By CYRIL TUOHY, managing editor of Risk & Insurance®
Investment gains and strong underwriting results, even in the face of a soft market, helped three big U.S.-based insurance carriers to deliver solid profits in the fourth quarter.
The Travelers Cos. Inc., based in Hartford, Conn., reported fourth quarter net income of $1.28 billion, or $2.36 per diluted share, up from $801 million, for $1.35 per diluted share in the year-ago period.
"Throughout the year our underwriting results were strong and our high quality investment portfolio continued to perform well," said Travelers Chairman and CEO Jay Fishman, in a release.
The company reported investment income of $813 million, up 68 percent from $483 million in the year-ago quarter. Travelers Cos. also reported gains in underwriting, which jumped to $856 million from $729 million, up 17 percent, from the year-ago period.
For ACE Ltd., the global insurer based in Zurich, fourth-quarter net income rose to $953 million or $2.81 per share, up from $20 million or $0.06 per share in the year-ago period.
Chairman and CEO Evan G. Greenberg said the results were due in part to the company's recent initiatives to diversify geographically and expand its business lines.
A presence in 50 countries and a diversified mix in property/casualty, accident, and health and life businesses helped offset the "challenging economic, financial and insurance market conditions," said Greenberg, in a statement.
Foreign exchange rates also helped the firm post the solid quarterly numbers. Net premiums written jumped 8 percent over the year-ago period; net premiums earned rose 5 percent over the year-ago period, according to company reports.
Excluding the impact of foreign exchange, ACE's net premiums written rose 4 percent; net premiums earned increased 1 percent, the company also reported.
The Chubb Group of Insurance Cos., the Warren, N.J.,.-based commercial property/casualty, personal and specialty lines underwriter, reported fourth-quarter net income of $695 million, or $2.03 per share, up from $407 million, or $1.13 per share, in year-ago period, with gains coming mainly from investment income. After-tax investment gains in the quarter jumped to $126 million from a loss of $162 million in the year-ago quarter, according to the company.
Underwriting income from property/casualty insurance dropped slightly to $436 million from $443 million in the year-ago quarter, the company reported.
Chubb Commercial Insurance (CCI) net written premiums for the fourth quarter declined 6 percent to $1.1 billion, the company reported. Chubb Specialty Insurance net written premiums were down 1 percent in the fourth quarter to $771 million.
Professional Liability net written premiums declined 2 percent, the company also reported, but surety net written premiums were up 8 percent.
Despite the decline in underwriting income, John D. Finnegan, Chubb's chairman, president and CEO, in a press release, called the company's overall fourth quarter results "terrific."
"Given the difficult economic conditions that prevailed in 2009, we believe these results continue to distinguish Chubb and are clear evidence of our commitment to sustained bottom-line profitability," Finnegan added.
February 9, 2010
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