Chubb posts lower fourth-quarter earnings

NEW YORK (Reuters) - High-end property and casualty insurer Chubb Corp (CB.N) said on Tuesday that net income fell in the fourth quarter as premiums in the U.S. insurance business declined.

Net earnings dropped to $650 million, or $1.68 a share, from $654 million, or $1.56 a share, in the year-earlier quarter. Chubb had 32 million fewer shares outstanding in the latest period.

"Chubb has been riding a great market," said Matt Nellans, an analyst with Morningstar. "But things will get worse when the good results from the premiums written over the past 12 months are no longer baked in."

Chubb, a top writer of specialty insurance, said operating earnings, which analysts use to measure performance, were $620 million, or $1.60 a share. A year earlier, Chubb's operating net was $614 million, or $1.46 a share.

Analysts, on average, had expected the Warren, New Jersey-based insurer to earn $1.47 a share before special items, according to Reuters Estimates.

While premiums were down 2 percent in the U.S. insurance business, they rose 15 percent outside the United States.

The insurer's expense ratio for the year, which measures the cost of underwriting, was more than a percentage point higher than a year ago.

Chief Executive John Finnegan said he expected the company to achieve operating income of $5.70 to $6.10 per share in 2008, compared with analysts' expectations of $5.84 a share, according to Reuters Estimates.

Chubb's shares closed at $50.89 on the New York Stock Exchange, up 18 cents. In the last 12 months, the stock has fallen about 2 percent compared with about an 11 percent decline in the Standard & Poor's insurance index .GSPINSC.

(Reporting by Ed Leefeldt; editing by Jeffrey Benkoe/Andre Grenon)