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Chubb’s North America Personal Property and Casualty Division

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Hurricanes

Chubb Limited’s (CB) North America Personal P&C Insurance division witnessed a significant decline in underwriting income. In 9M17, it generated $53 million, compared to $307 million in 9M16, which reflects an 82.7% fall. However, the division saw a rise in net premiums earned from $3.24 billion in 9M16 to $3.29 billion in 9M17, a 1.6% increase.

Chubb’s North America Personal P&C division saw a rise in pre-tax catastrophe losses from $275 million in 9M16 to $593 million in 9M17. In the first nine months of 2017, the division saw catastrophe losses mainly from unfavorable US natural conditions and hurricanes like Harvey and Irma. The division’s net investment income stood at $168 million in 9M17, compared to $155 million in 9M16.

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Significant decline

The North America Personal P&C Insurance division’s income stood at $206 million in 9M17, compared to $440 million in 9M16, which implies a decline of 53.2%. This decline primarily reflects downward momentum in underwriting income.

In 9M17, the North America Personal P&C Insurance division posted a combined ratio of 98.4%, compared to 90.5% in 9M16, mainly because of a rise in the loss expense ratio from 59.1% in 9M16 to 72.2% in 9M17. The division’s policy acquisition cost ratio stood at 20.4% in 9M17, compared to 23% in 9M16.

On an LTM (last-12-months) basis, Chubb’s dividend yield stood at 1.93%, and peers (XLF) CNA Financial Corporation (CNA), Principal Financial Group (PFG), and Hartford Financial Services (HIG) recorded 1.98%, 2.53%, and 1.66%, respectively.

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