Chubb Ltd. reported second-quarter net income of $1.22 billion, down 46.3% from $2.27 billion in the same period last year.
The insurer said in its earnings release after Tuesday’s market close that net income for the quarter was hit by after-tax realized losses of $565 million, “primarily due to the mark-to-market effect on private and public equity and from the sale of fixed income.”
Total net premium income increased 7.3% compared to Q2 2021 to $10.3 billion.
Net property/casualty premium income increased 9.0% to $9.731 billion. North America property/casualty net premiums increased 10.9%, driven by growth in commercial lines of 12.6% and consumer products of 5.4%.
The overall property/casualty premium increase included increases in commercial rates of 12% and consumer rates of 8%, Chubb Chairman and CEO Evan G. Greenberg said Wednesday during an earnings call with analysts.
“Pricing was strong and exceeded loss costs in commercial lines even as we increased the inflation factors we use in our loss ratios in anticipation of future increases in loss costs,” Greenberg said.
Mr. Greenberg said Chubb expected strong growth in farm premiums in the third quarter after seeing a 44% jump in the second quarter, driven by growth in crop insurance.
Property/casualty catastrophe losses totaled $291 million compared to $280 million in the same period last year.
Net investment income before taxes was a record $888 million, up from $884 million in last year’s second quarter. Mr. Greenberg said investment income would likely continue to rise along with interest rates.
Chubb’s total expense ratio improved to 84.0% from 85.5% in last year’s second quarter.
Mr. Greenberg said that while the commercial property/casualty environment remains favorable, the level of increases is subdued and additional interest is still required to keep pace with loss costs.
He added that the pricing environment is becoming more competitive in some casualty lines as more insurers try to grow.