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Chubb’s Net Investment Income Rose in 1H17

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Oct. 18 2017, Updated 7:44 a.m. ET

Investment income components

Chubb Limited (CB) generates the majority of its investment income from short-term investments, fixed maturities, and equity securities. The company has witnessed an increase in its net investment income in 1H17 compared to 1H16. It reported net investment income of ~$1.5 billion in 1H17 compared to ~$1.4 billion in 1H16, reflecting a 9.6% increase.

This increase was mostly due to a rise in the company’s dividends and investments in various asset classes. However, in the company’s corporate bond portfolio, the rise in call activity led to a rise in net investment income in 1H17.

Chubb Limited generated an 11% return on equity on a trailing-12-month (or TTM) basis. Insurance players (IYF) Allstate (ALL), MetLife (MET), and American International Group (AIG) generated returns of ~12.5%, 0.27%, and 0.34%, respectively, on their equity on a TTM basis.

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Investment expenses

Chubb Limited (CB) also witnessed an increase in its investment income from fixed maturities from ~$1.3 billion in 1H16 to ~$1.5 billion in 1H17. The company saw an increase in investment income derived from short-term investments in 1H17 compared to 1H16. 

In 1H17, the company reported investment income from these investments of $57.0 million compared to $45.0 million in 1H16.

With respect to the last major component, the company reported investment income of $22.0 million from equity securities in 1H17 compared to $21.0 million in 1H16. However, the company also incurred investment expenses, which offset its net investment income. 

In 1H17, Chubb incurred investment expenses of $78.0 million compared to $66.0 million in 1H16.

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