Summary
Chubb Ltd. (operating as ACE Limited) reported a significant decrease in net income for the third quarter of 2008, dropping to $54 million from $656 million in the same period of 2007. This decline was primarily driven by substantial net realized investment losses totaling $510 million, a stark contrast to the break-even realized gains/losses in the prior year's quarter. These investment losses were exacerbated by widening credit spreads and market volatility, notably including $150 million related to Lehman Brothers debt. Additionally, the company experienced a significant increase in catastrophe losses, particularly from Hurricanes Gustav and Ike, contributing to a higher loss and loss expense ratio. Despite the earnings pressure, the company saw a 17% increase in net premiums written for the quarter, partly due to the acquisition of Combined Insurance Company of America on April 1, 2008, for $2.56 billion. This acquisition diversified the company's accident and health (A&H) business and contributed positively to net premiums earned. The company also successfully redeemed all outstanding Preferred Shares during the quarter. The report highlights ongoing legal proceedings and investigations related to past industry practices, though management believes the ultimate liability will not materially impact the company's financial condition.
Financial Highlights
17 data points| Revenue | $3.62B |
| Interest Expense | $68.00M |
| Net Income | $54.00M |
| EPS (Basic) | $0.16 |
| EPS (Diluted) | $0.16 |
Key Highlights
- 1Net income for Q3 2008 plummeted to $54 million from $656 million in Q3 2007, primarily due to $510 million in net realized investment losses.
- 2Net premiums written increased by 17% to $3.28 billion, boosted by the acquisition of Combined Insurance Company of America and growth in A&H business.
- 3Catastrophe losses significantly increased, with net losses of $411 million in Q3 2008 compared to negligible amounts in Q3 2007, primarily due to Hurricanes Gustav and Ike.
- 4The company completed the acquisition of Combined Insurance Company of America on April 1, 2008, for $2.56 billion, adding $936 million in goodwill and other intangible assets.
- 5All outstanding Preferred Shares totaling $575 million were redeemed in June 2008.
- 6The company experienced a significant increase in its loss and loss expense ratio to 69.5% from 62.5% in the prior year's quarter, impacted by catastrophe losses and prior period development.
- 7The company also completed its redomestication to Zurich, Switzerland, effective July 18, 2008.