Chubb banks $2.3bn net income for Q1 2021

Chubb booked net income of $2.3bn in the first quarter of 2021, almost ten times higher than $252m for the same period last year, bolstered by net realised gains of $1.17bn. Numbers were buoyed by average rate increases of almost 15%.

Stripping out the gains and net realised losses of $946m for Q1 2020, Chubb’s core operating income was down 6% to $1.14bn from $1.22bn last year.

Catastrophe losses hit Chubb for $700m pre-tax in the first quarter, compared with $237m for Q1 2020. Most of the loss was for US storms at a cost of $657m. But the group held onto underwriting income of $622m, down 20% from $778m, and closed the quarter with a combined ratio of 91.8% for P&C business, including cat losses worth 9.1 percentage points. This compares with 89.1% in the prior year period.

Chubb said it had not recorded any change in its Covid-19 losses.

The group’s P&C net premiums were up 10% to $8bn, driven by 16% growth in commercial lines that recorded net premiums of $5.7bn for the quarter. US commercial P&C premiums were up 13% to $3.6bn, while overseas commercial P&C premiums increased 20% to $1.8bn.

Evan Greenberg, chairman and CEO of Chubb, said rates increase by almost 15% globally on average during the quarter and is confident of further rate increases for the rest of the year. “Frankly, they are a continued and rational response to the loss environment and years of industry underpricing,” he said.

“Chubb had another very good quarter with excellent commercial premium revenue growth globally, double-digit renewal rate change in our commercial P&C businesses, and further expansion of our underwriting margins,” Mr Greenberg added.

“We are leaning into the current favourable underwriting conditions, growing exposure and expanding margins,” he continued.

Chubb reported adjusted net investment income of $930m for Q1 2021, in line with last year but above the guidance range.