(Reuters) - Property and casualty insurer Chubb Corp (CB.N) 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 (TRV.N) and ACE Ltd ACE.N also reported better-than-expected results this week, helped by improved pricing.
“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 data.
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 million.
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.
Editing by Maju Samuel and Ted Kerr