Property and casualty insurer Chubb Corp. (CB), Thursday reported a plunge in fourth-quarter profit, hurt mostly by losses stemming from superstorm Sandy that battered the U.S. coast in October, as well as on a slight decline in revenues. Chubb's quarterly earnings came in above Street estimates, while revenues fell short of expectations.
Nevertheless, the insurer detailed a strong operating earnings outlook for the fiscal year 2013.
Chubb's results for the quarter were hurt by costs of $882 million, before tax, related to Sandy, which mainly devastated portions of the Caribbean and the Mid-Atlantic and Northeastern United States. The company still managed to post a profit, a trend it has maintained through 2005 Hurricane Katrina as well.
The Warren, New Jersey-based insurer reported fourth-quarter net income of $102 million or $0.38 per share, compared with $452 million or $1.60 per share last year.
Results for the quarter include net realized investment gains of $90 million before tax.
Excluding investment gains/losses, operating earnings for the quarter were $44 million or $0.16 per share, compared with $460 million or $1.63 per share a year ago.
On average, 22 analysts polled by Thomson Reuters expected a loss of $0.45 per share for the quarter. Analysts' estimates typically exclude special items.
Combined ratio - the percentage of revenue paid out towards insurance claims - worsened to 111.2 percent from 89.9 percent last year.
Net premiums written for the quarter edged down 2 percent to $2.9 billion from $3 billion last year. Thirteen analysts on consensus estimated revenues of $3.02 billion.
Premiums were down 2 percent in the U.S. and down 1 percent outside the U.S. Excluding foreign currency losses, premiums were up 1 percent. Premiums earned for the quarter were $2.93 billion, compared with $2.95 billion last year.
At the end of the quarter, book value improved to $60.45 per share from $56.15 per share last year. Book value, a key metric, shows the value remaining for common shareholders after all assets are liquidated and debts repaid.
For the full year 2013, Chubb estimates operating earnings of $6.40 to $6.80 per share. Analysts currently expect earnings of $6.26 per share for the year.
During the fourth quarter, Chubb repurchased 369,900 million common shares for a total of $28 million. Chubb announced a new share repurchase program for up to $1.3 billion of its common stock. The new program replaces an earlier program that provided for the repurchase of up to $1.2 billion shares.
Shares of Chubb closed Thursday at $80.31, down 0.17%, on a volume of 2 million shares on the NYSE. In after hours, the stock gained 1.48%. In the past year, the stock has traded in a range of $66.65 - $81.80.
by RTT Staff Writer
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