Record net income of $8.5bn for Chubb
Swiss-domiciled Chubb Limited, which has operations in 54 countries and territories including deep roots in Bermuda, has reported record net income of $8.54 billion and record core operating income of $5.57 billion for fiscal year 2021.
The company also reported record P&C underwriting income of $3.7 billion for the year.
Those results were bolstered by a strong fourth quarter that saw record core operating income of $1.65 billion, record P&C underwriting income of $1.27 billion, and net income of $2.14 billion.
During the quarter, the company entered into agreements with several shareholders to purchase additional ownership interests in Huatai Group, a Chinese financial services holding company that, upon regulatory approval of all outstanding agreements, will bring Chubb’s total aggregate ownership to 86.1 per cent.
Evan Greenberg, chairman and chief executive officer, said: “With double-digit commercial premium growth and continued underwriting margin expansion, Chubb finished the year with record quarterly earnings and underwriting results, which contributed to one of the best years in our company’s history.”
He added: “As I look forward, beyond continued strong organic performance, we will benefit from greater revenue and earnings, in the short and long term, from the acquisition of Cigna’s Asia business and increased ownership of Huatai Group in China when approved by the regulator.
“In sum, we are in a period of strong wealth creation, and 2022 should be a good year in terms of growth and margin improvement.”
Fourth quarter highlights included:
•Core operating income per share was a record $3.81, up 19.8 per cent, and beating consensus ($3.29) by 52 cents per share
•P&C underwriting income was a record $1.27 billion, up 30.7 per cent
•P&C combined ratio was 85.5 per cent, compared with 87.6 per cent prior year
•P&C current accident year combined ratio excluding catastrophe losses was a record 83.9 per cent, compared with 86.4 per cent prior year
•P&C net premiums written grew 9.6 per cent, driven by growth in commercial lines of 12.9 per cent
•Total North America P&C net premiums written were up 8.7 per cent, including growth in commercial lines of 11.2 per cent
•Overseas General P&C net premiums written were up 10.2 per cent, including growth in commercial lines of 15 per cent and consumer lines of 3.2 per cent
Annual highlights included:
•Full-year net income and core operating income were both records at $8.54 billion and $5.57 billion, up 141.7 per cent and 68.1 per cent, respectively
•Full-year P&C underwriting income was a record $3.7 billion, up 205.4 per cent, and record P&C current accident year underwriting income excluding catastrophe losses was $5.17 billion, up 26.9 per cent
•P&C combined ratio was 89.1 per cent, compared with 96.1 per cent prior year, and P&C current accident year combined ratio excluding catastrophe losses was a record 84.8 per cent, compared with 86.7 per cent prior year.
•Record full-year pre-tax net investment income and adjusted net investment income were $3.46 billion and $3.72 billion, respectively
•Full-year P&C net premiums written were up 13 per cent, the strongest organic growth in more than 15 years, driven by commercial lines growth of 17.7 per cent
•Total North America P&C net premiums written were up 12.1 per cent, including growth in commercial lines of 16.4 per cent
•Overseas General P&C net premiums written were up 14.8 per cent, including growth in commercial lines of 21.4 per cent and consumer lines of 5.6 per cent.
Mr Greenberg added: “Commercial P&C rates increased 10.5 per cent and 13 per cent, respectively, in North America and Overseas General and we expect rates to continue to exceed loss costs for some time to come.
“In our international consumer lines, growth is slowly recovering and gaining momentum. For example, premiums in our international A&H division increased over 5.5 per cent in constant dollars, the third consecutive quarter of growth and the best since the beginning of the pandemic.
“On the asset side of the balance sheet, adjusted net investment income topped $900 million for the quarter and contributed to a record $3.7 billion for the year. With the Fed finally accepting that inflation is a reality that is not going away, interest rates are rising and will continue to rise, and spreads should begin to widen, particularly if the Fed begins to shrink their balance sheet as they should.
“That will begin to benefit our fixed-income investment portfolio, which has a four-year duration. Every 100 basis points of portfolio yield for us produces about $1.2 billion of additional investment income.”
Despite being headquartered in Zurich, Chubb has deep roots on the island.
ACE, founded in Bermuda in 1985, acquired Chubb in 2016 and adopted the Chubb name globally.
The combined entity is the world’s largest publicly traded property and casualty company.
The organisation has offices on Woodbourne Avenue in Pembroke.