Chubb has posted a 26.6% decline in its third quarter core operating income to $US907 million ($1.28 billion) after a sharp rise in catastrophe losses dented earnings.

The insurer says pre-tax catastrophe losses, net of reinsurance and including reinstatement premiums, nearly quadrupled to US$925 million ($1.3 billion) from $US232 million ($328 million) a year earlier.

Severe weather-related events globally made up $US696 million ($985 million) of the catastrophe bill and wildfires accounted for $US110 million ($156 million).

The ongoing economic devastation of the pandemic also affected Chubb in the September quarter.

“In the third quarter, Chubb performed well despite a challenging environment that included the continued struggle by many nations to address the impact, both health and economic, of the COVID-19 pandemic, as well as a record number of natural catastrophes for the insurance industry globally,” Chairman and CEO Evan Greenberg said.

However, he says underwriting conditions in most regions remain strong and continues to improve, boosting property and casualty net premiums written by 6.4% in constant dollars to $US8.5 billion ($12 billion) during the third quarter.

Chubb says rates in North America increased 15% on average and 16% in the overseas general insurance market.

“The current commercial [property and casualty] market, as we have observed, is a natural response to prolonged industry underpricing of risk and the loss cost and interest rate environment,” Mr Greenberg said. “I believe the favourable trend will endure.

“Where we can get paid adequately to assume the risk and volatility, we are growing our exposures across the portfolio while achieving rates that exceed loss costs, and that means margin improvement.”

The property and casualty combined ratio worsened to 95.2% from 90.2% a year earlier.

Overall net income for the third quarter grew 9.4% to $US1.2 billion ($1.7 billion), bumped up in part by net investment income of $US840 million ($1.2 billion).