The Chubb Corporation reported that net income in the first quarter of 2004 was $360.7 million, a 61 percent increase over net income of $224.6 million in the first quarter of 2003. Net income per share increased 44 percent to $1.88 from $1.31.
Operating income, which the company defines as net income excluding after- tax realized investment gains and losses, increased 39 percent to $308.1 million in the first quarter of 2004 from $221.7 million in the first quarter of 2003. Operating income per share grew 25 percent to a record $1.61 from $1.29 a year ago.
The bulletin noted that the Q1 operating income figures “includes an after-tax loss of $9.3 million or $0.05 per share from the non-insurance business of Chubb Financial Solutions (CFS), compared to after-tax income of $9.1 million or $0.05 per share in the first quarter of 2003.”
Chubb’s net written premiums for the first quarter increased by 13 percent to $3 billion. Premiums for Chubb Re accounted for 4 percentage points of this growth. U.S. premiums grew 11 percent, while non-U.S. premiums grew 19 percent or 4 percent in local currencies.
Chubb said its “combined loss and expense ratio for the first quarter was 92.6 percent, compared with 95.3 percent in the corresponding year-earlier quarter. In the first quarter of 2004, catastrophe losses were $96.7 million and accounted for 3.5 points of the combined ratio. In the first quarter of 2003, catastrophe losses were $94.9 million and accounted for 4.1 points of the combined ratio. Excluding catastrophe losses, the first quarter combined ratio was 89.1 percent in 2004 and 91.2 percent in 2003. The expense ratio for the first quarter was 30.1 percent in 2004, compared with 30.4 percent in 2003.”
“We had an excellent first quarter,” commented Chairman and CEO John D. Finnegan, “reflecting the earn-through of higher premiums and favorable loss experience, including unusually low commercial property losses. We continued to enjoy double-digit premium growth by attracting new customers, securing rate increases when needed and retaining a high percentage of our existing customers, all while maintaining underwriting discipline.
“We expect that results in 2004 will continue to benefit from higher earned premiums and favorable terms and conditions,” he continued. “Our results for the first quarter put us well on the way to achieving or exceeding our operating earnings guidance of $5.90 to $6.30 per share for 2004, but it is, after all, only one quarter. We will revisit the forecast when we have had six months behind us, but meanwhile we will stay with our previous guidance. Our guidance assumes 3 points of catastrophes and excludes results from the non-insurance business of CFS.”
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