The Chubb Corporation reported third quarter net income yesterday of $604 million, compared to $246 million for the same 2005 quarter.

The numbers beat the consensus estimate by 11 cents per share, according to Bear Stearns analyst David Small. “In our view the quarter was characterized by lackluster top-line production offset by continued strong underlying profitability in core operations,” Mr. Small wrote.

Last year, Chubb's results for the third quarter were adversely affected by pre-tax costs of $511 million related to Hurricane Katrina.

The third quarter combined loss and expense ratio improved to 85.5 in 2006 from 102.2 in 2005. Excluding the impact of catastrophes, the third quarter combined ratio improved to 84 in 2006 from 85.2 in 2005.

Total net written premiums for the insurance and reinsurance businesses declined 1 percent to $3 billion in the third quarter. Excluding the impact of Katrina-related reinstatement premiums, total net written premiums declined 2 percent.

Mr. Small said the relatively weak top-line growth resulted from a softening commercial lines pricing environment and underscores the fact that future growth and profitability will likely fall below current levels.

Property and casualty investment income after taxes for the third quarter increased 10 percent to $295 million in 2006, from $267 million in 2005.

“Chubb's third quarter results were driven by outstanding profit contributions from all three of our insurance business units, including continued improvement in the Professional Liability segment of Chubb Specialty Insurance,” said John D. Finnegan, chairman, president and chief executive officer.

Special Reports /

Chubb Quarterly Net Doubles

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