Chubb Reports Third Quarter Net Income per Share of $1.98; Operating Income per Share Is a Record $1.98; Combined Ratio Is

 Chubb Reports Third Quarter Net Income per Share of $1.98; Operating Income
             per Share Is a Record $1.98; Combined Ratio Is 86.3%

2012 Operating Income per Share Guidance Is Increased to a Range of $6.70 to
$6.80

PR Newswire

WARREN, N.J., Oct. 25, 2012

WARREN, N.J., Oct. 25, 2012 /PRNewswire/ --The Chubb Corporation (NYSE: CB)
today reported that net income in the third quarter of 2012 was $533 million
compared to $298 million in the third quarter of 2011. Net income per share
increased 90% to $1.98 from $1.04.

Operating income, which the company defines as net income excluding after-tax
realized investment gains and losses, was $533 million in the third quarter of
2012 compared to $252 million in the third quarter of 2011. Operating income
per share increased 125% to a record $1.98 from $0.88.

The third quarter impact of catastrophes before tax was $17 million in 2012
and $420 million in 2011. The impact of catastrophes on third quarter net
income and operating income per share was $0.04 in 2012 and $0.95 in 2011. 

The third quarter combined loss and expense ratio was 86.3% in 2012 compared
to 102.6% in 2011. The impact of catastrophes accounted for 0.6 percentage
points of the combined ratio in the third quarter of 2012, compared to 14.4
percentage points in the third quarter of 2011. Excluding the impact of
catastrophes, the third quarter combined ratio improved to 85.7% in 2012 from
88.2% in 2011.

The expense ratio for the third quarter was 32.5% in 2012 and 32.4% in 2011.

Net written premiums increased 1% in the third quarter of 2012 to $2.9
billion. Excluding the effect of foreign currency translation, premiums were
up approximately 3%. Premiums increased 4% in the U.S. and declined 6%
outside the U.S. (were flat in local currencies).

Property and casualty investment income after taxes for the third quarter
declined 7% to $297 million in 2012 from $321 million in 2011.

Net realized investment losses for the third quarter of 2012 were less than $1
million, compared to net realized investment gains of $71 million before tax
($0.16 per share after-tax) in the third quarter of 2011.

During the third quarter, Chubb repurchased 4.1 million shares of its common
stock at a total cost of $301 million (an average of $73.80 per share). As
ofSeptember 30, 2012, there remained approximately $357 million available for
share repurchases under the current authorization.

Average diluted shares outstanding for the third quarter were 269.2 million in
2012 and 287.8 million in 2011.

"Chubb's third quarter operating earnings per share of $1.98 were the highest
of any quarter in Chubb's history," said John D. Finnegan, Chairman, President
and Chief Executive Officer. "This record result reflected strong underlying
underwriting performance as well as unusually low catastrophe losses. All
three of our business units made significant contributions to these results,
producing an outstanding 86.3% combined ratio. We're also encouraged by the
rate increases we continued to obtain in all of our business units."

Nine-Month Results

For the first nine months of 2012, net income was $1.4 billion or $5.29 per
share, compared with $1.2 billion or $4.16 per share for the first nine months
of 2011. Operating income for the first nine months totaled $1.4 billion or a
record $5.04 per share in 2012, compared with $1.0 billion or $3.50 per share
in 2011.

The impact of catastrophes in the first nine months of 2012 was $264 million
before tax. In the first nine months of 2011, the impact of catastrophes was
$1.0 billion before tax. The impact of catastrophes on net income and
operating income per share for the first nine months was $0.63 in 2012 and
$2.25 in 2011.

The combined ratio for the first nine months was 90.1% in 2012 compared to
97.1% in 2011. The impact of catastrophes in the first nine months accounted
for 3.0 percentage points of the combined ratio in 2012 and 11.7 points in
2011. Excluding the impact of catastrophes, the combined ratio in the first
nine months was 87.1% in 2012 and 85.4% in 2011.

The expense ratio for the first nine months was 32.0% in 2012 and 31.8% in
2011.

Net written premiums increased 2% in the first nine months of 2012 to $9.0
billion. Excluding the effect of foreign currency translation, premiums were
up approximately 3%. Premiums increased 4% in the U.S. and declined 3%
outside the U.S. (increased 1% in local currencies).

Property and casualty investment income after taxes for the first nine months
declined 4% to $908 million in 2012 from $949 million in 2011.

Net income for the first nine months of 2012 reflected net realized investment
gains of $103 million before tax ($0.25 per share after-tax). Net income for
the first nine months of 2011 reflected net realized investment gains of $300
million before tax ($0.66 per share after-tax).

Average diluted shares outstanding for the first nine months were 272.9
million in 2012 and 294.4 million in 2011.

During the first nine months of 2012, Chubb repurchased 12.7 million shares of
common stock at a total cost of $907 million (an average of $71.23 per share).

Revised Guidance for 2012

"Based on our record operating income per share for the first nine months and
our outlook for the fourth quarter," said Mr. Finnegan, "we are increasing our
full year 2012 operating income per share guidance to a range of $6.70 to
$6.80 from the $5.70 to $5.95 range we provided in July 2012. This revised
guidance is based on operating income per share of $5.04 for the first nine
months and an estimated range of $1.66 to $1.76 for the fourth quarter."

The revised guidance for 2012 operating income per share assumes an impact
from catastrophes of 2 percentage points in the fourth quarter, resulting in
an assumed impact of catastrophes for the year of 2.7 points, compared to an
assumption of 4.3 points in the previous guidance. The revised guidance
assumes 271 million average diluted shares outstanding for the year, unchanged
from the previous guidance.

The impact of each percentage point of catastrophe losses on 2012 full year
operating income per share is approximately $0.28.

Guidance and related assumptions are subject to the risks outlined in the
company's forward-looking information safe-harbor statements (see below).

Third Quarter Operations Review

Chubb Personal Insurance (CPI) net written premiums increased 3% in the third
quarter of 2012 to $1.1 billion. CPI's combined ratio was 82.8%, compared to
115.6% in the third quarter of 2011. The impact of catastrophe losses in the
third quarter accounted for 1.5 percentage points of the combined ratio in
2012 and 28.5 points in 2011. Excluding the impact of catastrophe losses,
CPI's third quarter combined ratio was 81.3% in 2012 and 87.1% in 2011.

Net written premiums for Homeowners increased 3%, and the combined ratio was
76.2%. Personal Automobile net written premiums declined 2%, and the combined
ratio was 92.0%. Other Personal lines premiums increased 8%, and the combined
ratio was 95.5%.

Chubb Commercial Insurance (CCI) net written premiums were up 2% in the third
quarter of 2012 to $1.2 billion. The combined ratio for the third quarter was
87.2% in 2012 and 101.1% in 2011. The impact of catastrophe losses in the
third quarter accounted for 0.2 percentage points of the combined ratio in
2012 and 11.2 points in 2011. Excluding the impact of catastrophe losses,
CCI's third quarter combined ratio was 87.0% in 2012 and 89.9% in 2011.

In the U.S., average third quarter CCI renewal rates were up 8%, premium
renewal retention was 84% and the ratio of new to lost business was 0.9 to 1.

Chubb Specialty Insurance (CSI) net written premiums declined 4% in the third
quarter of 2012 to $640 million. The combined ratio was 91.9% compared to
88.3% in the third quarter of 2011.

Professional Liability (PL) net written premiums were down 5%, and the
business had a combined ratio of 97.0%. In the U.S., average third quarter PL
renewal rates were up 8%, premium renewal retention was 82% and the ratio of
new to lost business was 0.6 to 1.

Surety net written premiums were up 3%, and the combined ratio was 55.8%.

Webcast Conference Call to be held Today at 5 P.M.

Chubb's senior management will discuss the company's third quarter performance
with investors and analysts today, October 25th, at 5 P.M. Eastern Daylight
Time. The conference call will be webcast live on the Internet at
http://www.chubb.com and archived later in the day for replay.

About Chubb

Founded in 1882, the Chubb Group of Insurance Companies provides property and
casualty insurance for personal and commercial customers worldwide through
8,500 independent agents and brokers. Chubb's global network includes
branches and affiliates throughout North America, Europe, Latin America, Asia
and Australia.

Chubb's Supplementary Investor Information Report has been posted on its
Internet site at http://www.chubb.com.

All financial results in this release and attachments are unaudited.

                                                       Glenn A. Montgomery
 For further information contact: Investors:
                                                       (908) 903-2365
                                                       Mark E. Greenberg
                                            Media:
                                                       (908) 903-2682



Definitions of Key Terms

Operating Income: Operating income, a non-GAAP financial measure, is net
income excluding after-tax realized investment gains and losses. Management
uses operating income, among other measures, to evaluate its performance
because the realization of investment gains and losses in any given period is
largely discretionary as to timing and can fluctuate significantly, which
could distort the analysis of trends.

Underwriting Income (Loss): Management evaluates underwriting results
separately from investment results. The underwriting operations consist of
four separate business units: personal insurance, commercial insurance,
specialty insurance and reinsurance assumed. Performance of the business
units is measured based on statutory underwriting results. Statutory
accounting principles applicable to property and casualty insurance companies
differ in certain respects from generally accepted accounting principles
(GAAP). Under statutory accounting principles, policy acquisition and other
underwriting expenses are recognized immediately, not at the time premiums are
earned. Statutory underwriting income (loss) is arrived at by reducing
premiums earned by losses and loss expenses incurred and statutory
underwriting expenses incurred.

Management uses underwriting results determined in accordance with GAAP, among
other measures, to assess the overall performance of the underwriting
operations. To convert statutory underwriting results to a GAAP basis,
certain policy acquisition expenses are deferred and amortized over the period
in which the related premiums are earned. Underwriting income (loss)
determined in accordance with GAAP is defined as premiums earned less losses
and loss expenses incurred and GAAP underwriting expenses incurred.

Property and Casualty Investment Income After Income Tax: Management uses
property and casualty investment income after income tax, a non-GAAP financial
measure, to evaluate its investment results because it reflects the impact of
any change in the proportion of tax exempt investment income to total
investment income and is therefore more meaningful for analysis purposes than
investment income before income tax.

Book Value per Common Share with Available-for-Sale Fixed Maturities at
Amortized Cost: Book value per common share represents the portion of
consolidated shareholders' equity attributable to one share of common stock
outstanding as of the balance sheet date. Consolidated shareholders' equity
includes, as part of accumulated other comprehensive income (loss), the
after-tax appreciation or depreciation, including unrealized
other-than-temporary impairment losses, of the Corporation's
available-for-sale fixed maturities, which are carried at fair value. The
appreciation or depreciation of available-for-sale fixed maturities is subject
to fluctuation due to changes in interest rates and therefore could distort
the analysis of trends. Management believes that book value per common share
with available-for-sale fixed maturities at amortized cost, a non-GAAP
financial measure, is an important measure of the underlying equity
attributable to one share of common stock.

Combined Loss and Expense Ratio or Combined Ratio: The combined loss and
expense ratio, expressed as a percentage, is the key measure of underwriting
profitability. Management uses the combined loss and expense ratio calculated
in accordance with statutory accounting principles applicable to property and
casualty insurance companies to evaluate the performance of the underwriting
operations. It is the sum of the ratio of losses and loss expenses to
premiums earned (loss ratio) plus the ratio of statutory underwriting expenses
to premiums written (expense ratio) after reducing both premium amounts by
dividends to policyholders.

Net Written Premiums Growth (Decrease) Excluding the Impact of Currency
Fluctuation: Management uses net written premiums growth (decrease) excluding
the impact of currency fluctuation, a non-GAAP financial measure, to evaluate
the trends in net written premiums, exclusive of the effect of fluctuations in
exchange rates between the U.S. dollar and the currencies in which
international business is transacted. In net written premiums growth
(decrease) excluding the impact of currency fluctuation, the effect of
fluctuations in the exchange rates is excluded as these rates may fluctuate
significantly and could distort the analysis of trends. Net written premiums
growth (decrease) excluding the impact of currency fluctuation is determined
by using the same exchange rate to translate each foreign currency denominated
net written premium amount in both periods.

FORWARD-LOOKING INFORMATION

In this press release, the conference call identified above and otherwise, we
may make statements regarding our results of operations, financial condition
and other matters that are "forward-looking statements" as that term is
defined in the Private Securities Litigation Reform Act of 1995 (PSLRA).
These forward-looking statements are made pursuant to the safe harbor
provisions of the PSLRA and include statements regarding management's 2012
operating income per share guidance and related assumptions. Forward-looking
statements frequently can be identified by words such as "believe," "expect,"
"anticipate," "intend," "plan," "will," "may," "should," "could," "would,"
"likely," "estimate," "predict," "potential," "continue," or other similar
expressions. Forward-looking statements are made based upon management's
current expectations and beliefs concerning trends and future developments and
their potential effects on Chubb. These statements are not guarantees of
future performance. Actual results may differ materially from those suggested
by forward-looking statements as a result of risks and uncertainties, which
include, among others, those discussed or identified from time to time in
Chubb's public filings with the Securities and Exchange Commission and those
associated with:

  oglobal political, economic and market conditions, particularly in the
    jurisdictions in which we operate and/or invest, including:

       ochanges in credit ratings, interest rates, market credit spreads and
         the performance of the financial markets;
       ocurrency fluctuations;
       othe effects of inflation;
       ochanges in domestic and foreign laws, regulations and taxes;
       ochanges in competition and pricing environments;
       oregional or general changes in asset valuations;
       othe inability to reinsure certain risks economically; and
       ochanges in the litigation environment;

  othe effects of the outbreak or escalation of war or hostilities;
  othe occurrence of terrorist attacks, including any nuclear, biological,
    chemical or radiological events;
  opremium pricing and profitability or growth estimates overall or by lines
    of business or geographic area, and related expectations with respect to
    the timing and terms of any required regulatory approvals;
  oadverse changes in loss cost trends;
  oour ability to retain existing business and attract new business at
    acceptable rates;
  oour expectations with respect to cash flow and investment income and with
    respect to other income;
  othe adequacy of our loss reserves, including:

       oour expectations relating to reinsurance recoverables;
       othe willingness of parties, including us, to settle disputes;
       odevelopments in judicial decisions or regulatory or legislative
         actions relating to coverage and liability, in particular, for
         asbestos, toxic waste and other mass tort claims;
       odevelopment of new theories of liability;
       oour estimates relating to ultimate asbestos liabilities; and
       othe impact from the bankruptcy protection sought by various asbestos
         producers and other related businesses;

  othe availability and cost of reinsurance coverage;
  othe occurrence of significant weather-related or other natural or
    human-made disasters, particularly in locations where we have
    concentrations of risk or changes to our estimates (or the assessments of
    rating agencies and other third parties) of our potential exposure to such
    events;
  othe impact of economic factors on companies on whose behalf we have issued
    surety bonds, and in particular, on those companies that file for
    bankruptcy or otherwise experience deterioration in creditworthiness;
  othe effects of disclosures by, and investigations of, companies relating
    to possible accounting irregularities, practices in the financial services
    industry, investment losses or other corporate governance issues,
    including:

       othe effects on the capital markets and the markets for directors and
         officers and errors and omissions insurance;
       oclaims and litigation arising out of actual or alleged accounting or
         other corporate malfeasance by other companies;
       oclaims and litigation arising out of practices in the financial
         services industry;
       oclaims and litigation relating to uncertainty in the credit and
         broader financial markets; and
       olegislative or regulatory proposals or changes;

  othe effects of changes in market practices in the U.S. property and
    casualty insurance industry arising from any legal or regulatory
    proceedings, related settlements and industry reform, including changes
    that have been announced and changes that may occur in the future;
  othe impact of legislative, regulatory and similar developments on our
    business, including those relating to terrorism, catastrophes, the
    financial markets, solvency standards, capital requirements and accounting
    guidance;
  oany downgrade in our claims-paying, financial strength or other credit
    ratings;
  othe ability of our subsidiaries to pay us dividends; and
  oour ability to implement management's strategic plans and initiatives.

Chubb assumes no obligation to update any forward-looking information set
forth in this document, which speak as of the date hereof.

THE CHUBB CORPORATION



SUPPLEMENTARY FINANCIAL DATA

(Unaudited)
                                  Periods Ended September 30
                                  Third Quarter Nine Months
                                  2012   2011   2012   2011
                                  (in millions)
PROPERTY AND CASUALTY INSURANCE
Underwriting
 Net Premiums Written            $2,913 $2,879 $8,962 $8,793
 Decrease (Increase) in
                                  64     53     (51)   (94)
 Unearned Premiums
 Premiums Earned              2,977  2,932  8,911  8,699
 Losses and Loss Expenses        1,597  2,054  5,164  5,666
 Operating Costs and Expenses    946    931    2,859  2,790
 Decrease (Increase) in Deferred
 Policy Acquisition Costs       9      (13)   (15)   (70)
 Dividends to Policyholders      7      7      23     23
 Underwriting Income (Loss)      418    (47)   880    290
Investments
 Investment Income Before
 Expenses                       373    404    1,145  1,200
 Investment Expenses             9      8      28     29
 Investment Income               364    396    1,117  1,171
Other Income                     1      8      6      24
Property and Casualty Income      783    357    2,003  1,485
CORPORATE AND OTHER               (56)   (62)   (173)  (188)
CONSOLIDATED OPERATING INCOME
BEFORE INCOME TAX                727    295    1,830  1,297
Federal and Foreign Income Tax    194    43     454    266
CONSOLIDATED OPERATING INCOME     533    252    1,376  1,031
REALIZED INVESTMENT GAINS
AFTER INCOME TAX                 -      46     67     195
CONSOLIDATED NET INCOME           $ 533 $ 298 $1,443 $1,226
PROPERTY AND CASUALTY INVESTMENT
INCOME AFTER INCOME TAX          $ 297 $ 321 $ 908 $ 949



                        Periods Ended September 30
                        Third Quarter          Nine Months
                        2012       2011        2012           2011
OUTSTANDING SHARE DATA
(in millions)
 Average Common and
Potentially
 Dilutive Shares      269.2      287.8       272.9          294.4
 Actual Common Shares                                     
at
                        261.9      278.1       261.9          278.1
 End of Period
DILUTED EARNINGS PER
SHARE DATA
 Operating Income      $1.98      $ .88       $5.04          $ 3.50
 Realized Investment   -          .16         .25            .66
Gains
 Net Income            $1.98      $1.04       $5.29          $ 4.16
 Effect of             $(.04)     $(.95)      $(.63)         $(2.25)
Catastrophes
                                   Sept. 30    Dec. 31        Sept. 30
                                   2012        2011           2011
                                               (As Adjusted)  (As Adjusted)
BOOK VALUE PER COMMON SHARE        $60.99      $56.15         $55.25
BOOK VALUE PER COMMON SHARE,                                

with Available-for-Sale Fixed                              
Maturities
                                   53.96       50.37          50.13
at Amortized Cost
Book value per common share at December 31, 2011 and September 30, 2011 has
been adjusted to reflect the adoption of new guidance issued by the Financial
Accounting Standards Board related to the accounting for costs associated with
acquiring or renewing insurance contracts. The adoption of this guidance
decreased shareholders' equity by $273 million as of December 31, 2011 and
September 30, 2011. The effect of the adoption of the new guidance on net
income for the nine months ended September 30, 2012 and September 30, 2011 was
not material.



PROPERTY AND CASUALTY UNDERWRITING RATIOS

PERIODS ENDED SEPTEMBER 30
                                 Third Quarter Nine Months 
                                                 
                                 2012    2011    2012    2011
Losses and Loss Expenses to                            
                                                 58.1%
Premiums Earned                 53.8%   70.2%           65.3%
Underwriting Expenses to                              

Premiums Written                32.5    32.4    32.0    31.8
Combined Loss and Expense Ratio  86.3%   102.6%  90.1%   97.1%
Effect of Catastrophes on                             

Combined Loss and Expense Ratio 0.6%    14.4%   3.0%    11.7%



PROPERTY AND CASUALTY LOSSES AND LOSS EXPENSES COMPONENTS

PERIODS ENDED SEPTEMBER 30
                                     Third Quarter Nine Months
                                     2012    2011    2012    2011
                                     (in millions)
Paid Losses and Loss Expenses        $1,639  $1,728  $4,927  $4,938
Increase (Decrease) in Unpaid Losses                      

and Loss Expenses                   (42)    326     237     728
Total Losses and Loss Expenses       $1,597  $2,054  $5,164  $5,666



PROPERTY AND CASUALTY PRODUCT MIX
                          Net Premiums Written Combined Loss and
                                           % Increase    Expense Ratios
                         2012     2011     (Decrease)   2012     2011
                         (in millions)
NINE MONTHS ENDED SEPTEMBER 30
Personal Insurance
 Automobile             $ 519   $ 517   - %          92.2%    94.8%
 Homeowners             1,940    1,872    4            82.1     106.2
 Other                  652      597      9            95.1     96.1
 Total Personal     3,111    2,986    4            86.5     102.2
Commercial Insurance
 Multiple Peril         840      852      (1)          90.4     108.0
 Casualty               1,248    1,247    -            91.6     86.7
 Workers' Compensation  789      662      19           95.2     92.5
 Property and Marine    1,092    1,058    3            94.3     119.0
 Total Commercial   3,969    3,819    4            92.6     101.4
Specialty Insurance
 Professional Liability 1,660    1,740    (5)          97.7     87.9
 Surety                 220      244      (10)         51.4     49.9
 Total Specialty    1,880    1,984    (5)          92.3     83.6
 Total Insurance    8,960    8,789    2            90.5     97.4
Reinsurance Assumed      2        4        *           *       *
 Total              $8,962   $8,793   2            90.1     97.1
QUARTERS ENDED SEPTEMBER 30
Personal Insurance
 Automobile             $ 170   $ 174   (2)%         92.0%    99.3%
 Homeowners             679      658      3            76.2     126.1
 Other                  213      197      8            95.5     97.6
 Total Personal     1,062    1,029    3            82.8     115.6
Commercial Insurance
 Multiple Peril         287      290      (1)          77.2     95.6
 Casualty               378      392      (4)          89.2     92.5
 Workers' Compensation  242      199      22           94.9     94.4
 Property and Marine    304      302      1            87.9     119.8
 Total Commercial   1,211    1,183    2            87.2     101.1
Specialty Insurance
 Professional Liability 567      594      (5)          97.0     92.5
 Surety                 73       71       3            55.8     55.5
 Total Specialty    640      665      (4)          91.9     88.3
 Total Insurance    2,913    2,877    1            86.8     103.0
Reinsurance Assumed      -        2        *           *       *
Total               $2,913   $2,879   1            86.3     102.6

*The change in net premiums written and the combined loss and expense ratios
are no longer presented for Reinsurance Assumed since this business is in
runoff.



SOURCE Chubb Corporation

Website: http://www.chubb.com
 
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