WARREN, N.J., July 29, 2002 – The Chubb Corporation [NYSE: CB] today reported that second quarter operating income per share increased 31% to $1.05 from $0.80 in the second quarter of 2001. Operating income increased 29% to $183.6 million from $142.4 million. Net income, which includes realized investment gains, was $210.2 million or $1.20 per share in the second quarter of 2002, compared with $146.8 million or $0.83 per share in the second quarter of 2001.

For the six months ended June 30, 2002, operating income was $387.9 million or $2.23 per share compared with $315.1 million or $1.76 per share in the first six months of 2001. Net income for the first half of 2002 was $408.4 million or $2.35 per share compared with 2001 first half net income of $321.8 million or $1.80 per share.

Property and casualty net premiums written in the second quarter of 2002 grew 29% to $2.1 billion. U.S. premiums grew 31%. Non-U.S. premiums grew 22%, or 19% in local currencies. Property and casualty net premiums written in the first six months of 2002 increased 28% to $4.3 billion.

The combined loss and expense ratio for the second quarter was 98.0% in 2002 and 103.5% in 2001. For the first half, the combined ratio was 97.0% in 2002 and 101.7% in 2001.

Catastrophe losses for the 2002 second quarter and six months were $10.3 million and $23.6 million, respectively, adding 0.5 and 0.6 percentage point to the respective combined ratios for these periods. In the second quarter and first half of 2001, catastrophe losses were $80.3 million and $91.8 million, respectively, adding 4.9 and 2.8 percentage points to the respective combined ratios for these periods.

Earnings for the second quarter of 2002 include a pre-tax loss of $15.9 million, or $0.06 per share after-tax, at Chubb Financial Solutions (CFS). The loss resulted mainly from a mark-to-market adjustment to recognize an increase in the fair value of CFS’s future obligations under outstanding credit derivative contracts. The adjustment is not a cash expense, and no claims have been incurred on any of CFS's contracts. A more detailed explanation of this and other aspects of Chubb’s results, and the outlook for the balance of 2002, will be provided at 9 A.M. (Eastern Time) today at a webcast investor conference call which is accessible to all through the company’s Website at www.chubb.com.

Chubb’s second quarter and six month after-tax results are summarized below:

"Chubb Commercial Insurance (CCI) had a banner second quarter, and its turnaround continued to gain momentum," said Dean R. O'Hare, Chairman and Chief Executive Officer. CCI's net written premiums jumped 41% to $767 million, and its combined ratio improved 17.7 points to 95.1% from 112.8% in the corresponding quarter a year ago." CCI accounted for 36% of Chubb’s second-quarter net written premiums.

"Applications for CCI coverage were up 35%," said Mr. O'Hare, "but we continued to maintain strong underwriting discipline, quoting on only 25% of the business on which we were asked to quote. We won 70% of the business on which we chose to quote, and we retained 79% of the accounts that came up for renewal, despite sharp rate increases." CCI renewal rate increases in the U.S. averaged 24%.

"We see clear evidence in the market of a flight to quality," Mr. O'Hare said, "as businesses switch to insurers who have the financial strength to pay claims, a reputation for paying rather than denying or delaying claims, the ability to help customers reduce insurance costs through loss control services and a global presence to serve them wherever they do business."

Chubb Specialty Insurance (CSI) second quarter net written premiums grew 30% to $734 million, representing 35% of Chubb’s total second quarter premiums. The combined ratio was 100.8%, compared with 94.7% in the second quarter of 2001. Premium growth was the result mostly of higher rates in Executive Protection (EP) and Financial Institutions (FI) and strong growth in other specialty lines, led by a 128% increase at Chubb Re. Reduced profitability at CSI resulted primarily from increased claim activity in directors & officers' (D&O) insurance and errors & omissions insurance. EP renewal rates in the U.S. increased an average of 33%, with public-company D&O rates up nearly 100%. "In EP, as well," said Mr. O'Hare, "applications for coverage are booming, enabling us to shift the business to a more desirable mix." FI renewal rates in the U.S. were up an average of 26%.

Chubb Personal Insurance (CPI) produced a combined ratio of 97.8%, as premiums grew 16% to $614 million, accounting for 29% of Chubb's total premiums. The combined ratio for Homeowners insurance was 105.9%, as favorable weather and higher rates in some states were offset by an increase in water damage and mold claims, primarily in Texas. The company has taken steps to reduce future mold claims in Texas. In 30 other states, the company has filed for contract changes that would enable it to offer coverage for mold as a separate peril that would be priced appropriately.

Updating the company's guidance for full-year 2002 performance, Mr. O'Hare said, "We expect premium growth of at least 25%, and we believe we can produce a combined ratio of 97.5% for the year. That would produce 2002 operating earnings per share of approximately $4.60." An explanation of the assumptions and risk factors associated with this estimate will be provided during the public conference call.

Property and casualty investment income after taxes for the second quarter increased 1.5% to $190.8 million from $188.0 million in 2001. On a per-share basis, property and casualty investment income after taxes increased 2.8% to $1.09 from $1.06. For the first half, property and casualty investment income after taxes in 2002 increased 1.0% to $376.4 million from $372.6 million. On a per-share basis, first half property and casualty investment income after taxes increased 3.8% to $2.17 from $2.09.

"Chubb has one of the most conservative investment portfolios in the property and casualty insurance industry," said Mr. O’Hare. At mid-year, the company had $17 billion of fixed income securities with an average credit rating of AA. About 60% of these securities are rated AAA, and less than 3% are rated below investment grade or are unrated. The portfolio is highly diversified by industry sector. In addition, the company has $700 million of public and private equity investments.

Chubb's debt-to-capital ratio at mid-year stood at 16.0%, down from 19.2% at year-end 2001.

During the second quarter, Chubb purchased 500,000 shares of its common stock in open-market transactions.

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, uncertainties and assumptions about our business. 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 and Exchange Commission and specifically to risks or uncertainties associated with:

• the availability of primary and reinsurance coverage, including the implications relating to terrorism legislation and regulation;
• global political conditions and the occurrence of any terrorist attacks, including any nuclear, biological or chemical events;
• premium price increases and profitability or growth estimates overall or by lines of business, and related expectations with respect to the timing and terms of any required regulatory approvals;
• our expectations with respect to cash flow projections and investment income and with respect to other income;
• the adequacy of loss reserves including: