Chubb is reporting a banner 2019 third quarter, but the company took a dent in its net income largely from losses relating to an accounting adjustment.

Net income for the insurer reached $1 billion, or $2.38 per diluted share, compared to more than $1.2 billion, or $2.64 per share, in the 2018 third quarter. Chubb blamed the 11.4 percent drop in net income on “mark-to-market” losses of $119 million connected to its variable annuity reinsurance portfolio. A year ago, there were adjusted realized gains of $163 million.

That accounting adjustment aside, Chubb saw growth in P/C premiums and underwriting income and improvement in an already healthy P/C combined ratio. Chubb Chairman and CEO Evan Greenberg said in prepared remarks that the results point to a carrier “in great shape” that is “executing at a high level.”

“We benefited from an improved pricing and underwriting environment and a flight to quality from commercial insurance buyers who are more often choosing Chubb,” Greenberg noted.

The Chubb CEO added that pricing continued to firm during the quarter, at double or greater the rate of the first quarter, in many cases. He said that rate increases are accelerating in general and spreading to more business classes. Aside from that, he said, growth initiatives are also making a difference in Chubb’s bottom line.

“We are also benefiting from our many product, customer and distribution-related growth initiatives in the U.S., Asia and Latin America,” Greenberg said.

Other results highlights:

• The P/C combined ratio was a healthy 90.2 versus a 90.9 combined ratio in the 2018 third quarter. Chubb said the number reflects lower catastrophe losses and higher crop insurance losses.
• Pre-tax catastrophe losses reached $232 million compared with $450 million in the 2018 third quarter.
• Agriculture underwriting income took a hit from crop insurance weather conditions, with underwriting reaching just $1 million compared with $79 million in the previous year.
• P/C net premiums written were $8 billion, up 6.2 percent from the previous year.
• P/C underwriting income came in at $754 million, a 12.6 percent jump from the 2018 third quarter. Global P/C underwriting income (excluding agriculture) reached $753 million, a 27.7 percent jump.
• Net investment income hit $873 million pre-tax, a 6 percent increase over the same period a year ago.

Source: Chubb