Evan G. Greenberg
Chairman and Chief Executive Officer at Chubb
Good morning. As you saw from the numbers, we had another outstanding quarter. Our performance was marked by double-digit global P&C premium growth, world-class P&C underwriting results, including an 88:4 combined ratio, record net investment income, and strong life operating income, all leading to record operating earnings per share. Once again, our premium revenue growth was well-spread and broad-based with excellent results in our commercial and consumer businesses in both our North American and international operations. Our annualized core operating ROE was 13.5%, with a return on tangible equity of 21.2%. Core operating income of $4.95 per share was up 58% over prior year. And for the first nine months, we have produced record operating income of $5.9 billion, or $14.27 per share, up 27.5%.
In the quarter, our underwriting performance was driven by a combination of strong earned premium growth, excellent underwriting margins, which included an ex-CAT current accident year combined ratio of 84:3, or 83 excluding agriculture, favorable prior-period reserve development in both North America and overseas general, and relatively average CAT losses compared to our expected. P&C underwriting income of $1.3 billion was up almost 84%. Our positive reserve development speaks to the strength of our reserves and our reasonably cautious or conservative approach to reserving. So, I've said for years, we generally strive to recognize bad news early and are slow to recognize good news. We're in a balance sheet business. Our loss reserves are the most important part of the liability side of our balance sheet.
On the asset side, record adjusted net investment income of $1.4 billion was up $361 million, or 34% over prior year. Our portfolio yield was 4.1% at the end of the third quarter, versus 3.4% a year ago, while our reinvestment rate is currently averaging 6.2%. We have very strong liquidity and our investment income run rate will continue to grow as we reinvest our cash flow at higher rates. We are growing income without a change to our invested asset risk profile. In the quarter, we increased our ownership in Huatai Group to 69.6% in our consolidating results, which were accretive to EPS and ROE. Earlier this month, we closed on additional shares and our ownership stands now at over 72%. I expect this to increase further and reach between 83% and 86%. A summary of the financial impact of Huatai is provided for you in the earnings release and the financial supplement. Peter will have more to say about financial items, including CAT, prior period reserve development investment income, book value, ROE and Huatai.
Now turning to growth, pricing and the rate environment. Consolidated net premiums for the company increased over 9% in the quarter, made up of 8.4% growth in our P&C business globally, and about 15% in our life division. Global P&C premium growth, which excludes agriculture, was 12.3%, with commercial lines up almost 10.5% and consumer lines up about 17.5%. In agriculture, crop premiums were lower than last year due to the timing of when we recognize them. Year-to-date premiums were in fact up modestly. As for the higher combined ratio in agriculture this quarter, we simply recognized a quarter earlier than last year what we think is the likely development for the year based on what we know today about crop conditions and pricing.
In terms of the commercial P&C rate environment, rates and price increases in property and casualty lives in aggregate remained strong in the quarter in both North America and our international divisions, while decreases in financial lines in North America continued. We remain vigilant and diligent about staying on top of loss cost inflation. Beginning with North America, commercial premiums excluding agriculture were up 8.7%. P&C growth was 10.5% excluding financial lines, which were up 1%. Our very large middle market division had its best quarter of the year with premium growth of 16.3% and middle market financial lines up 1.5%. Our major accounts and specialty division grew 7.2%, with P&C up 8.4% and financial lines flat. Overall, pricing for total North America commercial increased 9.3%, including rate of 5.9% and exposure change that acts like rate of 3.2%.
Let me provide a bit more color around rates and pricing. Pricing for commercial property and casualty was up 13.9%. Property pricing was up 23%, with rates up to 16.6% and exposure change of 5.5%. Casualty pricing in North America was up 11% with rates up 8.7% and exposure up 2%. In workers' comp, which includes both primary comp and large account risk management, pricing was up 5.5%, with rates essentially flat and exposure up 6%. We are trending loss costs in North America at 6.7%, the same as last quarter, and again, that compares to pricing of 9.3%. In general, we're trending loss costs in short-tail classes at 5.8%. In long-tail excluding workers' comp, loss costs are trending at 7.1%. And our first dollar workers' comp book is trending at 4.7%.
For financial lines, the underwriting environment remains impressive, particularly in D&O, rates have continued to decline. In the quarter, rates and pricing for North America financial lines in aggregate were down 4.8% and 3.8%, respectively. We are trending financial lines loss costs at 4.7%. Renewal retention for our commercial businesses in North America was 92.7% and our new business grew 14%.
On the consumer side, our high net-worth personal lines business had another excellent quarter, with premiums up over 9.5%, with rock-strong retention and new business growth. In our homeowners business, we achieved pricing of 15%, while our selected loss cost trend was similar to last quarter at 10.5%.
Turning to our international general insurance operations. Net premiums were up about 21.5%. And this includes a 7.5% contribution to growth from the Huatai consolidation. Our international commercial business grew 17.5%, while consumer was up 28.4%. In our international retail business, growth was broad-based with all major regions producing double-digit growth. Latin America led the way this quarter with premiums up 23%, made up of commercial lines growth of 16% and consumer up more than 28%. Europe and Asia-Pac had strong quarters, with growth of 14.2% and 10.2%, respectively. We continued to achieve improved rate to exposure across our international commercial portfolio, with pricing up 9.3%, rates up 5.7%, and exposure change of 3.4%. Property and casualty lines, pricing was up 11.7%, with rates up 7.1% and exposure up 4.3%, while financial lines pricing was up 2.3%.
Loss cost inflation across our international commercial portfolio remained steady from last quarter, trending at 6.6%. Within our international consumer, our A&H and personal lines divisions, both had strong quarters, with premiums up 16.5% and over 40%, respectively. Personal lines growth in Latin America rebounded sharply, with premiums up 43% on the back of growth in our Mexican auto portfolio where we're taking significant rate actions to reflect the loss cost environment. In our international life business, which is almost entirely Asia, premiums were up nearly 20%, including the impact of the Huatai consolidation. Life segment income was up nearly 15%, $288 million.
In summary, we had a simply outstanding quarter, contributing to outstanding year-to-date results. We are growing exposure in a thoughtful and balanced way, mindful of risk environment and underwriting conditions, which are favorable in many areas of our business. Looking forward, we are confident in our ability to continue growing revenue and operating earnings globally, which in turn drive EPS through the three engines of P&C underwriting income, investment income, life income.
I'm going to turn this call over to Peter and then I'm going to come back and take your questions.
