Chubb suspends buyback as it counts Sandy losses
NEW YORK (AP) — Property and casualty insurer Chubb Corp. on Thursday suspended its stock buyback program, because it has not yet been able to determine what its total costs related to Superstorm Sandy will be.
The Warren, N.J.-based company is considered to be one of the insurers most likely to suffer losses from Sandy. It said in a regulatory filing that given the short amount of time that has passed since the storm and the widespread nature of its destruction, it cannot yet determine its losses.
Chubb added that conditions in some areas affected by the storm could delay the notification and assessment of potential claims, which could extend the amount of time needed for it to calculate its losses.
As a result, Chubb said it has temporarily stopped buying back common stock under an existing buyback program in order to make sure that it's compliant with securities trading laws.
The company also said that because of the suspension, it might not complete the repurchase of all of the shares under its buyback program by the end of January, as previously hoped.
During the third quarter, Chubb repurchased 4.1 million shares for $301 million, leaving it with about $357 million left for repurchases as of Sept. 30.
Chubb, along with Allstate Corp. and Travelers Cos., claims a major share of the coverage in areas with heavy damages from Sandy, which hit densely populated areas of the East Coast, including New York City and New Jersey.
Damage forecasting firm Eqecat has said that economic losses related to Sandy could total as much as $50 billion. The estimate includes property damage and lost business. But New York Gov. Andrew Cuomo said Thursday that damages in his state alone could total $33 billion.
Insurance losses are typically a fraction of the overall cost.
In midday trading, Chubb shares rose 51 cents to $74.91. In the days since the storm hit the shares have fallen about 4 percent.