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Inside Chubb’s Overseas General Insurance Division

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Decline in underwriting income

Chubb Limited’s (CB) Overseas General Insurance Division reported underwriting income of $347.0 million in 1H17 compared to $358.0 million in 1H16, reflecting a decline of 3.1%.

This decline was mostly due to a fall in net premiums earned from $4.04 billion in 1H16 to $3.95 billion in 1H17, implying a 2.3% decline.

Chubb incurred total operating expenses of ~$26.0 billion on a trailing-12-month (or TTM) basis. Its peers (IYF) Allstate (ALL), RenaissanceRe Holdings Limited (RNR), and Everest Re Group (RE) reported total operating expenses of ~$33.9 billion, ~$1.1 billion, and ~$4.8 billion, respectively, on a TTM basis.

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Regions contributing to net premiums written

Chubb’s Overseas General Insurance Division generates the majority of its net premiums written from Latin America, Europe, and Asia. In 1H17, the division’s net premiums written stood at $4.2 billion compared to ~$4.1 billion in 1H16, implying an increase of 3.3%.

Out of $4.2 billion, Latin America contributed $1.0 billion, and Europe and Asia contributed ~$1.8 billion and ~$1.3 billion, respectively. Other regions contributed $195 million in 1H17.

The rise in the division’s net premiums written occurred because the production revenues from the first 14 days of January 2016 were not included. The acquisition of Chubb Corporation was completed on January 14, 2016.

This division saw a decline in its adjusted loss and loss expense ratio in 1H17 compared to 1H16. In 1H17, the division reported an adjusted loss and loss expense ratio of 51.9% compared to 52.8% in 1H16.

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