Chubb expects the prevailing coronavirus crisis to have a meaningful effect on its revenue and also on its net and core operating income in Q2 and other upcoming quarters
Chubb reports $252m net income for Q1 2020. (Credit: mohamed Hassan from Pixabay)
Chubb has announced a 75.8% drop in net income for the first quarter of 2020 (Q1 2020) at $252m or $0.55 per share, compared to $1.04bn net income or $2.25 per share, made in the same quarter in 2019.
The Swiss insurance company said that its performance in the first quarter in 2020 was affected by financial market volatility in the credit, equity, and foreign exchange markets, which eventually impacted its net income.
Chubb’s core operating income for Q1 2020, which ended 31 March, was up by 4.2% at $1.22bn or $2.68 per share, compared to $1.17bn or $2.54 per share, compared to Q1 2019.
The company said that there was no substantial impact on its Q1 2020 core operating income relating to the prevailing coronavirus outbreak.
However, the firm expects the global health crisis will have a meaningful effect on its revenue and also on its net and core operating income in the second quarter and possibly on future quarters due to a surge in insurance claims. This, the company said will be because of the coronavirus outbreak and recessionary economic conditions.
The Swiss insurer recorded $237m in pre-tax catastrophe losses in the first quarter 2020. Included in these are a $224m loss caused by global weather-related events and $13m related to the coronavirus pandemic, which the company will track as a separate ongoing catastrophe event.
Chubb’s property and casualty (P&C) net premiums written in Q1 2020 were $7.33bn, which is 8.9% more than the $6.73bn reported in Q1 2019.
The P&C underwriting income for the company in Q1 2020 was up by 9.3% at $778m.
On the other hand, the global P&C unit of the Swiss insurer, which excludes agriculture, had an 8.6% increase in its net premiums written in the first quarter 2020 at $7.17bn. The underwriting income for the unit surged 19.5% compared to the prior year quarter to $764m.
Chubb CEO comments on Q1 2020 results
Chubb chairman and CEO Evan Greenberg said: “The coronavirus is delivering a severe blow to the global economy. How long and how deep is unknown. It will have a major impact on the global insurance industry in terms of both losses and revenue.
“For Chubb, we expect our premium growth momentum to be impacted for a period as insurance exposures in important areas shrink. This will be an earnings event for our company; our balance sheet and liquidity remain strong.”