(January 29, 2010) — U.S. property and casualty insurers Chubb Corp. and Travelers Cos. are continuing to profit from gains in private equity investments, following the global stock-market rally during the second half of 2009.
As of last year’s fourth quarter, Chubb held about $2.1 billion in alternative investments, which increased by $169 million in the last three months of 2009. Comparatively, its alternative investments, which include private equity, suffered a $125 million loss the year before during the same period, according to Bloomberg. The Warren, New Jersey-based insurer reported its fourth-quarter net income increased 71% to $695 million, compared to $407 million in the fourth quarter of 2008.
Travelers’ non-fixed income investments, including private equity, hedge funds and real estate partnerships, earned $69 million, beating analysts’ forecasts. Comparatively, it lost $164 million in the fourth quarter of 2008. Of its $75 billion portfolio, Travelers has about $3 billion in non-fixed income assets, Bloomberg reported.
The insurers’ positive earnings may signal the profitability of alternative investments in the fourth quarter, and suggest improvements for competing insurers with alternative investments.
To contact the <em>aiCIO</em> editor of this story: Paula Vasan at <a href='mailto:pvasan@assetinternational.com'>pvasan@assetinternational.com</a>; 646-308-2742