Chubb Reports Third Quarter Net Income per Share of $0.73; Operating Income per Share...

Chubb Reports Third Quarter Net Income per Share of $0.73; Operating Income
per Share is $0.93; Combined Ratio is 98.1%

2008 Operating Income per Share Guidance Is Revised to Range of $5.45 to $5.55

WARREN, N.J., Oct. 23 /PRNewswire-FirstCall/ -- The Chubb Corporation (NYSE:
CB) today reported that net income in the third quarter of 2008 was $264
million or $0.73 per share, compared to $738 million or $1.87 per share in the
third quarter of 2007. Net income for the third quarter of 2008 reflects net
realized investment losses, including impairments, of $113 million before tax
($0.20 per share after-tax). Net income for the third quarter of 2007
includes net realized investment gains of $117 million before tax ($0.19 per
share after-tax).

Operating income, which the company defines as net income excluding after-tax
realized investment gains and losses, declined to $338 million from $662
million in the third quarter of 2007. Operating income per share declined 45%
to $0.93 from $1.68.

Total net written premiums for the third quarter decreased 1% to $2.9 billion.
Premiums were down 4% in the U.S. and up 8% outside the U.S. (4% in local
currencies).

The third quarter combined loss and expense ratio was 98.1% in 2008, compared
to 81.6% in 2007. The impact of catastrophes in the third quarter of 2008
accounted for 13.6 percentage points of the combined ratio and was principally
related to Hurricane Ike, including Chubb's estimated share of the assessment
from the Texas Windstorm Insurance Association. In the third quarter of 2007,
the impact of catastrophes accounted for 2.0 points. Excluding catastrophe
losses, the third quarter combined ratio was 84.5% in 2008 and 79.6% in 2007.
The expense ratio for the third quarter was 30.2% in 2008 and 29.8% in 2007.

Property and casualty investment income after taxes for the third quarter
increased 1% to $327 million in 2008 from $324 million in 2007.

During the third quarter, Chubb repurchased 5,914,324 shares of its common
stock at a total cost of $284 million. As of September 30, 2008, there were
3,400,882 shares of common stock remaining under the current repurchase
authorization.

"Obviously, losses from Hurricane Ike had a major adverse effect on our third
quarter results," said John D. Finnegan, Chairman, President and Chief
Executive Officer. "However, despite these substantial catastrophe losses, we
were still able to generate over $300 million in operating income, reflecting
the continuing underlying strength of all our business units in a challenging
environment. In addition, we were especially pleased with the performance of
our high-quality investment portfolio in a period of unprecedented financial
market turmoil."

Nine-Month Results

For the first nine months of 2008, net income was $1.4 billion or $3.78 per
share, compared with $2.2 billion or $5.33 per share for the first nine months
of 2007. Net income for the first nine months of 2008 reflects net realized
investment losses, including impairments, of $121 million before tax ($0.21
per share after-tax). Net income for the first nine months of 2007 includes
net realized investment gains of $328 million before tax ($0.52 per share
after-tax).

Operating income for the first nine months of 2008 totaled $1.5 billion or
$3.99 per share, compared with $1.9 billion or $4.81 per share for the first
nine months of 2007.

Total net written premiums for the first nine months remained flat at $8.9
billion. Premiums declined 3% in the U.S. and increased 11% outside the U.S.
(4% in local currencies).

The combined loss and expense ratio for the first nine months was 90.2% in
2008, compared to 82.6% in 2007. The impact of catastrophes in the first nine
months of 2008 accounted for 6.9 percentage points of the combined ratio,
compared to 2.8 points in the first nine months of 2007. The expense ratio
for the first nine months was 30.2% in 2008 and 29.9% in 2007.

Property and casualty investment income after taxes for the first nine months
increased 4% to $981 million in 2008 from $942 million in 2007.

During the first nine months, Chubb repurchased 22,711,788 shares of its
common stock at a total cost of $1.1 billion.

Revised Guidance

"We are revising our 2008 calendar year operating income per share guidance to
a range of $5.45 to $5.55 from the $5.70 to $6.10 range we provided in July,"
said Mr. Finnegan. "This revised guidance is based on operating income per
share of $3.99 in the first nine months and our forecast range of $1.46 to
$1.56 for the fourth quarter.

"The fourth quarter forecast assumes 2 percentage points of catastrophe losses
in the quarter," said Mr. Finnegan. "This brings our catastrophe loss
assumption for the year to 5.7 points, versus the assumption of 4 points in
our July guidance. This higher catastrophe assumption, driven by the adverse
effect of Hurricane Ike losses in the third quarter, accounts for virtually
all of the downward revision in our 2008 full-year earnings guidance."

Guidance and related assumptions are subject to the risks outlined in the
company's forward-looking information safe harbor statement below.

Third Quarter Operations Review
Chubb Personal Insurance (CPI) net written premiums grew 2% in the third
quarter to $1.0 billion. CPI's combined ratio for the quarter was 100.7%,
compared to 83.3% in the third quarter of 2007. Catastrophe losses for the
quarter accounted for 16.3 percentage points in 2008 and 5.2 points in 2007.

Net written premiums for Homeowners declined 2%, and the combined ratio was
102.9%. Personal Automobile net written premiums declined 4%, and the
combined ratio was 85.7%. Other Personal lines grew 23% and had a combined
ratio of 105.8%.

Chubb Commercial Insurance (CCI) net written premiums declined 2% in the third
quarter to $1.2 billion. The combined ratio for the quarter was 106.0% in
2008 and 84.4% in 2007. Catastrophe losses accounted for 19.9 percentage
points in the third quarter of 2008 and 0.8 percentage points in the third
quarter of 2007.

Average third quarter renewal rates in the U.S. were down 4% for CCI, which
retained 86% of the U.S. premiums that came up for renewal. In the U.S., the
ratio of new to lost business was 1.1 to 1.

Chubb Specialty Insurance (CSI) net written premiums declined 2% in the third
quarter to $709 million. The combined ratio was 82.3%, compared to 76.3% in
the third quarter of 2007.

Professional Liability (PL) net written premiums declined 5%, and the business
had a combined ratio of 84.3%. Average third quarter renewal rates in the
U.S. were down 2% for PL, which retained 87% of the U.S. premiums that came up
for renewal. In the U.S., the ratio of new to lost business was 1.1 to 1.

Surety net written premiums grew 16%, and the combined ratio was 65.0%.

Webcast Conference Call to be Held Today at 5 P.M.
Chubb's senior management will discuss the company's third quarter performance
with investors and analysts today, October 23rd, at 5 P.M. Eastern Daylight
Time. The conference call will be webcast live on the Internet at
http://www.chubb.com and archived later in the day for replay.

About Chubb

Founded in 1882, the Chubb Group of Insurance Companies provides property and
casualty insurance for personal and commercial customers worldwide through
8,500 independent agents and brokers. Chubb's global network includes
branches and affiliates throughout North America, Europe, Latin America, Asia
and Australia.

Chubb's Supplementary Investor Information Report has been posted on its
Internet site at http://www.chubb.com.

All financial results in this release and attachments are unaudited.

Definitions of Key Terms

Operating Income
Operating income, a non-GAAP financial measure, is net income excluding
after-tax realized investment gains and losses. Management uses operating
income, among other measures, to evaluate its performance because the
realization of investment gains and losses in any given period is largely
discretionary as to timing and can fluctuate significantly, which could
distort the analysis of trends.

Underwriting Income (Loss)
Management evaluates underwriting results separately from investment results.
The underwriting operations consist of four separate business units: personal
insurance, commercial insurance, specialty insurance and reinsurance assumed.
Performance of the business units is measured based on statutory underwriting
results. Statutory accounting principles applicable to property and casualty
insurance companies differ in certain respects from generally accepted
accounting principles (GAAP). Under statutory accounting principles, policy
acquisition and other underwriting expenses are recognized immediately, not at
the time premiums are earned. Statutory underwriting income (loss) is arrived
at by reducing premiums earned by losses and loss expenses incurred and
statutory underwriting expenses incurred.

Management uses underwriting results determined in accordance with GAAP, among
other measures, to assess the overall performance of the underwriting
operations. To convert statutory underwriting results to a GAAP basis, policy
acquisition expenses are deferred and amortized over the period in which the
related premiums are earned. Underwriting income (loss) determined in
accordance with GAAP is defined as premiums earned less losses and loss
expenses incurred and GAAP underwriting expenses incurred.

Property and Casualty Investment Income After Income Tax
Management uses property and casualty investment income after income tax, a
non-GAAP financial measure, to evaluate its investment performance because it
reflects the impact of any change in the proportion of the investment
portfolio invested in tax exempt securities and is therefore more meaningful
for analysis purposes than investment income before income tax.

Book Value per Common Share with Available-for-Sale Fixed Maturities at
Amortized Cost
Book value per common share represents the portion of consolidated
shareholders' equity attributable to one share of common stock outstanding as
of the balance sheet date. Consolidated shareholders' equity includes, as
part of accumulated other comprehensive income, the after-tax appreciation or
depreciation on the Corporation's available-for-sale fixed maturities, which
are carried at fair value. The appreciation or depreciation on
available-for-sale fixed maturities is subject to fluctuation due to changes
in interest rates and therefore could distort the analysis of trends.
Management believes that book value per common share with available-for-sale
fixed maturities at amortized cost, a non-GAAP financial measure, is an
important measure of the underlying equity attributable to one share of common
stock.

Combined Loss and Expense Ratio or Combined Ratio
The combined loss and expense ratio, expressed as a percentage, is the key
measure of underwriting profitability. Management uses the combined loss and
expense ratio calculated in accordance with statutory accounting principles
applicable to property and casualty insurance companies to evaluate the
performance of the underwriting operations. It is the sum of the ratio of
losses and loss expenses to premiums earned (loss ratio) plus the ratio of
statutory underwriting expenses to premiums written (expense ratio) after
reducing both premium amounts by dividends to policyholders.

FORWARD-LOOKING INFORMATION
Certain statements in this document are "forward-looking statements" as that
term is defined in the Private Securities Litigation Reform Act of 1995
(PSLRA). These forward-looking statements are made pursuant to the safe
harbor provisions of the PSLRA and include statements regarding management's
2008 operating income per share guidance and related assumptions.
Forward-looking statements are made based upon management's current
expectations and beliefs concerning trends and future developments and their
potential effects on Chubb. These statements are not guarantees of future
performance. Actual results may differ materially from those suggested by
forward-looking statements as a result of risks and uncertainties, which
include, among others, those discussed or identified from time to time in
Chubb's public filings with the Securities and Exchange Commission and those
associated with:

-- global political conditions and the occurrence of terrorist attacks,
including any nuclear, biological, chemical or radiological events;

-- the effects of the outbreak or escalation of war or hostilities;

-- premium pricing and profitability or growth estimates overall or by
lines of business or geographic area, and related expectations with
respect to the timing and terms of any required regulatory approvals;

-- adverse changes in loss cost trends;

-- the ability to retain existing business;

-- our expectations with respect to cash flow and investment income and
with respect to other income;

-- the adequacy of loss reserves, including:

-- our expectations relating to reinsurance recoverables;
-- the willingness of parties, including us, to settle disputes;
-- developments in judicial decisions or regulatory or legislative
actions relating to coverage and liability, in particular, for
asbestos, toxic waste and other mass tort claims;
-- development of new theories of liability;
-- our estimates relating to ultimate asbestos liabilities;
-- the impact from the bankruptcy protection sought by various
asbestos producers and other related businesses; and
-- the effects of proposed asbestos liability legislation, including
the impact of claims patterns arising from the possibility of
legislation and those that may arise if legislation is not
passed;

-- the availability and cost of reinsurance coverage;

-- the occurrence of significant weather-related or other natural or
human-made disasters, particularly in locations where we have
concentrations of risk;

-- the impact of economic factors on companies on whose behalf we have
issued surety bonds, and in particular, on those companies that file
for
bankruptcy or otherwise experience deterioration in creditworthiness;

-- the effects of disclosures by, and investigations of, companies
relating
to possible accounting irregularities, practices in the financial
services industry, investment losses or other corporate governance
issues, including:

-- claims and litigation arising out of stock option "backdating,"
"spring loading" and other equity grant practices by public
companies;
-- the effects on the capital markets and the markets for directors
and officers and errors and omissions insurance;
-- claims and litigation arising out of actual or alleged accounting
or other corporate malfeasance by other companies;
-- claims and litigation arising out of practices in the financial
services industry;
-- claims and litigation relating to uncertainty in the credit and
broader financial markets; and
-- legislative or regulatory proposals or changes;

-- the effects of changes in market practices in the U.S. property and
casualty insurance industry, in particular contingent commissions and
loss mitigation and finite reinsurance arrangements, arising from any
legal or regulatory proceedings, related settlements and industry
reform, including changes that have been announced and changes that
may
occur in the future;

-- the impact of legislative and regulatory developments on our business,
including those relating to terrorism and catastrophes;

-- any downgrade in our claims-paying, financial strength or other credit
ratings;

-- the ability of our subsidiaries to pay us dividends;

-- general economic and market conditions including:

-- changes in interest rates, market credit spreads and the
performance of the financial markets;
-- currency fluctuations;
-- the effects of inflation;
-- changes in domestic and foreign laws, regulations and taxes;
-- changes in competition and pricing environments;
-- regional or general changes in asset valuations;
-- the inability to reinsure certain risks economically; and
-- changes in the litigation environment; and

-- our ability to implement management's strategic plans and
initiatives.

Chubb assumes no obligation to update any forward-looking information set
forth in this document, which speak as of the date hereof.

THE CHUBB CORPORATION

SUPPLEMENTARY FINANCIAL DATA
(Unaudited)

Periods Ended September 30
Third Quarter Nine Months
------------- -----------
2008 2007 2008 2007
---- ---- ---- ----
(in millions)

PROPERTY AND CASUALTY INSURANCE
Underwriting
Net Premiums Written............. $2,900 $2,938 $8,883 $8,863
Decrease in Unearned Premiums.... 64 40 43 64
------ ------ ------ ------
Premiums Earned............... 2,964 2,978 8,926 8,927
------ ------ ------ ------
Losses and Loss Expenses......... 2,006 1,541 5,339 4,693
Operating Costs and Expenses..... 871 874 2,669 2,649
Decrease (Increase) in Deferred
Policy Acquisition Costs........ 7 (11) (29) (64)
Dividends to Policyholders....... 11 5 29 13
------ ------ ------ ------

Underwriting Income.............. 69 569 918 1,636
------ ------ ------ ------

Investments
Investment Income Before
Expenses........................ 418 413 1,254 1,201
Investment Expenses.............. 7 8 23 25
------ ------ ------ ------

Investment Income................ 411 405 1,231 1,176
------ ------ ------ ------

Other Income (Charges)............ 4 (1) 7 3
------ ------ ------ ------

Property and Casualty Income...... 484 973 2,156 2,815

CORPORATE AND OTHER................ (53) (43) (159) (108)
------ ------ ------ ------

CONSOLIDATED OPERATING INCOME
BEFORE INCOME TAX................. 431 930 1,997 2,707

Federal and Foreign Income Tax..... 93 268 521 763
------ ------ ------ ------

CONSOLIDATED OPERATING INCOME...... 338 662 1,476 1,944

REALIZED INVESTMENT GAINS (LOSSES)
AFTER INCOME TAX.................. (74) 76 (79) 213
------ ------ ------ ------

CONSOLIDATED NET INCOME............ $ 264 $ 738 $1,397 $2,157
====== ====== ====== ======

PROPERTY AND CASUALTY INVESTMENT
INCOME AFTER INCOME TAX........... $ 327 $ 324 $ 981 $ 942
====== ====== ====== ======

Periods Ended September 30
Third Quarter Nine Months
------------- -----------
2008 2007 2008 2007
---- ---- ---- ----

OUTSTANDING SHARE DATA
(in millions)
Average Common and Potentially
Dilutive Shares............... 362.3 393.6 369.2 404.5
Actual Common Shares at
End of Period................. 355.7 383.8 355.7 383.8

DILUTED EARNINGS PER SHARE DATA
Operating Income............... $ .93 $1.68 $ 3.99 $4.81
Realized Investment Gains
(Losses)...................... (.20) .19 (.21) .52
----- ----- ------ -----
Net Income..................... $ .73 $1.87 $ 3.78 $5.33
===== ===== ====== =====

Effect of Catastrophes......... $(.72) $(.10) $(1.09) $(.40)
===== ===== ====== =====

Sept. 30 Dec. 31 Sept. 30
2008 2007 2007
---- ---- ----

BOOK VALUE PER COMMON SHARE................. $38.25 $38.56 $37.12

BOOK VALUE PER COMMON SHARE,
with Available-for-Sale Fixed Maturities
at Amortized Cost.......................... 39.14 37.87 36.93

PROPERTY AND CASUALTY UNDERWRITING RATIOS
PERIODS ENDED SEPTEMBER 30

Third Quarter Nine Months
------------- -----------
2008 2007 2008 2007
---- ---- ---- ----
Losses and Loss Expenses to
Premiums Earned.................. 67.9% 51.8% 60.0% 52.7%
Underwriting Expenses to
Premiums Written................. 30.2 29.8 30.2 29.9
---- ---- ---- ----

Combined Loss and Expense Ratio... 98.1% 81.6% 90.2% 82.6%
==== ==== ==== ====

Effect of Catastrophes on
Combined Loss and Expense Ratio.. 13.6% 2.0% 6.9% 2.8%

PROPERTY AND CASUALTY LOSSES AND LOSS EXPENSES COMPONENTS
PERIODS ENDED SEPTEMBER 30

Third Quarter Nine Months
------------- -----------
2008 2007 2008 2007
---- ---- ---- ----
(in millions)

Paid Losses and Loss Expenses.... $1,633 $1,498 $4,546 $4,333
Increase in Unpaid Losses and
Loss Expenses................... 373 43 793 360
------ ------ ------ ------

Total Losses and Loss Expenses... $2,006 $1,541 $5,339 $4,693
====== ====== ====== ======

PROPERTY AND CASUALTY PRODUCT MIX

Net Premiums Written Combined Loss and
% Increase Expense Ratios
2008 2007 (Decrease) 2008 2007
---- ---- ---------- ---- ----
(in millions)

NINE MONTHS ENDED SEPTEMBER 30

Personal Insurance
Automobile.............$ 457 $ 472 (3)% 88.5% 89.6%
Homeowners............. 1,859 1,831 2 85.8 77.2
Other.................. 571 489 17 100.5 95.3
Total Personal..... 2,887 2,792 3 89.1 82.6

Commercial Insurance
Multiple Peril......... 915 926 (1) 87.0 81.1
Casualty............... 1,281 1,300 (1) 94.6 95.1
Workers' Compensation.. 666 686 (3) 80.5 76.0
Property and Marine.... 957 909 5 116.0 85.4
Total Commercial... 3,819 3,821 - 95.6 85.9

Specialty Insurance
Professional Liability. 1,847 1,893 (2) 84.0 83.7
Surety................. 276 257 7 76.1 31.5
Total Specialty.... 2,123 2,150 (1) 83.2 78.3

Total Insurance.... 8,829 8,763 1 90.5 83.0

Reinsurance Assumed...... 54 100 (46) * *

Total..............$8,883 $8,863 - 90.2 82.6

QUARTERS ENDED SEPTEMBER 30

Personal Insurance
Automobile............ $ 154 $ 161 (4)% 85.7% 91.1%
Homeowners............ 646 657 (2) 102.9 76.8
Other................. 195 159 23 105.8 99.0
Total Personal.... 995 977 2 100.7 83.3

Commercial Insurance
Multiple Peril........ 308 313 (2) 103.6 73.4
Casualty.............. 385 403 (4) 99.8 98.4
Workers' Compensation. 205 205 - 81.3 79.4
Property and Marine... 280 283 (1) 133.3 79.5
Total Commercial.. 1,178 1,204 (2) 106.0 84.4

Specialty Insurance
Professional Liability 617 647 (5) 84.3 81.8
Surety................ 92 79 16 65.0 30.8
Total Specialty... 709 726 (2) 82.3 76.3

Total Insurance... 2,882 2,907 (1) 98.4 82.1

Reinsurance Assumed..... 18 31 (42) * *

Total............. $2,900 $2,938 (1) 98.1 81.6

* Combined loss and expense ratios are no longer presented for Reinsurance
Assumed since this business is in run-off.

SOURCE Chubb Corporation

Investors, Glenn A. Montgomery, +1-908-903-2365, or Media, Mark E. Greenberg,
+1-908-903-2682, both for Chubb Corporation