* 4th-qtr oper profit $0.16/shr vs est. loss $0.45/shr
* Says expects oper profit $6.40-$6.80/shr for 2013
* $882 mln pre-tax catastrophe losses due to storm Sandy
* Approves new $1.3 bln share repurchase program
By Ashutosh Pandey
Jan 31 Chubb Corp posted a surprise
operating profit even as the property and casualty insurer
booked a pre-tax catastrophe loss of $882 million related to
superstorm Sandy, the largest loss from a natural disaster in
the company's history.
Chubb also said it planned to increase insurance rates in
the U.S. Northeast, which was battered by Sandy on Oct. 29.
Chubb was one of the most exposed insurers to the storm.
The company forecast operating earnings of between $6.40 and
$6.80 per share for 2013, well above the average analyst
estimate of $6.26.
"As we think about storm Sandy within the context of the
last several years of increasing weather-related losses, we
recognize the need for additional price increases," said
Executive Vice President Dino Robusto said on a post-earnings
conference call with analysts on Thursday.
"Prior to Sandy, we had implemented mid single-digit rate
increases for homeowners in the Northeast," he said. "Post Sandy
we plan to file for rate increases up to the low teens in some
areas of the northeast."
Chubb said it had approved a new $1.3 billion share
repurchase program to replace a $1.2 billion program suspended
while it calculated losses from the storm.
The company had bought back about $979 million of shares
under the earlier program.
Net income for the fourth quarter fell to $102 million, or
38 cents per share, from $452 million or $1.60 per share, a year
On an operating basis, profit fell more than 90 percent to
$44 million, or 16 cents per share. Analysts on average had
expected a loss of 45 cents per share, according to Thomson
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 for the fourth quarter declined 2
percent to $2.9 billion, while property and casualty investment
income fell 6 percent to $296 million.
"We expect some benefit to be offset by what we assume will
be a reversion to more normalized levels of non-CAT (weather
losses)," Chief Executive John Finnegan said on the call.
"We also expect headwinds in the form of lower
investment income in 2013 due to continued low interest rates."
Chubb's shares were up about 1.5 percent in extended trading
after closing at $80.31 on the New York Stock Exchange.
The stock is trading at life-high levels and have gained
more than 8 percent in the last month.
The S&P 500 property & casualty insurance index
has risen 9 percent in the same period.