Chubb Q1 2025 Earnings Impacted by California Wildfires Amid Underwriting Growth
Chubb reported a net income of $1.33 billion and core operating income of $1.49 billion for the first quarter of 2025, marking a significant decline from $2.14 billion and $2.16 billion, respectively, in the same period last year. This downturn was largely attributed to pre-tax catastrophe losses totaling $1.64 billion, primarily driven by California wildfires, which accounted for $1.47 billion of the losses and contributed 15.9 percentage points to the combined ratio. After-tax net catastrophe losses were $1.30 billion, translating to $3.21 per share, compared to $435 million and 4.4 points on the combined ratio in Q1 2024.
Despite these losses, Chubb's property and casualty (P&C) underwriting income reached $441 million with a combined ratio of 95.7%. When excluding catastrophe losses, current accident year underwriting income actually increased by 12.2% year-over-year to $1.83 billion, with a healthier combined ratio of 82.3%. This suggests underlying strength in underwriting performance despite external catastrophic events.
Looking forward, Chubb’s CEO Evan G. Greenberg indicated that about 80% of the company's global P&C and life insurance businesses hold strong growth potential. However, he voiced caution regarding the broader economic environment, citing concerns over U.S. trade policy, inflation, and recession risks, which are currently affecting business confidence and underscore the need for clearer policy direction to support economic stability.
For the full year 2024, Chubb achieved record net income of $9.27 billion and core operating income of $9.20 billion, supported by an 8.7% increase in consolidated net premiums written to $51.5 billion. The global P&C segment saw a 9.6% rise and life insurance premiums surged by 15.7%, with an annual combined ratio of 86.6%. Notably, Q4 catastrophe losses were also significant, totaling $607 million from hurricanes Milton and Helene.
In Q1 2025, net premiums written in the P&C segment increased by 3.2% to $10.93 billion, or 5.0% on a constant currency basis. North America premiums grew 3.4%, though growth-adjusted figures showed 6.4% increases excluding wildfire-related reinstatement premiums and large prior-year transactions. Overseas markets, including Latin America, Asia, and Europe, contributed to premium growth in general insurance and P&C segments.
Life insurance premiums rose 5.3% to $1.72 billion, with segment income up 8.6%. Investment income also strengthened, with pre-tax net investment income increasing 12.2% to $1.56 billion. Chubb's annualized return on equity stood at 8.2%, indicating sustained profitability despite the impact of natural catastrophe losses.