Log In

Reset Password

Chubb’s Greenberg expects firmer pricing

Evan Greenberg, chairman and CEO of Chubb Corp

Hurricane losses associated with Harvey, Irma and Maria piled up for Chubb Corp in the third quarter, contributing to pre-tax catastrophe losses of $1.9 billion.

However, the operating loss per share was 13 cents, beating a Wall Street consensus of 24 cents. And Evan Greenberg, chairman and CEO, believes the soft pricing market may be at an end.

He said: “I believe we are at the beginning of a firming price environment, driven by years of soft pricing that has resulted in inadequate rates in many classes.

“The magnitude of this year’s cat losses, which on a worldwide aggregate basis was between a one-in-five and one-in-ten year industry event, simply adds to the pressure to return to pricing that produces an adequate risk-adjusted return. In that regard, we intend as usual to demonstrate leadership.”

Pre-tax catastrophe losses for each of the hurricanes was $650 million for Harvey, $890 million for Irma, and $220 million for Maria.

Chubb’s net loss for the quarter was $70 million, compared with income of $1.36 billion for the same period a year ago.

Operating income, excluding catastrophe losses, was $1.46 billion, or $3.12 per share.

Mr Greenberg said: “We experienced a series of significant natural catastrophes, including three hurricanes and two earthquakes, which will likely produce the third $100 billion-plus year for insured catastrophe losses globally for the industry in the last 12 years.

“We ran a 111 per cent combined ratio and produced a loss of 13 cents per share, or essentially a quarter of our annual earnings, which is within our tolerance for risk and the amount of loss we would expect for these events.”

He added: “I’m proud of our claims and loss prevention organisation’s response serving our customers in their time of need. They continue to distinguish our company.”

Net premiums written were $7.9 billion, up 4.3 per cent year-on-year.

Yesterday, before the earnings data was released, Chubb’s shares on the New York Stock Exchange closed 59 cents, or 0.38 per cent, higher at $154.75.