* Q1 net profit $656 mln vs $506 mln year earlier
* Q1 oper earnings per share $2.14 vs est of $1.73
* Q1 commercial insurance revenue increases 3 pct
By Avik Das
April 25 Property and casualty insurer Chubb
Corp posted a stronger-than-expected 30 percent rise in
quarterly profit on strong pricing and said it would continue to
push for higher rates to offset weak investment returns.
Low interest rates have weighed on investment portfolios of
insurers as old, higher-yielding bonds pay off, forcing them to
put new money into lower-yielding debt.
Chubb will push for higher premiums given current market
conditions, Chief Executive John Finnegan said on a
post-earnings conference call on Thursday.
Travelers Cos Inc and ACE Ltd also reported
better-than-expected results this week, helped by improved
"I would guess that the pricing momentum would stick and if
there are larger catastrophes down the road, they would be
probably talking of double-digit rates," Macquarie Research
analyst Amit Kumar told Reuters.
Chubb's net profit rose 30 percent to $656 million, or $2.48
per share, in the first quarter from $506 million, or $1.83 per
share, a year earlier.
On an operating basis, profit was $2.14 per share. Analysts
on average had expected earnings of $1.73 per share, according
to Thomson Reuters I/B/E/S.
Chubb has not posted an operating loss on a per-share basis
since the third quarter of 2002, according to Thomson Reuters
Net written premiums rose 4 percent to $3.1 billion, while
the combined loss and expense ratio for the first quarter was
84.6 percent, compared with 90.2 percent last year.
"The pricing trends and the loss cost trends both are good.
Overall this is a solid quarter and I don't see anything in the
results which would make me revisit my outperform rating,"
Macquarie's Kumar said.
However, low interest rates continued to chip away at the
company's net investment income, which fell 8 percent to $351
Shares of Chubb, which has a market value of about $22
billion, were flat in extended trading after closing at $89.05
on the New York Stock Exchange on Thursday.
They have gained more than 16 percent this year.