(Reuters) - Chubb (NYSE:CB) Limited reported a surge in fourth-quarter adjusted profit on Tuesday, helped by stronger underwriting and investment incomes, sending U.S.-listed shares of the insurer up 2.8% in after-market trading.
The insurance industry typically enjoys stable demand for its products regardless of the economic backdrop, as policies are often guaranteed by employers and some are mandated by the government.
But heightened expectations of a soft landing have also boosted sentiment among businesses and reduced uncertainty, encouraging them to ramp up their spending on insurance policies.
Chubb's consolidated net premiums written rose 13.4% in the quarter, with commercial insurance up 10% and consumer insurance up 19.9%.
Insurers use their cash to buy a portfolio of assets, chiefly safe-haven ones such as U.S. Treasuries and other high-grade corporate bonds. Multiple rate hikes by the U.S. Federal Reserve have helped insurers earn higher interest from such investments.
Adjusted net investment income for Chubb's surged 33% to $1.49 billion.
The insurer's core operating income, excluding a one-time tax benefit, rose to $2.28 billion, or $5.54 per share, in the three months ended Dec. 31, compared with $1.67 billion, or $4 per share, a year earlier.