Chubb issues 2Q warning
Insurer blames Tropical Storm Allison for expected 25% drop in 2Q earnings
July 10, 2001: 9:55 a.m. ET
WARREN, N.J. (Reuters) - Chubb Corp. said Tuesday its second-quarter profits will fall by more than 25 percent from a year ago, due largely to losses from Tropical Storm Allison, which caused widespread damage in Texas, Louisiana and other southeastern states in June.
Chubb (CB: down $2.20 to $72.10, Research, Estimates) is the first major insurer to warn of large losses from Allison, following storm-related earnings warnings from three smaller regional insurers.
Warren, N.J.-based Chubb, one of the leading car, home and business insurers in the United States, said it paid out about $80 million in catastrophe claims in the second quarter, mostly for damage caused by Allison.
Chubb said these catastrophe losses, more than three times larger than in the same quarter last year, would chop about 29 cents a share off second-quarter earnings.
The firm said it now expects to report earnings between 75 cents and 80 cents per share, well below the 99 cents to $1.15 per share expected by analysts polled by earnings tracker First Call.
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