Chubb Ltd. said its second-quarter operating earnings surged on growth in premiums and net investment income, despite elevated losses for such natural disasters as the Fort McMurray wildfires in Canada.
Operating earnings are a widely watched benchmark for the insurance industry because they exclude realized capital gains and losses from companies’ investment portfolios, among other items that aren’t considered recurring on a quarterly basis.
Chubb, formed earlier this year when ACE Ltd. closed on a nearly $30 billion acquisition of Chubb, said its pretax catastrophe losses reached $390 million in the latest quarter, compared with $124 million a year earlier.
Higher catastrophe claims costs are expected to hurt earnings across the industry.
Zurich-based Chubb reported operating earnings of $1.06 billion, or $2.25 a share, up from $788 million, or $2.40 a share, a year earlier.
Net premiums written increased 60% to $7.64 billion and net investment income rose 26% to $708 million.
Analysts polled by Thomson Reuters expected per-share operating profit of $2.22 and net premiums written of $7.37 billion.
Over all, Chubb reported a profit of $726 million, or $1.54 a share, down from $942 million, or $2.86 a share, a year earlier.
Also Tuesday, Axis Capital Holdings Ltd. said its second-quarter operating earnings fell 50% on catastrophe losses related to natural disasters and weather events including the Fort Murray wildfires. Travelers Cos. on Thursday had reported that its second-quarter operating earnings fell 19%, also depressed by claims from catastrophes including the wildfires in Canada.
Source: The Wall Street Journal