio.
Evan G. Greenberg, chairman and chief executive officer of Chubb Limited, said: “The broad-based strength of the company globally was clearly evident in the quarter, with core operating income up 15% and per share earnings of $3.17 up 20%. All major areas of our business contributed. We produced simply excellent underwriting results despite an active catastrophe quarter. We had record investment income, which is and will be a growing source of earnings; double-digit P&C premium revenue growth in constant dollars, which was well balanced between commercial and consumer lines; and life insurance premiums that more than doubled with the closing of our acquisition of Cigna’s business in Asia.”
He added: “P&C underwriting income of $710m was up 15% and led to a combined ratio of 93.1%, which included pre-tax catastrophe losses of $1.2bn, with $975m from Hurricane Ian. For the year, record underwriting income of $3.4bn was up more than 40% or over $1bn, with an 87.5% combined ratio, an improvement of nearly three points over prior.”
He went on: “We continued to capitalize on rising interest rates, deploying cash at an average reinvestment rate of 5.8% versus a portfolio yield of 3.4%. Adjusted net investment income was a record $1.1bn, up over 12% and topping $1bn for the first time.”
Chubb also reported that consolidated net premiums written, including P&C and life insurance, were up over 17% in constant dollars. P&C grew, it said, by 11% with commercials lines up 11.5% and consumer lines up 9.5%, both in constant dollars. Life premiums, due to its consolidation of the Cigna business in Asia, were up 117%.
Greenberg said: “Commercial P&C pricing remained strong and continued to exceed our loss costs. We are focused on inflation and staying on top of it in terms of both pricing and reserving. Commercial pricing, which includes rate and exposure, increased 8.5% in North America and about 11% in our international operations in constant dollars.”
He added: “While we are operating in a challenging economic and geopolitical environment, we are optimistic about our prospects given the strengths and momentum of our businesses. With the combination of growth and underwriting margins in our P&C businesses; our growth in investment income; and the future revenue and earnings contributions from our life insurance businesses in Asia, we expect EPS to continue to grow at a healthy rate into the future.”
