Chubb Ltd. saw its net profit to $ 2.42 billion in the fourth quarter of 2020, as it benefited from double-digit premium growth for commercial lines in the midst of a continuing tough or strengthening market in most parts of the world.
"We had a very strong end to the year, excellent financial results, the headline with rapid growth in premium income and margin improvement – a trend we are confident will continue," said Evan G. Greenberg, Chairman and CEO of Chubb, at a Wednesday morning results conversation with analysts.
“During the quarter, we continued to experience a strong and constantly improving environment for commercial properties / accident prices. In fact, the level of speed and rate of increase was the strongest since this part of the insurance cycle began about three years ago, says Greenberg.
While almost all of Chubb's commercial real estate / accident rates reach prices that exceed cost losses, others have a way to go, he said.
"The interest rate environment, in my view, is a rational and necessary response to years of risk underpricing and a more uncertain risk environment today," says Greenberg
Net premium increased to $ 7.77 billion in the fourth quarter, an increase of 5.4% over the same period in 201
Pre-tax disaster losses were $ 314 million for the quarter, or $ 271 million net, down 27% from the previous year. There were no changes in the previously reported total property / damaged COVID-19 – incurred loss fee, Greenberg said.
Chubb's total property-to-accident ratio was 87.6% compared to 92.7% in the same period in 2019.
The current commercial market conditions have legs and Chubb expects the favorable insurance terms to continue, Greenberg said.
Total prices in North America's commercial properties / accidents increased by 16.5% during the quarter.
In larger accounts, the primary accident rates increased by 7%, while the general accident rates increased by over 36%. Property prices increased by more than 30%, while financial interest rates increased by more than 26%.
In Chubb's wholesale business at Westchester E&S, property prices increased by over 23%, the accident rate increased by almost 29% and financial interest rates increased by over 26%.
In Chubb's average market operations, property prices rose by more than 15%. The accident rate increased by almost 12%, excluding compensation to workers (up 0.5%), and interest rates on financial lines increased by more than 20%.
"Internationally, as in the United States in the markets where we grew, we continued to achieve improved speed exposure across the commercial portfolio," said Greenberg.
In its foreign general operations, interest rates rose by a total of 18.5%, while interest rates rose by 17% in international retail and 26% in wholesale London.
For the full year, Chubbs 'profit fell by 20.7% to $ 3.53 billion, and the net premium written increased to $ 31.31 billion, an increase of 4.8% compared to 2019. Chubbs' total expense ratio for 2020 was 96.1%, compared to 90.6% the previous year.
"Looking ahead, we have made a good start to the year during the first quarter – both the growth and the level of interest rate increase that we achieve looks a lot like the fourth quarter," says Greenberg.