Chubb Corp. reported better-than-expected third-quarter earnings with pretax hurricane losses of $511 million driving profits down by a third.
The Warren, N.J.-based insurer reported third-quarter net income of $246 million compared with $364 million for the period in 2004.
Chubb also announced it is starting a new reinsurance business in conjunction with a private equity fund.
Bear Stearns analyst David Small called the results "solid," noting it beat his estimates by more than 400 percent, along with the consensus of other analysts.
"The company has again shown its superior underwriting and risk management ability and proven that the repositioning of its book continues to yield positive results," Mr. Small said.
The analyst also said the formation of the new reinsurance unit will gain the company additional exposure to the reinsurance market without risking its own balance sheet.
The third-quarter combined ratio was 102, compared with 93.3 in the year-ago period. Catastrophes represented 17 combined ratio points in the third quarter, compared with 6.7 points in the third quarter last year.
Net written premiums for the quarter came in at $3 billion, similar to the third quarter of 2004.
Property-casualty investment income after taxes for the third quarter increased 10 percent to $267 million in 2005 from $242 million in 2004.
Mr. Small said a key lesson to learn from the Chubb results is that "vanilla commercial multi-peril policies continued to see pricing flat to down."
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