Evan G. Greenberg
Chairman and Chief Executive Officer at Chubb
Good morning. We had a very strong quarter with record operating income driven by outstanding underwriting and investment results as well as double-digit, constant dollar P&C premium growth. Pricing was strong and exceeded loss costs in commercial lines, even as we increased the inflation factors we are using in our loss ratios in anticipation of future increases to loss cost. Meanwhile, growth in our consumer businesses continued to accelerate. Core operating income in the quarter was a record $1.8 billion or $4.20 per share, up 16% over prior year. For the year, we have produced over $8 per share, up nearly 31%. Our second quarter underwriting results were simply lights out: $1.4 billion of underwriting income, which was up 21% over prior, with a published combined ratio of 84%, both record results; catastrophe losses in the quarter were reasonably right -- light relative to our expected losses and virtually flat with last year's second quarter; the P&C current accident year combined ratio, excluding cats, was 83.5%, a nearly two-point improvement over prior year. On the other side of the balance sheet, adjusted net investment income was a record $950 million for the quarter. As you know, we are predominantly a buy-and-hold fixed-income investor. Given rising interest rates and widening spreads, investment income is and will continue to rise. Our reinvestment rate is now averaging 4.7% against a portfolio yield of 3.2%. We've begun to thoughtfully and meaningfully accelerate the turnover of our portfolio in a targeted manner so that we can put cash to work more quickly at higher yields. Spreads have moved to more historical averages among the various fixed-income classes.
And the wind-down of QE could create more volatility and put more pressure on spreads in the future, which would benefit us. Peter will have more to say about these and other financial items. As you saw, we completed the acquisition of the Cigna business. As we had previously announced, the addition of Cigna's A&H and life business in Asia will be immediately accretive to core operating income per share and ROE. We have spent the past six to eight months planning the integration to generate the revenue and earning power the combination of our businesses together in each country should achieve. We are off to a rapid start and are beginning to execute. Having just come back from Asia and met with the teams in Korea and Thailand, morale among our new and existing colleagues is quite high, and there's a great sense of optimism in what the future holds for our business in the region. Our Cigna colleagues who are joining us, starting leadership, are a great fit with Chubb and our culture. Now turning to growth in the rate environment. Total P&C premiums globally increased 9% in the quarter on a published basis or 11% in constant dollars, with commercial up 12% and consumer up 8%. Growth in the quarter remains broad based with contributions from virtually all commercial businesses globally, from large corporate to middle market to small, from traditional to specialty, and most all regions of the world. Commercial P&C premiums for North America were up 12.5% or 8.7% excluding agriculture. While in Overseas General, commercial lines grew 13% in constant dollar.
And we then scrub six points of FX to arrive at the published result. Agriculture premiums were up 44% in the quarter driven overwhelmingly by crop insurance growth. Commodity prices plus growth in market share produced this result. Looking forward, we will have a very strong crop insurance revenue growth in the third quarter as well. In terms of the Commercial P&C rate environment, market conditions overall remained favorable, while the level of rate increases is moderating. The vast majority of our portfolio is achieving favorable risk-adjusted returns, and additional rate is therefore required primarily to keep pace with loss costs, which are hardly benign. The rate environment is naturally becoming a bit more competitive, particularly in certain casualty-related classes as more carriers seek to now grow. The market is reasonably disciplined, and I expect it will remain so given not only the specter of loss cost inflation, but the presence of other risk exposures such as climate change, the war in Ukraine, the litigation environment, cyber and the overall cost of reinsurance. Plenty of reminders to managements to get paid for the exposure underwritten. In the quarter in North America, total Commercial P&C premiums, excluding agriculture, grew 8.7%. Growth this quarter in commercial lines was led by our Major Accounts & Specialty Division, which grew about 10.5%, followed by our middle market and small commercial business, which grew about 6.5%. Renewal retention for our retail commercial businesses was a very strong 101% on a premium basis. Overall rates increased in North America commercial lines 7%, while total pricing, which includes rate and exposure, increased over 10.5%. Remember, most but not all of the exposure change helps to ameliorate loss costs.
In major accounts, which serves the largest companies in America, rates increased over 8% with pricing up 11.6%. General casualty rates were up nearly 13% and varied by class of casualty. While risk management-related comp in GL were up about 4%. Property rates were up around 9% and financial lines rates were up nearly 7.5%. In our E&S wholesale business, rates increased by just under 10% with pricing up over 14%. Property rates were up over 13%. Casualty was up 8.5% and financial lines rates were up 9.5%. In our middle market business, rates increased nearly 7%, excluding comp, with pricing up about 9%. Rates were -- for property were up 5%. Casualty rates were up over 7%. And comp rates were down 4.3%. However, comp pricing was up over 5% when taking into account exposure change. And finally, financial lines rates were up over 10%. Turning to loss costs for a minute. We increased our loss cost trends in North America to 6.5% in anticipation of rising costs, meaning the actual trends we are observing at this time are lower. Again, the 6.5% is compared to pricing that was up over 10.5%. In general, we are trending loss costs for short-tail classes close to 7%, up from 6.5% last quarter. In long-tail, excluding workers' comp, we're trending at 6.5%, up from 6%. And our first-dollar comp book is trending between 4% and 4.5%. These trend factors are contemplated in both our pricing and in our accident year loss picks in the quarter. Turning to our international general insurance operations. Retail Commercial P&C premiums grew 12.5% in constant dollars, while our London wholesale business grew over 10%. Retail commercial growth varied by region, with premiums up 14% in Asia Pacific, followed by growth of over 13% in Latin America.
Our U.K. and Europe division was up nearly 12%. Internationally, like in the U.S., we continued to achieve improved rate-to-exposure across our commercial portfolio. In our international business, rates increased in the quarter about 9.5%, while we estimate pricing was up about 12%. Rates varied by class and by region as well as country within region. Outside North America, we are currently trending loss costs at about 6.5%, up from 4%, though that varies by class of business and country. Loss cost factors we are using for short-tail are now running over seven. And in long-tail, we're trending at about six. Again, these factors are contemplated in both our pricing and in our accident year loss in the quarter and, like in North America, are higher than actual observed trends. International consumer lines growth in the quarter continued to pick up momentum as premiums increased over 12%, though FX then scrubbed about 7.5 points off the growth. Premiums in our international A&H business grew over 12% in constant dollar, with Latin America up over 19% and Asia Pacific up 13%, while our international personal lines grew 12%. Net premiums in our North America high net worth personal lines business were up 4.7% on the back of record new business activity.
Our true high net worth client segment grew 12%, while overall retention was very strong at nearly 98%. In our homeowners business, we achieved pricing of about 10%, while the homeowners loss cost trend is running about 10% as well. To sum it all up, we had simply an excellent quarter. And as I look ahead, I am mindful of the world and the conditions in which we operate, including inflation, the specter of recession, the war and energy and food security problems globally. With all that, we have a lot of broad-based momentum and earning power in our organization that gives me confidence. Commercial P&C growth and pricing are favorable, our consumer lines business growth is accelerating, our life company revenue and earnings will accelerate with the addition of the Cigna business in Asia. Asia is now a $7.5 billion region for our company. Our underwriting margins are excellent, and our investment income will grow nicely due to rising rates and strong cash flow. We are well positioned for continued excellent EPS growth well into the future.
I'll turn the call over to Peter, and then we'll come back and take your questions.
