Chubb has reported a 35.6% decline in first-quarter net profit to $US439 million ($592 million), due to integration costs and unfavourable currency movements.

The US-listed insurer faced a one-time charge of $US106 million ($143 million) for merger-related expenses during the March quarter following last year’s $US28.3 billion ($38.2 billion) acquisition by Zurich-based Ace.

The acquisition was completed in January, with the new entity trading as Chubb.

Property and casualty net written premium increased 52.8% to $US5.5 billion ($7.4 billion) and the property and casualty combined operating ratio deteriorated to 90% from 88.4%.

Underwriting income grew 52.3% to $US612 million ($825 million), while unfavourable foreign currency movements cost the insurer $US21 million ($28.3 million).

Chairman and CEO Evan Greenberg says the merger is already paying dividends, despite the hit to first-quarter earnings.

“The impact of merger-related focus is diminishing and foreign exchange should have a reduced effect in the second quarter,” he said.

“In fact, we are already beginning to see evidence of both.

“Our client renewal retention rates were very strong in the quarter, so the impact to growth came predominantly from new business, where greater momentum has begun to build.”

The integration process is proceeding well, with Chubb now expecting cost savings of $US750 million ($1.01 billion) by 2018, up from $US650 million ($876.7 million) originally estimated.

“Reception to the new Chubb in the market from customers, agents and brokers around the globe has been terrific,” Mr Greenberg said.

“We also now project that we will surpass our original run rate target for integration-related expense savings… the value creation that will come from the new Chubb is exceeding our initial expectations.”