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Chubb’s North America Commercial Division’s Income Fell

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What led to the decline?

Chubb Limited’s (CB) North American Commercial Property and Casualty division saw a substantial 17.2% decline in income—mainly because of unfavorable momentum in underwriting income. The division garnered total underwriting income of $632 million in 9M17, compared to $1.1 billion in 9M16, reflecting a substantial 45.5% fall.

The North America Commercial P&C division’s net premiums written stood at $9 billion in 9M17, compared to $8.6 billion in 9M16—a 4.4% increase. Production revenues from January 1 to January 14, 2016, weren’t included because an acquisition wrapped up on January 14.

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On an LTM (last-12-month) basis, Chubb posted earnings before interest, tax, depreciation, and amortization or EBITDA of $5.1 billion. Peers (XLF) Hartford Financial Services (HIG), CNA Financial Corporation (CNA), and Principal Financial Group (PFG) posted $3.2 billion, $2.7 billion, and $2.5 billion, respectively.

Huge catastrophe losses

Insurers have suffered huge catastrophe losses in 2017 because of hurricanes. The North America Commercial P&C division’s pre-tax catastrophe losses stood at $1.05 billion in 9M17, compared to $331 million in 9M16. In 9M17, these losses were mainly driven by unfavorable natural events in the United States and hurricanes like Harvey and Irma.

North America Commercial P&C division’s net investment income stood at $1.46 billion in 9M17, compared to $1.37 billion in 9M16, which reflects a 6.9% increase. The division witnessed a decline in administrative expenses from $840 million in 9M16 to $728 million in 9M17—a 13.3% fall.

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