(Bloomberg) -- Chubb Corp., the insurer of high-end homes and mega-yachts, said a lack of growth in the global economy and a stronger dollar could limit policy sales and investment income this year.
Further strengthening of the dollar against currencies of countries where the insurer has operations would pressure the business, Chief Executive Officer John Finnegan wrote in Warren, N.J.-based Chubb’s annual report posted on its website. The company writes about a quarter of its premiums outside of the U.S.
Underwriting results would be bolstered “if the U.S. economic recovery spread to the rest of the developed world, which as of this writing has shown no signs of emerging from its stagnation,” Finnegan said in the letter.
Insurers operating outside the U.S. have been struggling with a stronger dollar that pressured operating results as low interest rates cut into profits from corporate bonds. Chubb’s annual property and casualty after-tax investment income has declined by about $200 million since 2008, hurt by falls in the average yield on fixed-maturity securities, Finnegan said. The company expects the profit to continue its drop in 2015, according to a regulatory filing.
Chubb rose 1.4% to $101.75 in regular New York trading and has declined 1.7% this year.
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