Following the company's release of strong second-quarter earnings, John J. Degnan, chief operating officer of The Chubb Corp., yesterday took a dig at competitors for accepting federal aid.
Following the company’s release of strong second-quarter earnings, John J. Degnan, chief operating officer of The Chubb Corp., yesterday took a dig at competitors for accepting federal aid.
During Chubb’s earnings conference call, he pledged that the insurer would “compete vigorously against companies which are unsustainable but for government bailouts.”
The weakened condition of the Warren, N.J.-based company’s peers brought in a “continued but somewhat more modest and certainly uneven flow” of new business opportunities during the second quarter, Mr. Degnan said.
Just how the market dislocation will play out for Chubb during the rest of the year remains to be seen, he said.
“Will severely distressed carriers propped up by government funding and with reduced accountability to shareholders elevate the market share over responsible underwriting and disrupt the normal marketplace constraints of supply and demand?” he asked. “Rhetorically, one might ask if consumers are unlikely to buy a car built by the government, why on earth would they want to buy an insurance policy underwritten and adjusted by folks who act more like bureaucrats than businesspeople.”
The insurer reaped $551 million in profits for the second quarter, or $1.54 a share, up from $469 million, or $1.27 a share, a year earlier.
The net of written premiums slipped by 7% to $2.8 billion, from $3 billion a year earlier.
As a result of the insurer’s results, John D. Finnegan, chairman and chief executive, said during the conference call that the company will raise its 2009 operating-income guidance to a range of $5.20 to $5.50 a share, from the January estimate of $4.80 to $5.20 a share.
