Greenberg: Optimism high at the ‘new Chubb’
Energy and optimism are high after Ace Ltd's $29.5 billion takeover of US insurance giant Chubb Ltd.
That is the view of chairman and chief executive officer Evan Greenberg, who last night said the company had capped its last quarter trading as Ace Ltd with an “exceptionally strong underwriting performance”.
The combined company has taken the Chubb name.
In the fourth quarter of last year, Ace reported operating earnings of $780 million and full-year earnings of $9.76 per share. This was roughly in line with 2014.
Mr Greenberg said results of the Switzerland-based company, which started out in Bermuda in the mid-1980s, had been hit by the strong dollar and that operating income had risen 3.5 per cent when adjusted for foreign exchange.
“We are now the new Chubb, the largest publicly traded property and casualty insurer in the world,” Mr Greenberg said in Chubb's earnings statement last night.
“We've hit the ground running and are executing the thorough integration plans we established in the six months leading up to the close of the acquisition.
“The energy, morale and overall feeling of optimism are high throughout the ranks of the company. We are focused on knitting ourselves together as one and achieving the ambitious targets we have set and expect of ourselves and the value creation we will generate for the benefit of our customers, business partners, employees and shareholders.”
The company's final year of trading as Ace Ltd had been “historic and transformational”, he added.
“We completed the acquisition of the Fireman's Fund US high net worth personal lines business, launched ABR Re, and then announced the largest insurance transaction in history with the $29.5 billion acquisition of The Chubb Corporation, which we closed on January 14, 2016.
“Our strong earnings were driven first and foremost by an exceptionally strong underwriting performance as illustrated by property and casualty combined ratios of 87.7 per cent for the quarter and a record 87.4 per cent for the year.
“At almost $2 billion, full-year property and casualty underwriting income was also a record.
“Full-year net investment income of $2.2 billion, down about 2.5 per cent, stood up well, given foreign exchange rates and the low interest rate environment, and benefited from our strong cash flow of $3.9 billion.
“Foreign exchange headwinds, which have affected all dollar-based multinationals, impacted our revenue, income and book value growth throughout the year. Global P&C net premiums, which exclude agriculture, were down 2 per cent in the quarter but up 5 per cent in constant currency, compared to full-year growth of 1 per cent on a reported basis and nearly 8 per cent adjusted for foreign exchange.”