FOR IMMEDIATE RELEASE

Chubb Reports Fourth Quarter Earnings

WARREN, New Jersey, February 1, 2000 -- The Chubb Corporation [NYSE: CB] today announced higher operating earnings for the fourth quarter.

Operating income in the final quarter of 1999 was $160.6 million or $0.91 per share compared with $147.8 million or $0.90 per share in the corresponding quarter of 1998. Net income, which includes realized investment gains, was $163.6 million or $0.93 per share for the quarter compared with $157.6 million or $0.95 per share in the same quarter last year.

Operating income for the year 1999 totaled $565.3 million or $3.33 per share compared with $614.8 million or $3.65 per share in 1998. The 1998 results include a $26 million or $0.15 per share restructuring charge taken in the first quarter. Net income for 1999 was $621.1 million or $3.66 per share compared with $707.0 million or $4.19 per share last year.

Results of Executive Risk Inc., which was acquired by Chubb in July 1999, are included from the date of acquisition. Fourth quarter and twelve month after-tax results are summarized below:

For the fourth quarter, net property and casualty premiums written increased 2.5% to $1.4 billion. The combined ratio of 101.1% compares with 101.7% last year. Catastrophe losses were insignificant in the fourth quarter of both years: $2.6 million in the fourth quarter of 1999, adding 0.2 percentage point to the combined ratio; and $12.0 million in the fourth quarter of 1998, representing 0.9 percentage point of the combined ratio.

For the year 1999, net premiums written increased 3.6% to $5.7 billion. The combined ratio was 102.8% in 1999 and 99.8% in 1998. Catastrophe losses in 1999 were $224.5 million, adding 4.0 percentage points to the combined ratio. For the year 1998, catastrophe losses were $172.8 million or 3.3 percentage points of the combined ratio.

Property and casualty investment income after taxes increased 13.3% to $183.5 million or $1.04 per share in the fourth quarter from $162.0 million or $0.98 per share last year. For the full year, investment income increased 9.1% to $691.9 million or $4.08 per share from $634.1 million or $3.76 per share in 1998.

"We are very pleased with the performance of Chubb’s personal and specialty commercial lines," said Dean R. O’Hare, chairman and chief executive officer. "Personal lines turned in an outstanding quarter, with premium growth of 12.6% and a combined ratio of 82.7%." For all of 1999, premiums grew 11.7%, the fifth consecutive year in which the rate of premium growth increased for personal lines. The combined ratio for 1999 was 89.9% including catastrophes and 83.3% excluding catastrophes.

"The high level of profitability of personal lines despite substantial losses from Hurricane Floyd is truly remarkable," said Mr. O’Hare. "Moreover, Chubb emerged from the hurricane with a reinforced reputation among policyholders, agents and brokers for its broader coverage and superior claims service. That reputation will help us achieve continued growth in personal lines at attractive premium levels."

Specialty commercial lines grew 11.2% in the fourth quarter and had a combined ratio of 93.7%. For the full year, specialty commercial lines grew 9.4% and had a combined ratio of 93.6%. Premium growth reflected the acquisition in mid-1999 of Executive Risk Inc. The executive protection business now accounts for half of Chubb’s specialty commercial premiums.

"Now that the integration process is largely behind us and Ralph Jones and his new Chubb Executive Risk team have hit the ground running," said Mr. O’Hare, "we expect the executive protection business to resume healthy growth in 2000." Executive protection is among the most profitable of Chubb’s commercial lines, producing a combined ratio of 84.2% in the fourth quarter of 1999 and 84.3% for the full year.

As expected, standard commercial lines performed poorly in the fourth quarter, recording a combined ratio of 125.8%. Net written premiums for these lines declined 12.6%, as the company continued to prune accounts where it cannot achieve underwriting profitability. For the year 1999, standard commercial premiums declined 8.2% and this business had a combined ratio of 123.6%. Chubb’s pricing initiative continued to progress, as the average price increase on standard commercial policies renewed in the fourth quarter again exceeded the average price increase of the previous quarter.

"Our initiative to raise rates on renewed business and to weed out unprofitable business continues to make progress," said Mr. O’Hare. "But we continue to experience losses from underpriced business written in the extremely competitive market of the past few years. The lower premium base exacerbated the effect of such losses on the combined ratio for standard commercial lines. As we have said, it will take time for the benefits of the pricing initiative to reach the bottom line."

"The medicine is painful," said Mr. O’Hare, "but it’s working."

In the fourth quarter, Chubb repurchased 1.0 million shares of its common stock in the open market, bringing total 1999 share repurchases to 2.6 million shares.

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FORWARD LOOKING INFORMATION

Certain statements in this communication may be considered to be "forward looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995 such as statements that include words or phrases "will result", "is expected to", "will continue", "is anticipated", or similar expressions. Such statements are subject to certain risks and uncertainties. The factors which could cause actual results to differ materially from those suggested by any such statements include but are not limited to those discussed or identified from time to time in the Corporation's public filings with the Securities & Exchange Commission and specifically to: risks or uncertainties associated with the Corporation's expectations with respect to premium price increases and profitability or business retention estimates overall and by line of business, as well as its expectations with respect to premium growth or to the non-renewal of underpriced insurance accounts; and, more generally to: general economic conditions including changes in interest rates and the performance of the financial markets, changes in domestic and foreign laws, regulations and taxes, changes in competition and pricing environments, regional or general changes in asset valuations, the occurrence of significant natural disasters, the development of major Year 2000 liabilities, the inability to reinsure certain risks economically, the adequacy of loss reserves, as well as general market conditions, competition, pricing and restructurings.