Chubb Affirmed; Outlook Stable

S&P Ratings Services affirmed its “A” counter-party credit and senior debt ratings on Warren, N.J.-based Chubb Corp. In addition, S&P affirmed its “AA” counter-party credit and insurer financial strength ratings on Chubb’s operating companies. The outlook is stable.

Reportedly, the affirmation reflects Chubb’s continued very strong competitive positioning in a range of commercial and personal segments. In addition, the group enjoys very strong brand-name recognition globally and strong capitalization on a consolidated basis. Although the company experienced above-average reserve strengthening and one-time charges in recent years, new executive leadership—in place since early 2003—has succeeded in enhancing operating company capital strength, improving risk identification and management, renewing operating focus, and increasing financial flexibility.

S&P expects Chubb to maintain consolidated financial leverage of 15 percent to 20 percent and about $1 billion in cash and marketable securities for financial flexibility on the parent balance sheet through 2004. The capital position of the Federal Insurance Inter-company Pool is expected to further improve in 2004 through earnings retention. S&P expects Chubb to generate an underwriting profit in 2004 due to a hardened rate environment, improved loss trend, and reduced operating expenses. S&P views Chubb’s reserve strengthening needs and one-time charges in the past three years as above average for the current rating and unlikely to continue at a material level without having a negative effect on the current outlook and/or rating.