Oct. 25 (Bloomberg) -- Chubb Corp., the insurer of commercial property and high-end homes, said third-quarter profit rose 79 percent on lower catastrophe costs.
Net income increased to $533 million, or $1.98 a share, from $298 million, or $1.04, a year earlier, the Warren, New Jersey-based company said today in a statement. Operating profit, which excludes some investment results, was $1.98 a share, beating the $1.50 average estimate of 22 analysts surveyed by Bloomberg.
Hurricane Isaac, which made landfall in August, contributed to catastrophe costs in the period. Losses declined from a year earlier when Hurricane Irene boosted disaster costs and Chubb posted its lowest quarterly net income since 2008. Hurricanes most commonly occur in the third quarter.
“We have had Hurricane Isaac, but we haven’t had any other large losses beyond that,” Amit Kumar, an analyst at Macquarie Group Ltd., said in a phone interview before earnings were released.
The insurer climbed 2.2 percent to $81.13 in extended trading at 4:19 p.m. in New York after raising its forecast for full-year operating earnings per share. The company now expects a range of $6.70 to $6.80, up from a forecast of $5.70 to $5.95 in July.
Chubb had advanced 15 percent this year on the New York Stock Exchange, matching the gain in the 24-company KBW Insurance Index. Results were released after the close of regular trading.
Premium revenue rose to $3 billion from $2.9 billion a year earlier. Travelers Cos. and Evan Greenberg’s Ace Ltd., which compete against Chubb selling commercial insurance, reported improved third-quarter results this month as the companies charged clients more for coverage. Chubb, Ace and Travelers, the only insurer in the Dow Jones Industrial Average, all climbed to record highs in the past month of New York trading.
“Chubb is the gold standard in the property-casualty insurance space and goes from strength to strength with every report,” Kumar said. “Similar to other companies which have reported earlier, we expect Chubb to be at the leading edge of raising pricing.”
Chubb earned an underwriting profit of 13.7 cents on every dollar it collected in premiums for the quarter, compared with a loss of 2.6 cents a year earlier. Catastrophe costs declined to $17 million from $420 million.
Book value, a measure of assets minus liabilities, rose to $60.99 a share from $58.54 at the end of June.
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