CAT Losses Drive 95.7 Combined Ratio; Investment Income and Life Segment Show Growth
Chubb Limited (NYSE: CB) reported first-quarter 2025 net income on April 22, 2025, of $1.33 billion, or $3.29 per-share, down 37% from $2.14 billion, or $5.23 per-share, in the prior-year quarter. Core operating income was $1.49 billion, or $3.68 per-share, a 31% decrease year-over-year.
The quarter’s results were significantly impacted by $1.64 billion in pre-tax net catastrophe losses, largely driven by $1.47 billion in claims from the California wildfires. These losses accounted for 15.9 percentage points of the company’s 95.7% property and casualty (P&C) combined ratio. Excluding catastrophes and prior period development, Chubb’s current accident year combined ratio improved to 82.3%, from 83.7% a year ago.
“Our published combined ratio was 95.7% with underwriting income of $441 million, a notable result given $1.6 billion of catastrophe losses,” said Chubb Chairman and CEO Evan G. Greenberg. “Excluding CATs, the current accident year combined ratio was 82.3%, a nearly 1.5-point improvement from prior year.”
Premium Growth in Constant Dollars
Consolidated net premiums written rose to $12.65 billion, up 3.5%, or 5.7% in constant dollars. P&C net premiums written totaled $10.93 billion, up 3.2%, or 5.0% in constant dollars. Life Insurance premiums increased 5.3% to $1.72 billion, or 10.3% in constant dollars.
North America P&C net premiums written rose 3.4% to $6.62 billion. Excluding the effect of reinstatement premiums related to wildfire events and unusually large prior-year structured transactions, North America P&C premium growth was 6.4%, with personal lines up 10.1% and commercial lines up 5.3%.
Overseas General Insurance net premiums written grew 6.5% in constant dollars, with commercial insurance up 7.3% and consumer insurance up 5.0%. Regional growth in constant dollars was led by Latin America and Asia (both 6.1%) and Europe (5.5%).
Segment Performance
- P&C Underwriting Income: $441 million, down 68.5% from $1.40 billion.
- P&C Current Accident Year Underwriting Income Ex-CATs: $1.83 billion, up 12.2%.
- Life Insurance Income: $291 million, up 8.6%, or 15.7% in constant dollars.
Pre-tax net investment income increased 12.2% to $1.56 billion, while adjusted net investment income rose 12.7% to $1.67 billion.
Book value per share rose 2.7% to $164.01, and tangible book value per share increased 3.9% to $104.27. Excluding AOCI, book value and tangible book value per share increased 0.9% and 1.6%, respectively.
Operating Ratios and Returns
- Combined Ratio: 95.7% vs. 86.0% in Q1 2024
- Core Operating ROE: 8.6%, down from 13.4%
- Core Operating ROTE: 13.0%, compared to 21.3%
- Annualized ROE: 8.2%, versus 14.3%
Capital Return and Cash Flow
Chubb returned $751 million to shareholders, including $385 million in share repurchases and $366 million in dividends. Operating cash flow was $1.57 billion; adjusted operating cash flow reached $2.00 billion.
CEO Commentary
“We had a good first quarter that was overshadowed by the significant catastrophe losses we incurred from the California wildfires,” Greenberg said. “We produced $1.5 billion in core operating income, supported principally by excellent underlying underwriting results, double-digit growth in investment income and growing life insurance income.”
Greenberg noted macroeconomic concerns, including trade uncertainty and inflation, but expressed confidence in Chubb’s long-term performance. “I expect we will continue to grow operating income and EPS at a double-digit rate, CATs and FX notwithstanding.”
