CB - Earnings call transcript Q4 2018

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Operator

Good day, ladies and gentlemen and welcome to the Chubb Ltd. Fourth Quarter Year-End 2018 Earnings Conference Call. Today's call is being recorded. There will be a question-and-answer session at the end of today's prepared remarks. [Operator Instructions] For opening remarks and introductions, I would like to turn the conference over to your host, Karen Beyer, Investor Relations. ahead. go Please

Karen Beyer

welcome and and December XXXX XX, Thank earnings to conference quarter year-end call. fourth you our

Our report may these on on earnings at our and mix, today to will results differ investors.chubb.com our to contain forward-looking matters. statements, and factors uncertainties supplement, and conditions financial for are filings, actual pricing Please risks market and Company's including growth, and economic SEC see business information and which subject that website affect performance statements could which materially. more recent release, are relating available

will measures, comparable to We also details earnings of refer and supplement. measures and financial to are direct reconciliations most release in our non-GAAP press the related provided which GAAP financial

this morning. Now, my it’s speakers pleasure to our introduce

and questions. now, team. Also questions us with over to have Officer, Chief are of Evan. Greenberg, Executive several our Bancroft, assist management turn we followed with your Officer. And Phil Evan We'll take members I call your Financial will Chairman Chief the today to then by First, our

Evan Greenberg

morning. Good

As catastrophes a and we increased greater operating from fourth property natural activity in the U.S. marked world the per reported of perils quarter volatility numbers, you $X.XX from income quarter by share. the in elevated core variety The saw of from around the was loss from

and $XXX quarter X.X% give per core a the million. benefit was million globally, billion share income excluding tax P&C On $X.X income tax of record the benefit, $XXX to other over sense losses, hand, a in $XXX net CATs operating million you we strength, compared $XXX revenue after-tax tax included growth, and CAT the produced pricing up which income a income. had improved commercial million of premium last and enjoyed and with prior. strong was year, investment of of operating Core underlying included Simply,

excluding in quarter CATs, ratio and prior about ratio. in in commercial accident in CATs On versus XX.X% added trend. current the of large this to basis, our XX.X% combined was property elevated businesses, on loss and combined our included year. published X.X a the Our impacted accident this our by result, major or as what was as combined. activity the year was period P&C points XX.X% The division. is a X.X U.S middle-market E&S we can points our And not variability combined portfolio a well volatility From simply in see, short both year account

with have to losses our some in experience detail also discussed which We elevated you. in we continued homeowners’ U.S. book,

are track on strategies product with pricing, call. underwriting the We on and that last outlined we quarter's

state-by-state show the through business, this basis. results Given, on nature run to time take it’ll a some rate the in of regulatory

the a was runoff crop contribution benefited million by side business in positive settlement well plus our one-time A&E our Premium prior as pretax liabilities. reinsurance of in combined X.X% as included bringing the in from continued quarter growth quarter momentum $XXX points, On growth from strong our fourth The over the into FX ratio improved short-tail environment businesses. compared a published pricing revenue prior of reserve much in in X.X in number activity, quarter legacy period overall negative better And the January and rate the insurance third quarter development, which year. impact over dollars constant to with had this a of to movements tone our then X%. the actual a

in and the globally, price of best the best terms several In broad-based this most fact, in and of years. year was the quarter movement,

more We in are also means seeing certain markets and dislocation that opportunity.

a $XXX in There expect minimum, variability and For great is of million, of about $X.X we records. was maintain the that company. across net X.X% income energy the contributed to will growth and positive were and X.X%. was investment range the quarter-to-quarter. both deal environment investment year the a up quarter with Geo-economic optimism I our billion, Net in was dollars full-year, constant for at notwithstanding, some come

are the higher rates are P&C our per interest of yield billion an exceed beginning now driven was $X.X year split from investment per income for operating adjusted and cash benefit income improving of $X.XX to were up billion XX% reinvestment $X.X results $X.X a strong Earnings or environment. on book and current share, income flow basis positive that pretax being Our from and ‘XX. by between share billion. Core underwriting rate

for amount. more pretax For million calculating information, for billion, CAT we our losses planned when expecting CAT year than the about $XXX your were $X.X

ROE Our earnings core expected year on CAT an X.X% to or a the operating led of for X.X% basis.

to mark-to-market the For per share basis, was XX.X% to compared accident XX% and prior development. Adjusting combined And per ratio prior. ratio year by impacted interest exchange. investment XX.X% the income, and and combined year the will prior value rates X.X% year, current about more year. a the book say P&C about CATs, value unfavorably was up foreign and XX.X% book for excluding were for mark, was per book respectively. Phil share and have tangible of Book rising flat, versus tangible effect share very the X.X%, X.X%, on was the down CATs

X%. quarter were continued, North accounts, areas, for in major D&O commercial were XX% in rates in at wholesale The and excess America, public Commercial includes rates about divisions. is the customers change, for nearly better classes up dislocation and were premium less while the and measured up was numerous the specialty correction. up is major X.X%, positive personal and certain in were property the of overall X.X% experiencing needed doesn't renewal in third our materially in is XX%. with in the good what wholesale were our is some carriers for business businesses. Retention from Turning time the or risk up rates lines rate pressure which exposure, P&C America particularly best business up up margin of the continues that and other industry this North and some no over In market our another for up trends it affirming retention line reduced accounts growth in London quarter, I North or In exiting all last major That's to conditions. Overall, in curved environment, markets year, in casualty at of as premiums growth particularly by X up premiums was was our Rates because of strong our as of over signs quarter, U.S. rates In of specialty In include than Chubb the in up XX%, improve X.X%. wrote agriculture, sizes an and retail the their year. improving or North our hope appetite pricing underwriting many Westchester mentioned several opening the altogether. exception, saw marker by and the commercial, better price market we markets. improved small quarters. fact than X.X%. began while the X%. and and X%, American remained to management than market Renewal as third rate see quarter, and I quarter in P&C was were on market across is E&S in and same business, accounts we pricing middle-market to which margin America we spread last the important. of overall

X.X%. premiums business XX%, business revenue Renewal New percentage its our commercial In lines X.X%. net a was by added retention in In almost of our And exposure in In impacted XX% California the quarter, up quarter with our homeowners XX/X. continued premium declined share from XX%. the middle-market growth positive North was treaty, growth middle-market momentum America with includes X.X up and this points. net which personal growth initiatives. to almost meaningful existing rate premiums small that business, up was effective quota business, U.S. coming change pricing our we

very-strong up rate reinsurers, included paid X.X% change. Homeowners and premiums about in were pricing the was both XX%. X.X%. again, to Retention which exposure remained at premiums quarter, Excluding up

agriculture XX%. American had combined by business XX.X%, full-year about which a is highlighted very year, ratio of flat of prior North Our good a with

franchise leaders. business we is Our great clearly and insurance crop are the a

overseas our a operations, billion $XX insurance business. to general Turning

P&C in constant constant was X% mentioned, this growth in excellent As points. experienced up written a quarter of broad-based. then to X%. and premiums compared year-to-date Growth international Net about for were FX we division. our dollars had This I retail dollar growth of division favorably international X.X impact our negative

lines and our premiums grew conditions. again, certain the dynamic X%, coming from our business of years in strong It’s X.X% is and with was UK-Ireland of and of X%. This commercial overall, XX% growth markets, middle-market for in up business growth premiums back was Chubb were can up We growing London excellent from quickly our take Australia. dollars. shrinking. environment, Latin London the while quarter over and is improved an Net and XX% America Net the and improved in were example for our and of constant Continent P&C how price particular the international after the on several market changing respectively, small retail market commercial in benefited pricing advantage Asia-Pacific initiatives. wholesale up in up particularly initiatives X.X% quarter nimble

our international business line retail and country. As outside in wholesale for rates of in conditions few X%, lines in and time, by by rates a were retail in countries concentrated up pricing though our Overall, best the the some U.S., and vary London business.

personal an $X.X Ed Paul can volatility. finally, were London and greater constant quarter, pricing America life conditions up Chubb up were of trends. provide was summary, Keogh, again by And wholesale billion our lines the driven Rates Andrade XX.X% our property in earnings premium including performed In of X.X% professional and growth million. color of current example, revenue respectively. International Latin premiums despite $XXX with and of Krump, over and short-tail up Asia up and John John lines Asia X% excellent business on market in X.X%, a insurance quite business and quarter with were For had well, Clancy Juan dollar, further XX%. X%. year Lupica,

a momentum in our environment an have and the it’s terms pricing continuing We of underwriting and U.S., executing and a on in build good important improving few initiatives London advantage taking to territories. of growth

good a are to going over come to to the and start. year Our Phil organization then your With optimistic is we and we’re take and turn ahead, back I'll that, off questions. about

Phil Bancroft

overall the loss We the excellent Evan. year. completed was capital year $XX billion. with Even catastrophe strong for at total balance sheet and billion the our quarter significant flow strong and payments, you, a operating cash an financial $X.X position quite for with with billion Thank over $X.X of

quarter, and we $XXX shareholders the $XXX in to repurchases. returned During dividends million in million million $XXX share including

billion by in the spreads credit the interest $X.X investment our the of $X earnings, European on and issued Net partially year, XXst, unrealized after-tax, income for rate $X.X in equaling quarter shareholders, million. the in over over together, that gain and returned off year, declining debt is during million December the the of billion rates. $X dividends run offset interest securities realized throughout markets, late to billion million which Also, fixed share corporate For XX% excess quarter, million. included which the the of portfolio, $XXX billion reflecting annual billion we on losses of $X.X approximately portfolio the we by billion matured losses debt expense year, securities, were widening $X $XXX $XXX including mark-to-market in in Since over of of and hybrid $XX in our the redeemed reduced of paid repurchases.

annual X.X% portfolio of had loss the mark to unrealized of million of our in on driven December gain by on based the FX. the mark also portfolio we $XXX improvement XXst, had from percentage of the per operating equity on an dilution points. movements to portfolio. compared core Since private the value and portfolio, have to loss Chubb reduced million. $XX share XX decline as VA December to others the book acquisition, $XXX mark tangible is to XX% fair review on X%, retirement our market Since operating on and improved our related variable ROE losses XXst, plans annuity been $XX the value markets, X.X%. If we a income do, in principally market benefit from million X%, million our our included the equity the on reported have We dilution a for year in Since would

Our quarter private expected for adjusted above our and was net reinvestment to rates. the investment due equity range income higher distributions higher principally

was prior the equity quarter to distributions, from investment be investment in of comprising interest million income the period the favorable the the paid-to-incurred principally The development ratio of after-tax. of of was prior noted On development had a period million. includes constant and of $XXX rates approximately $XXX $XXX variability million favorable range While reserves expect offset million $XXX ratio now prior On million, remaining net and impact $XXX there impact reported our loss from This factors from year. quarterly adjusting the XXX% we runoff and favorable and XX% the for are reinsurance for $XXX $XXX above, development million. long-tail million the million that the a adjusted accident lines. catastrophe income, impact settlement by was in split XX% $XX pretax a for principally XX%. paid-to-incurred number We to development decreased favorable million, lines, private including net year, exposures in of reflecting a years XXXX payments of the $XXX favorable of prior, period basis, asbestos, loss short-tail related items adverse development. a dollar pretax or basis, to of legacy our After

catastrophe for rate part tax quarter XX.X%, in tax lower jurisdictions, were by incurred effective as previously in was which the losses, operating core disclosed. Our driven

tax effective line Our to XX%. full-year with operating range our XX% XX.X%, rate was in of

that rate by the XXXX, has hybrid the our That Karen. I’ll be call range we been of in tax of law back of annual effective tax turn XX%. is debt our the deductibility report the that debt. operating XX% intercompany not to impact core provisions For to a over tax true. affected expect will the now to There be

Karen Beyer

this happy At you. Thank to questions. point take we'd be your

Operator

Please hear [Operator ahead, Instructions] Stanley. Morgan Pan We'll first sir. from go Kai from

Kai Pan

one-off bit morning. good one-off. property you and considered you little Can than mentioned what gives larger confidence more give you that a a you line, details, Thank trend? rather it’s Evan, loss you commercial the in

Evan Greenberg

a There of is America an leads there number North larger just the It’s is that in data nothing variability trend. huge there had period us in And, of believe, a there frequency just quarter-to-quarter see believe have to that us but in a it’s see you nothing it in and volatility, just mean, losses I leads is we underwriting has impact. deviation, time. was losses we more to and and -- we can that’s volatility. variability a it of short very wasn't

we too into we've So, in trend. that’s first achieves what full achieving I fact, need lines and been been are year, actually can an tell in you. have And -- achieving rate or the ‘XX, short-tail that beyond And rate. ameliorating impact. that that, rate has And began and that exceeds continues we quarter

beneficial. that’s So, all

Kai Pan

second My on catastrophe the losses. question

catastrophe, would without ROE year You mentioned for the that been your X.X% X.X%. versus have

good elevated is I rate could Are points you coverage run my any of the last CAT of losses make probably the taking a you So, implies think given to exposure? years, calculation terms in X forward? still that mitigate load. reinsurance to points CAT my few normal just potentially sure math -- actions that’s And want do also, right. going

Evan Greenberg

our and constantly in terms portfolio We’re of how protect. it’s dynamic managing we

what's not forward-looking just I’m so, of expected work on expect, and that. are that’s as Kai. than years give far we to period But, looking as at in range going something any we a constantly that what And longer on engaged look, couple to And CAT.

have a XX of part to I'll don’t last So, remind years. average. the four average, XX have years elevated. you that; CATs. yet prior two to that, memories. adjust of a five lower the recent you're And far expected longer-term to People most years The the been years down that that become had number using or short we

And way both and put that and for a experience factor non-modeled project modeled, so, reflect they that you well. the on as

longer that's we look And a CAT how what so, at informs over loss period.

And I arrived it’s climate said Well, step simplistic change years, the that to editorialize now has to well, one that It’s has on this stability so, prior the or normal. to four think, expected five what you the just it two that? basis. is thinking more about years further boy, would new imagine number. last the have to and imagine

think, at more bit annual sort at same It’s a which number, looking stability I as have accident short-tail the more to credible averages quarterly number. looking versus a far term longer the variability result them. current is like in of

Operator

We will Suisse. hear from next from Credit Mike Zaremski

Mike Zaremski

Thanks. Good morning. the A load. follow-up to CAT the question on

what Because your to Given, know to was of terms math load? there done us here XX% tell XX-year took points the that been? what XXXX in was average CAT you or in XX XX could some has a merger XX-year above the so us of you place, do your that average -- the being to expectation have

Phil Bancroft

know only to own imagine don't modeled on comment can't your know math non-modeled I loss. math how what and I Well, our that. I do and we is;

So, this versus here of it can’t math. tell discuss your in we on we you disclose, free while math. some we’ll us But, to is is what this and And are about I you. us do your call some call engage my with don't, math

Mike Zaremski

my loss so, P&C relationship trends. always We question insights… pricing next of commercial versus is appreciate And your regarding

Phil Bancroft

By go to I’d math. I’m just in my put the out way, thought you. I But, ahead. confident that

Mike Zaremski

That’s fair. Okay.

just versus hovers improvement, trend feel commercial you side, rate improving trying environment margin the parse pricing to -- see do if So, largely higher you loss potentially the current feel around always to could Chubb or clearly yes, on the is environment levels? whether trends industry we’re due the commercial to that reacting rate regarding loss some

Evan Greenberg

No, I don’t see improvement. an

Mike Zaremski

or have talked to that -- having some number -- of quick backing management also bar, -- legal in, lot talked about some that speakers]. active Do you have think rise is a legal more lawsuits, insurance call One a litigation the asset third-party fair. teams capital the more people teams yourself is trends? finance maybe some And on industry’s class follow-up having answer. impact that, simple finding. and of That’s [multiple That’s of including loss about one

Evan Greenberg

the On only the think margin, margin. on I

Operator

Instructions] Fargo. [Operator will We Wells from from hear Greenspan Elyse

Elyse Greenspan

about My that Kai property quarter. the commercial you losses a first in was know back to asking see one-off where is to made seemed non-CAT into to elevated be variability month also due lines. the higher only sense property of any could comment going it just question non-CAT I the Did you I in ‘XX? in And a we’re losses of level then, to and you just the a back quarters reverted sense one normal you know Do us other have -- that January? of it’s give February. the

Evan Greenberg

but Yes. let’s The sure is, really to game. at And quarter -- by in on month fool's bit a Jesus, was answer saw write in and the when business. basically was your and looking North occur, America yes. And But about January one sorry, a keep prospective, it like way, in that's about property it’s Elyse, something of then you’re third billion quarter. property, other credible period. billion $X.X $X answer -- what, we you’re and -- We -- question, January, fourth fourth quarter. hardly And late it little

of So, The far -- it time. The not large Obviously, that unusual. it’s lot a experience as think quarter-to-quarter take well; period And I one not credible. annual very It's period Anyway, of it. January, a credible. better portfolio, questions. is short I’ve we a that with don't your month answered have is more a was please of month. variability it's

Elyse Greenspan

underlying later think in something the is to see of your pointed quarter of with time to you into the improve improvement margin the you then, coming or in first the I we to terms That states expect XXXX. homeowners, rates the seeing margin in to helpful. prepared Would start that more was about during the it get system. start takes remarks, get should that. that for And

Phil Bancroft

third pretty you through basis, should the of come We latter talked when it were something about see we a it begin rate the equal. clear quarter run in on things all being ‘XX, that would we it in to to be part

Elyse Greenspan

the of question, losses the how last numbers loss the your at you the timely you bought to that you saw my California California then, year, gross guys fires? then, fires start in guys for And give reinsurance compared of gross XXXX? us quarter. in did sense this Can gross losses a the for from the more in And XXXX

Evan Greenberg

gross it page publish didn't are to was miscommunication you We you, put CAT and didn’t it applicable so by a We going can the here. really one statement. giving CAT and not we're our really we page breaks give see what of an company, out to financial The how down, and balance number -- and impacts a a in you CAT and to is is that net. you view sheet investor's but the

give will And for so, you what need that. you we

Operator

Paul O'Neill. from hear We’ll next Newsome from Sandler

Paul Newsome

net new front entrants add a worth just efforts? still I like I’m just you it in was have a we change to seeing large new announcing lines that how feel We the personal interested have any environment. environment, market. hoping of could maybe competitive seem does really number into folks to on seem are -- that -- high that there of lot still if there's been to is

Evan Greenberg

on year. I’ll any the Krump of to my view, that we over stable consequence Paul don't that. pretty competitive a It’s way. From see environment change the last of point in ask comment

price business. ways mass one in there in and I margin. while high manage thing that the come a who for segment They in, market. services the net come some have Paul, we’ve entrants You that the on category, it’s they want… price-sensitive -- one seen coverage where coverages to less, that and you way But do the get to and the market or got the really the and to service matters the when in they the matters that’s is would capabilities a true worth. the don't particularly it’s they And say, are on offer market. and affluent in new end of under not that But, of And in

Paul Krump

said. Evan, I everything with just you agree

color try it. around to some to Just put more

the space better PRS even net is signature. XX%, recall what homes, premier worth, and and it’s on homeowners wealthy real the the actually will high in retention Our

lose do couple stop how we So, to trying that out customers can’t. figure to and of through a that, we’re but

hands -- And count They I months. if I the I definitely you they low-end the after at one-off in lost are of think writings, what in you'd really It any handle. how to the could of service new that. there on and XX are the we be two new very and conscious So, fire accounts the are of going not just look number market. brokers entrants can’t hundreds in last thousands they worry It’s traction that that little shocked getting is loss the to then not market. game a of agents are about, claims and about capitals happens they big if worry maybe

Evan Greenberg

And Service I it. don’t We has in Coverages It’s arrogant be improved. else have to standards rest this. about improve. everything we’re -- constantly about improve; we're like it, to not at service your not world. constantly must the would say constantly of

offer to choice customers. able be to to You’ve more

digital a buy represents to service large this iterate of a in capabilities Some be think full later. to all and that. who those And who crank where -- and able we And this got thing And coverage to to the to remains a boat in in continuing little some buy something opportunity experience areas want same marketing customer up want and there a we’re our sales. and marketplace. of because is the world and do you’ve with

Paul Newsome

about I business. wanted health accident ask to And the second,

one I for a haven't time. as to much the We focus it in think quite huge of some old At was about revenue… point XX% as have the that it, talked Chubb

Evan Greenberg

I think you mean…

Paul Newsome

in I of new that percentage kind of to or goal that And entity? combined business have is to You’re is the in was right. a curious it high -- an -- have the still idea each

Evan Greenberg

business. Yes. XX% our America, pie we North When improve and And and that double that digit, improving health you from of that Latin I high you of you de will growth last ‘XX. accident over Asia deals that I lot would America made business the which believe look health the Chile, know in lines, grow areas just in growth chart you will rate benefit the directly including on and in and that did, announced single particular, to the is look at as business memory, those year, one and accident to in at as have, distribution continue and of in -- And Banco we saw a investor business. what we deck have

DBS’s growth And so, our is double-digit, it the it percentage And in single reinvented DNA. it increase because Because Chile the a digital have to ours; whether Uber sponsors continue of boat. Southeast on middle grab, is the or that’s a -- capability a growing the that in or of to Asia which or in business. it’s it’s the is at Company. and of our growing, Banco the to -- our full the which a serving largest nothing to at serious high and lower increase it’s for increase customers area objective -- a with from we U.S. specialty the double-digit growing as or to income many de worksite benefits businesses, if by our now customer total in other $XXX deep our combined, is it’s marketing is we And Banamex’s premium million way, it is direct where will basis,

Operator

Yaron Goldman ahead. go from Sachs. Moving to next Please Kinar

Yaron Kinar

commercial. questions North Two on America

the adverse that’s experience, confirm experience I So, that the loss right? property from just to impact consolidated, want X.X% or claims first,

Evan Greenberg

Consolidated?

Phil Bancroft

total On P&C.

Yaron Kinar

sorry. Total P&C,

Evan Greenberg

Sorry. Yes, Yes the number. total post did we on P&C.

Yaron Kinar

that’s to excluding would what's it improved correct, else if property driving elevated led that that Is loss earned suggest accident ratio the actually could improvement? year something correct, So, rates, office it if talk is is it math that And year-over-year. about the is that? my you maybe

Evan Greenberg

loss on Are you ratio business? saying the the accident total

Yaron Kinar

America property the North excluding on commercial, deterioration. No,

Evan Greenberg

ratio Excluding loss deterioration, ratio? you the the are looking at property or and combined the

Yaron Kinar

loss The No. accident North ratio year America commercial. for

Evan Greenberg

that not you to and I'm related. through would line off likely sure it. I'm I completely mixed way modest number, take and the relating you. with But offline that would it that go be take will before that be We saying that to you. jump it with we’ll with very you’re And

Yaron Kinar

Okay. maybe second about here, leading may few top to Evan, Thank you industry -- then, industry a It expect that. the growth the increases America here. quarters to that in me you that the appreciate sounds above actually North I little you. impact commercial, the line bit rate be tries over talked on case, next your catch And rate up? as comments, maybe like you is if the the the increases. my question And to growth would

Evan Greenberg

together the -- A it this things. would glue I couple industry One, of way.

our own were You And saw first the January, or in on plans our of rate. month the or our in in to relative And was over we January. growth plan the fourth quarter -- good. exceeded growth

know don’t got fourth and varied business -- the disclose rate; we we America particularly by North our quarter. renewal don’t and line that And, wholesale same the in it plan our we in January in our You it. saw And is retention good. we or rate that better in

industry me on. to things And is that So environment well. implies the improving have couple as a going of you

the the That driving a areas starts but environment, companies dynamic to by pressure to withdrawing depends or competitors reducing reacting of the line on in area You of have of business. loss just the market. the that you not plays to with from supply-demand for part rate -- limits the

of I explain signal we’re pressing see and retention business, best the Okay? rate. you’re that terms you that's more it on. Anyway, think, going rates, why there you. in just way see only can to rate than it our for trying that’s But, yet adequacy. you So, thinking to And our I is is that

Operator

from open. Gelb line Barclays, your Jay is

Jay Gelb

over if to Based commentary ratio. past year there is and on years, that the good start combined accident in stable remarkably I back a three underlying is Chubb off the look XXXX,

Given the same the combined improving, the we the XXXX, be to pricing better that expect on XXXX? same accident is trend should in year or as

Evan Greenberg

which for balance around In that to said and number. beneficial. mix, varies. are that's stable static the imagine wouldn't particularly mix loss or ratio remarkably business. I is We keeping improvement. therefore on have I variability with imagine But, Remarkably it used rate cost -- a long-tail and where look an pace I management, is a it. exceeding this There just are What is so not and trend. risk short-tail needs business, classes and is which in trend, is you don't pick it stable. that has some portfolio do, wouldn't to I It achieving rate it. many constantly combined business And exercising of lines, of reinsurance a

would I all. so, That’s what And you within see say, is range a what deviation. you reasonable of get

Jay Gelb

okay. course, as excess as then, around XXXX, position I separately, full-year strong would said of what capital quantify for billion, flow And believe you year-end? Chubb’s operating cash given the of you $X.X Right,

Phil Bancroft

that the capital of off our is basis point would strip said impact full-year What we about a of excess have on the X.X ROE.

do So, you can math. the

Jay Gelb

hope I so.

Phil Bancroft

I trust you buddy.

Operator

hear from from Meredith Brian UBS. We’ll next

Brian Meredith

up guidance; I’m like it curios, that; to basis. Just year-over-year going just first looks something tax one, anything there Is rate actually is it’s it on little business, Phil, else just a bit on mix geographically?

Phil Bancroft

we the related we’re after-tax don’t as based compensation we don't would continue. our our at tax the things. to two lower take from because There had we yields, of related income deductions after-tax on look and Remember, will sell to bond portfolio. And have We’ve billion the to that about income. going be going our higher we’ve munies. expect in $X.X away we that that years, -- And doesn’t is One the expect some them expect yield of that is municipal exempt is, sold judgment to two recur. some past compensated deductions,

Brian Meredith

this I Was down quarter. year-over-year going Got administrative on? noticed FX-driven, it, expenses else was on basis makes sense. there And actually that then, a that were anything

Phil Bancroft

is at going timing, issue. it’s to It’s just timing be specific it’s nothing look principally point would and to, variable There it. that just I as a we

Brian Meredith

quarter, I I Evan, how look that a If ratio commercial combined American North going every the on of small think underlying the modestly. assume. business is your kind commercial, and your perform? for property some thing. ups much take lastly, was the down should at flat have just we to And Is to year way And the about pretty downs you’ll

Evan Greenberg

Yes.

about there It’s risk you at a a should in this think can little is it you by is and more variability in than have it, business. of nature You recent quarters. But, the the if past the quarter -- it some years. you’ll see business. variability a There is look

just So, happen. that can

we you just us a a one that’s Of annual in variability it’s than our time obviously course, And period early look. an that period. a is three-month we’re telling more then on when natural want take a a it pretty is there is something, or more know see judge business in that something continue. measure -- But we of what at and period underwriters. longer stable and is an -- what We spike we close it to changed

doesn't was look so, Look, just And as a some variability. and see see annual business. given judge the the I It’s business that this, and we from expect mean, of at can stable it we around we the the you again deviation surprise risk me, nature everything a it when more period.

Brian Meredith

I because out just to if sure want that… make you strip

Evan Greenberg

casualty, one-off got of whole you, frequency if [multiple a a But, different to story. some I tell large Casualty? view that’s have speakers] loss kind. I or different I saw a whole

Brian Meredith

sudden, sense, strip year-over-year a combined way loss make to model makes all And way just not a North to because on that large I of. of of down looks sure, off you kind that’s basis. America That want ratio your underlying out in

Evan Greenberg

take and Yes. it the don’t And think way. those. some we right I you will with do work that’s offline about

Operator

from Shields from next hear will We Meyer KBW.

Meyer Shields

there or follow I that to is North lower on Is randomness elevated losses? connection and the up to Brian’s question, saw year-over-year just commercial particularly just also expenses in we wanted America admin personal. some

Evan Greenberg

the quarter-to-quarter. to elevated is No, connection It losses. no randomness, a

Meyer Shields

could California homeowners through you take protection quota hoping share the was excess? I us over thought in buying Evan, process And of more

Evan Greenberg

concentration. of had have could is in had non-modeled CAT our put it both the of and Look, like, the just well impact CAT when England usual books of wanted exposures total California we states exposure frequency a where balance lot -- trying for reduce non- on the it benefited -- to in we did simply and purchased and book to initially Northeast was have -- we CAT We but of together. CAT. weren’t Company. the where non-modeled Northeast all an concentration balance We and you the in the we and amount these New winter the CAT the modeled exposure we we Well, share have our quarter losses that

reason of really single the ground was event And up that of the looking reinsurers single it to concentrated So, as simply produced to a the And And territory. they were better we concentration, concentration, then for not the gave the one quota purchasing because it just California in a for losses share. or event. the made sense to that extend the risk was balance; spread well. to concentration a Northeast us from

Operator

Larry Montgomery Scott, Greenberg from open. Janney your is now line

Larry Greenberg

still underlying and and is America, the given answer to you’ve North My But me on it. I’m enough to commercial question probably ask... also going

Evan Greenberg

me, Then, Larry. you’re asking why

Larry Greenberg

versus as some Because the it underlying by year, things fairly I’m you've of me the not just you some answer. bps you called loss ratio lost things, about the actually trends out the bps called over well. XX year. the way. I deteriorated price in the is sure XX let representative know out would last year business? But, say if But, for ask the The course this And of

Evan Greenberg

perfect. Perfect,

Larry Greenberg

Okay, thanks.

Evan Greenberg

gravity. is Yes. There

Larry Greenberg

year year. last of is than I more maybe in And coming least this And of the operating guys just discuss the indicated say, Okay. leverage was And there? ratio other I there at are had business, out to any would kind you then, thinking. expense that improved explanations

Evan Greenberg

one, give place had since if -- the some have put will, three And the those year. all Number benefits that emerged of you going had is runoff I’m we the projects final you merger. in there runoff, the to Larry, we answers. in

yes, quarter constant a the of sort be items. the that the of have them; benefit always But, of items one-off a thing. expense it’s during one-off in every there We ratio the is here. to have and number just expense year we there by business. seems But, And control that year. They nature vary

the two ratio the but are part Expense is really drivers enduring So, I gave first it. of you of strategy.

Operator

final And and Please from Ryan Ryan. go we do ahead, time, have question from Tunis one Autonomous at come time Research. final that for question will this

Ryan Tunis

year about a ago? versus in the feel maybe a line for couple Evan. guess, Do feel there pressure, casualty of about how Just do you today alleviated all, America loss pressure trend North I thinking is commercial, some? is like you more first

Evan Greenberg

stable. about It’s

We a -- over haven't we seen haven't last in from... trend change seen year, loss the

Ryan Tunis

all Is creep mostly liability to you lines excess or or... at it management into have casualty limited seen still it the

Evan Greenberg

the trend in trend and but want to stable. change you're a loss and it, middle-market, I'm but trend, I frequency -- our every our the the No, here. is asking sure loss that X that’s I not responding I -- it to comp -- book could we mean, a casualty. clarity make -- is business, line there the way you’re change But, severity What you trend tell so loss has about of X%. calling trend have asking points loss of in of stable, is to over

real. it's middle-market, casualty or it, Excess casualty, it’s to a it’s casualty major does. So, whether all loss account trend excess has

And up go stable. so, every But, costs the is loss trend year.

Ryan Tunis

the trying down... that to kind is personal line But, you. loss is this and earn still trend pin point -- I you some increases still the take to Got time of say has would at your for on getting stable. And that The rate going in. side, appreciate you’re it’s activity to worse

Evan Greenberg

it. severities say would we by actuals expected. yesterday, I at were month looking they looking loss, have just cause No. and frequency it versus believe it. of The stabilized; and we’re by average for we month severity, not time. a a stabilized, get seeing is on a stabilized. period of trend trying We're it to has we clear And see still it have we handle It seen

know shooting so, And we’re at. target the we

Operator

ma’am. Karen turn would like time, Please to go the Beyer. at your I ahead, back host, conference And to over this

Karen Beyer

attention this quarter. all Thank your again speaking you you look We and with Thank you forward a morning. to next day. and for time good have

Operator

your you That for today's We participation. all teleconference. thank does conclude

Chubb Limited (CB) 6 Feb 192018 Q4 Earnings call transcript