Exhibit 99.2
Chubb Limited
Financial Supplement
for the Quarter Ended March 31, 2018
Investor Contact
Helen M. Wilson
Phone: (441)299-9283
email: investorrelations@chubb.com
This report is for informational purposes only. It should be read in conjunction with documents filed by Chubb Limited with the Securities and Exchange Commission, including the most recent Annual Report on Form10-K and Quarterly Reports on Form10-Q.
Cautionary Statement Regarding Forward-Looking Statements
Any forward-looking statements made in this financial supplement reflect Chubb Limited’s current views with respect to future events and financial performance and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties which may cause actual results to differ materially from as indicated by such statements. For example, forward-looking statements related to financial performance, including exposures, reserves and recoverables, could be affected by the frequency and severity of unpredictable catastrophic events, actual loss experience, uncertainties in the reserving or settlement process, currency exchange fluctuations, new theories of liability, judicial, legislative, regulatory and other governmental developments, litigation tactics and developments, investigation developments and actual settlement terms, the amount and timing of reinsurance receivable, credit developments among reinsurers, and activities and expenses related to our post-acquisition integration of The Chubb Corporation.
Our forward-looking statements could also be affected by competition, pricing and policy term trends, market acceptance, changes in demand, actual market developments, rating agency action, possible terrorism or the outbreak and effects of war. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Chubb Limited
Financial Supplement Table of Contents
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I. | Financial Highlights | |||
- Consolidated Financial Highlights | 1 | |||
II. | Consolidated Results | |||
- Consolidated Statement of Operations | 2 | |||
- P&C Results—Consecutive Quarters | 3 | |||
- Catastrophe Losses | 4 | |||
- Summary Consolidated Balance Sheets | 5 | |||
- Line of Business | 6 | |||
- Consolidated Results by Segment | 7 - 8 | |||
III. | Global P&C Results | |||
- Global P&C Underwriting Results—Consecutive Quarters | 9 | |||
IV. | Segment Results | |||
- North America Commercial P&C Insurance | 10 | |||
- North America Personal P&C Insurance | 11 | |||
- North America Agricultural Insurance | 12 | |||
- Overseas General Insurance | 13 - 14 | |||
- Global Reinsurance | 15 | |||
- Life Insurance | 16 | |||
- Corporate | 17 | |||
V. | Balance Sheet Details | |||
- Loss Reserve Rollforward | 18 | |||
- Reinsurance Recoverable Analysis | 19 | |||
- Investment Portfolio | 20 - 23 | |||
- Net Realized and Unrealized Gains (Losses) | 24 | |||
- Debt and Capital | 25 | |||
- Computation of Basic and Diluted Earnings Per Share | 26 | |||
- Book Value and Book Value per Common Share | 27 | |||
VI. | Other Disclosures | |||
-Non-GAAP Financial Measures | 28 - 31 | |||
- Glossary | 32 |
The 2017 gross premiums written and net premiums written amounts for the North America Commercial P&C Insurance and Overseas General Insurance segments have been revised to reflect the transfer of certain multinational accounts between these segments to better align the reporting with the management of these businesses in 2018. The North America Commercial P&C Insurance segment transfers to (from) Overseas General Insurance segment in 2017 were: $12 million for Q1, $1 million for Q2, $3 million for Q3 and ($7) million for Q4. There is no impact on a consolidated basis.
Chubb Limited
Consolidated Financial Highlights
(in millions of U.S. dollars, except share, per share data, and ratios)
(Unaudited)
Note: All dollar amounts in the Financial Supplement are rounded. However, percent changes and ratios are calculated using whole dollars. Accordingly, calculations using rounded dollars may differ.
% Change | % Change ex Merger Actions (1) | Constant $ % Change | C$ % Change ex Merger Actions (1) | |||||||||||||||||||||||||
Three months ended March 31 | 1Q-18 vs. | 1Q-18 vs. | Constant $ | 1Q-18 vs. | 1Q-18 vs. | |||||||||||||||||||||||
2018 | 2017 | 1Q-17 | 1Q-17 | 2017 | 1Q-17 | 1Q-17 | ||||||||||||||||||||||
Gross premiums written | $ | 8,733 | $ | 8,401 | 3.9 | % | $ | 8,584 | 1.7 | % | ||||||||||||||||||
Net premiums written | $ | 7,104 | $ | 6,710 | 5.9 | % | $ | 6,865 | 3.5 | % | ||||||||||||||||||
P&C net premiums written | $ | 6,545 | $ | 6,186 | 5.8 | % | 6.6 | % | $ | 6,332 | 3.4 | % | 4.1 | % | ||||||||||||||
Global P&C net premiums written | $ | 6,437 | $ | 6,125 | 5.1 | % | 5.9 | % | $ | 6,271 | 2.6 | % | 3.4 | % | ||||||||||||||
Net premiums earned | $ | 7,027 | $ | 6,772 | 3.8 | % | $ | 6,898 | 1.9 | % | ||||||||||||||||||
Net investment income | $ | 806 | $ | 745 | 8.2 | % | $ | 750 | 7.5 | % | ||||||||||||||||||
Adjusted net investment income | $ | 877 | $ | 836 | 4.9 | % | $ | 841 | 4.3 | % | ||||||||||||||||||
Core operating income | $ | 1,097 | $ | 1,175 | -6.6 | % | $ | 1,190 | -7.8 | % | ||||||||||||||||||
Net income | $ | 1,082 | $ | 1,093 | -1.1 | % | ||||||||||||||||||||||
Operating cash flow | $ | 551 | $ | 1,013 | ||||||||||||||||||||||||
P&C combined ratio | ||||||||||||||||||||||||||||
Loss and loss expense ratio | 60.0 | % | 57.4 | % | ||||||||||||||||||||||||
Underwriting and administrative expense ratio | 30.1 | % | 30.1 | % | ||||||||||||||||||||||||
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Combined ratio | 90.1 | % | 87.5 | % | ||||||||||||||||||||||||
P&C Current Accident Year (CAY) combined ratio—ex Catastrophe losses (Cats) | ||||||||||||||||||||||||||||
Loss and loss expense ratio—ex Cats and PPD | 57.7 | % | 58.1 | % | ||||||||||||||||||||||||
Underwriting and administrative expense ratio—ex Cats and PPD | 29.9 | % | 29.9 | % | ||||||||||||||||||||||||
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CAY combined ratio ex Cats | 87.6 | % | 88.0 | % | ||||||||||||||||||||||||
ROE | 8.4 | % | 9.0 | % | ||||||||||||||||||||||||
Core operating return on equity (ROE) | 8.7 | % | 9.9 | % | ||||||||||||||||||||||||
Effective tax rate(2) | 11.1 | % | 10.5 | % | ||||||||||||||||||||||||
Core operating effective tax rate(2) | 12.0 | % | 14.0 | % | ||||||||||||||||||||||||
Diluted earnings per share | ||||||||||||||||||||||||||||
Net income | $ | 2.30 | $ | 2.31 | -0.4 | % | ||||||||||||||||||||||
Core operating income | $ | 2.34 | $ | 2.48 | -5.6 | % | ||||||||||||||||||||||
Weighted average basic common shares outstanding | 465.7 | 468.9 | ||||||||||||||||||||||||||
Weighted average diluted common shares outstanding | 469.5 | 472.7 | ||||||||||||||||||||||||||
December 31 2017 | % Change 1Q-18 vs 4Q-17 | |||||||||||||||||||||||||||
Book value per common share | $ | 110.10 | $ | 110.32 | -0.2 | % | ||||||||||||||||||||||
Book value per common share excluding foreign currency(3) | $ | 109.43 | $ | 110.32 | -0.8 | % | ||||||||||||||||||||||
Tangible book value per common share | $ | 65.65 | $ | 65.87 | -0.3 | % | ||||||||||||||||||||||
Tangible book value per common share excluding foreign currency (3) | $ | 65.35 | $ | 65.87 | -0.8 | % | ||||||||||||||||||||||
Total hybrid & financial debt/capitalization | 22.4 | % | 20.1 | % |
(1) | Net premiums written were adversely impacted by merger-related actions of $48 million in Q1 2018. |
(2) | The core operating effective tax rate is lower in 2018, primarily reflecting the favorable impact of the 2017 tax reform and higher U.S. catastrophe losses in the quarter. Additionally, the impact of the lower U.S. tax rate on integration and fair value amortization expenses, as well as the impact of lower tax benefit resulting from a reduction in integration expenses, increased the overall effective tax rate in the current year. |
(3) | For 2018, book value per common share and tangible book value per common share exclude the impact of foreign currency movement during the quarter. |
Financial Highlights | Page 1 |
Chubb Limited
Statement of Operations—Consecutive Quarters
(in millions of U.S. dollars)
(Unaudited)
Consolidated Statements of Operations
1Q-18 | 4Q-17 | 3Q-17 | 2Q-17 | 1Q-17 | Full Year 2017 | |||||||||||||||||||||
Gross premiums written | $ | 8,733 | $ | 8,960 | $ | 9,710 | $ | 9,305 | $ | 8,401 | $ | 36,376 | ||||||||||||||
Net premiums written | 7,104 | 7,051 | 7,902 | 7,581 | 6,710 | 29,244 | ||||||||||||||||||||
Net premiums earned | 7,027 | 7,218 | 7,807 | 7,237 | 6,772 | 29,034 | ||||||||||||||||||||
(1) | Adjusted losses and loss expenses | 4,100 | 4,272 | 6,252 | 4,148 | 3,789 | 18,461 | |||||||||||||||||||
Realized (gains) losses on crop derivatives | (2 | ) | — | 5 | 2 | — | 7 | |||||||||||||||||||
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Losses and loss expenses | 4,102 | 4,272 | 6,247 | 4,146 | 3,789 | 18,454 | ||||||||||||||||||||
Policy benefits | 151 | 176 | 169 | 163 | 168 | 676 | ||||||||||||||||||||
Policy acquisition costs | 1,464 | 1,447 | 1,488 | 1,449 | 1,397 | 5,781 | ||||||||||||||||||||
Administrative expenses | 692 | 737 | 714 | 706 | 676 | 2,833 | ||||||||||||||||||||
(2) | Adjusted net investment income | 877 | 873 | 893 | 855 | 836 | 3,457 | |||||||||||||||||||
Amortization expense of fair value adjustment on acquired invested assets | (71 | ) | (76 | ) | (80 | ) | (85 | ) | (91 | ) | (332 | ) | ||||||||||||||
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Net investment income | 806 | 797 | 813 | 770 | 745 | 3,125 | ||||||||||||||||||||
(3) | Adjusted realized gains (losses) | (4 | ) | — | (5 | ) | 103 | (7 | ) | 91 | ||||||||||||||||
Realized gains (losses) on crop derivatives | 2 | — | (5 | ) | (2 | ) | — | (7 | ) | |||||||||||||||||
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Net realized gains (losses) | (2 | ) | — | (10 | ) | 101 | (7 | ) | 84 | |||||||||||||||||
(4) | Adjusted interest expense | 169 | 168 | 162 | 160 | 166 | 656 | |||||||||||||||||||
Amortization benefit of fair value adjustment on acquired long term debt | (12 | ) | (12 | ) | (12 | ) | (13 | ) | (12 | ) | (49 | ) | ||||||||||||||
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Interest expense | 157 | 156 | 150 | 147 | 154 | 607 | ||||||||||||||||||||
Gains (losses) from fair value changes in separate account assets | 6 | 27 | 24 | 16 | 30 | 97 | ||||||||||||||||||||
Net realized gains (losses) related to unconsolidated entities | 44 | 122 | 89 | 143 | 52 | 406 | ||||||||||||||||||||
Other income (expense)—operating | (3 | ) | (82 | ) | 5 | (14 | ) | (12 | ) | (103 | ) | |||||||||||||||
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Other income (expense) | 47 | 67 | 118 | 145 | 70 | 400 | ||||||||||||||||||||
Amortization expense of purchased intangibles | 85 | 66 | 65 | 65 | 64 | 260 | ||||||||||||||||||||
Chubb integration expenses | 10 | 77 | 50 | 72 | 111 | 310 | ||||||||||||||||||||
Income tax expense (benefit) | 135 | (382 | ) | (85 | ) | 200 | 128 | (139 | ) | |||||||||||||||||
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Net income (loss) | $ | 1,082 | $ | 1,533 | $ | (70 | ) | $ | 1,305 | $ | 1,093 | $ | 3,861 | |||||||||||||
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(1) | Adjusted losses and loss expenses used throughout this report include realized gains and losses on crop derivatives. |
(2) | Adjusted net investment income used throughout this report excludes amortization of the fair value adjustment on acquired invested assets. |
(3) | Adjusted realized gains and losses used throughout this report excludes realized gains and losses on crop derivatives. |
(4) | Adjusted interest expense used throughout this report excludes amortization benefit of the fair value adjustment on acquired long term debt. |
Statement of Operations | Page 2 |
Chubb Limited
P&C Underwriting Results—Consecutive Quarters
(in millions of U.S. dollars, except ratios)
(Unaudited)
Chubb Limited P&C Underwriting Results
1Q-18 | 4Q-17 | 3Q-17 | 2Q-17 | 1Q-17 | Full Year 2017 | |||||||||||||||||||
P&C Underwriting income (Including Corporate and excluding Life Insurance) | ||||||||||||||||||||||||
Gross premiums written | $ | 8,141 | $ | 8,374 | $ | 9,142 | $ | 8,748 | $ | 7,851 | $ | 34,115 | ||||||||||||
Net premiums written | 6,545 | 6,496 | 7,363 | 7,058 | 6,186 | 27,103 | ||||||||||||||||||
Net premiums earned | 6,487 | 6,665 | 7,280 | 6,722 | 6,266 | 26,933 | ||||||||||||||||||
Adjusted losses and loss expenses | 3,895 | 4,089 | 6,071 | 3,966 | 3,596 | 17,722 | ||||||||||||||||||
Policy acquisition costs | 1,336 | 1,293 | 1,356 | 1,319 | 1,283 | 5,251 | ||||||||||||||||||
Administrative expenses | 614 | 660 | 637 | 629 | 604 | 2,530 | ||||||||||||||||||
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P&C Underwriting income (loss) | $ | 642 | $ | 623 | $ | (784 | ) | $ | 808 | $ | 783 | $ | 1,430 | |||||||||||
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P&C CAY Underwriting income ex Cats | $ | 813 | $ | 912 | $ | 839 | $ | 838 | $ | 758 | $ | 3,347 | ||||||||||||
% Change versus prior year period | ||||||||||||||||||||||||
Net premiums written | 5.8 | % | 1.7 | % | 4.6 | % | -0.8 | % | 12.9 | % | 4.2 | % | ||||||||||||
Net premiums written excluding merger-related actions(1) | 6.6 | % | 3.7 | % | 3.9 | % | 2.0 | % | 17.9 | % | 6.3 | % | ||||||||||||
Net premiums earned | 3.5 | % | 2.2 | % | 1.5 | % | -2.5 | % | 2.7 | % | 0.9 | % | ||||||||||||
Net premiums written constant $ | 3.4 | %�� | 0.5 | % | 4.6 | % | -0.2 | % | 13.4 | % | 4.2 | % | ||||||||||||
Net premiums written constant $ excluding merger-related actions(1) | 4.1 | % | 2.5 | % | 4.0 | % | 2.6 | % | 18.5 | % | 6.2 | % | ||||||||||||
Net premiums earned constant $ | 1.6 | % | 1.0 | % | 1.3 | % | -2.0 | % | 2.8 | % | 0.7 | % | ||||||||||||
P&C combined ratio | ||||||||||||||||||||||||
Loss and loss expense ratio | 60.0 | % | 61.4 | % | 83.4 | % | 59.0 | % | 57.4 | % | 65.8 | % | ||||||||||||
Policy acquisition cost ratio | 20.6 | % | 19.4 | % | 18.6 | % | 19.6 | % | 20.5 | % | 19.5 | % | ||||||||||||
Administrative expense ratio | 9.5 | % | 9.9 | % | 8.8 | % | 9.4 | % | 9.6 | % | 9.4 | % | ||||||||||||
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Combined ratio | 90.1 | % | 90.7 | % | 110.8 | % | 88.0 | % | 87.5 | % | 94.7 | % | ||||||||||||
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CAY P&C combined ratio—ex Cats | ||||||||||||||||||||||||
Loss and loss expense ratio—ex Cats and PPD | 57.7 | % | 57.1 | % | 61.3 | % | 58.6 | % | 58.1 | % | 58.8 | % | ||||||||||||
Underwriting and administrative expense ratio—ex Cats and PPD | 29.9 | % | 29.3 | % | 27.2 | % | 28.9 | % | 29.9 | % | 28.8 | % | ||||||||||||
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CAY combined ratio ex Cats | 87.6 | % | 86.4 | % | 88.5 | % | 87.5 | % | 88.0 | % | 87.6 | % | ||||||||||||
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Other ratios | ||||||||||||||||||||||||
Net premiums written/gross premiums written | 80 | % | 78 | % | 81 | % | 81 | % | 79 | % | 79 | % | ||||||||||||
Expense ratio | 30.1 | % | 29.3 | % | 27.4 | % | 29.0 | % | 30.1 | % | 28.9 | % | ||||||||||||
Expense ratio excluding A&H | 27.9 | % | 27.2 | % | 25.1 | % | 27.1 | % | 28.0 | % | 26.8 | % | ||||||||||||
Catastrophe reinstatement premiums (expenses)collected—pre-tax | $ | — | $ | (15 | ) | $ | 22 | $ | — | $ | — | $ | 7 | |||||||||||
Catastrophelosses—pre-tax | $ | 380 | $ | 432 | $ | 1,915 | $ | 200 | $ | 206 | $ | 2,753 | ||||||||||||
Favorable prior period development(PPD)—pre-tax | $ | (209 | ) | $ | (158 | ) | $ | (270 | ) | $ | (170 | ) | $ | (231 | ) | $ | (829 | ) |
(1) | Net premiums written were adversely impacted by merger-related actions of $48 million in Q1 2018. |
Note: Refer to theNon-GAAP financial measures section for further information on the calculation of the components of combined ratios.
P&C Results | Page 3 |
Chubb Limited
Segments results—Catastrophe Loss Charges
(in millions of U.S. dollars)
(Unaudited)
Chubb Limited Catastrophe Loss Charges—Q1 2018
North America Commercial P&C Insurance | North America Personal P&C Insurance | North America Agricultural Insurance | Overseas General Insurance | Global Reinsurance | Total Consolidated | |||||||||||||||||||
Catastrophe Loss Charges by Event—Gross | ||||||||||||||||||||||||
Northeast Winter Storms | $ | 57 | $ | 171 | $ | 1 | $ | — | $ | 2 | $ | 231 | ||||||||||||
California Mudslides | 4 | 177 | — | 1 | — | 182 | ||||||||||||||||||
Other | 24 | 31 | — | 21 | — | 76 | ||||||||||||||||||
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Total | $ | 85 | $ | 379 | $ | 1 | $ | 22 | $ | 2 | $ | 489 | ||||||||||||
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Catastrophe Loss Charges by Event—Net | ||||||||||||||||||||||||
Northeast Winter Storms | $ | 53 | $ | 139 | $ | 1 | $ | — | $ | 2 | $ | 195 | ||||||||||||
California Mudslides | 4 | 120 | — | 1 | — | 125 | ||||||||||||||||||
Other | 21 | 25 | — | 14 | — | 60 | ||||||||||||||||||
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Total | $ | 78 | $ | 284 | $ | 1 | $ | 15 | $ | 2 | $ | 380 | ||||||||||||
Reinstatement premiums | — | — | — | — | — | — | ||||||||||||||||||
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Total impact before income tax | $ | 78 | $ | 284 | $ | 1 | $ | 15 | $ | 2 | $ | 380 | ||||||||||||
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Income tax benefit | 77 | |||||||||||||||||||||||
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Total impact after income tax | $ | 303 | ||||||||||||||||||||||
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Catastrophe Losses | Page 4 |
Chubb Limited
Summary Consolidated Balance Sheets
(in millions of U.S. dollars, except per share data)
(Unaudited)
March 31 2018 | December 31 2017 | |||||||
Assets | ||||||||
Fixed maturities available for sale, at fair value | $ | 79,111 | $ | 78,939 | ||||
Fixed maturities held to maturity, at amortized cost | 14,253 | 14,335 | ||||||
Equity securities, at fair value | 948 | 937 | ||||||
Short-term investments, at fair value | 2,874 | 3,561 | ||||||
Other investments | 4,919 | 4,672 | ||||||
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Total investments | 102,105 | 102,444 | ||||||
Cash | 1,988 | 728 | ||||||
Securities lending collateral | 2,039 | 1,737 | ||||||
Insurance and reinsurance balances receivable | 9,570 | 9,334 | ||||||
Reinsurance recoverable on losses and loss expenses | 14,982 | 15,034 | ||||||
Deferred policy acquisition costs | 4,843 | 4,723 | ||||||
Value of business acquired | 321 | 326 | ||||||
Prepaid reinsurance premiums | 2,600 | 2,529 | ||||||
Goodwill and other intangible assets | 22,123 | 22,054 | ||||||
Investments in partially-owned insurance companies | 664 | 662 | ||||||
Other assets | 7,546 | 7,451 | ||||||
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Total assets | $ | 168,781 | $ | 167,022 | ||||
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Liabilities | ||||||||
Unpaid losses and loss expenses | $ | 63,139 | $ | 63,179 | ||||
Unearned premiums | 15,495 | 15,216 | ||||||
Future policy benefits | 5,412 | 5,321 | ||||||
Insurance and reinsurance balances payable | 6,148 | 5,868 | ||||||
Securities lending payable | 2,039 | 1,737 | ||||||
Accounts payable, accrued expenses, and other liabilities | 10,030 | 10,953 | ||||||
Deferred tax liabilities | 468 | 699 | ||||||
Short-term debt | 1,669 | 1,013 | ||||||
Long-term debt | 12,786 | 11,556 | ||||||
Trust preferred securities | 308 | 308 | ||||||
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Total liabilities | 117,494 | 115,850 | ||||||
Shareholders’ equity | ||||||||
Total shareholders’ equity, excl. AOCI | 51,789 | 50,629 | ||||||
Accumulated other comprehensive income (loss) (AOCI) | (502 | ) | 543 | |||||
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Total shareholders’ equity | 51,287 | 51,172 | ||||||
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Total liabilities and shareholders’ equity | $ | 168,781 | $ | 167,022 | ||||
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Book value per common share | $ | 110.10 | $ | 110.32 | ||||
% change over prior quarter | -0.2 | % | 1.5 | % | ||||
Tangible book value per common share | $ | 65.65 | $ | 65.87 | ||||
% change over prior quarter | -0.3 | % | 1.2 | % |
Consol Bal Sheet | Page 5 |
Chubb Limited
Consolidated Net Premiums Written by Line of Business
(in millions of U.S. dollars)
(Unaudited)
1Q-18 | 1Q-17 | % Change 1Q-18 vs. 1Q-17 | ||||||||||
Net premiums written | ||||||||||||
Commercial multiple peril (1) | $ | 201 | $ | 201 | 0.0 | % | ||||||
Commercial casualty | 1,145 | 1,049 | 9.2 | % | ||||||||
Workers’ compensation | 624 | 588 | 6.1 | % | ||||||||
Professional liability | 773 | 763 | 1.3 | % | ||||||||
Surety | 161 | 150 | 7.3 | % | ||||||||
Property and other short-tail lines | 1,040 | 1,044 | -0.4 | % | ||||||||
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Total Commercial P&C | 3,944 | 3,795 | 3.9 | % | ||||||||
Agriculture | 108 | 61 | 76.2 | % | ||||||||
Personal automobile—North America | 184 | 165 | 11.5 | % | ||||||||
Personal automobile—International | 214 | 186 | 15.1 | % | ||||||||
Personal homeowners | 738 | 697 | 5.9 | % | ||||||||
Personal other | 387 | 362 | 6.9 | % | ||||||||
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Total Personal lines | 1,523 | 1,410 | 8.0 | % | ||||||||
Total Property and Casualty lines | 5,575 | 5,266 | 5.9 | % | ||||||||
Global A&H lines(2) | 1,072 | 994 | 7.8 | % | ||||||||
Reinsurance lines | 193 | 199 | -3.0 | % | ||||||||
Life | 264 | 251 | 5.2 | % | ||||||||
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Total consolidated | $ | 7,104 | $ | 6,710 | 5.9 | % | ||||||
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(1) | Commercial multiple peril represents retail package business (property and general liability). |
(2) | For purposes of this schedule only, A&H results from our Combined North America and International businesses, normally included in the Life Insurance and Overseas General Insurance segments, respectively, as well as the A&H results of our North America Commercial P&C segment, are included within the Global A&H lines above. |
Line of Business | Page 6 |
Chubb Limited
Consolidated Results
(in millions of U.S. dollars, except ratios)
(Unaudited)
Q1 2018 | North America Commercial P&C Insurance | North America Personal P&C Insurance | North America Agricultural Insurance | Overseas General Insurance | Global Reinsurance | Corporate | Total P&C | Life Insurance | Total Consolidated | |||||||||||||||||||||||||||
Net premiums written | $ | 2,812 | $ | 1,048 | $ | 108 | $ | 2,384 | $ | 193 | $ | — | $ | 6,545 | $ | 559 | $ | 7,104 | ||||||||||||||||||
Net premiums earned | 3,029 | 1,140 | 43 | 2,107 | 168 | — | 6,487 | 540 | 7,027 | |||||||||||||||||||||||||||
Adjusted losses and loss expenses | 1,908 | 886 | (55 | ) | 1,078 | 67 | 11 | 3,895 | 205 | 4,100 | ||||||||||||||||||||||||||
Policy benefits | — | — | — | — | — | — | — | 151 | 151 | |||||||||||||||||||||||||||
(Gains) losses from fair value changes in separate account assets(1) | — | — | — | — | — | — | — | (6 | ) | (6 | ) | |||||||||||||||||||||||||
Policy acquisition costs | 472 | 237 | (1 | ) | 588 | 40 | — | 1,336 | 128 | 1,464 | ||||||||||||||||||||||||||
Administrative expenses | 231 | 65 | (3 | ) | 239 | 10 | 72 | 614 | 78 | 692 | ||||||||||||||||||||||||||
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Underwriting income (loss) | 418 | (48 | ) | 102 | 202 | 51 | (83 | ) | 642 | (16 | ) | 626 | ||||||||||||||||||||||||
Adjusted net investment income | 503 | 59 | 7 | 151 | 64 | 10 | 794 | 83 | 877 | |||||||||||||||||||||||||||
Other income (expense)—operating (1) | 6 | — | — | (7 | ) | 7 | (7 | ) | (1 | ) | (2 | ) | (3 | ) | ||||||||||||||||||||||
Amortization expense of purchased intangibles | — | (3 | ) | (7 | ) | (10 | ) | — | (64 | ) | (84 | ) | (1 | ) | (85 | ) | ||||||||||||||||||||
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Segment income (loss) | $ | 927 | $ | 8 | $ | 102 | $ | 336 | $ | 122 | $ | (144 | ) | $ | 1,351 | $ | 64 | $ | 1,415 | |||||||||||||||||
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Adjusted interest expense | (169 | ) | (169 | ) | ||||||||||||||||||||||||||||||||
Income tax expense | (149 | ) | (149 | ) | ||||||||||||||||||||||||||||||||
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Core operating income (loss) | (462 | ) | 1,097 | |||||||||||||||||||||||||||||||||
Chubb integration expenses, net of $2 million tax benefit | (8 | ) | (8 | ) | ||||||||||||||||||||||||||||||||
Amortization of fair value adjustment of acquired invested assets and long-term debt, net of $9 million tax benefit(2) | (50 | ) | (50 | ) | ||||||||||||||||||||||||||||||||
Adjusted net realized gains (losses), net of $3 million tax benefit (3) | 43 | 43 | ||||||||||||||||||||||||||||||||||
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Net income (loss) | $ | (477 | ) | $ | 1,082 | |||||||||||||||||||||||||||||||
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Combined ratio | 86.2 | % | 104.2 | % | NM | 90.4 | % | 69.5 | % | 90.1 | % | |||||||||||||||||||||||||
CAY combined ratio ex Cats | 87.0 | % | 79.7 | % | 67.7 | % | 90.7 | % | 77.0 | % | 87.6 | % |
(1) | For the Life Insurance segment, (gains) losses from fair value changes in separate account assets that do not qualify for separate account reporting under GAAP have been reclassified for underwriting income (loss) presentation from Other income (expense). |
(2) | Related to the acquisition of The Chubb Corporation. |
(3) | Includes net realized gains (losses) related to unconsolidated entities. |
Consolidated Results 2018 | Page 7 |
Chubb Limited
Consolidated Results
(in millions of U.S. dollars, except ratios)
(Unaudited)
Q1 2017 | North America Commercial P&C Insurance | North America Personal P&C Insurance | North America Agricultural Insurance | Overseas General Insurance | Global Reinsurance | Corporate | Total P&C | Life Insurance | Total Consolidated | |||||||||||||||||||||||||||
Net premiums written | $ | 2,730 | $ | 984 | $ | 61 | $ | 2,212 | $ | 199 | $ | — | $ | 6,186 | $ | 524 | $ | 6,710 | ||||||||||||||||||
Net premiums earned | 3,041 | 1,086 | 14 | 1,936 | 189 | — | 6,266 | 506 | 6,772 | |||||||||||||||||||||||||||
Adjusted losses and loss expenses | 1,860 | 633 | (73 | ) | 1,071 | 94 | 11 | 3,596 | 193 | 3,789 | ||||||||||||||||||||||||||
Policy benefits | — | — | — | — | — | — | — | 168 | 168 | |||||||||||||||||||||||||||
(Gains) losses from fair value changes in separate account assets (1) | — | — | — | — | — | — | — | (30 | ) | (30 | ) | |||||||||||||||||||||||||
Policy acquisition costs | 487 | 217 | (1 | ) | 529 | 51 | — | 1,283 | 114 | 1,397 | ||||||||||||||||||||||||||
Administrative expenses | 231 | 65 | (5 | ) | 245 | 10 | 58 | 604 | 72 | 676 | ||||||||||||||||||||||||||
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Underwriting income (loss) | 463 | 171 | 93 | 91 | 34 | (69 | ) | 783 | (11 | ) | 772 | |||||||||||||||||||||||||
Adjusted net investment income | 478 | 55 | 6 | 148 | 62 | 12 | 761 | 75 | 836 | |||||||||||||||||||||||||||
Other income (expense)—operating (1) | (4 | ) | (1 | ) | — | 1 | — | (7 | ) | (11 | ) | (1 | ) | (12 | ) | |||||||||||||||||||||
Amortization expense of purchased intangibles | — | (3 | ) | (7 | ) | (11 | ) | — | (42 | ) | (63 | ) | (1 | ) | (64 | ) | ||||||||||||||||||||
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Segment income (loss) | $ | 937 | $ | 222 | $ | 92 | $ | 229 | $ | 96 | $ | (106 | ) | $ | 1,470 | $ | 62 | $ | 1,532 | |||||||||||||||||
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Adjusted interest expense | (166 | ) | (166 | ) | ||||||||||||||||||||||||||||||||
Income tax expense | (191 | ) | (191 | ) | ||||||||||||||||||||||||||||||||
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Core operating income (loss) | (463 | ) | 1,175 | |||||||||||||||||||||||||||||||||
Chubb integration expenses, net of $37 million tax benefit | (74 | ) | (74 | ) | ||||||||||||||||||||||||||||||||
Amortization of fair value adjustment of acquired invested | (55 | ) | (55 | ) | ||||||||||||||||||||||||||||||||
Adjusted net realized gains (losses), net of $2 million tax benefit(3) | 47 | 47 | ||||||||||||||||||||||||||||||||||
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Net income (loss) | $ | (545 | ) | $ | 1,093 | |||||||||||||||||||||||||||||||
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Combined ratio | 84.8 | % | 84.2 | % | NM | 95.3 | % | 82.1 | % | 87.5 | % | |||||||||||||||||||||||||
CAY combined ratio ex Cats | 87.9 | % | 78.3 | % | 74.6 | % | 92.1 | % | 77.0 | % | 88.0 | % |
(1) | For the Life Insurance segment, (gains) losses from fair value changes in separate account assets that do not qualify for separate account reporting under GAAP have been reclassified for underwriting income (loss) presentation from Other income (expense). |
(2) | Related to the acquisition of The Chubb Corporation. |
(3) | Includes net realized gains (losses) related to unconsolidated entities. |
Consolidated Results 2017 | Page 8 |
Chubb Limited
Global P&C Underwriting Results—Consecutive Quarters
(in millions of U.S. dollars, except ratios)
(Unaudited)
Global P&C includes the company’s North America Commercial P&C Insurance segment (refer to page 10), North America Personal P&C Insurance segment (refer to page 11), Overseas General Insurance segment (refer to page 13), Global Reinsurance segment (refer to page 15), and Corporate (refer to page 17). Global P&C excludes the North America Agricultural Insurance and Life Insurance segments.
Global P&C (Including Corporate and excluding Agriculture)
1Q-18 | 4Q-17 | 3Q-17 | 2Q-17 | 1Q-17 | Full Year 2017 | |||||||||||||||||||
Global P&C Underwriting income | ||||||||||||||||||||||||
Gross premiums written | $ | 7,936 | $ | 8,098 | $ | 7,839 | $ | 8,179 | $ | 7,684 | $ | 31,800 | ||||||||||||
Net premiums written | 6,437 | 6,370 | 6,437 | 6,655 | 6,125 | 25,587 | ||||||||||||||||||
Net premiums earned | 6,444 | 6,413 | 6,382 | 6,378 | 6,252 | 25,425 | ||||||||||||||||||
Adjusted losses and loss expenses | 3,950 | 4,029 | 5,307 | 3,674 | 3,669 | 16,679 | ||||||||||||||||||
Policy acquisition costs | 1,337 | 1,287 | 1,307 | 1,292 | 1,284 | 5,170 | ||||||||||||||||||
Administrative expenses | 617 | 664 | 638 | 627 | 609 | 2,538 | ||||||||||||||||||
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Global P&C Underwriting income (loss) | $ | 540 | $ | 433 | $ | (870 | ) | $ | 785 | $ | 690 | $ | 1,038 | |||||||||||
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Global P&C CAY Underwriting income ex Cats | $ | 786 | $ | 758 | $ | 752 | $ | 807 | $ | 739 | $ | 3,056 | ||||||||||||
% Change versus prior year period | ||||||||||||||||||||||||
Net premiums written | 5.1 | % | 0.3 | % | 4.0 | % | -1.2 | % | 13.1 | % | 3.6 | % | ||||||||||||
Net premiums written excluding merger-related actions(1) | 5.9 | % | 2.3 | % | 3.3 | % | 1.7 | % | 18.2 | % | 5.8 | % | ||||||||||||
Net premiums earned | 3.1 | % | 0.6 | % | 0.4 | % | -2.9 | % | 2.9 | % | 0.2 | % | ||||||||||||
Net premiums written constant $ | 2.6 | % | -0.8 | % | 4.0 | % | -0.6 | % | 13.7 | % | 3.6 | % | ||||||||||||
Net premiums written constant $ excluding merger-related actions(1) | 3.4 | % | 1.2 | % | 3.3 | % | 2.4 | % | 18.7 | % | 5.8 | % | ||||||||||||
Net premiums earned constant $ | 1.2 | % | -0.6 | % | 0.3 | % | -2.3 | % | 3.0 | % | 0.0 | % | ||||||||||||
Combined ratio | ||||||||||||||||||||||||
Loss and loss expense ratio | 61.3 | % | 62.8 | % | 83.1 | % | 57.6 | % | 58.7 | % | 65.6 | % | ||||||||||||
Policy acquisition cost ratio | 20.8 | % | 20.1 | % | 20.5 | % | 20.3 | % | 20.5 | % | 20.3 | % | ||||||||||||
Administrative expense ratio | 9.5 | % | 10.4 | % | 10.0 | % | 9.8 | % | 9.8 | % | 10.0 | % | ||||||||||||
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Combined ratio | 91.6 | % | 93.3 | % | 113.6 | % | 87.7 | % | 89.0 | % | 95.9 | % | ||||||||||||
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CAY combined ratio—ex Cats | ||||||||||||||||||||||||
Loss and loss expense ratio—ex Cats and PPD | 57.6 | % | 57.9 | % | 58.0 | % | 57.3 | % | 57.9 | % | 57.8 | % | ||||||||||||
Underwriting and administrative expense ratio—ex Cats and PPD | 30.2 | % | 30.3 | % | 30.2 | % | 30.1 | % | 30.3 | % | 30.2 | % | ||||||||||||
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CAY combined ratio ex Cats | 87.8 | % | 88.2 | % | 88.2 | % | 87.4 | % | 88.2 | % | 88.0 | % | ||||||||||||
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Other ratios | ||||||||||||||||||||||||
Net premiums written/gross premiums written | 81 | % | 79 | % | 82 | % | 81 | % | 80 | % | 80 | % | ||||||||||||
Expense ratio | 30.3 | % | 30.5 | % | 30.5 | % | 30.1 | % | 30.3 | % | 30.3 | % | ||||||||||||
Expense ratio excluding A&H | 28.2 | % | 28.4 | % | 28.3 | % | 28.2 | % | 28.1 | % | 28.3 | % | ||||||||||||
Catastrophe reinstatement premiums (expenses)collected—pre-tax | $ | — | $ | (15 | ) | $ | 22 | $ | — | $ | — | $ | 7 | |||||||||||
Catastrophelosses—pre-tax | $ | 379 | $ | 432 | $ | 1,910 | $ | 192 | $ | 201 | $ | 2,735 | ||||||||||||
Favorable prior period development(PPD)—pre-tax | $ | (133 | ) | $ | (122 | ) | $ | (266 | ) | $ | (170 | ) | $ | (152 | ) | $ | (710 | ) |
(1) | Net premiums written were adversely impacted by merger-related actions of $48 million in Q1 2018. |
Global P&C | Page 9 |
Chubb Limited
Segment Results—Consecutive Quarters
(in millions of U.S. dollars, except ratios)
(Unaudited)
North America Commercial P&C Insurance
1Q-18 | 4Q-17 | 3Q-17 | 2Q-17 | 1Q-17 | Full Year 2017 | |||||||||||||||||||
Gross premiums written(1) | $ | 3,678 | $ | 4,102 | $ | 3,919 | $ | 4,077 | $ | 3,653 | $ | 15,751 | ||||||||||||
Net premiums written(1) | 2,812 | 3,000 | 3,086 | 3,203 | 2,730 | 12,019 | ||||||||||||||||||
Net premiums earned | 3,029 | 3,035 | 3,016 | 3,099 | 3,041 | 12,191 | ||||||||||||||||||
Losses and loss expenses | 1,908 | 1,911 | 2,580 | 1,936 | 1,860 | 8,287 | ||||||||||||||||||
Policy acquisition costs | 472 | 453 | 469 | 464 | 487 | 1,873 | ||||||||||||||||||
Administrative expenses | 231 | 253 | 256 | 241 | 231 | 981 | ||||||||||||||||||
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Underwriting income (loss) | 418 | 418 | (289 | ) | 458 | 463 | 1,050 | |||||||||||||||||
Net investment income | 503 | 496 | 497 | 490 | 478 | 1,961 | ||||||||||||||||||
Other income (expense)—operating | 6 | (5 | ) | 4 | 4 | (4 | ) | (1 | ) | |||||||||||||||
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Segment income | $ | 927 | $ | 909 | $ | 212 | $ | 952 | $ | 937 | $ | 3,010 | ||||||||||||
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CAY Underwriting income ex Cats | $ | 395 | $ | 386 | $ | 346 | $ | 429 | $ | 367 | $ | 1,528 | ||||||||||||
Combined ratio | ||||||||||||||||||||||||
Loss and loss expense ratio | 63.0 | % | 63.0 | % | 85.5 | % | 62.5 | % | 61.2 | % | 68.0 | % | ||||||||||||
Policy acquisition cost ratio | 15.6 | % | 14.9 | % | 15.5 | % | 15.0 | % | 16.0 | % | 15.4 | % | ||||||||||||
Administrative expense ratio | 7.6 | % | 8.3 | % | 8.6 | % | 7.7 | % | 7.6 | % | 8.0 | % | ||||||||||||
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Combined ratio | 86.2 | % | 86.2 | % | 109.6 | % | 85.2 | % | 84.8 | % | 91.4 | % | ||||||||||||
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CAY combined ratio—ex Cats | ||||||||||||||||||||||||
Loss and loss expense ratio—ex Cats and PPD | 64.0 | % | 64.1 | % | 65.2 | % | 63.4 | % | 64.4 | % | 64.3 | % | ||||||||||||
Underwriting and administrative expense ratio—ex Cats and PPD | 23.0 | % | 23.2 | % | 23.5 | % | 22.7 | % | 23.5 | % | 23.2 | % | ||||||||||||
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CAY combined ratio ex Cats | 87.0 | % | 87.3 | % | 88.7 | % | 86.1 | % | 87.9 | % | 87.5 | % | ||||||||||||
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Catastrophe reinstatement premiumsexpensed—pre-tax | $ | — | $ | (1 | ) | $ | (3 | ) | $ | — | $ | — | $ | (4 | ) | |||||||||
Catastrophelosses—pre-tax | $ | 78 | $ | 167 | $ | 868 | $ | 102 | $ | 83 | $ | 1,220 | ||||||||||||
Favorable prior period development(PPD)—pre-tax(2) | $ | (101 | ) | $ | (200 | ) | $ | (236 | ) | $ | (131 | ) | $ | (179 | ) | $ | (746 | ) | ||||||
% Change versus prior year period | ||||||||||||||||||||||||
Net premiums written | 3.0 | % | -2.7 | % | -0.7 | % | -1.3 | % | 18.6 | % | 2.4 | % | ||||||||||||
Net premiums written excluding merger-related actions(3) | 4.4 | % | -1.0 | % | 1.1 | % | 1.3 | % | 22.2 | % | 4.7 | % | ||||||||||||
Net premiums earned | -0.4 | % | -1.7 | % | -2.3 | % | -1.6 | % | 5.0 | % | -0.2 | % | ||||||||||||
Other ratios | ||||||||||||||||||||||||
Net premiums written/gross premiums written | 76 | % | 73 | % | 79 | % | 79 | % | 75 | % | 76 | % | ||||||||||||
Production by Size | ||||||||||||||||||||||||
Net Premiums Written(1) | ||||||||||||||||||||||||
Major Accounts & Specialty (4) | $ | 1,630 | $ | 1,753 | $ | 1,786 | $ | 1,965 | $ | 1,572 | $ | 7,076 | ||||||||||||
Commercial(4) | 1,182 | 1,247 | 1,300 | 1,238 | 1,158 | 4,943 | ||||||||||||||||||
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Total | $ | 2,812 | $ | 3,000 | $ | 3,086 | $ | 3,203 | $ | 2,730 | $ | 12,019 | ||||||||||||
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(1) | 2017 amounts (Q1: $12 million; Q2: $1 million; Q3: $3 million; Q4: $(7) million) have been revised to reflect the North America Commercial P&C Insurance segment transfer of certain multinational accounts to (from) the Overseas General Insurance segment to better align the reporting with the management of these businesses in 2018. There is no impact on a consolidated basis. |
(2) | For Q1 2018, favorable prior period development is net of $6 million of unfavorable expense adjustments and $4 million of unfavorable reinstatement premium adjustments. For Q1 2017, favorable prior period development is net of $9 million of favorable reinstatement premium adjustments. |
(3) | Q1 2018 includes the adverse impact of merger-related actions, respectively, as follows: Major Accounts & Specialty $38 million and Commercial $2 million. |
(4) | Major Accounts & Specialty: principally large corporate accounts and wholesale business. Commercial: principally middle market and small commercial accounts. |
NA Commercial | Page 10 |
Chubb Limited
Segment Results—Consecutive Quarters
(in millions of U.S. dollars, except ratios)
(Unaudited)
North America Personal P&C Insurance
1Q-18 | 4Q-17 | 3Q-17 | 2Q-17 | 1Q-17 | Full Year 2017 | |||||||||||||||||||
Gross premiums written | $ | 1,181 | $ | 1,260 | $ | 1,338 | $ | 1,409 | $ | 1,145 | $ | 5,152 | ||||||||||||
Net premiums written | 1,048 | 1,100 | 1,194 | 1,255 | 984 | 4,533 | ||||||||||||||||||
Net premiums earned | 1,140 | 1,103 | 1,117 | 1,093 | 1,086 | 4,399 | ||||||||||||||||||
Losses and loss expenses | 886 | 887 | 1,062 | 683 | 633 | 3,265 | ||||||||||||||||||
Policy acquisition costs | 237 | 226 | 226 | 230 | 217 | 899 | ||||||||||||||||||
Administrative expenses | 65 | 72 | 61 | 66 | 65 | 264 | ||||||||||||||||||
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Underwriting income (loss) | (48 | ) | (82 | ) | (232 | ) | 114 | 171 | (29 | ) | ||||||||||||||
Net investment income | 59 | 58 | 57 | 56 | 55 | 226 | ||||||||||||||||||
Other expense—operating | — | (1 | ) | (1 | ) | (1 | ) | (1 | ) | (4 | ) | |||||||||||||
Amortization expense of purchased intangibles | (3 | ) | (4 | ) | (4 | ) | (5 | ) | (3 | ) | (16 | ) | ||||||||||||
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Segment income (loss) | $ | 8 | $ | (29 | ) | $ | (180 | ) | $ | 164 | $ | 222 | $ | 177 | ||||||||||
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CAY Underwriting income ex Cats | $ | 230 | $ | 218 | $ | 251 | $ | 228 | $ | 236 | $ | 933 | ||||||||||||
Combined ratio | ||||||||||||||||||||||||
Loss and loss expense ratio | 77.7 | % | 80.4 | % | 95.1 | % | 62.4 | % | 58.3 | % | 74.2 | % | ||||||||||||
Policy acquisition cost ratio | 20.8 | % | 20.5 | % | 20.2 | % | 21.1 | % | 20.0 | % | 20.4 | % | ||||||||||||
Administrative expense ratio | 5.7 | % | 6.6 | % | 5.5 | % | 6.1 | % | 5.9 | % | 6.1 | % | ||||||||||||
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Combined ratio | 104.2 | % | 107.5 | % | 120.8 | % | 89.6 | % | 84.2 | % | 100.7 | % | ||||||||||||
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CAY combined ratio—ex Cats | ||||||||||||||||||||||||
Loss and loss expense ratio—ex Cats and PPD | 53.3 | % | 54.0 | % | 51.9 | % | 52.1 | % | 52.4 | % | 52.6 | % | ||||||||||||
Underwriting and administrative expense ratio—ex Cats and PPD | 26.4 | % | 26.5 | % | 25.6 | % | 27.2 | % | 25.9 | % | 26.3 | % | ||||||||||||
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CAY combined ratio ex Cats | 79.7 | % | 80.5 | % | 77.5 | % | 79.3 | % | 78.3 | % | 78.9 | % | ||||||||||||
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Catastrophe reinstatement premiumsexpensed—pre-tax | $ | — | $ | (19 | ) | $ | (3 | ) | $ | — | $ | — | $ | (22 | ) | |||||||||
Catastrophelosses—pre-tax | $ | 284 | $ | 278 | $ | 448 | $ | 77 | $ | 68 | $ | 871 | ||||||||||||
Unfavorable (favorable) prior period development(PPD)—pre-tax | $ | (6 | ) | $ | 3 | $ | 32 | $ | 37 | $ | (3 | ) | $ | 69 | ||||||||||
% Change versus prior year period | ||||||||||||||||||||||||
Net premiums written | 6.5 | % | 5.8 | % | 18.0 | % | 2.0 | % | 13.0 | % | 9.1 | % | ||||||||||||
Net premiums earned | 5.1 | % | 2.6 | % | 3.4 | % | -4.0 | % | 6.0 | % | 1.9 | % | ||||||||||||
Other ratios | ||||||||||||||||||||||||
Net premiums written/gross premiums written | 89 | % | 87 | % | 89 | % | 89 | % | 86 | % | 88 | % |
NA Personal | Page 11 |
Chubb Limited
Segment Results—Consecutive Quarters
(in millions of U.S. dollars, except ratios)
(Unaudited)
North America Agricultural Insurance
1Q-18 | 4Q-17 | 3Q-17 | 2Q-17 | 1Q-17 | Full Year 2017 | |||||||||||||||||||
Gross premiums written | $ | 205 | $ | 276 | $ | 1,303 | $ | 569 | $ | 167 | $ | 2,315 | ||||||||||||
Net premiums written | 108 | 126 | 926 | 403 | 61 | 1,516 | ||||||||||||||||||
Net premiums earned | 43 | 252 | 898 | 344 | 14 | 1,508 | ||||||||||||||||||
Adjusted losses and loss expenses(1) | (55 | ) | 60 | 764 | 292 | (73 | ) | 1,043 | ||||||||||||||||
Policy acquisition costs | (1 | ) | 6 | 49 | 27 | (1 | ) | 81 | ||||||||||||||||
Administrative expenses | (3 | ) | (4 | ) | (1 | ) | 2 | (5 | ) | (8 | ) | |||||||||||||
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Underwriting income | 102 | 190 | 86 | 23 | 93 | 392 | ||||||||||||||||||
Net investment income | 7 | 7 | 6 | 6 | 6 | 25 | ||||||||||||||||||
Other expense—operating | — | (1 | ) | — | (1 | ) | — | (2 | ) | |||||||||||||||
Amortization expense of purchased intangibles | (7 | ) | (7 | ) | (8 | ) | (7 | ) | (7 | ) | (29 | ) | ||||||||||||
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Segment income | $ | 102 | $ | 189 | $ | 84 | $ | 21 | $ | 92 | $ | 386 | ||||||||||||
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CAY Underwriting income ex Cats | $ | 27 | $ | 154 | $ | 87 | $ | 31 | $ | 19 | $ | 291 | ||||||||||||
Combined ratio | ||||||||||||||||||||||||
Loss and loss expense ratio | NM | 23.7 | % | 85.1 | % | 85.2 | % | NM | 69.2 | % | ||||||||||||||
Policy acquisition cost ratio | NM | 2.4 | % | 5.4 | % | 7.7 | % | NM | 5.4 | % | ||||||||||||||
Administrative expense ratio | NM | -1.7 | % | -0.1 | % | 0.4 | % | NM | -0.6 | % | ||||||||||||||
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Combined ratio | NM | 24.4 | % | 90.4 | % | 93.3 | % | NM | 74.0 | % | ||||||||||||||
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CAY combined ratio—ex Cats | ||||||||||||||||||||||||
Loss and loss expense ratio—ex Cats and PPD | 68.9 | % | 36.9 | % | 84.9 | % | 83.0 | % | 75.8 | % | 76.2 | % | ||||||||||||
Underwriting and administrative expense ratio—ex Cats and PPD | -1.2 | % | 3.1 | % | 5.4 | % | 8.1 | % | -1.2 | % | 5.3 | % | ||||||||||||
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CAY combined ratio ex Cats | 67.7 | % | 40.0 | % | 90.3 | % | 91.1 | % | 74.6 | % | 81.5 | % | ||||||||||||
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Catastrophelosses—pre-tax | $ | 1 | $ | — | $ | 5 | $ | 8 | $ | 5 | $ | 18 | ||||||||||||
Favorable prior period development(PPD)—pre-tax(2) | $ | (76 | ) | $ | (36 | ) | $ | (4 | ) | $ | — | $ | (79 | ) | $ | (119 | ) | |||||||
% Change versus prior year period | ||||||||||||||||||||||||
Net premiums written | 76.2 | % | 214.3 | % | 9.0 | % | 7.7 | % | -4.6 | % | 14.2 | % | ||||||||||||
Net premiums earned | 214.2 | % | 72.3 | % | 9.6 | % | 5.4 | % | -41.6 | % | 14.6 | % | ||||||||||||
Other ratios | ||||||||||||||||||||||||
Net premiums written/gross premiums written | 53 | % | 46 | % | 71 | % | 71 | % | 37 | % | 66 | % |
(1) | Includes realized gains/losses on crop derivatives. |
(2) | For Q1 2018, favorable prior period development is net of $40 million unfavorable net earned premium adjustments and $4 million of favorable profit-sharing commissions. For Q1 2017, favorable prior period development is net of $61 million unfavorable net earned premium adjustments and $4 million of favorable profit-sharing commissions. |
NA Agriculture | Page 12 |
Chubb Limited
Segment Results—Consecutive Quarters
(in millions of U.S. dollars, except ratios)
(Unaudited)
Overseas General Insurance
1Q-18 | 4Q-17 | 3Q-17 | 2Q-17 | 1Q-17 | Full Year 2017 | |||||||||||||||||||
Gross premiums written(1) | $ | 2,872 | $ | 2,632 | $ | 2,380 | $ | 2,465 | $ | 2,674 | $ | 10,151 | ||||||||||||
Net premiums written(1) | 2,384 | 2,165 | 1,966 | 2,007 | 2,212 | 8,350 | ||||||||||||||||||
Net premiums earned | 2,107 | 2,113 | 2,064 | 2,018 | 1,936 | 8,131 | ||||||||||||||||||
Losses and loss expenses | 1,078 | 965 | 1,281 | 964 | 1,071 | 4,281 | ||||||||||||||||||
Policy acquisition costs | 588 | 568 | 569 | 555 | 529 | 2,221 | ||||||||||||||||||
Administrative expenses | 239 | 248 | 246 | 243 | 245 | 982 | ||||||||||||||||||
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Underwriting income (loss) | 202 | 332 | (32 | ) | 256 | 91 | 647 | |||||||||||||||||
Net investment income | 151 | 150 | 164 | 148 | 148 | 610 | ||||||||||||||||||
Other income (expense)—operating | (7 | ) | (10 | ) | 10 | 3 | 1 | 4 | ||||||||||||||||
Amortization expense of purchased intangibles | (10 | ) | (12 | ) | (11 | ) | (11 | ) | (11 | ) | (45 | ) | ||||||||||||
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Segment income | $ | 336 | $ | 460 | $ | 131 | $ | 396 | $ | 229 | $ | 1,216 | ||||||||||||
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CAY Underwriting income ex Cats | $ | 195 | $ | 204 | $ | 195 | $ | 178 | $ | 153 | $ | 730 | ||||||||||||
Combined ratio | ||||||||||||||||||||||||
Loss and loss expense ratio | 51.1 | % | 45.7 | % | 62.1 | % | 47.8 | % | 55.3 | % | 52.6 | % | ||||||||||||
Policy acquisition cost ratio | 27.9 | % | 26.9 | % | 27.6 | % | 27.5 | % | 27.3 | % | 27.3 | % | ||||||||||||
Administrative expense ratio | 11.4 | % | 11.7 | % | 11.9 | % | 12.0 | % | 12.7 | % | 12.1 | % | ||||||||||||
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Combined ratio | 90.4 | % | 84.3 | % | 101.6 | % | 87.3 | % | 95.3 | % | 92.0 | % | ||||||||||||
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CAY combined ratio—ex Cats | ||||||||||||||||||||||||
Loss and loss expense ratio—ex Cats and PPD | 51.4 | % | 51.6 | % | 51.3 | % | 51.6 | % | 52.1 | % | 51.7 | % | ||||||||||||
Underwriting and administrative expense ratio—ex Cats and PPD | 39.3 | % | 38.7 | % | 39.3 | % | 39.6 | % | 40.0 | % | 39.3 | % | ||||||||||||
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CAY combined ratio ex Cats | 90.7 | % | 90.3 | % | 90.6 | % | 91.2 | % | 92.1 | % | 91.0 | % | ||||||||||||
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Catastrophe reinstatement premiums (expenses)collected—pre-tax | $ | — | $ | 5 | $ | (9 | ) | $ | — | $ | — | $ | (4 | ) | ||||||||||
Catastrophelosses—pre-tax | $ | 15 | $ | (55 | ) | $ | 326 | $ | 10 | $ | 50 | $ | 331 | |||||||||||
Unfavorable (favorable) prior period development(PPD)—pre-tax | $ | (22 | ) | $ | (68 | ) | $ | (108 | ) | $ | (88 | ) | $ | 12 | $ | (252 | ) | |||||||
% Change versus prior year period | ||||||||||||||||||||||||
Net premiums written | 7.8 | % | 2.5 | % | 1.3 | % | -1.1 | % | 8.3 | % | 2.8 | % | ||||||||||||
Net premiums earned | 8.8 | % | 3.1 | % | 1.4 | % | -3.6 | % | -0.9 | % | 0.0 | % | ||||||||||||
Net premiums written constant $ | 1.4 | % | -0.2 | % | 1.3 | % | 0.3 | % | 10.0 | % | 2.8 | % | ||||||||||||
Net premiums earned constant $ | 3.0 | % | 0.2 | % | 0.9 | % | -2.3 | % | -0.3 | % | -0.4 | % | ||||||||||||
Other ratios | ||||||||||||||||||||||||
Net premiums written/gross premiums written | 83 | % | 82 | % | 83 | % | 81 | % | 83 | % | 82 | % |
(1) | 2017 amounts (Q1: $12 million; Q2: $1 million; Q3: $3 million; Q4: $(7) million) have been revised to reflect the North America Commercial P&C Insurance segment transfer of certain multinational accounts to (from) the Overseas General Insurance segment to better align the reporting with the management of these businesses in 2018. There is no impact on a consolidated basis. |
Overseas General Insurance | Page 13 |
Chubb Limited
Segment Results
(in millions of U.S. dollars)
(Unaudited)
Overseas General Insurance—Production by Region
1Q-18 | 1Q-17 | % Change 1Q-18 vs. 1Q-17 | Constant $ 1Q-17 | Constant $ % Change 1Q-18 vs. 1Q-17 | ||||||||||||||||
Net premiums written | ||||||||||||||||||||
Europe | $ | 1,110 | $ | 1,030 | 7.8 | % | $ | 1,128 | -1.6 | % | ||||||||||
Latin America | 528 | 497 | 6.2 | % | 507 | 4.1 | % | |||||||||||||
Asia | 657 | 577 | 13.9 | % | 604 | 8.8 | % | |||||||||||||
Other (1) (2) | 89 | 108 | -17.6 | % | 112 | -20.5 | % | |||||||||||||
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Total | $ | 2,384 | $ | 2,212 | 7.8 | % | $ | 2,351 | 1.4 | % | ||||||||||
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(1) | Q1 2017 was revised to include $12 million, representing the transfer of certain multinational accounts from the North America Commercial P&C Insurance segment to better align the reporting with the management of these businesses in 2018. There is no impact on a consolidated basis. |
(2) | Primarily includes Eurasia and Africa, and the company’s international supplemental A&H business of Combined Insurance. |
Overseas General Ins. - Region | Page 14 |
Chubb Limited
Segment Results—Consecutive Quarters
(in millions of U.S. dollars, except ratios)
(Unaudited)
Global Reinsurance
1Q-18 | 4Q-17 | 3Q-17 | 2Q-17 | 1Q-17 | Full Year 2017 | |||||||||||||||||||
Gross premiums written | $ | 205 | $ | 104 | $ | 202 | $ | 228 | $ | 212 | $ | 746 | ||||||||||||
Net premiums written | 193 | 105 | 191 | 190 | 199 | 685 | ||||||||||||||||||
Net premiums earned | 168 | 162 | 185 | 168 | 189 | 704 | ||||||||||||||||||
Losses and loss expenses | 67 | 126 | 295 | 46 | 94 | 561 | ||||||||||||||||||
Policy acquisition costs | 40 | 40 | 43 | 43 | 51 | 177 | ||||||||||||||||||
Administrative expenses | 10 | 11 | 11 | 12 | 10 | 44 | ||||||||||||||||||
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Underwriting income (loss) | 51 | (15 | ) | (164 | ) | 67 | 34 | (78 | ) | |||||||||||||||
Net investment income | 64 | 66 | 80 | 65 | 62 | 273 | ||||||||||||||||||
Other income (expense)—operating | 7 | (1 | ) | 3 | (1 | ) | — | 1 | ||||||||||||||||
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Segment income (loss) | $ | 122 | $ | 50 | $ | (81 | ) | $ | 131 | $ | 96 | $ | 196 | |||||||||||
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CAY Underwriting income ex Cats | $ | 39 | $ | 32 | $ | 26 | $ | 39 | $ | 42 | $ | 139 | ||||||||||||
Combined ratio | ||||||||||||||||||||||||
Loss and loss expense ratio | 40.1 | % | 78.9 | % | 158.2 | % | 27.8 | % | 49.6 | % | 79.8 | % | ||||||||||||
Policy acquisition cost ratio | 23.6 | % | 24.4 | % | 23.4 | % | 25.7 | % | 26.8 | % | 25.1 | % | ||||||||||||
Administrative expense ratio | 5.8 | % | 6.9 | % | 5.8 | % | 6.7 | % | 5.7 | % | 6.3 | % | ||||||||||||
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Combined ratio | 69.5 | % | 110.2 | % | 187.4 | % | 60.2 | % | 82.1 | % | 111.2 | % | ||||||||||||
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CAY combined ratio—ex Cats | ||||||||||||||||||||||||
Loss and loss expense ratio—ex Cats and PPD | 47.7 | % | 50.1 | % | 46.5 | % | 44.4 | % | 43.2 | % | 46.0 | % | ||||||||||||
Underwriting and administrative expense ratio—ex Cats and PPD | 29.3 | % | 31.3 | % | 35.7 | % | 32.6 | % | 33.8 | % | 33.2 | % | ||||||||||||
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CAY combined ratio ex Cats | 77.0 | % | 81.4 | % | 82.2 | % | 77.0 | % | 77.0 | % | 79.2 | % | ||||||||||||
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Catastrophe reinstatement premiumscollected—pre-tax | $ | — | $ | — | $ | 37 | $ | — | $ | — | $ | 37 | ||||||||||||
Catastrophelosses—pre-tax | $ | 2 | $ | 42 | $ | 268 | $ | 3 | $ | — | $ | 313 | ||||||||||||
Unfavorable (favorable) prior period development(PPD)—pre-tax(1) | $ | (14 | ) | $ | 5 | $ | (41 | ) | $ | (31 | ) | $ | 8 | $ | (59 | ) | ||||||||
% Change versus prior year period | ||||||||||||||||||||||||
Net premiums written as reported | -3.0 | % | -8.2 | % | 47.1 | % | -17.7 | % | -0.9 | % | 1.4 | % | ||||||||||||
Net premiums earned as reported | -11.0 | % | -3.4 | % | 20.4 | % | -9.6 | % | -6.4 | % | -0.7 | % | ||||||||||||
Net premiums written constant $ | -4.8 | % | -9.3 | % | 47.9 | % | -16.5 | % | 0.2 | % | 2.2 | % | ||||||||||||
Net premiums earned constant $ | -12.8 | % | -5.1 | % | 20.0 | % | -8.1 | % | -5.5 | % | -0.4 | % | ||||||||||||
Other ratios | ||||||||||||||||||||||||
Net premiums written/gross premiums written | 94 | % | 100 | % | 95 | % | 83 | % | 94 | % | 92 | % |
(1) | For Q1 2018, favorable prior period development includes $1 million of unfavorable net earned premium adjustments. For Q1 2017, unfavorable prior period development includes $7 million of favorable net earned premium adjustments. |
Global Reinsurance | Page 15 |
Chubb Limited
Segment Results—Consecutive Quarters
(in millions of U.S. dollars)
(Unaudited)
Life Insurance
1Q-18 | 4Q-17 | 3Q-17 | 2Q-17 | 1Q-17 | Full Year 2017 | |||||||||||||||||||
Gross premiums written | $ | 592 | $ | 586 | $ | 568 | $ | 557 | $ | 550 | $ | 2,261 | ||||||||||||
Net premiums written | 559 | 555 | 539 | 523 | 524 | 2,141 | ||||||||||||||||||
Net premiums earned | 540 | 553 | 527 | 515 | 506 | 2,101 | ||||||||||||||||||
Losses and loss expenses | 205 | 183 | 181 | 182 | 193 | 739 | ||||||||||||||||||
Policy benefits(1) | 151 | 176 | 169 | 163 | 168 | 676 | ||||||||||||||||||
(Gains) losses from fair value changes in separate account assets(1) | (6 | ) | (27 | ) | (24 | ) | (16 | ) | (30 | ) | (97 | ) | ||||||||||||
Policy acquisition costs | 128 | 154 | 132 | 130 | 114 | 530 | ||||||||||||||||||
Administrative expenses | 78 | 77 | 77 | 77 | 72 | 303 | ||||||||||||||||||
Net investment income | 83 | 83 | 78 | 77 | 75 | 313 | ||||||||||||||||||
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Life Insurance underwriting income (2) | 67 | 73 | 70 | 56 | 64 | 263 | ||||||||||||||||||
Other expense—operating | (2 | ) | (3 | ) | (5 | ) | (4 | ) | (1 | ) | (13 | ) | ||||||||||||
Amortization expense of purchased intangibles | (1 | ) | — | (1 | ) | — | (1 | ) | (2 | ) | ||||||||||||||
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Segment income | $ | 64 | $ | 70 | $ | 64 | $ | 52 | $ | 62 | $ | 248 | ||||||||||||
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% Change versus prior year period | ||||||||||||||||||||||||
Net premiums written | 6.7 | % | 1.2 | % | 1.1 | % | -0.7 | % | 1.6 | % | 0.8 | % | ||||||||||||
Net premiums earned | 6.8 | % | 3.5 | % | 2.8 | % | 0.8 | % | 1.6 | % | 2.2 | % | ||||||||||||
Net premiums written constant $ | 5.0 | % | 0.3 | % | 1.1 | % | -1.0 | % | 0.9 | % | 0.3 | % | ||||||||||||
Net premiums earned constant $ | 5.0 | % | 2.3 | % | 2.8 | % | 0.5 | % | 0.7 | % | 1.6 | % |
(1) | (Gains) losses from fair value changes in separate account assets that do not qualify for separate account reporting under GAAP have been reclassified from Other income (expense) for purposes of presenting Life Insurance underwriting income. The offsetting movement in the separate account liabilities is included in Policy benefits. |
(2) | We assess the performance of our Life Insurance business based on Life Insurance underwriting income which includes Net investment income and (Gains) losses from fair value changes in separate account assets. |
International life insurance net premiums written and deposits breakdown (excludes Combined North America and Life reinsurance businesses):
1Q-18 | 1Q-17 | % Change 1Q-18 vs. 1Q-17 | Constant $ % Change 1Q-18 vs. 1Q-17 | |||||||||||||
International life insurance net premiums written | $ | 217 | $ | 198 | 10.0 | % | 6.2 | % | ||||||||
International life insurance deposits(3) | 379 | 310 | 22.0 | % | 16.9 | % | ||||||||||
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Total international life insurance net premiums written and deposits | $ | 596 | $ | 508 | 17.3 | % | 12.8 | % | ||||||||
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International life insurance segment income | $ | 17 | $ | 13 | 32.5 | % | 32.6 | % | ||||||||
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(3) | Includes deposits collected on universal life and investment contracts. Consistent with GAAP, premiums collected on universal life and investment contracts are considered deposits and excluded from revenues. |
Life Insurance | Page 16 |
Chubb Limited
Segment Results—Consecutive Quarters
(in millions of U.S. dollars)
(Unaudited)
Corporate
1Q-18 | 4Q-17 | 3Q-17 | 2Q-17 | 1Q-17 | Full Year 2017 | |||||||||||||||||||
Gross premiums written | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Net premiums written | — | — | — | — | — | — | ||||||||||||||||||
Net premiums earned | — | — | — | — | — | — | ||||||||||||||||||
Losses and loss expenses | 11 | 140 | 89 | 45 | 11 | 285 | ||||||||||||||||||
Policy acquisition costs | — | — | — | — | — | — | ||||||||||||||||||
Administrative expenses | 72 | 80 | 64 | 65 | 58 | 267 | ||||||||||||||||||
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Underwriting loss | (83 | ) | (220 | ) | (153 | ) | (110 | ) | (69 | ) | (552 | ) | ||||||||||||
Adjusted net investment income | 10 | 13 | 11 | 13 | 12 | 49 | ||||||||||||||||||
Other expense—operating | (7 | ) | (61 | ) | (6 | ) | (14 | ) | (7 | ) | (88 | ) | ||||||||||||
Adjusted interest expense (1) | (169 | ) | (168 | ) | (162 | ) | (160 | ) | (166 | ) | (656 | ) | ||||||||||||
Amortization (expense) benefit of purchased intangibles | (64 | ) | (43 | ) | (41 | ) | (42 | ) | (42 | ) | (168 | ) | ||||||||||||
2017 tax reform transition benefit | — | 450 | — | — | — | 450 | ||||||||||||||||||
Income tax (expense) benefit ex 2017 tax reform transition benefit | (149 | ) | (131 | ) | 61 | (223 | ) | (191 | ) | (484 | ) | |||||||||||||
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Core operating loss | (462 | ) | (160 | ) | (290 | ) | (536 | ) | (463 | ) | (1,449 | ) | ||||||||||||
Chubb integration expenses, net of tax | (8 | ) | (57 | ) | (36 | ) | (50 | ) | (74 | ) | (217 | ) | ||||||||||||
Amortization of fair value adjustment of acquired invested assets | (50 | ) | (41 | ) | (50 | ) | (52 | ) | (55 | ) | (198 | ) | ||||||||||||
Adjusted net realized gains (losses), net of tax (2) | 43 | 142 | 76 | 227 | 47 | 492 | ||||||||||||||||||
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|
| |||||||||||||
Net loss | $ | (477 | ) | $ | (116 | ) | $ | (300 | ) | $ | (411 | ) | $ | (545 | ) | $ | (1,372 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Unfavorable prior period development(PPD)—pre-tax | $ | 10 | $ | 138 | $ | 87 | $ | 43 | $ | 10 | $ | 278 |
(1) | SeeNon-GAAP financial measures. |
(2) | Includes net realized gains (losses) related to unconsolidated entities. |
Corporate | Page 17 |
Chubb Limited
Loss Reserve Rollforward
(in millions of U.S. dollars, except ratios)
(Unaudited)
Unpaid Losses | Net Paid to Incurred Ratio | |||||||||||||||
Gross | Ceded | Net | ||||||||||||||
Balance at December 31, 2016 | $ | 60,540 | $ | 12,708 | $ | 47,832 | ||||||||||
Losses and loss expenses incurred | 4,752 | 963 | 3,789 | |||||||||||||
Losses and loss expenses paid | (4,830 | ) | (923 | ) | (3,907 | ) | 103 | % | ||||||||
Other (incl. foreign exch. revaluation) | 117 | 63 | 54 | |||||||||||||
|
|
|
|
|
| |||||||||||
Balance at March 31, 2017 | $ | 60,579 | $ | 12,811 | $ | 47,768 | ||||||||||
Losses and loss expenses incurred | 5,016 | 870 | 4,146 | |||||||||||||
Losses and loss expenses paid | (5,356 | ) | (1,234 | ) | (4,122 | ) | 99 | % | ||||||||
Other (incl. foreign exch. revaluation) | 155 | 38 | 117 | |||||||||||||
|
|
|
|
|
| |||||||||||
Balance at June 30, 2017 | $ | 60,394 | $ | 12,485 | $ | 47,909 | ||||||||||
Losses and loss expenses incurred | 8,410 | 2,163 | 6,247 | |||||||||||||
Losses and loss expenses paid | (5,207 | ) | (909 | ) | (4,298 | ) | 69 | % | ||||||||
Other (incl. foreign exch. revaluation) | 556 | 131 | 425 | |||||||||||||
|
|
|
|
|
| |||||||||||
Balance at September 30, 2017 | $ | 64,153 | $ | 13,870 | $ | 50,283 | ||||||||||
Losses and loss expenses incurred | 5,755 | 1,483 | 4,272 | |||||||||||||
Losses and loss expenses paid | (6,419 | ) | (1,298 | ) | (5,121 | ) | 120 | % | ||||||||
Other (incl. foreign exch. revaluation) | (310 | ) | (41 | ) | (269 | ) | ||||||||||
|
|
|
|
|
| |||||||||||
Balance at December 31, 2017 | $ | 63,179 | $ | 14,014 | $ | 49,165 | ||||||||||
Losses and loss expenses incurred | 5,028 | 926 | 4,102 | |||||||||||||
Losses and loss expenses paid | (5,448 | ) | (1,206 | ) | (4,242 | ) | 103 | % | ||||||||
Other (incl. foreign exch. revaluation) | 380 | 88 | 292 | |||||||||||||
|
|
|
|
|
| |||||||||||
Balance at March 31, 2018 | $ | 63,139 | $ | 13,822 | $ | 49,317 | ||||||||||
Add net recoverable on paid losses | — | 1,160 | (1,160 | ) | ||||||||||||
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|
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|
|
| |||||||||||
Balance including net recoverable on paid losses | $ | 63,139 | $ | 14,982 | $ | 48,157 | ||||||||||
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|
|
Loss Reserve Rollforward | Page 18 |
Chubb Limited
Reinsurance Recoverable Analysis
(in millions of U.S. dollars)
(Unaudited)
Net Reinsurance Recoverable by Division
March 31 2018 | December 31 2017 | |||||||
Reinsurance recoverable on paid losses and loss expenses | ||||||||
Active operations | $ | 972 | $ | 808 | ||||
Brandywine and OtherRun-off | 271 | 286 | ||||||
|
|
|
| |||||
Total | $ | 1,243 | $ | 1,094 | ||||
|
|
|
| |||||
Reinsurance recoverable on unpaid losses and loss expenses | ||||||||
Active operations | $ | 12,842 | $ | 12,992 | ||||
Brandywine and OtherRun-off | 1,217 | 1,269 | ||||||
|
|
|
| |||||
Total | $ | 14,059 | $ | 14,261 | ||||
|
|
|
| |||||
Gross reinsurance recoverable | ||||||||
Active operations | $ | 13,814 | $ | 13,800 | ||||
Brandywine and OtherRun-off | 1,488 | 1,555 | ||||||
|
|
|
| |||||
Total | $ | 15,302 | $ | 15,355 | ||||
|
|
|
| |||||
Provision for uncollectible reinsurance(1) | ||||||||
Active operations | $ | (188 | ) | $ | (183 | ) | ||
Brandywine and OtherRun-off | (132 | ) | (138 | ) | ||||
|
|
|
| |||||
Total | $ | (320 | ) | $ | (321 | ) | ||
|
|
|
| |||||
Net reinsurance recoverable | ||||||||
Active operations | $ | 13,626 | $ | 13,617 | ||||
Brandywine and OtherRun-off | 1,356 | 1,417 | ||||||
|
|
|
| |||||
Total | $ | 14,982 | $ | 15,034 | ||||
|
|
|
|
(1) | The provision for uncollectible reinsurance is based on a default analysis applied to gross reinsurance, net of usable collateral of approximately $3.7 billion. |
Reinsurance Recoverable | Page 19 |
Chubb Limited
Investment Portfolio
(in millions of U.S. dollars)
(Unaudited)
March 31 2018 | December 31 2017 | |||||||||||||||
Market Value | ||||||||||||||||
Fixed maturities available for sale | $ | 79,111 | $ | 78,939 | ||||||||||||
Fixed maturities held to maturity | 14,122 | 14,474 | ||||||||||||||
Short-term investments | 2,874 | 3,561 | ||||||||||||||
|
|
|
| |||||||||||||
Total fixed maturities | $ | 96,107 | $ | 96,974 | ||||||||||||
|
|
|
| |||||||||||||
Asset Allocation by Market Value | ||||||||||||||||
Treasury | $ | 4,277 | 4 | % | $ | 4,049 | 4 | % | ||||||||
Agency | 593 | 1 | % | 564 | 1 | % | ||||||||||
Corporate and asset-backed | 26,564 | 28 | % | 27,215 | 28 | % | ||||||||||
Mortgage-backed | 18,467 | 19 | % | 18,032 | 19 | % | ||||||||||
Municipal | 19,550 | 20 | % | 20,766 | 21 | % | ||||||||||
Non-U.S. | 23,782 | 25 | % | 22,787 | 23 | % | ||||||||||
Short-term investments | 2,874 | 3 | % | 3,561 | 4 | % | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total fixed maturities | $ | 96,107 | 100 | % | $ | 96,974 | 100 | % | ||||||||
|
|
|
|
|
|
|
| |||||||||
Credit Quality by Market Value | ||||||||||||||||
AAA | $ | 14,723 | 15 | % | $ | 15,512 | 16 | % | ||||||||
AA | 37,322 | 39 | % | 37,407 | 39 | % | ||||||||||
A | 18,306 | 19 | % | 18,369 | 19 | % | ||||||||||
BBB | 12,616 | 13 | % | 12,377 | 13 | % | ||||||||||
BB | 7,710 | 8 | % | 7,941 | 8 | % | ||||||||||
B | 5,235 | 6 | % | 5,135 | 5 | % | ||||||||||
Other | 195 | 0 | % | 233 | 0 | % | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total fixed maturities | $ | 96,107 | 100 | % | $ | 96,974 | 100 | % | ||||||||
|
|
|
|
|
|
|
| |||||||||
Cost/Amortized Cost | ||||||||||||||||
Fixed maturities available for sale | $ | 79,208 | $ | 77,835 | ||||||||||||
Fixed maturities held to maturity | 14,253 | 14,335 | ||||||||||||||
Short-term investments | 2,874 | 3,561 | ||||||||||||||
|
|
|
| |||||||||||||
Subtotal fixed maturities | 96,335 | 95,731 | ||||||||||||||
Equity securities | 948 | 737 | ||||||||||||||
Other investments | 4,919 | 4,417 | ||||||||||||||
|
|
|
| |||||||||||||
Total investment portfolio | $ | 102,202 | $ | 100,885 | ||||||||||||
|
|
|
| |||||||||||||
Avg. duration of fixed maturities | 4.3 years | 4.2 years | ||||||||||||||
Avg. market yield of fixed maturities | 3.3 | % | 2.9 | % | ||||||||||||
Avg. credit quality | A/Aa | A/Aa | ||||||||||||||
Avg. yield on invested assets (1) | 3.4 | % | 3.5 | % |
(1) | Calculated using adjusted net investment income. |
Investments | Page 20 |
Chubb Limited
Investment Portfolio—2
(in millions of U.S. dollars)
(Unaudited)
Mortgage-backed Fixed Income Portfolio
S&P Credit Rating | ||||||||||||||||||||||||
AAA | AA | A | BBB | BB and below | Total | |||||||||||||||||||
Mortgage-backed securities | ||||||||||||||||||||||||
Market Value at March 31, 2018 | ||||||||||||||||||||||||
Agency residential mortgage-backed (RMBS) | $ | — | $ | 15,176 | $ | — | $ | — | $ | — | $ | 15,176 | ||||||||||||
Non-agency RMBS | 28 | 27 | 85 | 29 | 24 | 193 | ||||||||||||||||||
Commercial mortgage-backed | 2,809 | 203 | 86 | — | — | 3,098 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total mortgage-backed securities at market value | $ | 2,837 | $ | 15,406 | $ | 171 | $ | 29 | $ | 24 | $ | 18,467 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Corporate and Asset-backed Fixed Income Portfolios
S&P Credit Rating | ||||||||||||||||||||
Investment Grade | ||||||||||||||||||||
AAA | AA | A | BBB | Total | ||||||||||||||||
Market Value at March 31, 2018 | ||||||||||||||||||||
Asset-backed | $ | 715 | $ | 102 | $ | 41 | $ | 26 | $ | 884 | ||||||||||
Banks | — | 15 | 1,616 | 1,491 | 3,122 | |||||||||||||||
Basic Materials | — | — | 101 | 207 | 308 | |||||||||||||||
Communications | — | 163 | 260 | 1,257 | 1,680 | |||||||||||||||
Consumer, Cyclical | — | 227 | 476 | 663 | 1,366 | |||||||||||||||
Consumer,Non-Cyclical | 107 | 525 | 1,692 | 1,368 | 3,692 | |||||||||||||||
Diversified Financial Services | 7 | 13 | 464 | 239 | 723 | |||||||||||||||
Energy | — | 49 | 72 | 557 | 678 | |||||||||||||||
Industrial | — | 27 | 745 | 522 | 1,294 | |||||||||||||||
Utilities | — | 23 | 830 | 398 | 1,251 | |||||||||||||||
All Others | 158 | 396 | 908 | 723 | 2,185 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | $ | 987 | $ | 1,540 | $ | 7,205 | $ | 7,451 | $ | 17,183 | ||||||||||
|
|
|
|
|
|
|
|
|
|
S&P Credit Rating | ||||||||||||||||
Below Investment Grade | ||||||||||||||||
BB | B | CCC | Total | |||||||||||||
Market Value at March 31, 2018 | ||||||||||||||||
Asset-backed | $ | 3 | $ | 2 | $ | 9 | $ | 14 | ||||||||
Banks | — | — | — | — | ||||||||||||
Basic Materials | 320 | 133 | 1 | 454 | ||||||||||||
Communications | 794 | 746 | 4 | 1,544 | ||||||||||||
Consumer, Cyclical | 1,032 | 551 | 40 | 1,623 | ||||||||||||
Consumer,Non-Cyclical | 826 | 1,194 | 47 | 2,067 | ||||||||||||
Diversified Financial Services | 188 | 124 | — | 312 | ||||||||||||
Energy | 626 | 240 | 4 | 870 | ||||||||||||
Industrial | 521 | 519 | 14 | 1,054 | ||||||||||||
Utilities | 209 | 70 | — | 279 | ||||||||||||
All Others | 726 | 424 | 14 | 1,164 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 5,245 | $ | 4,003 | $ | 133 | $ | 9,381 | ||||||||
|
|
|
|
|
|
|
|
Investments 2 | Page 21 |
Chubb Limited
Investment Portfolio—3
(in millions of U.S. dollars)
(Unaudited)
Non-U.S. Fixed Income Portfolio
March 31, 2018
Market Value by S&P Credit Rating | ||||||||||||||||||||||||
AAA | AA | A | BBB | BB and below | Total | |||||||||||||||||||
Non-U.S. Government Securities | ||||||||||||||||||||||||
United Kingdom | $ | — | $ | 1,392 | $ | — | $ | — | $ | — | $ | 1,392 | ||||||||||||
Republic of Korea | — | 1,071 | — | — | — | 1,071 | ||||||||||||||||||
Canada | 988 | — | — | — | — | 988 | ||||||||||||||||||
Federative Republic of Brazil | — | — | — | — | 812 | 812 | ||||||||||||||||||
Province of Ontario | — | 9 | 630 | — | — | 639 | ||||||||||||||||||
United Mexican States | — | — | 454 | 125 | — | 579 | ||||||||||||||||||
Province of Quebec | — | 510 | — | — | — | 510 | ||||||||||||||||||
Federal Republic of Germany | 494 | — | — | — | — | 494 | ||||||||||||||||||
Kingdom of Thailand | — | — | 488 | — | — | 488 | ||||||||||||||||||
French Republic | — | 343 | — | — | — | 343 | ||||||||||||||||||
OtherNon-U.S. Government Securities | 972 | 1,077 | 908 | 569 | 1,016 | 4,542 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total | $ | 2,454 | $ | 4,402 | $ | 2,480 | $ | 694 | $ | 1,828 | $ | 11,858 | ||||||||||||
|
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|
|
|
|
|
|
|
|
|
Market Value by S&P Credit Rating | ||||||||||||||||||||||||
AAA | AA | A | BBB | BB and below | Total | |||||||||||||||||||
Non-U.S. Corporate Securities | ||||||||||||||||||||||||
United Kingdom | $ | 139 | $ | 93 | $ | 620 | $ | 980 | $ | 232 | $ | 2,064 | ||||||||||||
Canada | 104 | 164 | 371 | 478 | 337 | 1,454 | ||||||||||||||||||
United States(1) | 3 | 26 | 188 | 380 | 401 | 998 | ||||||||||||||||||
France | 6 | 49 | 543 | 278 | 35 | 911 | ||||||||||||||||||
Australia | 126 | 174 | 355 | 159 | 14 | 828 | ||||||||||||||||||
Netherlands | 71 | 10 | 340 | 193 | 50 | 664 | ||||||||||||||||||
Germany | 154 | 38 | 117 | 216 | 24 | 549 | ||||||||||||||||||
Japan | — | 37 | 376 | 7 | 4 | 424 | ||||||||||||||||||
Switzerland | 50 | 19 | 164 | 158 | 19 | 410 | ||||||||||||||||||
China | — | 1 | 258 | 43 | 8 | 310 | ||||||||||||||||||
OtherNon-U.S. Corporate Securities | 431 | 361 | 997 | 947 | 576 | 3,312 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total | $ | 1,084 | $ | 972 | $ | 4,329 | $ | 3,839 | $ | 1,700 | $ | 11,924 | ||||||||||||
|
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|
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|
|
(1) | Countries represent the ultimate parent company’s country of risk.Non-U.S. corporate securities could be issued by foreign subsidiaries of U.S. corporations. |
Investments 3 | Page 22 |
Chubb Limited
Investment Portfolio—4
(in millions of U.S. dollars)
(Unaudited)
Fixed Maturity Investment Portfolio
Top 10 Global Corporate Exposures
March 31, 2018 | Market Value | Rating | ||||||
1 | Wells Fargo & Co | $ | 542 | A- | ||||
2 | JP Morgan Chase & Co | 417 | A- | |||||
3 | Goldman Sachs Group Inc | 410 | BBB+ | |||||
4 | AT&T Inc | 399 | BBB+ | |||||
5 | Anheuser-Busch InBev NV | 354 | A- | |||||
6 | Bank of America Corp | 340 | A- | |||||
7 | Verizon Communications Inc | 338 | BBB+ | |||||
8 | General Electric Co | 334 | A | |||||
9 | Morgan Stanley | 328 | BBB+ | |||||
10 | HSBC Holdings Plc | 307 | A |
Investments 4 | Page 23 |
Chubb Limited
Net Realized and Unrealized Gains (Losses)
(in millions of U.S. dollars)
(Unaudited)
Three months ended March 31, 2018 | ||||||||||||||||||||||||||||||||||||
Realized Gains (Losses) | Unrealized Gains (Losses) | Realized and Unrealized Gains (Losses) | ||||||||||||||||||||||||||||||||||
Gains (Losses) Pre-Tax | Tax (Expense) Benefit | Gains (Losses) After-Tax | Gains (Losses) Pre-Tax | Tax (Expense) Benefit | Gains (Losses) After-Tax | Gains (Losses) Pre-Tax | Tax (Expense) Benefit | Gains (Losses) After-Tax | ||||||||||||||||||||||||||||
Fixed maturities (1) | $ | (23 | ) | $ | 3 | $ | (20 | ) | $ | (1,211 | ) | $ | 223 | $ | (988 | ) | $ | (1,234 | ) | $ | 226 | $ | (1,008 | ) | ||||||||||||
Fixed income derivatives | 17 | (1 | ) | 16 | — | — | — | 17 | (1 | ) | 16 | |||||||||||||||||||||||||
Public equity | 10 | (2 | ) | 8 | — | — | — | 10 | (2 | ) | 8 | |||||||||||||||||||||||||
Private equity | 44 | (9 | ) | 35 | — | — | — | 44 | (9 | ) | 35 | |||||||||||||||||||||||||
Mark-to-market on public and private equity (2) | 8 | 3 | 11 | — | — | — | 8 | 3 | 11 | |||||||||||||||||||||||||||
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|
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| |||||||||||||||||||
Total investment portfolio | 56 | (6 | ) | 50 | (1,211 | ) | 223 | (988 | ) | (1,155 | ) | 217 | (938 | ) | ||||||||||||||||||||||
Mark-to-market from variable annuity reinsurance derivative transactions, net of applicable hedges (3) | 60 | — | 60 | — | — | — | 60 | — | 60 | |||||||||||||||||||||||||||
Foreign exchange | (77 | ) | 9 | (68 | ) | 397 | (19 | ) | 378 | 320 | (10 | ) | 310 | |||||||||||||||||||||||
Partially-owned entities (4) | (1 | ) | — | (1 | ) | — | — | — | (1 | ) | — | (1 | ) | |||||||||||||||||||||||
Other (5) | 2 | — | 2 | (23 | ) | 4 | (19 | ) | (21 | ) | 4 | (17 | ) | |||||||||||||||||||||||
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|
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| |||||||||||||||||||
Net gains (losses) | $ | 40 | $ | 3 | $ | 43 | $ | (837 | ) | $ | 208 | $ | (629 | ) | $ | (797 | ) | $ | 211 | $ | (586 | ) | ||||||||||||||
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|
(1) | Other-than-temporary impairments for the quarter in realized gains (losses) were $1 million for fixed maturities. |
(2) | Effective Q1 2018, the company adopted new guidance that requires the recognition ofmark-to-market changes of public equities and cost-method private equities to be recognized through realized gains (losses) on the income statement. Previously these unrealized gains (losses) were recorded through other comprehensive income (loss) on the balance sheet. |
(3) | The quarter includes $22 million of gains on applicable hedges. These gains are bothpre-tax andafter-tax. |
(4) | Partially-owned entities are investments where we hold more than an insignificant percentage of the investee’s shares. Refer to theNon-GAAP financial measures section for additional details. |
(5) | Other unrealized gains (losses) are primarily related to the company’s post-retirement programs. |
Three months ended March 31, 2017 | ||||||||||||||||||||||||||||||||||||
Realized Gains (Losses) | Unrealized Gains (Losses) | Realized and Unrealized Gains (Losses) | ||||||||||||||||||||||||||||||||||
Gains (Losses) Pre-Tax | Tax (Expense) Benefit | Gains (Losses) After-Tax | Gains (Losses) Pre-Tax | Tax (Expense) Benefit | Gains (Losses) After-Tax | Gains (Losses) Pre-Tax | Tax (Expense) Benefit | Gains (Losses) After-Tax | ||||||||||||||||||||||||||||
Fixed maturities | $ | (12 | ) | $ | 6 | $ | (6 | ) | $ | 256 | $ | (95 | ) | $ | 161 | $ | 244 | $ | (89 | ) | $ | 155 | ||||||||||||||
Fixed income derivatives | 6 | 6 | 12 | — | — | — | 6 | 6 | 12 | |||||||||||||||||||||||||||
Public equity | 4 | — | 4 | 28 | (10 | ) | 18 | 32 | (10 | ) | 22 | |||||||||||||||||||||||||
Private equity | 50 | (18 | ) | 32 | 31 | (3 | ) | 28 | 81 | (21 | ) | 60 | ||||||||||||||||||||||||
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|
|
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| |||||||||||||||||||
Total investment portfolio(6) | 48 | (6 | ) | 42 | 315 | (108 | ) | 207 | 363 | (114 | ) | 249 | ||||||||||||||||||||||||
Mark-to-market from variable annuity reinsurance derivative transactions, net of applicable hedges(7) | 19 | — | 19 | — | — | — | 19 | — | 19 | |||||||||||||||||||||||||||
Foreign exchange | (19 | ) | 6 | (13 | ) | 134 | (3 | ) | 131 | 115 | 3 | 118 | ||||||||||||||||||||||||
Partially-owned entities(8) | (6 | ) | 2 | (4 | ) | — | — | — | (6 | ) | 2 | (4 | ) | |||||||||||||||||||||||
Other(9) | 3 | — | 3 | (20 | ) | (4 | ) | (24 | ) | (17 | ) | (4 | ) | (21 | ) | |||||||||||||||||||||
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| |||||||||||||||||||
Net gains (losses) | $ | 45 | $ | 2 | $ | 47 | $ | 429 | $ | (115 | ) | $ | 314 | $ | 474 | $ | (113 | ) | $ | 361 | ||||||||||||||||
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(6) | Other-than-temporary impairments for the quarter in realized gains (losses) include $6 million for fixed maturities, $5 million for public equity and $8 million for private equity. |
(7) | The quarter includes $74 million of losses on applicable hedges. These losses are bothpre-tax andafter-tax. |
(8) | Partially-owned entities are investments where we hold more than an insignificant percentage of the investee’s shares. Refer to theNon-GAAP financial measures section for additional details. |
(9) | Other unrealized gains (losses) are primarily related to the company’s post-retirement programs. |
Net Gains (Losses) | Page 24 |
Chubb Limited
Debt and Capital
(in millions of U.S. dollars, except ratios)
(Unaudited)
March 31 2018 | December 31 2017 | December 31 2016 | ||||||||||
Financial Debt: | ||||||||||||
Total short-term debt(1) | $ | 1,669 | $ | 1,013 | $ | 500 | ||||||
Total long-term debt(2) | 12,786 | 11,556 | 12,610 | |||||||||
|
|
|
|
|
| |||||||
Total financial debt | $ | 14,455 | $ | 12,569 | $ | 13,110 | ||||||
Hybrid debt: | ||||||||||||
Total trust preferred securities | 308 | 308 | 308 | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 14,763 | $ | 12,877 | $ | 13,418 | ||||||
|
|
|
|
|
| |||||||
Capitalization: | ||||||||||||
Shareholders’ equity | $ | 51,287 | $ | 51,172 | $ | 48,275 | ||||||
Hybrid debt | 308 | 308 | 308 | |||||||||
Financial debt | 14,455 | 12,569 | 13,110 | |||||||||
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Total capitalization | $ | 66,050 | $ | 64,049 | $ | 61,693 | ||||||
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Leverage ratios (based on total capital): | ||||||||||||
Hybrid debt | 0.5 | % | 0.5 | % | 0.5 | % | ||||||
Financial debt | 21.9 | % | 19.6 | % | 21.3 | % | ||||||
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Total hybrid & financial debt | 22.4 | % | 20.1 | % | 21.8 | % |
Note: As of March 31, 2018, there was $0.3 billion usage of credit facilities on a total commitment of $1.0 billion.
(1) | During March 2018, the $300 million 5.8% senior notes matured and were fully paid. In addition, the $1.0 billion junior subordinated capital securities were reclassified to short-term debt. Subsequently, on April 6, 2018, the capital securities were redeemed. |
(2) | In March 2018, we issued $2.2 billion of European senior notes (€900 million at 1.55% due 2028 and €900 million at 2.5% due 2038). |
Debt and Capital | Page 25 |
Chubb Limited
Computation of Basic and Diluted Earnings Per Share
(in millions of U.S. dollars, except share and per share data)
(Unaudited)
Three months ended March 31 | ||||||||
2018 | 2017 | |||||||
Numerator | ||||||||
Core operating income to common shares | $ | 1,097 | $ | 1,175 | ||||
Amortization of fair value adjustment of acquired invested assets and long-term debt,pre-tax(1) | (59 | ) | (79 | ) | ||||
Tax benefit on amortization adjustment | 9 | 24 | ||||||
Chubb integration expenses,pre-tax | (10 | ) | (111 | ) | ||||
Tax benefit on Chubb integration expenses | 2 | 37 | ||||||
Adjusted net realized gains (losses),pre-tax | 40 | 45 | ||||||
Tax benefit on adjusted net realized gains (losses) | 3 | 2 | ||||||
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Net income | $ | 1,082 | $ | 1,093 | ||||
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Rollforward of Common Shares Outstanding | ||||||||
Shares—beginning of period | 463,833,179 | 465,968,716 | ||||||
Repurchase of shares | — | (1,036,064 | ) | |||||
Shares issued, excluding option exercises | 1,575,789 | 1,684,373 | ||||||
Issued for option exercises | 422,518 | 605,994 | ||||||
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Shares—end of period | 465,831,486 | 467,223,019 | ||||||
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Denominator | ||||||||
Weighted average shares outstanding(2) | 465,703,240 | 468,903,086 | ||||||
Effect of other dilutive securities | 3,770,351 | 3,828,604 | ||||||
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Adj. wtd. avg. shares outstanding and assumed conversions | 469,473,591 | 472,731,690 | ||||||
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Basic earnings per share | ||||||||
Core operating income | $ | 2.35 | $ | 2.50 | ||||
Amortization of fair value adjustment of acquired invested assets and long-term debt, net of tax(1) | (0.11 | ) | (0.12 | ) | ||||
Chubb integration expenses, net of tax | (0.02 | ) | (0.16 | ) | ||||
Adjusted net realized gains (losses), net of tax | 0.10 | 0.11 | ||||||
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Net income | $ | 2.32 | $ | 2.33 | ||||
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Diluted earnings per share | ||||||||
Core operating income | $ | 2.34 | $ | 2.48 | ||||
Amortization of fair value adjustment of acquired invested assets and long-term debt, net of tax(1) | (0.11 | ) | (0.12 | ) | ||||
Chubb integration expenses, net of tax | (0.02 | ) | (0.16 | ) | ||||
Adjusted net realized gains (losses), net of tax | 0.09 | 0.11 | ||||||
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| |||||
Net income | $ | 2.30 | $ | 2.31 | ||||
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(1) | Related to the acquisition of The Chubb Corporation. |
(2) | Includes unvested restricted stock units that are not included in common shares outstanding as the shares are not issued until time of vesting, but are eligible to receive dividends (participating securities). |
Earnings per share | Page 26 |
Chubb Limited
Book Value and Book Value per Common Share
(in millions of U.S. dollars, except share and per share data)
(Unaudited)
Reconciliation of Book Value per Common Share
March 31 2018 | December 31 2017 | March 31 2017 | ||||||||||
Shareholders’ equity | $ | 51,287 | $ | 51,172 | $ | 49,224 | ||||||
Less: goodwill and other intangible assets, net of tax | 20,706 | 20,621 | 20,013 | |||||||||
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Numerator for tangible book value per share | $ | 30,581 | $ | 30,551 | $ | 29,211 | ||||||
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Book value - % change over prior quarter | 0.2 | % | 1.4 | % | 2.0 | % | ||||||
Tangible book value - % change over prior quarter | 0.1 | % | 1.2 | % | 3.4 | % | ||||||
Denominator | 465,831,486 | 463,833,179 | 467,223,019 | |||||||||
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Book value per common share | $ | 110.10 | $ | 110.32 | $ | 105.35 | ||||||
Tangible book value per common share | $ | 65.65 | $ | 65.87 | $ | 62.52 | ||||||
Reconciliation of Book Value | ||||||||||||
Shareholders’ equity, beginning of quarter | $ | 51,172 | $ | 50,471 | $ | 48,275 | ||||||
Core operating income | 1,097 | 1,489 | 1,175 | |||||||||
Amortization of fair value adjustment of acquired invested assets and long-term debt, net of tax(1) | (50 | ) | (41 | ) | (55 | ) | ||||||
Chubb integration expenses, net of tax | (8 | ) | (57 | ) | (74 | ) | ||||||
Adjusted net realized gains (losses), net of tax(2) | 43 | 142 | 47 | |||||||||
Net unrealized gains (losses) on the investment portfolio | (988 | ) | (193 | ) | 207 | |||||||
Repurchase of shares | — | (123 | ) | (140 | ) | |||||||
Dividend declared on common shares | (332 | ) | (330 | ) | (324 | ) | ||||||
Cumulative translation | 378 | (411 | ) | 131 | ||||||||
Postretirement benefit liability | (18 | ) | 78 | (24 | ) | |||||||
Other (3) | (7 | ) | 147 | 6 | ||||||||
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$ | 51,287 | $ | 51,172 | $ | 49,224 | |||||||
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(1) | Related to the acquisition of The Chubb Corporation. |
(2) | Includes net realized gains (losses) related to unconsolidated entities. |
(3) | Other primarily includes proceeds from exercise of stock options and stock compensation, offset by the value of any share cancellations for restricted stock vesting taxes. |
Reconciliation Book Value | Page 27 |
Chubb Limited
Non-GAAP Financial Measures
(Unaudited)
Regulation G—Non-GAAP Financial Measures
In presenting our results, we included and discussed certain non-GAAP measures. These non-GAAP measures, which may be defined differently by other companies, are important for an understanding of our overall results of operations and financial condition. However, they should not be viewed as a substitute for measures determined in accordance with generally accepted accounting principles (GAAP).
We provide financial measures such as gross premiums written, net premiums written, net premiums earned, and core operating income (loss) on a constant-dollar basis. We believe it is useful to evaluate the trends in these measures exclusive of the effect of fluctuations in exchange rates between the U.S. dollar and the currencies in which our international business is transacted, as these exchange rates could fluctuate significantly between periods and distort the analysis of trends. The impact is determined by assuming constant foreign exchange rates between periods by translating prior period results using the same local currency exchange rates as the comparable current period.
Adjusted losses and loss expenses includes realized gains and losses on crop derivatives. The crop derivatives are purchased to provide economic benefit, in a manner similar to reinsurance protection, in the event that a significant decline in commodity pricing will impact underwriting results. We view gains and losses on these derivatives as part of the results of our underwriting operations and therefore realized gains and losses from these derivatives are reclassified from adjusted net realized gains (losses), also a non-GAAP financial measure.
Adjusted net realized gains (losses), net of tax includes net realized gains (losses) and net realized gains (losses) recorded in other income (expense) related to unconsolidated subsidiaries, and excludes realized gains and losses on crop derivatives. These derivatives were purchased to provide economic benefit, in a manner similar to reinsurance protection, in the event that a significant decline in commodity pricing impacts underwriting results. We view gains and losses on these derivatives as part of the results of our underwriting operations, and therefore realized gains (losses) from these derivatives are reclassified to adjusted losses and loss expenses. The P&C combined ratio includes adjusted losses and loss expenses in the ratio numerator.
In presenting our segment income (loss) results, we have shown our performance with reference to underwriting results. Underwriting results are calculated by subtracting adjusted losses and loss expenses, policy benefits, policy acquisition costs, and administrative expenses from net premiums earned. We use underwriting results and adjusted operating ratios to monitor the results of our operations without the impact of certain factors, including investment income, other income and expenses, interest and income tax expense, and adjusted net realized gains (losses). P&C underwriting income is a non-GAAP financial measure which excludes the Life Insurance segment. P&C loss and loss expense ratio and P&C combined ratio (both non-GAAP financial measures) include adjusted losses and loss expenses in the ratio numerator. P&C expense ratio (a non-GAAP financial measure) and P&C combined ratio include policy acquisition costs and administrative expenses in the ratio numerator. A reconciliation of combined ratio to P&C combined ratio is provided on page 31.
P&C combined ratio is the sum of the loss and loss expense ratio, acquisition cost ratio and the administrative expense ratio excluding the life business and including the realized gains and losses on the crop derivatives. These derivatives were purchased to provide economic benefit, in a manner similar to reinsurance protection, in the event that a significant decline in commodity pricing will impact underwriting results. We view gains and losses on these derivatives as part of the results of our underwriting operations.
CAY P&C combined ratio excluding the impact of catastrophe losses and prior period development (PPD) is a non-GAAP financial measure. The combined ratio numerator includes adjusted losses and loss expenses, policy acquisition costs, and administrative expenses. The denominator includes net premiums earned adjusted to exclude the amount of reinstatement premiums (expensed) collected. In periods where there are adjustments on loss sensitive policies, these adjustments are excluded from PPD and net earned premiums when calculating the ratios. We believe that excluding the impact of catastrophe losses and PPD provides a better evaluation of our underwriting performance and enhances the understanding of the trends in our property & casualty business that may be obscured by these items.
Expense ratio excluding accident and health (A&H) is a non-GAAP financial measure and excludes the impact of our A&H business from our expense ratio. The expense ratio for the A&H business is typically higher than our traditional P&C business, and we believe that this measure provides better comparison to our peer companies that may not have a significant A&H block of business.
Global P&C performance metrics are non-GAAP financial measures and comprise consolidated adjusted operating results (including corporate) and exclude the adjusted operating results of the company’s Life Insurance and North America Agricultural Insurance segments. We believe that these measures are useful and meaningful to investors as they are used by management to assess the company’s global P&C operations which are the most economically similar. We exclude the North America Agricultural Insurance and Life Insurance segments because the results of these businesses do not always correlate with the results of our global P&C operations.
Adjusted net investment income is net investment income excluding the amortization of the fair value adjustment on acquired invested assets. We believe this measure is meaningful as it highlights the underlying performance of our invested assets and portfolio management in support of our lines of business.
Other income (expense) – operating is a non-GAAP financial measure and excludes the portion of net realized gains and losses related to unconsolidated entities from other income (expense). These gains and losses are reported as net realized gains (losses) and represent the non-operating activities of entities where we hold more than an insignificant percentage of the investee’s shares. We exclude these gains and losses from other income (expense) to enhance the understanding of our segments’ operations as they are heavily influenced by, and fluctuate in part according to market conditions. Other income (expense) – operating and net realized gains and losses related to unconsolidated entities are recorded to Other income (expense) in our income statement on a GAAP basis.
Core operating income (loss) is a non-GAAP financial measure that excludes the after-tax impact of adjusted net realized gains (losses), net realized gains (losses) included in other income (expense) related to partially owned entities, Chubb integration expenses, and the amortization of the fair value adjustments related to purchased invested assets and long-term debt from the Chubb Corp acquisition. We exclude adjusted realized gains and losses because the amount of these gains (losses) are heavily influenced by, and fluctuate in part according to the availability of market opportunities. We exclude Chubb integration expenses due to the size and complexity of this acquisition. These integration expenses are distortive to our results and are not indicative of our underlying profitability. We believe that excluding these integration expenses facilitates the comparison of our financial results to our historical operating results. Chubb integration expenses are incurred by the overall company and are therefore included in Corporate. The costs are not related to the on-going activities of the individual segments and are therefore excluded from our definition of segment income (loss), as well.
Core operating income excluding catastrophe losses excludes the impact of catastrophe losses due to the significant size and number of these events in Q1 2018 which could obscure the underlying operating results. We believe this measure provides a better evaluation of our operating performance and enhances the understanding of the trends in our property and casualty business. Core operating income with expected level of catastrophe losses is a non-GAAP financial measure which excludes catastrophe losses above expected level. The adjustment for normalized catastrophe activity reduces the unusually large impact of catastrophe activity in Q1 2018 which could obscure our underlying performance. Current accident year core operating income excluding catastrophe losses is core operating income adjusted to exclude catastrophe losses and prior period development (PPD). We believe it is useful to exclude catastrophe losses, as they are not predictable as to timing and amount, and PPD, as these unexpected loss developments on historical reserves are not indicative of our underlying performance. Core operating income, Core operating income excluding catastrophe losses, Core operating income with expected level of catastrophe losses, and Current accident year core operating income excluding catastrophe losses should not be viewed as a substitute for net income determined in accordance with GAAP. References to core operating income measures mean net of tax, whether or not noted.
Core operating effective tax rate is a non-GAAP financial measure. The numerator excludes tax on adjusted net realized gains (losses), tax on Chubb integration expenses, and tax on the amortization of the fair value adjustments related to purchased invested assets and long-term debt from the Chubb Corp acquisition. The denominator is core operating income (loss), before tax. Core operating effective tax rate should not be viewed as a substitute for effective tax rate determined in accordance with GAAP.
Tangible book value per common share is a non-GAAP financial measure and is shareholders’ equity less goodwill and other intangible assets, net of tax, divided by the shares outstanding. We believe that goodwill and other intangible assets are not indicative of our underlying insurance results or trends and make book value comparisons to less acquisitive peer companies less meaningful. A reconciliation of tangible book value per share is provided on page 27. In addition, we disclose per share measures that exclude the impact of foreign currency fluctuations during 2017 in order to adjust for the distortive effects of fluctuations in exchange rates.
International life insurance net premiums written and deposits collected, is a non-GAAP financial measure. Deposits collected on universal life and investment contracts (life deposits) are not reflected as revenues in our consolidated statements of operations in accordance with GAAP. However, we include life deposits in presenting growth in our life insurance business because new life deposits are an important component of production and key to our efforts to grow our business.
Net premiums written excluding merger-related actions is a non-GAAP performance measure. Since the acquisition of The Chubb Corporation, we have entered into new reinsurance agreements with third-party reinsurers for the Chubb Corp businesses and have taken other merger-related actions, including exiting certain types of business that do not meet our underwriting standards or adhere to our risk diversification strategy. We believe that these measures are meaningful to evaluate trends in our underlying business on a comparable basis.
Reconciliation Non-GAAP | Page 28 |
Chubb Limited
Non-GAAP Financial Measures—2
(in millions of U.S. dollars, except ratios)
(Unaudited)
RegulationG—Non-GAAP Financial Measures (continued)
Core operating ROE
Core operating return on equity (ROE) or ROE calculated using core operating income: The ROE numerator includes income adjusted to excludeafter-tax adjusted net realized gains (losses), Chubb integration expenses, and the amortization of the fair value adjustment of acquired invested assets and long-term debt. The ROE denominator includes the average shareholders’ equity for the period adjusted to exclude unrealized gains (losses) on investments, net of tax. Core operating ROE is a useful measure as it enhances the understanding of the return on shareholders’ equity by highlighting the underlying profitability relative to shareholders’ equity excluding the effect of unrealized gains and losses on our investments.
1Q-18 | 1Q-17 | Full Year 2017 | ||||||||||
Net income | $ | 1,082 | $ | 1,093 | $ | 3,861 | ||||||
Core operating income | $ | 1,097 | $ | 1,175 | $ | 3,784 | ||||||
Equity—beginning of period, as reported | $ | 51,172 | $ | 48,275 | $ | 48,275 | ||||||
Less: unrealized gains (losses) on investments, net of deferred tax(1) | 1,033 | 1,058 | 1,058 | |||||||||
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Equity—beginning of period, as adjusted | $ | 50,139 | $ | 47,217 | $ | 47,217 | ||||||
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Equity—end of period, as reported | $ | 51,287 | $ | 49,224 | $ | 51,172 | ||||||
Less: unrealized gains (losses) on investments, net of deferred tax | 45 | 1,265 | 1,450 | |||||||||
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Equity—end of period, as adjusted | $ | 51,242 | $ | 47,959 | $ | 49,722 | ||||||
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Weighted average equity, as reported | $ | 51,230 | $ | 48,750 | $ | 49,724 | ||||||
Weighted average equity, as adjusted | $ | 50,691 | $ | 47,588 | $ | 48,470 | ||||||
ROE | 8.4 | % | 9.0 | % | 7.8 | % | ||||||
Core operating ROE | 8.7 | % | 9.9 | % | 7.8 | % |
(1) | During Q1 2018, the company adopted new guidance that requires the reclassification of $417 million of unrealized appreciation to beginning retained earnings related to public equities and cost-method private equities. Refer to footnote 2 on page 24 for further information. |
Core operating effective tax rate
The following table presents the reconciliation of effective tax rate to the core operating effective tax rate:
1Q-18 | 4Q-17 | 3Q-17 | 2Q-17 | 1Q-17 | Full Year 2017 | |||||||||||||||||||
Tax expense (benefit), as reported | $ | 135 | $ | (382 | ) | $ | (85 | ) | $ | 200 | $ | 128 | $ | (139 | ) | |||||||||
Tax benefit on amortization of fair value of acquired invested assets and debt(1) | (9 | ) | (23 | ) | (18 | ) | (20 | ) | (24 | ) | (85 | ) | ||||||||||||
Tax benefit on Chubb integration expenses | (2 | ) | (20 | ) | (14 | ) | (22 | ) | (37 | ) | (93 | ) | ||||||||||||
Tax expense (benefit) on adjusted net realized gains (losses) | (3 | ) | (20 | ) | 8 | 19 | (2 | ) | 5 | |||||||||||||||
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Tax expense (benefit), adjusted | $ | 149 | $ | (319 | ) | $ | (61 | ) | $ | 223 | $ | 191 | $ | 34 | ||||||||||
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Income (loss) before tax, as reported | $ | 1,217 | $ | 1,151 | $ | (155 | ) | $ | 1,505 | $ | 1,221 | $ | 3,722 | |||||||||||
Less: amortization of fair value of acquired invested assets and debt(1) | (59 | ) | (64 | ) | (68 | ) | (72 | ) | (79 | ) | (283 | ) | ||||||||||||
Less: Chubb integration expenses | (10 | ) | (77 | ) | (50 | ) | (72 | ) | (111 | ) | (310 | ) | ||||||||||||
Less: adjusted realized gains (losses) | (4 | ) | — | (5 | ) | 103 | (7 | ) | 91 | |||||||||||||||
Less: realized gains (losses) related to unconsolidated entities | 44 | 122 | 89 | 143 | 52 | 406 | ||||||||||||||||||
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Core operating income (loss) before tax | $ | 1,246 | $ | 1,170 | $ | (121 | ) | $ | 1,403 | $ | 1,366 | $ | 3,818 | |||||||||||
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Effective tax rate | 11.1 | % | -33.1 | % | 54.7 | % | 13.3 | % | 10.5 | % | -3.7 | % | ||||||||||||
Adjustment for tax impact of amortization of fair value of acquired invested assets and debt(1) | 0.2 | % | 3.7 | % | 8.6 | % | 0.6 | % | 1.0 | % | 2.3 | % | ||||||||||||
Adjustment for tax impact of Chubb integration expenses | 0.1 | % | 3.8 | % | 6.6 | % | 0.8 | % | 1.7 | % | 2.6 | % | ||||||||||||
Adjustment for tax impact of adjusted net realized gains (losses) | 0.6 | % | -1.6 | % | -19.0 | % | 1.3 | % | 0.8 | % | -0.3 | % | ||||||||||||
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Core operating effective tax rate | 12.0 | % | -27.2 | % | 50.9 | % | 16.0 | % | 14.0 | % | 0.9 | % | ||||||||||||
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(1) | Related to the acquisition of The Chubb Corporation. |
Core operating income (loss)
The following table presents the reconciliation of Net income (loss) to Core operating income (loss):
1Q-18 | 4Q-17 | 3Q-17 | 2Q-17 | 1Q-17 | Full Year 2017 | |||||||||||||||||||
Net income (loss), as reported | $ | 1,082 | $ | 1,533 | $ | (70 | ) | $ | 1,305 | $ | 1,093 | $ | 3,861 | |||||||||||
Amortization of fair value adjustment of acquired invested assets | (59 | ) | (64 | ) | (68 | ) | (72 | ) | (79 | ) | (283 | ) | ||||||||||||
Tax benefit on amortization adjustment | 9 | 23 | 18 | 20 | 24 | 85 | ||||||||||||||||||
Chubb integration expenses, pre-tax | (10 | ) | (77 | ) | (50 | ) | (72 | ) | (111 | ) | (310 | ) | ||||||||||||
Tax benefit on Chubb integration expenses | 2 | 20 | 14 | 22 | 37 | 93 | ||||||||||||||||||
Adjusted net realized gains (losses) | (4 | ) | — | (5 | ) | 103 | (7 | ) | 91 | |||||||||||||||
Net realized gains (losses) related to unconsolidated entities(2) | 44 | 122 | 89 | 143 | 52 | 406 | ||||||||||||||||||
Tax benefit (expense) on adjusted net realized gains (losses) | 3 | 20 | (8 | ) | (19 | ) | 2 | (5 | ) | |||||||||||||||
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Core operating income (loss) | $ | 1,097 | $ | 1,489 | $ | (60 | ) | $ | 1,180 | $ | 1,175 | $ | 3,784 | |||||||||||
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(1) | Related to the acquisition of The Chubb Corporation. |
(2) | Realized gains (losses) on partially-owned entities, which are investments where we hold more than an insignificant percentage of the investee’s shares. The net income or loss is included in other income (expense). |
Reconciliation Non-GAAP 2 | Page 29 |
Chubb Limited
Non-GAAP Financial Measures—3
(in millions of U.S. dollars, except per share data, and ratios)
(Unaudited)
Regulation G—Non-GAAP Financial Measures (continued)
Core operating ROE with expected level of Cats
1Q-18 | ||||
Equity—beginning of period, as reported | $ | 51,172 | ||
Less: unrealized gains (losses) on investments, net of deferred tax | 1,033 | |||
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Equity—beginning of period, as adjusted | $ | 50,139 | ||
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Equity—end of period, as reported | $ | 51,287 | ||
Less: unrealized gains (losses) on investments, net of deferred tax | 45 | |||
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Equity—end of period, as adjusted | $ | 51,242 | ||
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Add: Actual Cats above expected levels | 135 | |||
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Equity—end of period, as adjusted, w/ expected level of Cats | $ | 51,377 | ||
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Weighted average equity, as reported | $ | 51,230 | ||
Weighted average equity, as adjusted | $ | 50,691 | ||
Weighted average equity, as adjusted, w/ expected level of Cats | $ | 50,758 | ||
ROE | 8.4 | % | ||
Core operating ROE | 8.7 | % | ||
Core operating ROE, w/ expected level of Cats | 9.7 | % |
Core operating income measures
1Q-18 | 1Q-17 | % Change 1Q-18 vs. 1Q-17 | ||||||||||
Core operating income | $ | 1,097 | $ | 1,175 | ||||||||
Less: Catastrophe losses | (303 | ) | (164 | ) | ||||||||
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Core operating income ex Cats | $ | 1,400 | $ | 1,339 | 4.6 | % | ||||||
Less: Prior period development | 166 | 155 | ||||||||||
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Core operating income ex Cats and PPD | $ | 1,234 | $ | 1,184 | ||||||||
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Core operating income | $ | 1,097 | $ | 1,175 | ||||||||
Add: Actual Cats above expected levels | 135 | 8 | ||||||||||
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Core operating income w/ expected level of Cats | $ | 1,232 | $ | 1,183 | 4.2 | % | ||||||
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Core operating income ex Cats per share | $ | 2.98 | $ | 2.83 | 5.3 | % | ||||||
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Core operating income ex Cats and PPD per share | $ | 2.63 | $ | 2.50 | 5.2 | % | ||||||
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Core operating income w/ expected level of Cats per share | $ | 2.62 | $ | 2.50 | 4.8 | % | ||||||
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P&C combined ratio with expected level of Cats
1Q-18 | 1Q-17 | |||||||
P&C combined ratio | 90.1 | % | 87.5 | % | ||||
Less: Catastrophe losses | 5.8 | % | 3.3 | % | ||||
Less: Prior period development | -3.3 | % | -3.8 | % | ||||
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P&C CAY combined ratio excluding Cats | 87.6 | % | 88.0 | % | ||||
Add: Expected level of Cats | 3.1 | % | 3.2 | % | ||||
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P&C CAY combined ratio w/ expected level of Cats | 90.7 | % | 91.2 | % | ||||
Add: Prior period development | -3.3 | % | -3.8 | % | ||||
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P&C combined ratio w/ expected level of Cats | 87.4 | % | 87.4 | % | ||||
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Reconciliation Non-GAAP 3 | Page 30 |
Chubb Limited
Non-GAAP Financial Measures—4
(in millions of U.S. dollars, except ratios)
(Unaudited)
RegulationG—Non-GAAP Financial Measures (continued)
P&C combined ratio
The P&C combined ratio includes the impact of realized gains and losses on crop derivatives. These derivatives were purchased to provide economic benefit, in a manner similar to reinsurance protection, in the event that a significant decline in commodity pricing will impact underwriting results. We view gains and losses on these derivatives as part of the results of our underwriting operations.
The following tables present the calculation of combined ratio, as reported, for each segment to P&C combined ratio, adjusted for catastrophe losses (CATs) and PPD.
Q1 2018 | North America Commercial P&C Insurance | North America Personal P&C Insurance | North America Agricultural Insurance | Overseas General Insurance | Global Reinsurance | Corporate | Total P&C | |||||||||||||||||||||||||
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Losses and loss expenses | ||||||||||||||||||||||||||||||||
Losses and loss expenses | $ | 1,908 | $ | 886 | $ | (53 | ) | $ | 1,078 | $ | 67 | $ | 11 | $ | 3,897 | |||||||||||||||||
Realized (gains) losses on crop derivatives | — | — | (2 | ) | — | — | — | (2 | ) | |||||||||||||||||||||||
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Adjusted losses and loss expenses | A | $ | 1,908 | $ | 886 | $ | (55 | ) | $ | 1,078 | $ | 67 | $ | 11 | $ | 3,895 | ||||||||||||||||
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Catastrophe losses | (78 | ) | (284 | ) | (1 | ) | (15 | ) | (2 | ) | — | (380 | ) | |||||||||||||||||||
PPD and related adjustments | ||||||||||||||||||||||||||||||||
PPD, net of related adjustments—favorable (unfavorable) | 101 | 6 | 76 | 22 | 14 | (10 | ) | 209 | ||||||||||||||||||||||||
Net earned premium adjustments on PPD—unfavorable (favorable) | — | — | 40 | — | 1 | — | 41 | |||||||||||||||||||||||||
Expense adjustments—unfavorable (favorable) | 6 | — | (4 | ) | — | — | — | 2 | ||||||||||||||||||||||||
PPD reinstatement premiums | 4 | — | — | — | — | — | 4 | |||||||||||||||||||||||||
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PPD—gross of related adjustments—favorable (unfavorable) | 111 | 6 | 112 | 22 | 15 | (10 | ) | 256 | ||||||||||||||||||||||||
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Loss and loss expense ex CATs and PPD | B | $ | 1,941 | $ | 608 | $ | 58 | $ | 1,085 | $ | 80 | $ | 1 | $ | 3,773 | |||||||||||||||||
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Policy acquisition costs and administrative expenses | ||||||||||||||||||||||||||||||||
Policy acquisition costs and administrative expenses | C | $ | 703 | $ | 302 | $ | (4 | ) | $ | 827 | $ | 50 | $ | 72 | $ | 1,950 | ||||||||||||||||
Expense adjustments—favorable (unfavorable) | (6 | ) | — | 4 | — | — | — | (2 | ) | |||||||||||||||||||||||
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Policy acquisition costs and administrative expenses, adjusted | D | $ | 697 | $ | 302 | $ | — | $ | 827 | $ | 50 | $ | 72 | $ | 1,948 | |||||||||||||||||
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Net premiums earned | E | $ | 3,029 | $ | 1,140 | $ | 43 | $ | 2,107 | $ | 168 | $ | 6,487 | |||||||||||||||||||
Net earned premium adjustments on PPD—unfavorable (favorable) | — | — | 40 | — | 1 | 41 | ||||||||||||||||||||||||||
Reinstatement premiums expensed on PPD | 4 | — | — | — | — | 4 | ||||||||||||||||||||||||||
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Net premiums earned excluding adjustments | F | $ | 3,033 | $ | 1,140 | $ | 83 | $ | 2,107 | $ | 169 | $ | 6,532 | |||||||||||||||||||
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P&C Combined ratio | ||||||||||||||||||||||||||||||||
Losses and loss expense ratio | A/E | 63.0 | % | 77.7 | % | NM | 51.1 | % | 40.1 | % | 60.0 | % | ||||||||||||||||||||
Policy acquisition costs and administrative expense ratio | C/E | 23.2 | % | 26.5 | % | NM | 39.3 | % | 29.4 | % | 30.1 | % | ||||||||||||||||||||
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P&C Combined ratio | 86.2 | % | 104.2 | % | NM | 90.4 | % | 69.5 | % | 90.1 | % | |||||||||||||||||||||
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CAY P&C combined ratio—ex Cats | ||||||||||||||||||||||||||||||||
Loss and loss expense ratio, adjusted | B/F | 64.0 | % | 53.3 | % | 68.9 | % | 51.4 | % | 47.7 | % | 57.7 | % | |||||||||||||||||||
Policy acquisition costs and administrative expense ratio, adjusted | D/F | 23.0 | % | 26.4 | % | -1.2 | % | 39.3 | % | 29.3 | % | 29.9 | % | |||||||||||||||||||
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CAY P&C combined ratio—ex Cats | 87.0 | % | 79.7 | % | 67.7 | % | 90.7 | % | 77.0 | % | 87.6 | % | ||||||||||||||||||||
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Combined ratio | ||||||||||||||||||||||||||||||||
Combined ratio | 90.1 | % | ||||||||||||||||||||||||||||||
Add: impact of gains and losses on crop derivatives | 0.0 | % | ||||||||||||||||||||||||||||||
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P&C Combined ratio | 90.1 | % | ||||||||||||||||||||||||||||||
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Note: The ratios above are calculated using whole U.S. dollars. Accordingly, calculations using rounded amounts may differ. Letters A, B, C, D, E, and F included in the table are references for calculating the ratios above.
Reconciliation Non-GAAP 4 | Page 31 |
Chubb Limited
Glossary
Chubb Limited Consolidatedcomprises all segments including Corporate.
Book value per common share: Shareholders’ equity divided by the shares outstanding.
P&C combined ratio:The sum of the loss and loss expense ratio, acquisition cost ratio and the administrative expense ratio excluding the life business and including realized gains and losses on crop derivatives.
Core operating effective tax rate: Income tax expense excluding tax expense (benefit) on adjusted net realized gains (losses), tax benefit on amortization of fair value of acquired invested assets and debt, and tax benefit on Chubb integration expenses, divided by income excluding adjusted net realized gains (losses) before tax, amortization of fair value of acquired invested assets and debt before tax, and Chubb integration expenses before tax.
Tangible book value per common share:Shareholders’ equity less goodwill and other intangible assets, net of tax, divided by the shares outstanding.
Average market yield of fixed maturities:Weighted average yield to maturityof our fixed income portfolio based on the market prices of the holdings as of that date.
Average yield on invested assets:Net investment income divided by average cost of fixed maturities and other investments, and average market value of equity securities.
Tangible capital:Total capitalization less goodwill and other intangible assets.
Total capitalization:Short-term debt, long-term debt, trust preferreds, and shareholders’ equity.
Chubb integration expenses:Chubb integration expenses comprise legal and professional fees and all other costs directly related to the integration activities of the Chubb Corp acquisition. Chubb integration expenses are incurred by the overall company and are therefore included in Corporate. These costs are not related to theon-going business activities of the segments and are therefore excluded from our definition of segment income.
NM: Not meaningful.
Glossary | Page 32 |