Chubb Q3: Earnings Beat, Despite Decline in Premiums Written

| About: Chubb Ltd (CB)

Chubb Corporation (NYSE:CB) third quarter earnings came in at $1.56 per share, ahead of the Zacks Consensus Estimate of $1.29 per share. Last year, the company reported earnings of 93 cents. The results were helped by a mild hurricane season, which overshadowed decline in premiums written.

Net income spiked to $596 million or $1.69 a share from $264 million, or 73 cents a share, in the year-ago period.

Though the company has improved its profits, its total net written premiums declined 7% to $2.7 billion from $2.9 billion, reflecting reduced demand due to the global recession.

On the basis of net written premiums by business segments, Chubb Personal Insurance declined 5%year-over-year, Chubb Commercial Insurance declined 8% year-over-year and Chubb Specialty Insurance declined 6% year-over-year.

Underwriting profits rose to $423 million from $69 million in the same quarter last year. Last year, the company recorded huge catastrophe losses.

The quarter’s combined loss and expense ratio improved to 85.4% from 98.1% last year, mainly due to a low catastrophe loss.

During the quarter, Chubb repurchased 8.7 million shares at a total cost of $412 million. As of Sep 30, 2009, there were 7.0 million shares remaining under the current repurchase authorization. Book value per share for the quarter was $45.43, up 19% from $38.25 in the year-ago quarter.

For the fourth quarter, the company expects earnings to lie in the range of $1.41–1.51 per share. For the full year, the management has increased its guidance to $5.90–6.00 from the $5.20–5.50 per share previously.

Peer Travelers Companies Inc. (TRV) also benefited from the weak hurricane season, boosting its earnings in the quarter to $1.65 per share from 36 cents per share.