By CYRIL TUOHY, managing editor of Risk & Insurance®
The Warren, N.J.-based commercial and personal lines giant Chubb Corp. reported second-quarter net income of $518 million, down from $551 million in the second quarter of 2009. Operating income was $460 million in the second quarter of 2010 compared with $533 million in the second quarter of 2009.
The impact of catastrophes in the second quarter of 2010 was $193 million pretax, compared with $43 million pretax in the second quarter of 2009. The $193 million reflects the impact of numerous storms throughout the United States, the most significant of which was the May hailstorm in Oklahoma.
John D. Finnegan, chairman, president and CEO, said in a statement that catastrophe losses were "unusually high."
"Results were again driven by solid underwriting performance in each of our business units, producing an overall combined ratio excluding catastrophes of 83.5 percent," he added.
Net written premiums for the second quarter of 2010 were $2.9 billion, an increase of 1 percent from $2.8 billion in the second quarter of 2009. Excluding the effect of foreign currency translation, premiums were flat. Premiums declined 1 percent in the United States and increased 11 percent outside the United States, the company also said.
The second-quarter combined loss and expense ratio was 90.4 percent in 2010, compared with 85.9 percent in 2009, with the impact of second-quarter catastrophes accounting for 6.9 percentage points of the combined ratio, compared with 1.5 points in the year-ago quarter, the company also said.
CNA, the Chicago-based commercial-lines insurer, posted net income of $283 million, up from $105 million in the year-ago period, the company reported.
For the three months ended June 30, catastrophe losses were $31 million after-tax, compared with losses of $28 million after-tax for the year-ago period. The combined ratio was 89.4 percent, down from 98.1 percent in the year-ago period.
"We are pleased to report our second-quarter results, which include strong P/C underwriting results and solid investment results," said Thomas F. Motamed, chairman and CEO of CNA Financial Corp., in a statement.
The company's specialty segment, which represents 45 percent of the property/casualty unit's net written premiums, delivered particularly strong results in the quarter, Motamed also said.
Second-quarter net income from the specialty lines jumped to $189 million, from $95 million in the year-ago period, the company reported. The specialty-lines unit delivered a combined ratio of 79 percent, up 10.8 points from the year-ago period, the company also reported.
In the company's commercial-lines segment, net income improved $65 million for the three months ended June 30 compared with the year-ago period, due to better investment results, the company said.
Net realized investment results helped boost the commercial-lines unit despite a decrease in operating income due to writing less premium, lower insurance exposures and more competition in the marketplace, the company also said.
Hartford, Conn.-based Travelers Companies Inc. reported second-quarter net income of $670 million, down from $740 million in the year-ago period. Travelers' commercial-lines segment took a big hit from "record second-quarter weather losses," from wind, hail storms and flooding, said Jay Fishman, chairman and CEO, in a statement.
Catastrophe losses, net of reinsurance, rose to $439 million in the second quarter, up from $200 million in the year-ago period, the company also reported. Underwriting gains declined to $220 million in the second quarter, from $329 million in the year-ago period, the company also reported.
The decrease in the underwriting gain in the current quarter reflected a GAAP combined ratio of 95.2 percent, compared with 93.2 percent in the prior year quarter, Travelers also reported.
The increase in the combined ratio was driven by a $239 million pretax increase in catastrophe losses, offset by a $123 million pretax increase in net favorable prior year reserve development, the company also said.
August 3, 2010
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