Chubb in Fat City

It hits targets and raises guidance.
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Chubb (CB) - Get Report beat third-quarter targets and guided higher for the year.

The Warren, N.J., insurer made $604 million, or $1.43 a share, for the quarter ended Sept. 30, up from the year-ago $246 million, or 60 cents a share. On an operating basis, excluding realized investment gains and losses, earnings rose to $1.37 a share from 45 cents a year ago.

Analysts were looking for $1.26 a share.

The third-quarter combined loss and expense ratio -- reflecting the proportion of premium dollars paid out on claims -- improved to 85.5% in 2006 from 102.2% in 2005. The impact of catastrophes in the third quarter accounted for 1.5 percentage points of the combined ratio in 2006 and 17.0 points in 2005.

Excluding the impact of catastrophes, the third quarter combined ratio improved to 84% in 2006 from 85.2% in 2005. The expense ratio for the third quarter was 28.6% in 2006 and 27.8% 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 CEO John D. Finnegan. "Based on our favorable outlook for the fourth quarter and the benign hurricane season so far, we are updating our 2006 calendar-year operating-income-per-share guidance from the $4.90 to $5.10 range we provided in July to a new range of $5.40 to $5.50."

Analysts were looking for $5.25.

Shares rose a dime to $54.75.