2008 Operating Income per Share Guidance of $5.70 to $6.10 Is Affirmed



    WARREN, N.J., July 24 /EMWNews/ -- The Chubb Corporation

(NYSE: CB) today reported that net income in the second quarter of 2008 was

$469 million or $1.27 per share, compared to $709 million or $1.75 per

share in the second quarter of 2007.



    Operating income, which the company defines as net income excluding

after-tax realized investment gains and losses, declined to $518 million

from $648 million in the second quarter of 2007. Operating income per share

declined 13% to $1.40 from $1.60.



    Total net written premiums for the second quarter were flat at $3.0

billion. Premiums were down 3% in the U.S. and up 11% outside the U.S. (3%

in local currencies).



    The second quarter combined loss and expense ratio was 88.5% in 2008,

compared to 82.7% in 2007. Catastrophe losses for the second quarter of

2008 accounted for 5.4 percentage points of the combined ratio. In the

second quarter of 2007, catastrophe losses accounted for 3.9 points of the

combined ratio. The expense ratio for the second quarter was 29.8% in 2008

and 29.6% in 2007.



    Property and casualty investment income after taxes for the second

quarter increased 4% to $327 million in 2008 from $313 million in 2007.



    During the second quarter, Chubb repurchased 5,477,480 shares of its

common stock at a total cost of $281 million. As of June 30, 2008, there

were 9,315,206 shares of common stock remaining under the current

repurchase authorization.



    "In an otherwise excellent quarter, our results were adversely impacted

by unusually high catastrophe losses and by one large Surety loss," said

John D. Finnegan, Chairman, President and Chief Executive Officer. The

catastrophe losses were primarily related to storms in the Midwest United

States that mostly affected Chubb's commercial Property & Marine insurance

line.



    Six-Month Results



    For the first six months of 2008, net income was $1.1 billion or $3.04

per share, compared with $1.4 billion or $3.46 per share for the first half

of 2007. Operating income for the first half of 2008 totaled $1.1 billion

or $3.05 per share, compared with $1.3 billion or $3.13 per share for the

first half of 2007.



    Total net written premiums for the first six months increased 1% to

$6.0 billion. Premiums declined 2% in the U.S. and increased 13% outside

the U.S. (4% in local currencies).



    The combined loss and expense ratio for the first six months was 86.2%

in 2008, compared to 83.1% in 2007. Catastrophe losses in the first half of

2008 accounted for 3.6 percentage points of the combined ratio. In the

first half of 2007, catastrophe losses accounted for 3.2 points of the

combined ratio. The expense ratio for the first six months was 30.1% in

2008 and 30.0% in 2007.



    Property and casualty investment income after taxes for the first six

months increased 6% to $654 million in 2008 from $618 million in 2007.



    During the first six months, Chubb repurchased 16,797,464 shares of its

common stock at a total cost of $863 million.



    Outlook for 2008



    "Since our catastrophe losses in the first six months were higher than

expected and we're now in the midst of the hurricane season," said Mr.

Finnegan, "we have increased our catastrophe loss assumption for the full

year from 3 points to 4 points. Nevertheless, in light of the strong

underlying performance of our businesses in the first half and the outlook

for the second half, we are affirming the guidance we provided last January

for full-year 2008 operating income per share of $5.70 to $6.10." The

impact of each point of catastrophe losses on operating income per share

for the year is approximately $0.20.




    The updated operating income guidance also assumes:



    -- Flat to modestly lower net written premiums for the full year;

    -- A combined ratio between 86% and 88% for the year, based on combined

ratios of 85% to 87% for Chubb Personal Insurance, 90% to 92% for Chubb

Commercial Insurance and 82% to 84% for Chubb Specialty Insurance;



    -- Growth of property and casualty investment income after taxes of 3%

to 5% for the year; and



    -- Average diluted shares outstanding of 368 million for the year.



    Guidance and related assumptions are subject to the risks outlined in

the company's forward-looking information safe-harbor statement below.



    Second Quarter Operations Review



    Chubb Personal Insurance (CPI) net written premiums grew 4% in the

second quarter to $1.0 billion. CPI's combined ratio for the quarter was

81.9%, compared to 85.3% in the second quarter of 2007. Catastrophe losses

for the quarter accounted for 4.5 percentage points in 2008 and 8.1 points

in 2007.



    Net written premiums for Homeowners grew 3%, and the combined ratio was

75.1%. Personal Automobile net written premiums declined 2%, and the

combined ratio was 86.7%. Other Personal lines grew 15% and had a combined

ratio of 101.5%.



    Chubb Commercial Insurance (CCI) net written premiums declined 1% in

the second quarter to $1.3 billion. The combined ratio for the quarter was

93.7% in 2008 and 85.4% in 2007. Catastrophe losses accounted for 9.2

percentage points in the second quarter of 2008 and 3.3 percentage points

in the second quarter of 2007.



    Average second quarter renewal rates in the U.S. were down 6% for CCI,

which retained 85% of the U.S. premiums that came up for renewal. In the

U.S., the ratio of new to lost business was 1.1 to 1.



    Chubb Specialty Insurance (CSI) net written premiums declined 4% in the

second quarter to $711 million. The combined ratio was 89.3%, compared to

75.6% in the second quarter of 2007.



    Professional Liability (PL) net written premiums declined 4%, and the

business had a combined ratio of 84.0%. Average second quarter renewal

rates in the U.S. were down 3% for PL, which retained 88% of the U.S.

premiums that came up for renewal. In the U.S., the ratio of new to lost

business was 1.2 to 1.



    Surety net written premiums were down 10%, and the combined ratio was

128.4% due to one large loss.



    Webcast Conference Call to be Held Today at 5 P.M.



    Chubb's senior management will discuss the company's second quarter

performance with investors and analysts today, July 24th, at 5 P.M. Eastern

Daylight Time. The conference call will be webcast live on the Internet at

http://www.chubb.com and archived later in the day for replay.

    About Chubb



    Founded in 1882, the Chubb Group of Insurance Companies provides

property and casualty insurance for personal and commercial customers

worldwide through 8,500 independent agents and brokers. Chubb's global

network includes branches and affiliates throughout North America, Europe,

Latin America, Asia and Australia.



    Chubb's Supplementary Investor Information Report has been posted on

its Internet site at http://www.chubb.com.






    All financial results in this release and attachments are unaudited.







    For further information contact:  Investors:    Glenn A. Montgomery

                                                    (908) 903-2365



                                      Media:        Mark E. Greenberg

                                                    (908) 903-2682







    Definitions of Key Terms

    Operating Income



    Operating income, a non-GAAP financial measure, is net income excluding

after-tax realized investment gains and losses. Management uses operating

income, among other measures, to evaluate its performance because the

realization of investment gains and losses in any given period is largely

discretionary as to timing and can fluctuate significantly, which could

distort the analysis of trends.



    Underwriting Income (Loss)



    Management evaluates underwriting results separately from investment

results. The underwriting operations consist of four separate business

units: personal insurance, commercial insurance, specialty insurance and

reinsurance assumed. Performance of the business units is measured based on

statutory underwriting results. Statutory accounting principles applicable

to property and casualty insurance companies differ in certain respects

from generally accepted accounting principles (GAAP). Under statutory

accounting principles, policy acquisition and other underwriting expenses

are recognized immediately, not at the time premiums are earned. Statutory

underwriting income (loss) is arrived at by reducing premiums earned by

losses and loss expenses incurred and statutory underwriting expenses

incurred.



    Management uses underwriting results determined in accordance with

GAAP, among other measures, to assess the overall performance of the

underwriting operations. To convert statutory underwriting results to a

GAAP basis, policy acquisition expenses are deferred and amortized over the

period in which the related premiums are earned. Underwriting income (loss)

determined in accordance with GAAP is defined as premiums earned less

losses and loss expenses incurred and GAAP underwriting expenses incurred.



    Property and Casualty Investment Income After Income Tax



    Management uses property and casualty investment income after income

tax, a non-GAAP financial measure, to evaluate its investment performance

because it reflects the impact of any change in the proportion of the

investment portfolio invested in tax exempt securities and is therefore

more meaningful for analysis purposes than investment income before income

tax.



    Book Value per Common Share with Available-for-Sale Fixed Maturities at

Amortized Cost



    Book value per common share represents the portion of consolidated

shareholders' equity attributable to one share of common stock outstanding

as of the balance sheet date. Consolidated shareholders' equity includes,

as part of accumulated other comprehensive income, the after-tax

appreciation or depreciation on the Corporation's available-for-sale fixed

maturities, which are carried at fair value. The appreciation or

depreciation on available-for- sale fixed maturities is subject to

fluctuation due to changes in interest rates and therefore could distort

the analysis of trends. Management believes that book value per common

share with available-for-sale fixed maturities at amortized cost, a

non-GAAP financial measure, is an important measure of the underlying

equity attributable to one share of common stock.



    Combined Loss and Expense Ratio or Combined Ratio



    The combined loss and expense ratio, expressed as a percentage, is the

key measure of underwriting profitability. Management uses the combined

loss and expense ratio calculated in accordance with statutory accounting

principles applicable to property and casualty insurance companies to

evaluate the performance of the underwriting operations. It is the sum of

the ratio of losses and loss expenses to premiums earned (loss ratio) plus

the ratio of statutory underwriting expenses to premiums written (expense

ratio) after reducing both premium amounts by dividends to policyholders.



    FORWARD-LOOKING INFORMATION



    Certain statements in this document are "forward-looking statements" as

that term is defined in the Private Securities Litigation Reform Act of

1995 (PSLRA). These forward-looking statements are made pursuant to the

safe harbor provisions of the PSLRA and include statements regarding

management's 2008 operating income per share guidance and related

assumptions. Forward- looking statements are made based upon management's

current expectations and beliefs concerning trends and future developments

and their potential effects on Chubb. These statements are not guarantees

of future performance. Actual results may differ materially from those

suggested by forward-looking statements as a result of risks and

uncertainties, which include, among others, those discussed or identified

from time to time in Chubb's public filings with the Securities and

Exchange Commission and those associated with:






    -- global political conditions and the occurrence of terrorist attacks,

       including any nuclear, biological, chemical or radiological events;



    -- the effects of the outbreak or escalation of war or hostilities;



    -- premium pricing and profitability or growth estimates overall or by

       lines of business or geographic area, and related expectations with

       respect to the timing and terms of any required regulatory approvals;



    -- adverse changes in loss cost trends;



    -- our ability to retain existing business;



    -- our expectations with respect to cash flow projections and investment

       income and with respect to other income;



    -- the adequacy of loss reserves, including:

       - our expectations relating to reinsurance recoverables;

       - the willingness of parties, including us, to settle disputes;

       - developments in judicial decisions or regulatory or legislative

         actions relating to coverage and liability, in particular, for

         asbestos, toxic waste and other mass tort claims;

       - development of new theories of liability;

       - our estimates relating to ultimate asbestos liabilities;

       - the impact from the bankruptcy protection sought by various asbestos

         producers and other related businesses; and

       - the effects of proposed asbestos liability legislation, including

         the impact of claims patterns arising from the possibility of

         legislation and those that may arise if legislation is not passed;



    -- the availability and cost of reinsurance coverage;



    -- the occurrence of significant weather-related or other natural or

       human-made disasters, particularly in locations where we have

       concentrations of risk;



    -- the impact of economic factors on companies on whose behalf we have

       issued surety bonds, and in particular, on those companies that file

       for bankruptcy or otherwise experience deterioration in

       creditworthiness;



    -- the effects of disclosures by, and investigations of, companies

       relating to possible accounting irregularities, practices in the

       financial services industry, investment losses or other corporate

       governance issues, including:

       - claims and litigation arising out of stock option "backdating,"

         "spring loading" and other option grant practices by public

          companies;

       - the effects on the capital markets and the markets for directors and

         officers and errors and omissions insurance;

       - claims and litigation arising out of actual or alleged accounting or

         other corporate malfeasance by other companies; claims and services

         industry;

       - litigation arising out of practices in the financial

       - claims and litigation relating to uncertainty in the credit and

         broader financial markets; and

       - legislative or regulatory proposals or changes;



    -- the effects of changes in market practices in the U.S. property and

       casualty insurance industry, in particular contingent commissions and

       loss mitigation and finite reinsurance arrangements, arising from any

       legal or regulatory proceedings, related settlements and industry

       reform, including changes that have been announced and changes that may

       occur in the future;



    -- the impact of legislative and regulatory developments on our business,

       including those relating to terrorism and catastrophes;



    -- any downgrade in our claims-paying, financial strength or other credit

       ratings;



    -- the ability of our subsidiaries to pay us dividends;



    -- general economic and market conditions including:

       - changes in interest rates, market credit spreads and the performance

         of the financial markets;

       - the effects of inflation;

       - changes in domestic and foreign laws, regulations and taxes;

       - changes in competition and pricing environments;

       - regional or general changes in asset valuations;

       - the inability to reinsure certain risks economically; and

       - changes in the litigation environment; and



    -- our ability to implement management's strategic plans and initiatives.



    Chubb assumes no obligation to update any forward-looking information

set forth in this document, which speak as of the date hereof.










                            THE CHUBB CORPORATION



                         SUPPLEMENTARY FINANCIAL DATA

                                 (Unaudited)





                                              Periods Ended June 30

                                      Second Quarter            Six Months

                                     2008        2007        2008       2007

                                                  (in millions)



    PROPERTY AND CASUALTY INSURANCE

    Underwriting

     Net Premiums Written.......... $3,047      $3,058      $5,983     $5,925

     Decrease (Increase) in

      Unearned Premiums............    (61)        (94)        (21)        24

     Premiums Earned...............  2,986       2,964       5,962      5,949

     Losses and Loss Expenses......  1,749       1,572       3,333      3,152

     Operating Costs and Expenses..    904         905       1,798      1,775

     Increase in Deferred Policy

      Acquisition Costs............    (23)        (56)        (36)       (53)

     Dividends to Policyholders....      9           3          18          8



     Underwriting Income...........    347         540         849      1,067



    Investments

     Investment Income Before

      Expenses.....................    418         396         836        788

     Investment Expenses...........      8           6          16         17



     Investment Income.............    410         390         820        771



    Other Income...................      -           1           3          4



    Property and Casualty Income...    757         931       1,672      1,842



    CORPORATE AND OTHER............    (52)        (38)       (106)       (65)



    CONSOLIDATED OPERATING INCOME

     BEFORE INCOME TAX.............    705         893       1,566      1,777



    Federal and Foreign Income Tax..   187         245         428        495



    CONSOLIDATED OPERATING INCOME...   518         648       1,138      1,282



    REALIZED INVESTMENT GAINS

     (LOSSES) AFTER INCOME TAX......   (49)         61          (5)       137



    CONSOLIDATED NET INCOME......... $ 469      $  709      $1,133     $1,419



    PROPERTY AND CASUALTY INVESTMENT

     INCOME AFTER INCOME TAX........ $ 327      $  313      $  654     $  618







                                             Periods Ended June 30

                                      Second Quarter            Six Months

                                     2008         2007       2008        2007



    OUTSTANDING SHARE DATA

     (in millions)

     Average Common and Potentially

      Dilutive Shares..............  369.4       405.7      372.6       410.0

     Actual Common Shares at

      End of Period................  360.6       393.3      360.6       393.3



    DILUTED EARNINGS PER SHARE DATA

     Operating Income............... $1.40       $1.60      $3.05       $3.13

     Realized Investment Gains

      (Losses)......................  (.13)        .15       (.01)        .33

     Net Income..................... $1.27       $1.75      $3.04       $3.46



     Effect of Catastrophes......... $(.28)      $(.18)     $(.37)      $(.30)





                                               June 30     Dec. 31     June 30

                                                 2008        2007        2007



    BOOK VALUE PER COMMON SHARE................ $39.19      $38.56     $35.13



    BOOK VALUE PER COMMON SHARE,

     with Available-for-Sale

     Fixed Maturities at Amortized Cost........  39.29       37.87      35.61





                  PROPERTY AND CASUALTY UNDERWRITING RATIOS

                            PERIODS ENDED JUNE 30



                                             Second Quarter       Six Months

                                             2008      2007     2008      2007



    Losses and Loss Expenses to

     Premiums Earned.....................    58.7%     53.1%    56.1%    53.1%

    Underwriting Expenses to

     Premiums Written....................    29.8      29.6     30.1     30.0



    Combined Loss and Expense Ratio......    88.5%     82.7%    86.2%    83.1%



    Effect of Catastrophes on

     Combined Loss and Expense Ratio.....     5.4%      3.9%     3.6%     3.2%





          PROPERTY AND CASUALTY LOSSES AND LOSS EXPENSES COMPONENTS

                            PERIODS ENDED JUNE 30



                                          Second Quarter         Six Months

                                         2008        2007       2008      2007

                                                     (in millions)



    Paid Losses and Loss Expenses....... $1,508     $1,319     $2,812   $2,779

    Increase in Unpaid Losses and

     Loss Expenses......................    241        253        521      373



    Total Losses and Loss Expenses...... $1,749     $1,572     $3,333   $3,152





                      PROPERTY AND CASUALTY PRODUCT MIX





                               Net Premiums Written          Combined Loss and

                                                % Increase     Expense  Ratios

                              2008       2007    (Decrease)    2008       2007

                               (in millions)



    SIX MONTHS ENDED JUNE 30



    Personal Insurance

     Automobile............   $  303   $  311      (3)%        89.8%     88.8%

     Homeowners............    1,213    1,174       3          77.4      77.4

     Other.................      376      330      14          97.7      93.3

      Total Personal.......    1,892    1,815       4          83.3      82.3



    Commercial Insurance

     Multiple Peril.........     607      613      (1)         78.9      85.0

     Casualty...............     896      897       -          92.1      93.4

     Workers' Compensation..     461      481      (4)         80.2      74.5

     Property and Marine....     677      626       8         107.3      88.4

      Total Commercial......   2,641    2,617       1          90.5      86.7



    Specialty Insurance

     Professional Liability.   1,230    1,246      (1)         83.8      84.8

     Surety.................     184      178       3          81.4      32.0

      Total Specialty.......   1,414    1,424      (1)         83.6      79.4



      Total Insurance.......   5,947    5,856       2          86.5      83.5



    Reinsurance Assumed.....      36       69     (48)           *         *



      Total.................  $5,983   $5,925       1          86.2      83.1





    QUARTERS ENDED JUNE 30



    Personal Insurance

     Automobile.............  $  161   $  164      (2)%        86.7%     82.3%

     Homeowners.............     674      654       3          75.1      83.8

     Other..................     180      157      15         101.5      93.8

      Total Personal........   1,015      975       4          81.9      85.3



    Commercial Insurance

     Multiple Peril.........     312      306       2          79.5      86.7

     Casualty...............     436      456      (4)         91.9      92.4

     Workers' Compensation..     213      224      (5)         77.8      72.0

     Property and Marine....     340      325       5         120.4      83.7

      Total Commercial......   1,301    1,311      (1)         93.7      85.4



    Specialty Insurance

     Professional Liability.     626      649      (4)         84.0      80.5

     Surety.................      85       94     (10)        128.4      32.7

      Total Specialty.......     711      743      (4)         89.3      75.6



      Total Insurance.......   3,027    3,029       -          88.9      82.9



     Reinsurance Assumed....     20        29     (31)           *         *



      Total................. $3,047    $3,058       -          88.5      82.7





    * Combined loss and expense ratios are no longer presented for

Reinsurance Assumed since this business is in run-off.