Insurer Chubb profit jumps five-fold, $1.5 bln buyback planned

Reuters

* Fourth-quarter net profit $569 mln vs $102 mln year earlier

* Operating earnings per share $2.07 vs est $2.04

* Announces $1.5 bln share buyback

* Expects FY2014 operating earnings of $7.10-$7.40/shr vs est $7.60

Jan 30 (Reuters) - Property and casualty insurer Chubb Corp reported a better-than-expected quarterly profit as its claims fell 30 percent and announced a $1.5 billion share buyback.

The company, however, warned that first-quarter results would be hurt by severe winter weather in the United States that would trim net profit by 39-52 cents per share after tax.

The insurer said it expected to earn $7.10-$7.40 per share in 2014 on an operating basis, below analysts' average estimate of $7.60.

Chubb's net profit rose more than five-fold to $569 million, or $2.24 per share, in the fourth quarter ended Dec. 31, from $102 million, or 38 cents per share, a year earlier.

Profit in the year-earlier quarter was affected by Super storm Sandy, which battered the U.S. east coast in October 2012.

On an operating basis, Chubb earned $2.07 per share, above analysts' average estimate of $2.04 per share, according to Thomson Reuters I/B/E/S.

Net earned premium rose 4 percent to $3.04 billion.

Losses and loss expenses fell about 30 percent to $1.66 billion.

"Our combined ratio in the quarter was a very strong 85.5 percent, once again reflecting the impact of higher rates and strong underwriting performance in all of our business units," Chief Executive John Finnegan said.

The company's year-earlier combined ratio was 111.2 percent. The ratio is an indicator of the total claims and expenses incurred over net earned premiums. A combined ratio over 100 indicates that an insurer has an underwriting loss.

The company reported an underwriting profit of $430 million, compared to a loss of $332 million a year earlier.

However, low interest rates continued to chip away at Chubb's investment income, which fell more than 4 percent to $349 million.

Rival Travelers Inc reported a three-fold rise in profit last week due to low catastrophe losses but the slowing pace of its rate hikes raised concerns about the company's margins.

Chubb's previous share buyback program has been completed.

Shares of the Warren, New Jersey-based insurer, which has a market value of about $22 billion, closed at $86.76 on the New York Stock Exchange on Thursday.

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