Chubb delivered an impressive set of half-year figures buoyed by record second-quarter core operating profit and underwriting results, on the back of its best P&C global revenue growth for 15 years as the market continued to harden.
The insurer said the second-quarter P&C pricing environment was “strong” in all important regions around the world, with overall rates up 16% in international business and 13.5% in North America. The insurer believes the hardening will continue.
“Chubb had simply an outstanding quarter, highlighted by record core operating earnings and underwriting results. We produced the best P&C premium revenue growth globally in over 15 years, powered by our commercial P&C businesses and supported by continued robust commercial P&C pricing,” said Chubb’s chairman and CEO Evan G Greenberg.
“We are capitalising on a strong commercial P&C pricing environment… From everything we see today, I am confident these market conditions will continue,” he added.
Chubb’s net income rebounded to $4.57bn in the first half of 2021 from a loss of $79m in the prior-year period. Core operating income was $2.76bn, compared with $966m in H1 2020.
The half-year combined ratio improved to 88.6% compared to 101% a year earlier, with the current accident-year P&C combined ratio excluding cat losses at 85.3%, versus 87.5% at the midway point last year. P&C underwriting delivered a profit of $1.19bn from a loss of £929m in the first half of last year.
Gross written premiums rose to $22.4bn in H1 from $19.8bn.
These numbers were boosted by strong second-quarter numbers.
Net income was up to $2.27bn after a loss of $331m in Q2 2020. Chubb delivered a record core operating profit of $1.62bn from a loss of $254m.
P&C net written premiums were up 15% globally to $9.55bn, powered by commercial lines and the best organic P&C growth since 2004. The quarter’s result comprised 20.7% growth in commercial lines excluding agriculture. P&C premiums grew by 33% in international business and 16% in North America.
Chubb’s second-quarter P&C combined ratio was 85%, compared with 112.3% in the same period last year. The P&C current accident-year underwriting income, excluding catastrophe losses, was up 27% to a record $1.2bn. This was driven by a P&C current accident-year combined ratio excluding catastrophe losses of 85.4%, compared with 87.4% in the prior year.
The combined ratio for international business was 83.9%, from 107.1% in the second quarter of last year.
Chubb’s pre-tax and after-tax catastrophe losses, net of reinsurance and including reinstatement premiums, were $280m and $226m respectively in the quarter. This compares with $1.81bn and $1.51bn in Q2 2020.
Record pre-tax net investment income was up 7% to $884m in Q2. For the half year, it rose to $1.75bn from $1.69bn.
“Our company is firing on all cylinders – we are growing our business while we continue to expand underwriting margins. We will continue to outperform and deliver strong, sustainable shareholder value,” said Mr Greenberg.