WARREN, N.J., April 23 /PRNewswire-FirstCall/ -- The Chubb Corporation (NYSE: CB) today reported that net income in the first quarter of 2009 was $341 million or $0.95 per share, compared to $664 million or $1.77 per share in the first quarter of 2008.
Operating income, which the company defines as net income excluding after-tax realized investment gains and losses, declined to $514 million from $620 million in the first quarter of 2008. Operating income per share decreased 13% to $1.43 in the first quarter of 2009 from $1.65 in the first quarter of 2008.
Net written premiums for the first quarter decreased 7% to $2.7 billion. Excluding the effect of currency fluctuation, premiums were down 2%. Premiums declined 5% in the U.S. and 12% outside the U.S. (increased 5% in local currencies).
The first quarter combined loss and expense ratio was 88.1% in 2009, compared to 83.9% in 2008. The impact of catastrophes accounted for 0.9 percentage points of the combined ratio in the first quarter of 2009, compared to 1.8 percentage points in the first quarter of 2008. Excluding the impact of catastrophes, the first quarter combined ratio was 87.2% in 2009 and 82.1% in 2008. The expense ratio for the first quarter was 30.8% in 2009 and 30.5% in 2008.
Property and casualty investment income after taxes for the first quarter declined 6% to $306 million in 2009 from $327 million in 2008, largely due to currency fluctuation.
Net income for the first quarter of 2009 reflects net realized investment losses, including impairments, of $266 million before tax ($0.48 per share after-tax), stemming primarily from the company's alternative investments. Realized gains and losses for alternative investments are generally reported on a one-quarter lag; the losses in the first quarter of 2009 reflect the significant global decline in asset values in the fourth quarter of 2008. Net income for the first quarter of 2008 included net realized investment gains of $68 million before tax ($0.12 per share after-tax).
'In the first quarter, Chubb continued to perform well in a difficult economic and investment environment,' said John D. Finnegan, Chairman, President and Chief Executive Officer. 'We generated substantial underwriting profits, reflecting contributions from all of our business units, and our investment portfolio performed extremely well in what continued to be very volatile global capital markets.
'In looking at developments in the quarter,' said Mr. Finnegan, 'we were especially pleased by the continued improvement in premium rates, as evidenced by the fact that our Commercial and Professional Liability U.S. renewal rate changes were both positive for the first time in five years.'
During the first quarter of 2009, Chubb repurchased 1,804,500 shares of its common stock at a total cost of $74 million (an average of $40.87 per share). As of March 31, 2009, there were 17,979,400 shares of common stock remaining for repurchase under the current authorization.
First Quarter Operations Review
Chubb Personal Insurance (CPI) net written premiums declined 4% in the first quarter to $843 million. CPI's combined ratio for the quarter was 90.0%, compared to 84.8% in the first quarter of 2008. The impact of catastrophes accounted for 1.5 percentage points in the first quarter of 2009 and 1.7 points in 2008. Excluding the impact of catastrophes, CPI's first quarter combined ratio was 88.5% in 2009 and 83.1% in 2008.
Net written premiums for Homeowners declined 5%, and the combined ratio was 88.2%. Personal Automobile net written premiums declined 8%, and the combined ratio was 89.8%. Other Personal lines grew 1% and had a combined ratio of 97.4%.
Chubb Commercial Insurance (CCI) net written premiums declined 6% in the first quarter to $1.3 billion. The combined ratio for the quarter was 90.2% in 2009 and 87.2% in 2008. The impact of catastrophes accounted for 1.0 percentage point in the first quarter of 2009 compared to 3.0 points in the first quarter of 2008. Excluding the impact of catastrophes, CCI's first quarter combined ratio was 89.2% in 2009 and 84.2% in 2008.
Average first quarter renewal rates in the U.S. were up 1% for CCI, which retained 85% of the U.S. premiums that came up for renewal. In the U.S., the ratio of new to lost business was 1.0 to 1.
Chubb Specialty Insurance (CSI) net written premiums were down 10% in the first quarter to $630 million. The combined ratio was 85.1%, compared to 78.1% in the first quarter of 2008.
Professional Liability (PL) net written premiums declined 8%, and the business had a combined ratio of 91.3%. Average first quarter renewal rates in the U.S. were up 1% for PL, which retained 85% of the U.S. premiums that came up for renewal. In the U.S., the ratio of new to lost business was 1.2 to 1.
Surety net written premiums were down 22%, and the combined ratio was 38.3%.
Webcast Conference Call to be Held Today at 5 P.M.
Chubb's senior management will discuss the company's first quarter performance with investors and analysts today, April 23rd, at 5 P.M. Eastern Daylight Time. The conference call will be webcast live on the Internet at http://www.chubb.com and archived later in the day for replay.
About Chubb
Founded in 1882, the Chubb Group of Insurance Companies provide property and casualty insurance for personal and commercial customers worldwide through 8,500 independent agents and brokers. Chubb's global network includes branches and affiliates throughout North America, Europe, Latin America, Asia and Australia.
Chubb's Supplementary Investor Information Report has been posted on its Internet site at http://www.chubb.com.
All financial results in this release and attachments are unaudited.
For further information contact: Investors: Glenn A. Montgomery
(908) 903-2365
Media: Mark E.
