(Reuters) - Insurance company Chubb posted a rise in fourth-quarter profit on Tuesday, helped by strong gains in its underwriting business and higher returns on its investments.

However, the Zurich-based insurer said it expects a pre-tax net cost of $1.5 billion from the California fires, which will impact its first quarter of 2025. These wildfires are the costliest in U.S. history, according to several estimates.

Insurance spending has shown resilience despite ongoing economic and environmental uncertainties, as businesses and individuals continue to prioritize coverage to mitigate risks ranging from natural disasters to cyberattacks and health emergencies.

Chubb's Global P&C net premiums written, which excludes Agriculture, were up 6.7% year over year, with commercial insurance up 6.4% and consumer insurance up 7.5%.

The insurer's net investment income surged, driven by a market rally fueled by the Federal Reserve rate cut and expectations of lower corporate taxes and deregulation under President Donald Trump.

Its adjusted net investment income jumped 13.7% to record $1.69 billion in the quarter.

The insurer's core operating income, excluding tax benefits, rose to $2.45 billion, or $6.02 per share, in the three months ended Dec. 31, compared with $2.28 billion, or $5.54 per share, a year earlier.