Chubb 1st-quarter profit climbs 36 percent despite higher catastrophe claims

Chubb posts 36 percent jump in 1st-quarter profit

WARREN, N.J. — Insurer Chubb Corp. on Thursday said its first-quarter profit shot up 36 percent despite a high number of catastrophes during the first three months of the year.

Net income for the three months ended March 31 rose to $464 million, or $1.39 per share, from $341 million, or 95 cents per share, in the year-earlier quarter.

There were 7 percent fewer shares outstanding in the recent quarter, which boosted per-share income.

Analysts polled by Thomson Reuters, on average, expected profit of 95 cents per share.

Operating income, which excludes realized investment gains and losses, came to $381 million, or $1.14 per share.

Chubb said it took a one-time charge of $22 million, or 7 cents per share, related to the recently enacted federal health care legislation. The reforms eliminated a tax benefit associated with Medicare Part D subsidies to be received by companies that provide prescription drug coverage to retirees.

Net premiums written for the first quarter increased 1 percent to $2.77 billion, up marginally from $2.74 billion last year. Excluding the effect of currency fluctuation, premiums were down 3 percent. Premiums declined 4 percent in the U.S. and increased 16 percent abroad.

The impact of catastrophes in the quarter was $344 million, or 67 cents per share, compared with $26 million, or 5 cents per share, in the first quarter of 2009. Among the incidents with during the period were the earthquake in Chile, storms in Australia and Europe and several severe storms on the East Coast.

Chubb’s combined ratio was 93.6 percent, compared with 88.1 percent last year. The impact of catastrophes accounted for 12.3 percentage points of the combined ratio in the first quarter, compared with 0.9 percentage points a year ago. The measure is the sum of an insurance company’s loss ratio and expense ratio, and is used to indicate profitability. A ratio above 100 means that for every premium dollar taken in, more than a dollar went for losses, expenses, and commissions. A figure below 100 indicates an underwriting profit.

Investment income rose to $387 million from $379 million last year.

Chubb shares closed the regular session down 3 cents at $52.31.