Chubb has warned its future earnings would take an indefinite hit, as the COVID-19 pandemic drags the global economy into its worst slump since the 2008 financial crisis.

The warning came as the insurer reported first quarter net income fell sharply to $US252 million ($399 million) from $US1.04 billion ($1.6 billion) a year earlier.

Severe financial market volatility in the credit, equity and foreign exchange markets heavily impacted net income, Chubb says.

The property and casualty (P&C) business held up well, with underwriting income up 9.3% to $US778 million ($1.2 billion) but future quarters would probably see a “meaningful impact” on revenue and core operating income because of the virus-induced downturn.

Chubb says the impact would come in the form of “an increase in insurance claims due to both the pandemic and recessionary economic conditions.”

“The coronavirus is delivering a severe blow to the global economy. How long and how deep is unknown,” Chairman and CEO Evan Greenberg said. “It will have a major impact on the global insurance industry in terms of both losses and revenue.

“For Chubb, we expect our premium growth momentum to be impacted for a period as insurance exposures in important areas shrink. This will be an earnings event for our company.”

In the first quarter, P&C net written premiums rose 8.9% to $US7.3 billion ($11.6 billion) and the combined ratio improved to 89.1% from 89.2%.

Pre-tax catastrophe losses declined to $US237 million ($376 million) from $US250 million ($396 million) a year earlier. The losses included $US13 million ($20.6 million) from the global virus pandemic, which will be tracked as a separate ongoing catastrophe event.