The Chubb Corp. reported its 2013 second quarter net income of $579 million, a 43.3 percent increase from $404 million net income posted a year ago.

The company said it benefited from higher rates and stronger underlying underwriting performance, which offset slightly higher catastrophe losses compared to the same period in 2012.

The net income for the first six months of 2013 was $1.235 billion, a 35.7 percent climb from $910 million a year ago.

Net written premiums for the 2013 second quarter were $3.1 billion, unchanged from a year ago. Net written premiums for the first half of 2013 were $6.157 billion, up 1.79 percent from $6.049 billion a year ago.

The combined ratio for the 2013 second quarter improved to 88.8 percent (80.9 percent excluding the impact of catastrophes), compared to 93.8 percent a year ago (86.3 percent excluding the impact of catastrophes). The combined ratio for the first six months of 2013 also improved, falling to 86.7 percent (82.4 excluding the impact of catastrophes) from 92.0 percent (87.8 excluding the impact of catastrophes) reported during the 2012 first half.

The impact of catastrophes in the 2013 second quarter was $237 million before tax, up 6.3 percent from the $223 million loss before tax during the same period a year ago. The insurer said catastrophe losses during the latest quarter were related mostly to various severe storms in the central United States and storms and flooding in southern Alberta, Canada.

Investment income declined, though net realized investment gains rose compared to a year ago. Property/casualty investment income for the second quarter was $286 million, declining 6 percent compared to $303 million a year ago. Property/casualty investment income for the first six months of 2013 was $574 million, down 6 percent from $611 million for the 2012 first half. Net realized investment gains for the second quarter were $179 million before tax, compared to $47 million before tax a year ago. For the first half of 2013, net realized investment gains were $317 million before tax, compared to $103 million one year ago.

“Chubb produced excellent results in the second quarter of 2013,” CEO John Finnegan said. “Earnings in the quarter benefited from positive effects on earned premiums of rate increases in recent periods and the continued low level of non-Cat loss activity.”

Finnegan noted that net written premiums for the quarter were flat at $3.1 billion, while the combined ratio for the latest quarter was 88.8, including nearly 8 points of catastrophe losses.

“These results reflect our focus on bottom line profitability, underwriting discipline and push for higher rates, which was necessitated by the dual headwinds of lower investment income and continued high levels of catastrophe losses,” Finnegan said. “We remain encouraged by the renewal rate increases we continued to obtain in all our business units.”

The insurer said it expects to continue to get rate increases going forward. During an earnings conference call, Paul Krump, president of the commercial and specialty lines, said the company is seeing “no significant changes in the overall market tone” regarding the pace of rate improvements in Chubb’s commercial lines business (CCI). Average second quarter renewal rates in the U.S. were up 8 percent for CCI, which retained 83 percent of U.S. premiums that came up for renewal.

Krump said this observation is probably at odds with some industry participants “who suggested that some parts of the commercial market may be softening or experiencing additional competition.” He said it might be because Chubb is mostly in middle-market and has much less participation in the jumbo property market than many other insurers that may be making those comments about softening.

The company’s commercial lines business (CCI) did not grow during the second quarter — largely due to some downsizing of its exposure on some large accounts in the Northeast after Superstorm Sandy — but the company expects it to grow the rest of the year. The CCI’s net written premiums for the latest quarter were $1.3 billion, down 3 percent compared to one year ago.

“After Irene and Sandy, we looked at our catastrophe exposures, in particular in the Northeast, and there were a number of accounts where we decided to take smaller participation,” Krump said. “That drop-off in participation gets recorded as an exposure drop-off, and that is what impacted the exposure.”

On the other hand, workers’ comp had some renewal exposure increases, he added, which means the customers gave higher payroll projections for the year going forward than they had in the past.

In personal lines, the company continues to have good momentum in both the auto and homeowners, said Dino Robusto, executive vice president of The Chubb Corporation and president of personal lines and claims.

“Momentum is good on both homeowners and auto,” Robusto said. Regarding homeowner rate increases, the company is currently in the process of filing mid-to-high single digits and up to low-teens in some Northeast regions, Robusto said. In auto, the company has gotten “a couple of points of rate” he said.

Chubb also announced an improved full-year 2013 earnings outlook. “In light of our performance in the first half of the year and our outlook for the second half,” said Finnegan, “we have increased our guidance for full year 2013 operating income per share to a range of $7.30 to $7.50 from the $6.40 to $6.80 range we provided in our January 2013 guidance. We have raised our guidance despite an increase in our catastrophe loss assumption for the full year from 4.0 percentage points to 4.6 points.”

The revised guidance for the full year 2013 shows a 1-to-3 percent increase in net written premiums, a combined ratio of about 88 percent and a 6-to-8 percent decline in property and casualty investment income.

Q2 Operations Review by Business Lines

The Chubb Personal Insurance (CPI) business’ net written premiums rose 4 percent in the second quarter to $1.2 billion. CPI’s combined ratio for the quarter improved to 89.6 percent from 91.2 percent one year ago.

The impact of catastrophe losses in the second quarter accounted for 12.7 percentage points of the combined ratio, compared to 11.5 points a year ago. Excluding the impact of catastrophe losses, CPI’s second quarter combined ratio was 76.9 percent in 2013 and 79.7 percent in 2012.

Net written premiums for homeowners increased 4 percent, and the combined ratio was 86.9 percent. Personal automobile net written premiums were up 5 percent, and the combined ratio was 95.3 percent. Other personal lines premiums were up 3 percent, and the combined ratio was 93.3 percent.

The Chubb Commercial Insurance (CCI) business’ net written premiums fell 3 percent in the second quarter of 2013 to $1.3 billion. The combined ratio for the second quarter improved to 89.9 percent in 2013 from 97.5 percent in 2012.

The impact of catastrophe losses in the second quarter accounted for 8.1 percentage points of the combined ratio in 2013, compared to 8.2 points a year ago. Excluding the impact of catastrophe losses, CCI’s second quarter combined ratio was 81.8 percent in 2013 and 89.3 percent in 2012.

Average second quarter renewal rates in the U.S. were up 8 percent for CCI, which retained 83 percent of the U.S. premiums that came up for renewal. In the U.S., the ratio of new to lost business was 0.7 to 1.

The Chubb Specialty Insurance (CSI) business’ net written premiums declined 2 percent in the second quarter to $626 million. The second quarter combined ratio improved to 86.0 percent in 2013 from 91.4 percent in 2012.

Professional Liability (PL) net written premiums were down 1 percent, and the business had a combined ratio of 91.9 percent. In the U.S., average second quarter PL renewal rates were up 9 percent, premium renewal retention was 84 percent and the ratio of new to lost business was 0.7 to 1.

Surety net written premiums were down 7 percent, and the combined ratio was 42.1 percent.