NU Online News Service, April 24, 2:42 p.m. EDT

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Chubb Corp. reported its first-quarter net income dropped 49percent from the previous year, but the earnings were good enoughto beat analysts' estimates by 5 cents a share.

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The Warren, N.J.-based insurer reported first-quarter net incomedropped $323 million on the comparative quarter to $341million.

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Its results translated into operating income per share of $1.43,better than the $1.38 consensus estimate of analysts. First-quarternet income per share dropped from $1.77 a share last year to 95cents a share this quarter.

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The drop was the result of the combination of claims losses,losses on investments and a decrease in net premium written.

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Chubb reported net premiums written fell 7 percent, or $193million to $2.74 billion. Investment income fell 8 percent, or $31million, to $379 million.

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The company reported its combined ratio deteriorated 4.2 points,rising to 88.1, with the effects of catastrophes impacting the rateby 0.9 points.

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Personal lines combined ratio rose 5.2 points to 90; commerciallines combined ratio rose 3 points to 90.2; and specialty linesrose 7 points to 85.1.

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During an analyst's conference call John D. Finnegan, chairman,president and chief executive officer of Chubb, said the insurercontinued to "operate in a difficult market environment" but wasable to produce positive results "despite the difficulty."

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Mr. Finnegan said the drop in premium written was attributableto the strength of the dollar on overseas underwriting and theimpact on insurance buying of the economic downturn.

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John J. Degnan, vice chairman and chief operation officer, saidrates across all lines of business are experiencing increases andthe company is experiencing a steady stream of clients who areleaving insurers whose financial position is in question.

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But he said migration does not involve a flood of clientsbecause competition remains tough as some carriers cut prices30-to-40 percent in order to retain business.

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He said Chubb is refusing to write business that does not meetits underwriting criteria and refuses to underprice risk.

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Mr. Degnan said Chubb believes the "firming market is underway."He said it "is more incremental than we had hoped, but it isunderway."

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In response to a question about reports that The Hartford issoliciting bids to sell its property-casualty division, Mr.Finnegan indicated Chubb would prefer to pursue organic growth overan acquisition, but declined to comment further.

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According to press reports yesterday, The Hartford is solicitingbids from several insurers to purchase its p-c business aftersuffering significant losses in its life business.

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