Evan G. Greenberg
Chairman and Chief Executive Officer at Chubb
Good morning. As you saw from the numbers, we had an excellent finish to the year with record operating earnings and underwriting results, double-digit commercial premium growth globally, strong levels of rate increase and slow but improving growth in our consumer business globally. This performance led to one of the best years in our company's history, with the best organic growth in P&C premiums in over 15 years and record financial results spanning both net and core operating income, calendar and current accident year underwriting income and investment income. Simply stunning results across the board and a testament to the organization and so many of my colleagues last year. Core operating income in the quarter was $1.65 billion or $3.81 per share, up nearly 20% over prior year. For the year, we produced net and core operating income of $8.5 billion and $5.6 billion, respectively. Again, both record results. In the quarter, $1.27 billion of underwriting income was a 31% increase over prior year with a combined ratio of 85.5. Allow me to digress for just a second. In my judgment, the calendar year or published combined ratio is the primary measure of underwriting performance that investors and management should focus on because natural catastrophes are a regular and expected occurrence and the volatility cannot be dismissed away. Our P&C current accident year combined ratio, excluding catastrophes, was 83.9%, a 2.5 point improvement over prior year. This is an important but secondary measure that provides useful insight into the current underlying strength of our businesses. Full year P&C underwriting income was a record $3.7 billion, up over 200% and that's with $2.4 billion of catastrophe losses in the second costliest year for the industry in terms of cats. On the investment side, adjusted net investment income topped $900 million for the quarter and was a record $3.7 billion for the year.
With the Fed finally accepting that inflation is a reality that is not going away anytime soon, interest rates are rising and will continue to rise. QE is coming to a rapid end and spreads should begin to widen, particularly if the Fed begins to shrink their balance sheet, as they should. As a reminder, every 100 basis points of yield for us provides about $1.2 billion of additional investment income, and we run about a 4-year portfolio duration. As I remarked over a year ago, we're in a period of very strong wealth creation, which is reflected vividly by our quarterly and full year results. And I expect this trend will continue, driven by further growth and margin expansion. Peter will have more to say about cats prior period development, investment income, book value and other financial items. Before I get to our discussion of growth in rate, as you saw in the press release, we have entered into agreements with several shareholders to purchase additional ownership interest in Huatai Group in China. Upon regulatory approval, which we expect sometime during '22, our total aggregate ownership will be north of 80%. Separately, integration planning for the Cigna transaction, which we announced in the fourth quarter and I covered on our last call is progressing well. We expect to close in the first half of the year. Now turning to growth and the rate environment. P&C premiums in the quarter increased 9.6%, with commercial up 13% and consumer up 2.2. This strong performance capped a year where we grew our premium revenue 13%, the strongest organic growth since '03, with commercial up 17.7% and consumer up 2.3%. Growth in the quarter was broad-based, with contributions from virtually all commercial businesses globally, from large corporate to middle market to small, from traditional to specialty to agriculture, including most regions of the world. Commercial premiums for North America were up over 11%, while in overseas general, they grew 15%.
For the year, we have grown our commercial business almost 18%. And for perspective, since 2019, it has grown by nearly 1/3 or over $5 billion of net premium, and that's the size of or bigger than most insurers. In terms of rate, the level of rate increases remains robust and is naturally slowing as portfolios achieve or approach rate adequacy. At the same time, whether short or long-tail exposure, the loss environment is anything but benign. The level of rate increases remains well in excess of loss costs and I expect this trend to continue for some time. In the quarter, in North America, total premiums grew 8.7%, with Commercial up over 11%, driven by growth in our major accounts and specialty business of 12% and our middle market and small commercial business of 9.7%. Total exposure change is actually down 0.6% in the quarter. And it's a combination of an increase in economic exposure of 3.4% due to higher payrolls, sales and other economically sensitive activity; and on the other hand, a decline in exposure due to underwriting changes, such as increased detachment points and higher deductibles, a good thing, though it negatively impacted growth. Our retail businesses achieved a 100% retention this quarter on a premium basis and 89% on an account basis, both very strong. Overall rates increased in North America commercial lines 10.5%. Loss costs are trending about 5.5% and vary by line. In general, loss costs for short-tail classes are running about 4%. Though again, we anticipate these to rise and have reacted accordingly. In long tail, excluding workers' comp, we are trending at a 6% rate, and our first dollar workers' comp book is trending between 4% and 4.5%. Let me give you a better sense of the rate increase movement in North America. In major accounts, which serves the largest companies in America, rates increased in the quarter by 10.5%. Risk management-related primary casualty rates were up over 4%.
General casualty rates were up over 16% and varied by class of casualty, and property rates were up 9.7%, while financial lines rates were up over 17%. In our E&S wholesale business, rates increased by 14.5% in the quarter. Property rates were up 12.5%, casualty was up almost 17%, while financial lines rates were up 18.5%. In our middle market business, rates increased in the quarter about 9%. Rates for property were up 9%. Casualty, excluding comp, were up nearly 9% and comp rates were down 1.5%. While comp pricing on the other hand, which is rate plus exposure, was up about 3%. And finally, financial lines rates were up about 19%. Turning to our International General Insurance operations. Commercial P&C premiums grew 15% on a published basis. International Retail Commercial grew over 13%, while our London wholesale business grew 28%. Retail commercial growth varied by region, with premiums up 19% in our U.K. and Europe division. Asia Pacific was up about 12.5%, while our Latin America commercial business grew over 9%. Internationally, like in the U.S., we continued to achieve improved rate to exposure across our commercial portfolio. In our international retail business, rates increased in the quarter 13% with property up 8%, financial lines up 30% and primary and excess casualty up 7% and 11%, respectively. By the way, these rate increases were nearly identical to those from the prior quarter. In our London wholesale business in the quarter, property rates were up 8%, financial Lines rates were up 24% and marine up 5%. Outside North America, loss costs are currently trending about 3%, though that varies by class of business and country. While international consumer lines growth in the quarter continued to be heavily impacted by the pandemic's ongoing effects on consumer-related activities, growth continued to slowly recover and was 3.5% on a published and constant dollar basis. A clear example of that is our international A&H division, which grew for the third consecutive quarter.
And on a currency-adjusted basis, Q4 was our best quarter since the beginning of the pandemic, with growth of 5.5%. Across Asia and Latin America in our direct marketed business through banks, retailers and digital platforms, we are seeing activity pick up for consumer lending, credit card growth and branch openings. In fact, our direct marketing business grew double digits in Latin America, and we had our best growth quarter in the year in Asia Pac. All in all, I expect growth in our consumer lines to continue to improve as the year goes along. The underlying health of the business is excellent. Net premiums in our North America high networth personal lines business were up 3.3%. Our true high networth client segment, the heart of our business, grew 13% in the quarter. Overall retention was very strong this quarter at nearly 98%, and we achieved pricing, which includes rate and exposure of 13% -- 13.5% in our homeowners portfolio. Claims severity in our U.S. personal lines business is running just under 9%, with homeowners cost to repair and rebuild increasing 11%. In our Asia-focused international life insurance business, net premiums plus deposits were up about 25% in the quarter. Profitability was impacted this quarter from a true-up of our COVID reserve charges, which overall for the company were net positive, but negatively impacted life. Lastly, net premiums in our Global Re-business were up 37%. And while conditions have improved in reinsurance, we remain cautious in most lines. Rates and terms in most classes are still not adequate to earn what we believe is needed to justify the volatility and earn an appropriate risk-adjusted return. We had an outstanding year, and I look ahead -- looking ahead, we're off to a very good start in the first quarter overall. Market conditions remain consistent with what we experienced in the fourth quarter. '22 should be a good year in terms of continued growth and margin improvement as we capitalize on favorable underwriting conditions for our commercial P&C businesses globally. I expect rates to continue to exceed loss costs. Consumer lines growth should return as the pandemic eases, though, as you know, there is no certainty. In the future, as rates -- interest rates rise and spreads potentially widen, our investment income will rise, and our strategic investments such as Cigna and Huatai will provide us with greater revenue, earnings and growth opportunity. All of this gives me great confidence in the future.
I'll now turn the call over to Peter, and then we're going to come back and take your questions.
