Chubb 3Q Earnings Easily Top Views

Chubb (CB) reported late Thursday better-than-expected third-quarter earnings, though its narrowed profit fell victim to declining specialty and commercial premiums.  

The Warren, NJ-based company posted net income of $572 million, or $1.80 a share, compared with $596 million, or $1.69 a share, in the same quarter last year.

Excluding investment gains and losses, earnings were $1.69 a share, trumping the Street’s view of $1.39.

Investment gains were $54 million, down from $69 million a year ago.

Earnings were hit by higher catastrophes, up to $58 million from $22 million a year ago, offset by slightly improved net written premiums to $2.73 billion, virtually matching average analyst estimates polled by Thomson Reuters.

While net written premiums remained flat in the company’s specialty and commercial insurance units, personal insurance premiums grew 4% to $980 million.

During the quarter, Chubb bought back 10.2 million of its shares at a cost of $555 million, or $54.63 a share. As of Sept. 30, there were 6.6 million shares left under the current authorization.

Chubb Chairman John D. Finnegan said the quarter represented the property and casualty insurer’s ability to “generate outstanding profitability and book value growth during a period of challenging economic and industry conditions.”

Based on the favorable results, the company offered an optimistic fourth-quarter outlook, now anticipating earnings in the range of $5.75 to $5.85 a share, up from its earlier prediction of $5.15 to $5.55.

Separately Thursday, the company announced several changes to its executive lineup amid the Dec. 31 retirement of current chief operating officer John J. Degnan.

The moves include the promotions of current chief underwriting officer, Paul J. Krump, as president of commercial and special lines, and current chief administrative officer, Dino E. Robusto, as president of personal lines and claims.

Chubb’s current chief global field officer, Harold L. Morrison, will remain in that roll and receive the additional responsibilities of chief administrative officer.

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AmEx 3Q Earnings Up 70%

Credit-card giant American Express (AXP) on Thursday reported a 70% increase in third-quarter profits from a year ago on improved consumer spending.

Earnings from continuing operations rose to $1.09 billion, or 90 cents a diluted share, from $642 million, or 54 cents, in the same period a year earlier, the New York-based company said in a statement.

The figures easily beat Wall Street’s projected estimate of 86 cents a share.

“Cardmember spending rose a strong 14% with the largest increases coming from businesses where we’ve been making significant investments: charge and premium co-brand products, corporate cards and cards issued by our bank partners,” chief executive Kenneth I. Chenault said in the statement.

Revenue jumped 17% to slightly more than $7 billion.

The credit card industry has come under increasing government scrutiny in the wake of the recent financial crisis. Credit card companies have been criticized for allegedly hiding fees and providing misleading information to consumers.

Earlier this month Chenault vowed to fight an anti-trust lawsuit filed by the U.S. Justice Department. The government is challenging AmEx contracts that bar merchants from steering consumers to cheaper card brands and alternative payment forms.

AmEx’s is arguing that merchants are willing to pay more for American Express because its cardholders are generally fairly affluent and make for good customers. Visa Inc. (V) and MasterCard Inc. (MA), payment networks whose business models are different than AmEx, have agreed to settle.  

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