Excellent underwriting results and a very strong prior period reserve development helped propel Chubb Ltd to a $2.8 billion third quarter profit, up $300,000 million on the same period year before.

A record core operating income of $3 billion, was up 28.7 per cent and Q3 net income per share of $6.99 had increased by 22.6 per cent.

Chairman and chief executive Evan Greenberg said: “We had a simply outstanding quarter.”

He said the results pointed to his firm’s broad-based, diversified nature — geographically, by customer segment, by commercial and consumer and by product and distribution channel.

He said their core operating income was driven by record underwriting and investment income and double-digit growth in life income.

“Our core operating earnings per share was also a record, $7.49 per share, up 31 per cent,” he said.

Mr Greenberg said underwriting income on both a published and accident year ex-catastrophe basis was supported by solid premium growth and underwriting margin improvement.

Published underwriting income of $2.3 billion rose 55 per cent from a year ago, with a record combined ratio of 81.8 per cent — about six percentage points better than a year earlier.

“While we benefited from light catastrophe losses in the quarter, the real story is our underlying underwriting results, which were excellent and very strong prior period reserve development,” Mr Greenberg said.

Accident year underwriting income, excluding Cats was a record $2.2 billion, up 10 per cent, with a combined ratio of 82.5 per cent, nearly a full-point improvement from prior year, with most all of it coming from loss ratio improvement.

“Adjusted net investment income of $1.8 billion was up 8.3 per cent,” Mr Greenberg said. “Financial, economic and fiscal conditions favour continued attractive fixed income and alternative investment portfolio returns on our growing invested asset.”

During Q3 Chubb also increased its share buybacks since its stock was trading well bellow intrinsic value.

“Given our earning power, increased buyback activity will continue, while at the same time we build additional capital and our invested asset base,” Mr Greenberg said.

He added that Chubb’s fundamentals and positioning was excellent.

“Our balance sheet, starting with our loss reserves, has never been stronger,” the CEO said. “I am confident we will maintain superior earnings growth, including double-digit growth in (earnings per share), book and tangible book value, with core operating return on equity increasing to 14 per cent plus over the medium term, (catastrophe events) and (foreign exchange fluctuations) notwithstanding.”