Exhibit 99.2
Chubb Limited
Financial Supplement
for the Quarter Ended March 31, 2023
Investor Contact
Karen Beyer: (212) 827-4445
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 Form 10-K and Quarterly Reports on Form 10-Q.
Cautionary Statement Regarding Forward-Looking Statements
Any forward-looking statements made in this financial supplement reflect Chubb Limiteds 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 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 and credit developments among reinsurers.
Our forward-looking statements could also be affected by, among other things, 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, and such other factors identified in our filings with the Securities and Exchange Commission. 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
Page | ||||||
I. |
Financial Highlights | |||||
- Consolidated Financial Highlights | 1 | |||||
II. |
Consolidated Results | |||||
- Consolidated Statement of Operations | 2 | |||||
- P&C Results - Consecutive Quarters | 3 | |||||
- Global P&C Results - Consecutive Quarters | 4 | |||||
- Summary Consolidated Balance Sheets | 5 | |||||
- Product Line | 6 | |||||
- Consolidated Results by Segment | 7 - 8 | |||||
III. |
Segment Results | |||||
- North America Commercial P&C Insurance | 9 | |||||
- North America Personal P&C Insurance | 10 | |||||
- North America Agricultural Insurance | 11 | |||||
- Overseas General Insurance | 12 | |||||
- Global Reinsurance | 13 | |||||
- Life Insurance | 14 | |||||
- Corporate | 15 | |||||
IV. |
Balance Sheet Details | |||||
- Loss Reserve Rollforward | 16 | |||||
- Reinsurance Recoverable Analysis | 17 | |||||
- Investment Portfolio | 18 - 21 | |||||
- Net Realized and Unrealized Gains (Losses) | 22 | |||||
- Debt and Capital | 23 | |||||
- Computation of Basic and Diluted Earnings Per Share | 24 | |||||
- Book Value and Book Value per Common Share | 25 | |||||
V. |
Other Disclosures | |||||
- Non-GAAP Financial Measures | 26 - 30 | |||||
- Accounting Adoption | 31 | |||||
- Glossary | 32 |
New U.S. GAAP Accounting Standard Adopted in 2023
Effective January 1, 2023, the company adopted the Long-Duration Targeted Improvements (LDTI) U.S. GAAP guidance, which principally impacted the Life Insurance segment. Financial data for the prior reporting periods in this report are adjusted, as applicable, and are presented in accordance with the new guidance.
Refer to page 31 in this financial supplement for more details.
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.
As Adjusted | ||||||||||||||||||||
Three months ended March 31 | Constant $ | Constant $ | ||||||||||||||||||
2023 | 2022 | % Change | 2022 | % Change | ||||||||||||||||
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Gross premiums written |
$ | 13,004 | $ | 11,494 | 13.1% | $ | 11,333 | 14.7% | ||||||||||||
Net premiums written |
$ | 10,710 | $ | 9,189 | 16.6% | $ | 9,051 | 18.3% | ||||||||||||
P&C net premiums written |
$ | 9,417 | $ | 8,613 | 9.3% | $ | 8,486 | 11.0% | ||||||||||||
Global P&C net premiums written |
$ | 9,124 | $ | 8,551 | 6.7% | $ | 8,424 | 8.3% | ||||||||||||
Life Insurance net premiums written |
$ | 1,293 | $ | 576 | 124.4% | $ | 565 | 128.7% | ||||||||||||
Net premiums earned |
$ | 10,142 | $ | 8,737 | 16.1% | $ | 8,618 | 17.7% | ||||||||||||
P&C underwriting income |
$ | 1,213 | $ | 1,283 | -5.5% | $ | 1,269 | -4.4% | ||||||||||||
P&C CAY underwriting income ex Cats |
$ | 1,475 | $ | 1,376 | 7.2% | $ | 1,360 | 8.5% | ||||||||||||
Adjusted net investment income |
$ | 1,200 | $ | 901 | 33.2% | $ | 896 | 34.0% | ||||||||||||
Core operating income |
$ | 1,842 | $ | 1,647 | 11.8% | $ | 1,629 | 13.1% | ||||||||||||
Net investment income |
$ | 1,107 | $ | 822 | 34.7% | $ | 817 | 35.6% | ||||||||||||
Net income |
$ | 1,892 | $ | 1,953 | -3.2% | |||||||||||||||
Operating cash flow |
$ | 2,251 | $ | 2,444 | ||||||||||||||||
P&C combined ratio |
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Loss and loss expense ratio |
58.9 | % | 56.5 | % | ||||||||||||||||
Policy acquisition cost and administrative expense ratio |
27.4 | % | 27.8 | % | ||||||||||||||||
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Combined ratio |
86.3 | % | 84.3 | % | ||||||||||||||||
P&C Current Accident Year (CAY) combined ratio ex Catastrophe losses (Cats) |
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CAY loss and loss expense ratio ex Cats |
55.9 | % | 56.3 | % | ||||||||||||||||
CAY policy acquisition cost and administrative expense ratio ex Cats |
27.5 | % | 27.2 | % | ||||||||||||||||
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CAY combined ratio ex Cats |
83.4 | % | 83.5 | % | ||||||||||||||||
ROE |
14.6 | % | 13.7 | % | ||||||||||||||||
Core operating return on tangible equity (ROTE) |
19.4 | % | 17.1 | % | ||||||||||||||||
Core operating return on equity (ROE) |
12.6 | % | 11.4 | % | ||||||||||||||||
Effective tax rate |
16.9 | % | 15.3 | % | ||||||||||||||||
Core operating effective tax rate |
18.1 | % | 16.8 | % | ||||||||||||||||
Diluted earnings per share |
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Net income |
$ | 4.53 | $ | 4.55 | -0.4% | |||||||||||||||
Core operating income |
$ | 4.41 | $ | 3.83 | 15.1% | |||||||||||||||
Weighted average basic common shares outstanding |
414.3 | 425.8 | ||||||||||||||||||
Weighted average diluted common shares outstanding |
417.9 | 429.8 | ||||||||||||||||||
As Adjusted | ||||||||||||||||||||
March 31 2023 |
December 31 2022 |
% Change 1Q-23 vs. 4Q-22 |
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Book value per common share |
$ | 127.94 | $ | 121.85 | 5.0% | |||||||||||||||
Tangible book value per common share |
$ | 78.84 | $ | 72.51 | 8.7% |
Financial Highlights | Page 1 |
Chubb Limited
Statement of Operations - Consecutive Quarters
(in millions of U.S. dollars)
(Unaudited)
As Adjusted | ||||||||||||||||||||||||
Consolidated Statements of Operations | 1Q-23 | 4Q-22 | 3Q-22 | 2Q-22 | 1Q-22 | Full Year 2022 | ||||||||||||||||||
Gross premiums written |
$ | 13,004 | $ | 12,440 | $ | 15,006 | $ | 13,038 | $ | 11,494 | $ | 51,978 | ||||||||||||
Net premiums written |
10,710 | 10,226 | 12,012 | 10,293 | 9,189 | 41,720 | ||||||||||||||||||
Net premiums earned |
10,142 | 10,544 | 11,530 | 9,549 | 8,737 | 40,360 | ||||||||||||||||||
Adjusted losses and loss expenses (1) |
5,149 | 5,741 | 7,082 | 5,197 | 4,563 | 22,583 | ||||||||||||||||||
Realized (gains) losses on crop derivatives |
1 | 2 | 19 | (9 | ) | (1 | ) | 11 | ||||||||||||||||
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Losses and loss expenses |
5,148 | 5,739 | 7,063 | 5,206 | 4,564 | 22,572 | ||||||||||||||||||
Adjusted policy benefits (2) |
822 | 799 | 774 | 379 | 404 | 2,356 | ||||||||||||||||||
Gains (losses) from fair value changes in separate account liabilities |
25 | (74 | ) | 67 | 18 | 31 | 42 | |||||||||||||||||
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Policy benefits |
797 | 873 | 707 | 361 | 373 | 2,314 | ||||||||||||||||||
Policy acquisition costs |
1,948 | 1,924 | 1,970 | 1,726 | 1,719 | 7,339 | ||||||||||||||||||
Administrative expenses |
930 | 916 | 883 | 818 | 778 | 3,395 | ||||||||||||||||||
Adjusted net investment income (3) |
1,200 | 1,118 | 1,054 | 950 | 901 | 4,023 | ||||||||||||||||||
Other (income) expense from private equity partnerships |
(91 | ) | (60 | ) | (69 | ) | (48 | ) | (63 | ) | (240 | ) | ||||||||||||
Amortization expense of fair value adjustment on acquired invested assets |
(2 | ) | (5 | ) | (6 | ) | (14 | ) | (16 | ) | (41 | ) | ||||||||||||
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Net investment income |
1,107 | 1,053 | 979 | 888 | 822 | 3,742 | ||||||||||||||||||
Adjusted realized gains (losses) (4) |
(76 | ) | (147 | ) | (437 | ) | (512 | ) | 22 | (1,074 | ) | |||||||||||||
Realized gains (losses) on crop derivatives |
(1 | ) | (2 | ) | (19 | ) | 9 | 1 | (11 | ) | ||||||||||||||
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Net realized gains (losses) |
(77 | ) | (149 | ) | (456 | ) | (503 | ) | 23 | (1,085 | ) | |||||||||||||
Market risk benefits gains (losses) |
(115 | ) | (5 | ) | 69 | (33 | ) | 49 | 80 | |||||||||||||||
Adjusted interest expense (5) |
165 | 159 | 156 | 139 | 137 | 591 | ||||||||||||||||||
Amortization benefit of fair value adjustment on acquired long term debt |
(5 | ) | (5 | ) | (6 | ) | (5 | ) | (5 | ) | (21 | ) | ||||||||||||
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Interest expense |
160 | 154 | 150 | 134 | 132 | 570 | ||||||||||||||||||
Gains (losses) from fair value changes in separate account assets |
(25 | ) | 74 | (67 | ) | (18 | ) | (31 | ) | (42 | ) | |||||||||||||
Net realized gains (losses) related to unconsolidated entities |
238 | (207 | ) | (184 | ) | (138 | ) | 267 | (262 | ) | ||||||||||||||
Other income (expense) from private equity partnerships |
91 | 60 | 69 | 48 | 63 | 240 | ||||||||||||||||||
Other income (expense) - operating |
(8 | ) | (25 | ) | (20 | ) | 7 | 13 | (25 | ) | ||||||||||||||
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Other income (expense) |
296 | (98 | ) | (202 | ) | (101 | ) | 312 | (89 | ) | ||||||||||||||
Amortization expense of purchased intangibles |
72 | 74 | 69 | 71 | 71 | 285 | ||||||||||||||||||
Cigna integration expenses |
22 | 22 | 23 | 3 | | 48 | ||||||||||||||||||
Income tax expense |
384 | 332 | 263 | 291 | 353 | 1,239 | ||||||||||||||||||
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Net income |
$ | 1,892 | $ | 1,311 | $ | 792 | $ | 1,190 | $ | 1,953 | $ | 5,246 | ||||||||||||
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(1) Adjusted losses and loss expenses used throughout this report includes realized gains and losses on crop derivatives.
(2) Adjusted policy benefits used throughout this report excludes gains and losses from fair value changes in separate account liabilities.
(3) Adjusted net investment income used throughout this report excludes Amortization expense of fair value adjustment on acquired invested assets and includes income from private equity partnerships where we hold more than three percent ownership.
(4) Adjusted realized gains (losses) used throughout this report excludes realized gains and losses on crop derivatives.
(5) Adjusted interest expense used throughout this report excludes Amortization benefit of 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-23 | 4Q-22 | 3Q-22 | 2Q-22 | 1Q-22 | Full Year
2022 | ||||||||||||||||||
P&C underwriting income (Including Corporate and excluding Life Insurance) | ||||||||||||||||||||||||
Gross premiums written |
$ | 11,645 | $ | 11,158 | $ | 13,663 | $ | 12,437 | $ | 10,885 | $ | 48,143 | ||||||||||||
Net premiums written |
9,417 | 9,021 | 10,747 | 9,731 | 8,613 | 38,112 | ||||||||||||||||||
Net premiums earned |
8,878 | 9,359 | 10,286 | 9,010 | 8,195 | 36,850 | ||||||||||||||||||
Adjusted losses and loss expenses |
5,117 | 5,734 | 7,055 | 5,170 | 4,539 | 22,498 | ||||||||||||||||||
Adjusted policy benefits |
110 | 76 | 108 | 81 | 93 | 358 | ||||||||||||||||||
Policy acquisition costs |
1,675 | 1,676 | 1,704 | 1,588 | 1,586 | 6,554 | ||||||||||||||||||
Administrative expenses |
763 | 752 | 709 | 730 | 694 | 2,885 | ||||||||||||||||||
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P&C underwriting income |
$ | 1,213 | $ | 1,121 | $ | 710 | $ | 1,441 | $ | 1,283 | $ | 4,555 | ||||||||||||
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P&C CAY underwriting income ex Cats |
$ | 1,475 | $ | 1,354 | $ | 1,646 | $ | 1,485 | $ | 1,376 | $ | 5,861 | ||||||||||||
% Change versus prior year period |
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Net premiums written |
9.3% | 5.9% | 8.5% | 9.0% | 7.1% | 7.7% | ||||||||||||||||||
Net premiums earned |
8.3% | 7.5% | 9.3% | 9.8% | 7.5% | 8.5% | ||||||||||||||||||
Net premiums written constant $ |
11.0% | 9.8% | 11.2% | 11.0% | 9.0% | 10.3% | ||||||||||||||||||
Net premiums earned constant $ |
9.8% | 11.3% | 12.3% | 12.0% | 9.1% | 11.2% | ||||||||||||||||||
P&C combined ratio |
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Loss and loss expense ratio |
58.9% | 62.1% | 69.6% | 58.3% | 56.5% | 62.0% | ||||||||||||||||||
Policy acquisition cost ratio |
18.8% | 17.9% | 16.6% | 17.6% | 19.3% | 17.8% | ||||||||||||||||||
Administrative expense ratio |
8.6% | 8.0% | 6.9% | 8.1% | 8.5% | 7.8% | ||||||||||||||||||
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Combined ratio |
86.3% | 88.0% | 93.1% | 84.0% | 84.3% | 87.6% | ||||||||||||||||||
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CAY P&C combined ratio ex Cats |
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CAY loss and loss expense ratio ex Cats |
55.9% | 59.9% | 60.6% | 57.8% | 56.3% | 58.8% | ||||||||||||||||||
CAY policy acquisition cost and administrative expense ratio ex Cats | 27.5% | 25.7% | 23.4% | 25.7% | 27.2% | 25.4% | ||||||||||||||||||
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CAY combined ratio ex Cats |
83.4% | 85.6% | 84.0% | 83.5% | 83.5% | 84.2% | ||||||||||||||||||
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Other ratios |
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Net premiums written/gross premiums written |
81% | 81% | 79% | 78% | 79% | 79% | ||||||||||||||||||
Expense ratio |
27.4% | 25.9% | 23.5% | 25.7% | 27.8% | 25.6% | ||||||||||||||||||
Expense ratio excluding A&H |
25.7% | 24.2% | 21.6% | 24.1% | 26.2% | 23.9% | ||||||||||||||||||
Catastrophe reinstatement premiums (expensed) collected - pre-tax | $ | - | $ | (6 | ) | $ | 55 | $ | - | $ | - | $ | 49 | |||||||||||
Catastrophe losses - pre-tax | $ | 458 | $ | 394 | $ | 1,213 | $ | 291 | $ | 333 | $ | 2,231 | ||||||||||||
Favorable prior period development (PPD) - pre-tax | $ | (196 | ) | $ | (167 | ) | $ | (222 | ) | $ | (247 | ) | $ | (240 | ) | $ | (876 | ) | ||||||
Impact of catastrophe losses on P&C combined ratio - Unfavorable | 5.1% | 4.2% | 11.3% | 3.2% | 4.0% | 5.9% | ||||||||||||||||||
Impact of PPD on P&C combined ratio - Favorable | -2.2% | -1.8% | -2.2% | -2.7% | -3.2% | -2.5% | ||||||||||||||||||
Impact of Cats and PPD on P&C combined ratio - Unfavorable | 2.9% | 2.4% | 9.1% | 0.5% | 0.8% | 3.4% |
P&C Results | Page 3 |
Chubb Limited
Global P&C Underwriting Results - Consecutive Quarters
(in millions of U.S. dollars, except ratios)
(Unaudited)
Global P&C includes the companys North America Commercial P&C Insurance segment (refer to page 9), North America Personal P&C Insurance segment (refer to page 10), Overseas General Insurance segment (refer to page 12), Global Reinsurance segment (refer to page 13), and Corporate (refer to page 15). Global P&C excludes the North America Agricultural Insurance and Life Insurance segments.
Full Year | ||||||||||||||||||||||||
Global P&C (Including Corporate and excluding Agriculture) |
1Q-23 | 4Q-22 | 3Q-22 | 2Q-22 | 1Q-22 | 2022 | ||||||||||||||||||
Global P&C underwriting income |
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Gross premiums written |
$ | 11,240 | $ | 10,662 | $ | 11,121 | $ | 11,379 | $ | 10,569 | $ | 43,731 | ||||||||||||
Net premiums written |
9,124 | 8,637 | 9,024 | 8,993 | 8,551 | 35,205 | ||||||||||||||||||
Net premiums earned |
8,719 | 8,738 | 8,613 | 8,437 | 8,224 | 34,012 | ||||||||||||||||||
Adjusted losses and loss expenses |
4,977 | 5,007 | 5,611 | 4,692 | 4,631 | 19,941 | ||||||||||||||||||
Adjusted policy benefits |
110 | 76 | 108 | 81 | 93 | 358 | ||||||||||||||||||
Policy acquisition costs |
1,660 | 1,661 | 1,636 | 1,557 | 1,574 | 6,428 | ||||||||||||||||||
Administrative expenses |
760 | 766 | 706 | 728 | 695 | 2,895 | ||||||||||||||||||
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Global P&C underwriting income |
$ | 1,212 | $ | 1,228 | $ | 552 | $ | 1,379 | $ | 1,231 | $ | 4,390 | ||||||||||||
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Global P&C CAY underwriting income ex Cats |
$ | 1,450 | $ | 1,493 | $ | 1,448 | $ | 1,402 | $ | 1,350 | $ | 5,693 | ||||||||||||
% Change versus prior year period |
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Net premiums written |
6.7% | 4.8% | 6.3% | 6.8% | 8.8% | 6.7% | ||||||||||||||||||
Net premiums earned |
6.0% | 6.2% | 6.7% | 8.2% | 9.4% | 7.6% | ||||||||||||||||||
Net premiums written constant $ |
8.3% | 8.8% | 9.4% | 8.9% | 10.7% | 9.5% | ||||||||||||||||||
Net premiums earned constant $ |
7.5% | 10.2% | 10.2% | 10.5% | 11.1% | 10.5% | ||||||||||||||||||
Combined ratio |
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Loss and loss expense ratio |
58.3% | 58.2% | 66.4% | 56.6% | 57.4% | 59.7% | ||||||||||||||||||
Policy acquisition cost ratio |
19.1% | 19.0% | 19.0% | 18.5% | 19.1% | 18.9% | ||||||||||||||||||
Administrative expense ratio |
8.7% | 8.7% | 8.2% | 8.6% | 8.5% | 8.5% | ||||||||||||||||||
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Combined ratio |
86.1% | 85.9% | 93.6% | 83.7% | 85.0% | 87.1% | ||||||||||||||||||
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CAY combined ratio ex Cats |
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CAY loss and loss expense ratio ex Cats |
55.6% | 55.4% | 56.1% | 56.3% | 56.1% | 56.0% | ||||||||||||||||||
CAY policy acquisition cost and administrative expense ratio ex Cats |
27.8% | 27.5% | 27.1% | 27.1% | 27.5% | 27.3% | ||||||||||||||||||
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CAY combined ratio ex Cats |
83.4% | 82.9% | 83.2% | 83.4% | 83.6% | 83.3% | ||||||||||||||||||
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Other ratios |
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Net premiums written/gross premiums written |
81% | 81% | 81% | 79% | 81% | 81% | ||||||||||||||||||
Expense ratio |
27.8% | 27.7% | 27.2% | 27.1% | 27.6% | 27.4% | ||||||||||||||||||
Expense ratio excluding A&H |
26.0% | 26.0% | 25.3% | 25.4% | 26.0% | 25.7% | ||||||||||||||||||
Catastrophe reinstatement premiums (expensed) collected - pre-tax |
$ | - | $ | (6 | ) | $ | 55 | $ | - | $ | - | $ | 49 | |||||||||||
Catastrophe losses - pre-tax |
$ | 434 | $ | 382 | $ | 1,182 | $ | 270 | $ | 333 | $ | 2,167 | ||||||||||||
Favorable prior period development (PPD) - pre-tax |
$ | (196) | $ | (123 | ) | $ | (231 | ) | $ | (247 | ) | $ | (214 | ) | $ | (815) | ||||||||
Impact of catastrophe losses on combined ratio - Unfavorable |
5.0% | 4.4% | 13.1% | 3.2% | 4.0% | 6.2% | ||||||||||||||||||
Impact of PPD on combined ratio - Favorable |
-2.3% | -1.4% | -2.7% | -2.9% | -2.6% | -2.4% | ||||||||||||||||||
Impact of Cats and PPD on combined ratio - Unfavorable |
2.7% | 3.0% | 10.4% | 0.3% | 1.4% | 3.8% |
Global P&C | Page 4 |
Chubb Limited
Summary Consolidated Balance Sheets
(in millions of U.S. dollars, except per share data)
(Unaudited)
As Adjusted
| ||||||||
March 31 | December 31 | |||||||
2023 | 2022 | |||||||
Assets |
||||||||
Fixed maturities available for sale, at fair value |
$ | 88,364 | $ | 85,220 | ||||
Fixed maturities held to maturity, at amortized cost |
8,425 | 8,848 | ||||||
Equity securities, at fair value |
942 | 827 | ||||||
Short-term investments, at fair value |
3,693 | 4,960 | ||||||
Other investments |
14,192 | 13,696 | ||||||
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|
| |||
Total investments |
115,616 | 113,551 | ||||||
Cash |
2,288 | 2,012 | ||||||
Securities lending collateral |
1,582 | 1,523 | ||||||
Insurance and reinsurance balances receivable |
12,340 | 11,933 | ||||||
Reinsurance recoverable on losses and loss expenses |
18,141 | 18,859 | ||||||
Deferred policy acquisition costs |
6,296 | 6,031 | ||||||
Value of business acquired (VOBA) |
3,603 | 3,702 | ||||||
Prepaid reinsurance premiums |
3,166 | 3,136 | ||||||
Goodwill and other intangible assets |
21,539 | 21,669 | ||||||
Investments in partially-owned insurance companies |
3,728 | 2,507 | ||||||
Separate account assets |
5,300 | 5,190 | ||||||
Other assets |
7,816 | 8,904 | ||||||
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| |||
Total assets |
$ | 201,415 | $ | 199,017 | ||||
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| |||
Liabilities |
||||||||
Unpaid losses and loss expenses |
$ | 75,417 | $ | 75,747 | ||||
Unearned premiums |
20,261 | 19,713 | ||||||
Future policy benefits |
10,782 | 10,476 | ||||||
Market risk benefits |
830 | 800 | ||||||
Policyholder account balances |
2,593 | 2,573 | ||||||
Separate account liabilities |
5,300 | 5,190 | ||||||
Insurance and reinsurance balances payable |
7,778 | 7,780 | ||||||
Securities lending payable |
1,582 | 1,523 | ||||||
Accounts payable, accrued expenses, and other liabilities |
8,661 | 9,134 | ||||||
Deferred tax liabilities |
541 | 377 | ||||||
Short-term and long-term debt |
14,375 | 14,877 | ||||||
Trust preferred securities |
308 | 308 | ||||||
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Total liabilities |
148,428 | 148,498 | ||||||
Shareholders equity |
||||||||
Total shareholders equity, excl. AOCI |
61,882 | 60,704 | ||||||
Accumulated other comprehensive income (loss) (AOCI) |
(8,895 | ) | (10,185 | ) | ||||
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Total shareholders equity |
52,987 | 50,519 | ||||||
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|
| |||
Total liabilities and shareholders equity |
$ | 201,415 | $ | 199,017 | ||||
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| |||
Book value per common share |
$ | 127.94 | $ | 121.85 | ||||
% change over prior quarter |
5.0% | 6.1% | ||||||
Tangible book value per common share |
$ | 78.84 | $ | 72.51 | ||||
% change over prior quarter |
8.7% | 8.9% | ||||||
Book value per common share, excl. AOCI |
$ | 149.42 | $ | 146.42 | ||||
% change over prior quarter |
2.0% | 1.6% | ||||||
Tangible book value per common share, excl. AOCI |
$ | 98.02 | $ | 94.90 | ||||
% change over prior quarter |
3.3% | 2.4% |
Consol Bal Sheet | Page 5 |
Chubb Limited
Consolidated Net Premiums Written by Product Line
(in millions of U.S. dollars)
(Unaudited)
As Adjusted | Constant $ | |||||||||||||||
1Q-23 | 1Q-22 | % Change | % Change | |||||||||||||
Net premiums written |
||||||||||||||||
Commercial multiple peril (1) |
$ | 340 | $ | 290 | 17.5% | 17.5% | ||||||||||
Commercial casualty |
1,903 | 1,837 | 3.6% | 5.3% | ||||||||||||
Workers compensation |
618 | 603 | 2.5% | 2.5% | ||||||||||||
Financial lines |
1,156 | 1,182 | -2.3% | -0.5% | ||||||||||||
Surety |
160 | 153 | 4.5% | 4.2% | ||||||||||||
Property and other short-tail lines |
2,025 | 1,777 | 14.0% | 16.5% | ||||||||||||
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Total Commercial P&C lines |
6,202 | 5,842 | 6.2% | 7.8% | ||||||||||||
Agriculture |
293 | 62 | NM | NM | ||||||||||||
Personal automobile |
427 | 412 | 3.6% | 0.9% | ||||||||||||
Personal homeowners |
902 | 830 | 8.7% | 9.4% | ||||||||||||
Personal other |
507 | 495 | 2.6% | 6.5% | ||||||||||||
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Total Personal lines |
1,836 | 1,737 | 5.7% | 6.5% | ||||||||||||
Global A&H - P&C |
809 | 719 | 12.5% | 16.3% | ||||||||||||
Reinsurance lines |
277 | 253 | 9.4% | 10.4% | ||||||||||||
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Total P&C |
$ | 9,417 | $ | 8,613 | 9.3% | 11.0% | ||||||||||
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Life Insurance |
1,293 | 576 | 124.4% | 128.7% | ||||||||||||
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Total Consolidated |
$ | 10,710 | $ | 9,189 | 16.6% | 18.3% | ||||||||||
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(1) Commercial multiple peril represents retail package business (property and general liability).
Product Line | Page 6 |
Chubb Limited
Consolidated Results - Three months ended March 31, 2023
(in millions of U.S. dollars, except ratios)
(Unaudited)
Q1 2023 |
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 |
$ 4,288 | $ | 1,296 | $ | 293 | $ | 3,263 | $ | 277 | $ | - | $ | 9,417 | $ | 1,293 | $ | 10,710 | |||||||||||||||||||||||
Net premiums earned |
4,369 | 1,320 | 159 | 2,786 | 244 | - | 8,878 | 1,264 | 10,142 | |||||||||||||||||||||||||||||||
Adjusted losses and loss expenses |
2,729 | 888 | 140 | 1,237 | 112 | 11 | 5,117 | 32 | 5,149 | |||||||||||||||||||||||||||||||
Adjusted policy benefits |
- | - | - | 110 | - | - | 110 | 712 | 822 | |||||||||||||||||||||||||||||||
Policy acquisition costs |
613 | 272 | 15 | 713 | 62 | - | 1,675 | 273 | 1,948 | |||||||||||||||||||||||||||||||
Administrative expenses |
295 | 79 | 3 | 280 | 9 | 97 | 763 | 167 | 930 | |||||||||||||||||||||||||||||||
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Underwriting income (loss) |
732 | 81 | 1 | 446 | 61 | (108 | ) | 1,213 | 80 | 1,293 | ||||||||||||||||||||||||||||||
Adjusted net investment income |
698 | 82 | 17 | 188 | 49 | 13 | 1,047 | 153 | 1,200 | |||||||||||||||||||||||||||||||
Other income (expense) - operating |
(7 | ) | (1 | ) | (1 | ) | 9 | 1 | (24 | ) | (23 | ) | 15 | (8 | ) | |||||||||||||||||||||||||
Amortization expense of purchased intangibles |
- | (2 | ) | (6 | ) | (18 | ) | - | (42 | ) | (68 | ) | (4 | ) | (72 | ) | ||||||||||||||||||||||||
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Segment income (loss) |
$ 1,423 | $ | 160 | $ | 11 | $ | 625 | $ | 111 | $ | (161 | ) | $ | 2,169 | $ | 244 | $ | 2,413 | ||||||||||||||||||||||
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Adjusted interest expense |
(165 | ) | (165 | ) | ||||||||||||||||||||||||||||||||||||
Income tax expense |
(406 | ) | (406 | ) | ||||||||||||||||||||||||||||||||||||
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Core operating income (loss) |
(732 | ) | 1,842 | |||||||||||||||||||||||||||||||||||||
Cigna integration expenses, net of $3 million tax benefit |
(19 | ) | (19 | ) | ||||||||||||||||||||||||||||||||||||
Amortization of fair value adjustment of acquired invested assets and long-term debt, net of $1 million tax expense |
2 | 2 | ||||||||||||||||||||||||||||||||||||||
Adjusted net realized gains (losses), net of $20 million tax benefit (1) |
182 | 182 | ||||||||||||||||||||||||||||||||||||||
Market risk benefits gains (losses) (2) |
(115 | ) | (115 | ) | ||||||||||||||||||||||||||||||||||||
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Net income (loss) |
$ | (682 | ) | $ | 1,892 | |||||||||||||||||||||||||||||||||||
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Combined ratio |
83.2% | 93.9% | 99.2% | 84.0% | 75.1% | 86.3% | ||||||||||||||||||||||||||||||||||
CAY combined ratio ex Cats |
81.2% | 80.6% | 83.9% | 85.1% | 78.4% | 83.4% |
(1) Includes Net realized gains (losses) related to unconsolidated entities.
(2) Includes $57 million of losses on applicable hedges. These losses are both pre-tax and after-tax.
Consol Results - QTD 2023 | Page 7 |
Chubb Limited
Consolidated Results - Three months ended March 31, 2022
(in millions of U.S. dollars, except ratios)
(Unaudited)
As Adjusted | As Adjusted | |||||||||||||||||||||||||||||||||||||||
Q1 2022 |
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 |
$ 4,039 | $ | 1,180 | $ | 62 | $ | 3,079 | $ | 253 | $ | - | $ | 8,613 | $ | 576 | $ | 9,189 | |||||||||||||||||||||||
Net premiums earned |
4,114 | 1,247 | (29 | ) | 2,628 | 235 | - | 8,195 | 542 | 8,737 | ||||||||||||||||||||||||||||||
Adjusted losses and loss expenses |
2,497 | 713 | (92 | ) | 1,296 | 115 | 10 | 4,539 | 24 | 4,563 | ||||||||||||||||||||||||||||||
Adjusted policy benefits |
- | - | - | 93 | - | - | 93 | 311 | 404 | |||||||||||||||||||||||||||||||
Policy acquisition costs |
573 | 260 | 12 | 679 | 62 | - | 1,586 | 133 | 1,719 | |||||||||||||||||||||||||||||||
Administrative expenses |
265 | 69 | (1 | ) | 269 | 9 | 83 | 694 | 84 | 778 | ||||||||||||||||||||||||||||||
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Underwriting income (loss) |
779 | 205 | 52 | 291 | 49 | (93 | ) | 1,283 | (10 | ) | 1,273 | |||||||||||||||||||||||||||||
Adjusted net investment income |
489 | 59 | 7 | 147 | 85 | 11 | 798 | 103 | 901 | |||||||||||||||||||||||||||||||
Other income (expense) - operating |
(6 | ) | (1 | ) | - | (2 | ) | - | (8 | ) | (17 | ) | 30 | 13 | ||||||||||||||||||||||||||
Amortization expense of purchased intangibles |
- | (2 | ) | (7 | ) | (14 | ) | - | (46 | ) | (69 | ) | (2 | ) | (71 | ) | ||||||||||||||||||||||||
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Segment income (loss) |
$ 1,262 | $ | 261 | $ | 52 | $ | 422 | $ | 134 | $ | (136 | ) | $ | 1,995 | $ | 121 | $ | 2,116 | ||||||||||||||||||||||
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Adjusted interest expense |
(137 | ) | (137 | ) | ||||||||||||||||||||||||||||||||||||
Income tax expense |
(332 | ) | (332 | ) | ||||||||||||||||||||||||||||||||||||
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Core operating income (loss) |
(605 | ) | 1,647 | |||||||||||||||||||||||||||||||||||||
Amortization of fair value adjustment of acquired invested assets and long-term debt, net of $2 million tax benefit |
(9 | ) | (9 | ) | ||||||||||||||||||||||||||||||||||||
Adjusted net realized gains (losses), net of $23 million tax (1) |
266 | 266 | ||||||||||||||||||||||||||||||||||||||
Market risk benefits gains (losses) (2) |
49 | 49 | ||||||||||||||||||||||||||||||||||||||
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Net income (loss) |
$ | (299 | ) | $ | 1,953 | |||||||||||||||||||||||||||||||||||
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Combined ratio |
81.1% | 83.5% | NM | 88.9% | 79.0% | 84.3% | ||||||||||||||||||||||||||||||||||
CAY combined ratio ex Cats |
81.7% | 79.6% | 79.5% | 85.5% | 79.9% | 83.5% |
(1) Includes Net realized gains (losses) related to unconsolidated entities.
(2) Includes $42 million of gains on applicable hedges. These gains are both pre-tax and after-tax.
Consol Results - QTD 2022 | Page 8 |
Chubb Limited
Segment Results - Consecutive Quarters
(in millions of U.S. dollars, except ratios)
(Unaudited)
North America Commercial P&C Insurance |
Full Year | |||||||||||||||||||||||
1Q-23 | 4Q-22 | 3Q-22 | 2Q-22 | 1Q-22 | 2022 | |||||||||||||||||||
Gross premiums written |
$ | 5,316 | $ | 5,718 | $ | 5,937 | $ | 6,078 | $ | 5,132 | $ | 22,865 | ||||||||||||
Net premiums written |
4,288 | 4,463 | 4,722 | 4,665 | 4,039 | 17,889 | ||||||||||||||||||
Net premiums earned |
4,369 | 4,462 | 4,283 | 4,248 | 4,114 | 17,107 | ||||||||||||||||||
Losses and loss expenses |
2,729 | 2,849 | 3,036 | 2,446 | 2,497 | 10,828 | ||||||||||||||||||
Policy acquisition costs |
613 | 612 | 583 | 545 | 573 | 2,313 | ||||||||||||||||||
Administrative expenses |
295 | 299 | 272 | 277 | 265 | 1,113 | ||||||||||||||||||
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Underwriting income |
732 | 702 | 392 | 980 | 779 | 2,853 | ||||||||||||||||||
Adjusted net investment income |
698 | 647 | 589 | 522 | 489 | 2,247 | ||||||||||||||||||
Other income (expense) - operating |
(7 | ) | (5 | ) | (6 | ) | - | (6 | ) | (17 | ) | |||||||||||||
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Segment income |
$ | 1,423 | $ | 1,344 | $ | 975 | $ | 1,502 | $ | 1,262 | $ | 5,083 | ||||||||||||
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CAY underwriting income ex Cats |
$ | 822 | $ | 859 | $ | 824 | $ | 817 | $ | 752 | $ | 3,252 | ||||||||||||
Combined ratio |
||||||||||||||||||||||||
Loss and loss expense ratio |
62.5% | 63.8% | 70.9% | 57.6% | 60.7% | 63.3% | ||||||||||||||||||
Policy acquisition cost ratio |
14.0% | 13.8% | 13.6% | 12.8% | 13.9% | 13.5% | ||||||||||||||||||
Administrative expense ratio |
6.7% | 6.7% | 6.4% | 6.5% | 6.5% | 6.5% | ||||||||||||||||||
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Combined ratio |
83.2% | 84.3% | 90.9% | 76.9% | 81.1% | 83.3% | ||||||||||||||||||
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| |||||||
CAY combined ratio ex Cats |
||||||||||||||||||||||||
CAY loss and loss expense ratio ex Cats |
60.5% | 60.8% | 61.5% | 61.4% | 61.5% | 61.3% | ||||||||||||||||||
CAY policy acquisition cost and administrative expense ratio ex Cats (1) |
20.7% | 20.0% | 19.6% | 19.4% | 20.2% | 19.8% | ||||||||||||||||||
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CAY combined ratio ex Cats |
81.2% | 80.8% | 81.1% | 80.8% | 81.7% | 81.1% | ||||||||||||||||||
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Catastrophe reinstatement premiums expensed - pre-tax |
$ | - | $ | (1 | ) | $ | - | $ | - | $ | - | $ | (1 | ) | ||||||||||
Catastrophe losses - pre-tax |
$ | 162 | $ | 157 | $ | 598 | $ | 124 | $ | 81 | $ | 960 | ||||||||||||
Favorable prior period development (PPD) - pre-tax (2) |
$ | (72 | ) | $ | (1 | ) | $ | (166 | ) | $ | (287 | ) | $ | (108 | ) | $ | (562 | ) | ||||||
% Change versus prior year period |
||||||||||||||||||||||||
Net premiums written |
6.2% | 8.9% | 8.1% | 8.9% | 10.2% | 9.0% | ||||||||||||||||||
Net premiums earned |
6.2% | 10.7% | 8.3% | 11.7% | 12.0% | 10.6% | ||||||||||||||||||
Other ratios |
||||||||||||||||||||||||
Net premiums written/gross premiums written |
81% | 78% | 80% | 77% | 79% | 78% | ||||||||||||||||||
Production by Size - Net premiums written (3) |
||||||||||||||||||||||||
Major Accounts & Specialty |
$ | 2,483 | $ | 2,682 | $ | 2,869 | $ | 2,895 | $ | 2,336 | $ | 10,782 | ||||||||||||
Commercial |
1,805 | 1,781 | 1,853 | 1,770 | 1,703 | 7,107 | ||||||||||||||||||
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Total |
$ | 4,288 | $ | 4,463 | $ | 4,722 | $ | 4,665 | $ | 4,039 | $ | 17,889 | ||||||||||||
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(1) Q1 2023 includes the adverse impact of 0.4 percentage points reflecting higher year-over-year pension expenses from unfavorable market condition.
(2) Q1 2023 comprised $112 million of favorable development, partially offset by a charge of $40 million related to development from 2022 late-season catastrophes.
(3) Major Accounts & Specialty: large corporate accounts and wholesale business. Commercial: principally middle market and small commercial accounts.
NA Commercial | Page 9 |
Chubb Limited
Segment Results - Consecutive Quarters
(in millions of U.S. dollars, except ratios)
(Unaudited)
North America Personal P&C Insurance |
Full Year | |||||||||||||||||||||||
1Q-23 | 4Q-22 | 3Q-22 | 2Q-22 | 1Q-22 | 2022 | |||||||||||||||||||
Gross premiums written |
$ | 1,483 | $ | 1,515 | $ | 1,575 | $ | 1,626 | $ | 1,350 | $ | 6,066 | ||||||||||||
Net premiums written |
1,296 | 1,315 | 1,392 | 1,426 | 1,180 | 5,313 | ||||||||||||||||||
Net premiums earned |
1,320 | 1,328 | 1,334 | 1,271 | 1,247 | 5,180 | ||||||||||||||||||
Losses and loss expenses |
888 | 843 | 857 | 773 | 713 | 3,186 | ||||||||||||||||||
Policy acquisition costs |
272 | 265 | 274 | 258 | 260 | 1,057 | ||||||||||||||||||
Administrative expenses |
79 | 78 | 71 | 73 | 69 | 291 | ||||||||||||||||||
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Underwriting income |
81 | 142 | 132 | 167 | 205 | 646 | ||||||||||||||||||
Net investment income |
82 | 84 | 76 | 64 | 59 | 283 | ||||||||||||||||||
Other income (expense) - operating |
(1 | ) | (1 | ) | (1 | ) | (1 | ) | (1 | ) | (4 | ) | ||||||||||||
Amortization expense of purchased intangibles |
(2 | ) | (3 | ) | (2 | ) | (3 | ) | (2 | ) | (10 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Segment income |
$ | 160 | $ | 222 | $ | 205 | $ | 227 | $ | 261 | $ | 915 | ||||||||||||
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|
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|
|
|
|
|
|
|
|
|
| |||||||
CAY underwriting income ex Cats |
$ | 257 | $ | 305 | $ | 273 | $ | 259 | $ | 254 | $ | 1,091 | ||||||||||||
Combined ratio |
||||||||||||||||||||||||
Loss and loss expense ratio |
67.3% | 63.5% | 64.2% | 60.8% | 57.2% | 61.5% | ||||||||||||||||||
Policy acquisition cost ratio |
20.6% | 19.9% | 20.6% | 20.3% | 20.8% | 20.4% | ||||||||||||||||||
Administrative expense ratio |
6.0% | 5.9% | 5.3% | 5.8% | 5.5% | 5.6% | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Combined ratio |
93.9% | 89.3% | 90.1% | 86.9% | 83.5% | 87.5% | ||||||||||||||||||
|
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|
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|
|
|
|
|
|
|
|
|
|
|
| |||||||
CAY combined ratio ex Cats |
||||||||||||||||||||||||
CAY loss and loss expense ratio ex Cats |
53.9% | 51.3% | 53.6% | 53.6% | 53.3% | 52.9% | ||||||||||||||||||
CAY policy acquisition cost and administrative expense ratio ex Cats (1) |
26.7% | 25.8% | 25.9% | 26.1% | 26.3% | 26.0% | ||||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
| |||||||
CAY combined ratio ex Cats |
80.6% | 77.1% | 79.5% | 79.7% | 79.6% | 78.9% | ||||||||||||||||||
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|
| |||||||
Catastrophe reinstatement premiums expensed - pre-tax |
$ | - | $ | (2 | ) | $ | - | $ | - | $ | - | $ | (2 | ) | ||||||||||
Catastrophe losses - pre-tax |
$ | 159 | $ | 160 | $ | 274 | $ | 95 | $ | 100 | $ | 629 | ||||||||||||
Unfavorable (favorable) prior period development (PPD) - pre-tax (2) |
$ | 17 | $ | 1 | $ | (133 | ) | $ | (3 | ) | $ | (51 | ) | $ | (186 | ) | ||||||||
% Change versus prior year period |
||||||||||||||||||||||||
Net premiums written |
9.9% | 5.9% | 7.1% | 4.7% | 7.4% | 6.2% | ||||||||||||||||||
Net premiums earned |
5.9% | 5.1% | 7.2% | 3.9% | 5.3% | 5.4% | ||||||||||||||||||
Other ratios |
||||||||||||||||||||||||
Net premiums written/gross premiums written |
87% | 87% | 88% | 88% | 87% | 88% |
(1) Q1 2023 includes the adverse impact of 0.5 percentage points reflecting higher year-over-year pension expenses from unfavorable market condition.
(2) Q1 2023 included a charge of $9 million related to development from 2022 late-season catastrophes. Q1 2022 included a reserve release due to lower than expected paid and reported loss activity attributable to the indirect effects of COVID related economic slowdown.
NA Personal | Page 10 |
Chubb Limited
Segment Results - Consecutive Quarters
(in millions of U.S. dollars, except ratios)
(Unaudited)
North America Agricultural Insurance |
Full Year | |||||||||||||||||||||||
1Q-23 | 4Q-22 | 3Q-22 | 2Q-22 | 1Q-22 | 2022 | |||||||||||||||||||
Gross premiums written |
$ | 405 | $ | 496 | $ | 2,542 | $ | 1,058 | $ | 316 | $ | 4,412 | ||||||||||||
Net premiums written |
293 | 384 | 1,723 | 738 | 62 | 2,907 | ||||||||||||||||||
Net premiums earned |
159 | 621 | 1,673 | 573 | (29 | ) | 2,838 | |||||||||||||||||
Adjusted losses and loss expenses |
140 | 727 | 1,444 | 478 | (92 | ) | 2,557 | |||||||||||||||||
Policy acquisition costs |
15 | 15 | 68 | 31 | 12 | 126 | ||||||||||||||||||
Administrative expenses |
3 | (14 | ) | 3 | 2 | (1 | ) | (10 | ) | |||||||||||||||
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|
| |||||||
Underwriting income (loss) |
1 | (107 | ) | 158 | 62 | 52 | 165 | |||||||||||||||||
Net investment income |
17 | 13 | 9 | 7 | 7 | 36 | ||||||||||||||||||
Other income (expense) - operating |
(1 | ) | - | (1 | ) | - | - | (1 | ) | |||||||||||||||
Amortization expense of purchased intangibles |
(6 | ) | (6 | ) | (7 | ) | (6 | ) | (7 | ) | (26 | ) | ||||||||||||
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| |||||||
Segment income (loss) |
$ | 11 | $ | (100 | ) | $ | 159 | $ | 63 | $ | 52 | $ | 174 | |||||||||||
|
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|
|
|
|
|
|
| |||||||
CAY underwriting income (loss) ex Cats |
$ | 25 | $ | (139 | ) | $ | 198 | $ | 83 | $ | 26 | $ | 168 | |||||||||||
Combined ratio |
||||||||||||||||||||||||
Loss and loss expense ratio |
88.5% | 117.1% | 86.3% | 83.3% | NM | 90.1% | ||||||||||||||||||
Policy acquisition cost ratio |
9.3% | 2.4% | 4.1% | 5.4% | NM | 4.4% | ||||||||||||||||||
Administrative expense ratio |
1.4% | -2.3% | 0.2% | 0.4% | NM | -0.3% | ||||||||||||||||||
|
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|
|
|
| |||||||
Combined ratio |
99.2% | 117.2% | 90.6% | 89.1% | NM | 94.2% | ||||||||||||||||||
|
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|
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|
|
|
|
|
|
| |||||||
CAY combined ratio ex Cats |
||||||||||||||||||||||||
CAY loss and loss expense ratio ex Cats (1) |
73.1% | 122.0% | 84.0% | 79.6% | 70.6% | 90.5% | ||||||||||||||||||
CAY policy acquisition cost and administrative expense ratio ex Cats |
10.8% | 0.1% | 4.2% | 5.8% | 8.9% | 3.9% | ||||||||||||||||||
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
CAY combined ratio ex Cats |
83.9% | 122.1% | 88.2% | 85.4% | 79.5% | 94.4% | ||||||||||||||||||
|
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|
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|
|
|
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|
|
|
|
|
|
| |||||||
Catastrophe losses - pre-tax |
$ | 24 | $ | 12 | $ | 31 | $ | 21 | $ | - | $ | 64 | ||||||||||||
Unfavorable (favorable) prior period development (PPD) - pre-tax |
$ | - | $ | (44 | ) | $ | 9 | $ | - | $ | (26 | ) | $ | (61 | ) | |||||||||
% Change versus prior year period |
||||||||||||||||||||||||
Net premiums written |
NM | 37.9% | 21.8% | 44.0% | -65.9% | 21.7% | ||||||||||||||||||
Net premiums earned |
NM | 29.5% | 25.0% | 39.6% | NM | 21.4% | ||||||||||||||||||
Other ratios |
||||||||||||||||||||||||
Net premiums written/gross premiums written |
72% | 77% | 68% | 70% | 20% | 66% |
(1) Q1 2023 included a 1.5 percentage point increase from a year-over-year impact from the companys crop commodity price hedge activity which produced a loss this quarter versus a gain last year.
NA Agriculture | Page 11 |
Chubb Limited
Segment Results - Consecutive Quarters
(in millions of U.S. dollars, except ratios)
(Unaudited)
Overseas General Insurance |
Full Year | |||||||||||||||||||||||
1Q-23 | 4Q-22 | 3Q-22 | 2Q-22 | 1Q-22 | 2022 | |||||||||||||||||||
Gross premiums written |
$ | 4,131 | $ | 3,249 | $ | 3,313 | $ | 3,345 | $ | 3,798 | $ | 13,705 | ||||||||||||
Net premiums written |
3,263 | 2,696 | 2,645 | 2,640 | 3,079 | 11,060 | ||||||||||||||||||
Net premiums earned |
2,786 | 2,738 | 2,741 | 2,696 | 2,628 | 10,803 | ||||||||||||||||||
Losses and loss expenses |
1,237 | 1,122 | 1,333 | 1,143 | 1,296 | 4,894 | ||||||||||||||||||
Adjusted policy benefits |
110 | 76 | 108 | 81 | 93 | 358 | ||||||||||||||||||
Policy acquisition costs |
713 | 722 | 720 | 697 | 679 | 2,818 | ||||||||||||||||||
Administrative expenses |
280 | 259 | 264 | 278 | 269 | 1,070 | ||||||||||||||||||
|
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|
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|
|
|
|
|
|
| |||||||
Underwriting income |
446 | 559 | 316 | 497 | 291 | 1,663 | ||||||||||||||||||
Adjusted net investment income |
188 | 166 | 151 | 162 | 147 | 626 | ||||||||||||||||||
Other income (expense) - operating |
9 | 1 | 2 | (3 | ) | (2 | ) | (2 | ) | |||||||||||||||
Amortization expense of purchased intangibles |
(18 | ) | (17 | ) | (12 | ) | (14 | ) | (14 | ) | (57 | ) | ||||||||||||
|
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| |||||||
Segment income |
$ | 625 | $ | 709 | $ | 457 | $ | 642 | $ | 422 | $ | 2,230 | ||||||||||||
|
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|
|
|
|
|
|
|
|
|
| |||||||
CAY underwriting income ex Cats |
$ | 416 | $ | 416 | $ | 409 | $ | 373 | $ | 382 | $ | 1,580 | ||||||||||||
Combined ratio |
||||||||||||||||||||||||
Loss and loss expense ratio |
48.4% | 43.7% | 52.6% | 45.4% | 52.9% | 48.6% | ||||||||||||||||||
Policy acquisition cost ratio |
25.6% | 26.4% | 26.3% | 25.9% | 25.8% | 26.1% | ||||||||||||||||||
Administrative expense ratio |
10.0% | 9.5% | 9.6% | 10.3% | 10.2% | 9.9% | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Combined ratio |
84.0% | 79.6% | 88.5% | 81.6% | 88.9% | 84.6% | ||||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
CAY combined ratio ex Cats |
||||||||||||||||||||||||
CAY loss and loss expense ratio ex Cats |
49.4% | 49.0% | 49.2% | 50.0% | 49.4% | 49.4% | ||||||||||||||||||
CAY policy acquisition cost and administrative expense ratio ex Cats |
35.7% | 35.8% | 35.9% | 36.2% | 36.1% | 36.0% | ||||||||||||||||||
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
CAY combined ratio ex Cats |
85.1% | 84.8% | 85.1% | 86.2% | 85.5% | 85.4% | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Catastrophe reinstatement premiums expensed - pre-tax |
$ | - | $ | (3 | ) | $ | - | $ | - | $ | - | $ | (3 | ) | ||||||||||
Catastrophe losses - pre-tax |
$ | 113 | $ | 64 | $ | 98 | $ | 49 | $ | 151 | $ | 362 | ||||||||||||
Favorable prior period development (PPD) - pre-tax (1) |
$ | (143 | ) | $ | (210 | ) | $ | (5 | ) | $ | (173 | ) | $ | (60 | ) | $ | (448 | ) | ||||||
% Change versus prior year period |
||||||||||||||||||||||||
Net premiums written |
6.0% | -1.3% | 1.9% | 5.7% | 6.5% | 3.2% | ||||||||||||||||||
Net premiums written - Commercial |
6.2% | -0.9% | 2.5% | 7.0% | 8.6% | 4.3% | ||||||||||||||||||
Net premiums written - Consumer |
5.6% | -2.0% | 1.1% | 3.9% | 3.0% | 1.5% | ||||||||||||||||||
Net premiums earned |
6.0% | 0.6% | 2.9% | 4.6% | 6.0% | 3.5% | ||||||||||||||||||
Net premiums written constant $ |
10.0% | 9.7% | 11.7% | 12.4% | 11.9% | 11.4% | ||||||||||||||||||
Net premiums written - Commercial |
10.8% | 9.4% | 11.0% | 13.0% | 13.6% | 11.8% | ||||||||||||||||||
Net premiums written - Consumer |
8.6% | 10.3% | 12.7% | 11.6% | 9.0% | 10.8% | ||||||||||||||||||
Net premiums earned constant $ |
9.9% | 12.0% | 13.1% | 11.1% | 11.0% | 11.8% | ||||||||||||||||||
Other ratios: Net premiums written/gross premiums written |
79% | 83% | 80% | 79% | 81% | 81% | ||||||||||||||||||
Constant $ | ||||||||||||||||||||||||
Production by Region - Net premiums written | 1Q-23 | 1Q-22 | % Change | % Change | ||||||||||||||||||||
Europe, Middle East and Africa |
$ | 1,721 | $ | 1,654 | 4.0% | 10.1% | ||||||||||||||||||
Latin America |
661 | 605 | 9.2% | 5.3% | ||||||||||||||||||||
Asia Pacific |
733 | 643 | 14.0% | 18.6% | ||||||||||||||||||||
Japan |
105 | 115 | -8.2% | 7.2% | ||||||||||||||||||||
Other (2) |
43 | 62 | -30.1% | -27.6% | ||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Total |
$ | 3,263 | $ | 3,079 | 6.0% | 10.0% | ||||||||||||||||||
|
|
|
|
|
|
(1) Q1 2023 includes $43 million related to a reserve release from 2022 late-season catastrophes.
(2) Includes the companys international supplemental A&H business of Combined Insurance and other international operations including mainland China.
Overseas General Insurance | Page 12 |
Chubb Limited
Segment Results - Consecutive Quarters
(in millions of U.S. dollars, except ratios)
(Unaudited)
Global Reinsurance | Full Year | |||||||||||||||||||||||
1Q-23 | 4Q-22 | 3Q-22 | 2Q-22 | 1Q-22 | 2022 | |||||||||||||||||||
Gross premiums written |
$ | 310 | $ | 180 | $ | 296 | $ | 330 | $ | 289 | $ | 1,095 | ||||||||||||
Net premiums written |
277 | 163 | 265 | 262 | 253 | 943 | ||||||||||||||||||
Net premiums earned |
244 | 210 | 255 | 222 | 235 | 922 | ||||||||||||||||||
Losses and loss expenses |
112 | 105 | 311 | 139 | 115 | 670 | ||||||||||||||||||
Policy acquisition costs |
62 | 62 | 59 | 57 | 62 | 240 | ||||||||||||||||||
Administrative expenses |
9 | 9 | 8 | 10 | 9 | 36 | ||||||||||||||||||
|
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|
|
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|
|
|
|
|
|
| |||||||
Underwriting income (loss) |
61 | 34 | (123 | ) | 16 | 49 | (24 | ) | ||||||||||||||||
Adjusted net investment income |
49 | 49 | 71 | 76 | 85 | 281 | ||||||||||||||||||
Other income (expense) - operating |
1 | - | - | (1 | ) | - | (1 | ) | ||||||||||||||||
|
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|
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|
|
|
|
|
|
| |||||||
Segment income (loss) |
$ | 111 | $ | 83 | $ | (52 | ) | $ | 91 | $ | 134 | $ | 256 | |||||||||||
|
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|
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|
|
|
|
|
|
| |||||||
CAY underwriting income ex Cats |
$ | 53 | $ | 35 | $ | 34 | $ | 43 | $ | 47 | $ | 159 | ||||||||||||
Combined ratio |
||||||||||||||||||||||||
Loss and loss expense ratio |
45.7% | 49.6% | 122.1% | 62.6% | 48.8% | 72.6% | ||||||||||||||||||
Policy acquisition cost ratio |
25.6% | 29.8% | 22.9% | 25.6% | 26.5% | 26.1% | ||||||||||||||||||
Administrative expense ratio |
3.8% | 4.2% | 3.4% | 4.6% | 3.7% | 3.9% | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Combined ratio |
75.1% | 83.6% | 148.4% | 92.8% | 79.0% | 102.6% | ||||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
CAY combined ratio ex Cats |
||||||||||||||||||||||||
CAY loss and loss expense ratio ex Cats |
49.0% | 49.5% | 49.6% | 49.7% | 49.9% | 49.7% | ||||||||||||||||||
CAY policy acquisition cost and administrative expense ratio ex Cats |
29.4% | 33.6% | 33.4% | 30.7% | 30.0% | 31.8% | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
CAY combined ratio ex Cats |
78.4% | 83.1% | 83.0% | 80.4% | 79.9% | 81.5% | ||||||||||||||||||
|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Catastrophe reinstatement premiums collected - pre-tax |
$ | - | $ | - | $ | 55 | $ | - | $ | - | $ | 55 | ||||||||||||
Catastrophe losses - pre-tax |
$ | - | $ | 1 | $ | 212 | $ | 2 | $ | 1 | $ | 216 | ||||||||||||
Unfavorable (favorable) prior period development (PPD) - pre-tax |
$ | (8 | ) | $ | - | $ | - | $ | 25 | $ | (3 | ) | $ | 22 | ||||||||||
% Change versus prior year period |
||||||||||||||||||||||||
Net premiums written as reported |
9.4% | -4.6% | 19.5% | -4.0% | 22.0% | 8.0% | ||||||||||||||||||
Net premiums earned as reported |
3.9% | -2.1% | 20.9% | 15.2% | 30.8% | 15.6% | ||||||||||||||||||
Net premiums written constant $ |
10.4% | -2.0% | 21.8% | -3.2% | 22.4% | 9.5% | ||||||||||||||||||
Net premiums earned constant $ |
5.0% | 0.5% | 23.9% | 17.2% | 32.1% | 17.9% | ||||||||||||||||||
Other ratios |
||||||||||||||||||||||||
Net premiums written/gross premiums written |
89% | 91% | 89% | 80% | 87% | 86% |
Global Reinsurance | Page 13 |
Chubb Limited
Segment Results - Consecutive Quarters
(in millions of U.S. dollars)
(Unaudited)
As Adjusted | ||||||||||||||||||||||||
Life Insurance | Full Year | |||||||||||||||||||||||
1Q-23 | 4Q-22 | 3Q-22 | 2Q-22 | 1Q-22 | 2022 | |||||||||||||||||||
Gross premiums written |
$ | 1,359 | $ | 1,282 | $ | 1,343 | $ | 601 | $ | 609 | $ | 3,835 | ||||||||||||
Net premiums written |
1,293 | 1,205 | 1,265 | 562 | 576 | 3,608 | ||||||||||||||||||
Net premiums earned |
1,264 | 1,185 | 1,244 | 539 | 542 | 3,510 | ||||||||||||||||||
Losses and loss expenses |
32 | 7 | 27 | 27 | 24 | 85 | ||||||||||||||||||
Adjusted policy benefits |
712 | 723 | 666 | 298 | 311 | 1,998 | ||||||||||||||||||
Policy acquisition costs |
273 | 248 | 266 | 138 | 133 | 785 | ||||||||||||||||||
Administrative expenses |
167 | 164 | 174 | 88 | 84 | 510 | ||||||||||||||||||
Adjusted net investment income |
153 | 150 | 147 | 109 | 103 | 509 | ||||||||||||||||||
Other income (expense) - operating |
15 | (8 | ) | (4 | ) | 12 | 30 | 30 | ||||||||||||||||
Amortization expense of purchased intangibles |
(4 | ) | (3 | ) | (2 | ) | (3 | ) | (2 | ) | (10 | ) | ||||||||||||
|
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|
|
|
|
|
|
| |||||||
Segment income |
$ | 244 | $ | 182 | $ | 252 | $ | 106 | $ | 121 | $ | 661 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
% Change versus prior year period |
||||||||||||||||||||||||
Net premiums written |
124.4% | 93.9% | 111.0% | -7.1% | -5.6% | 48.1% | ||||||||||||||||||
Net premiums earned |
133.1% | 98.0% | 115.6% | -7.2% | -6.8% | 50.1% | ||||||||||||||||||
Net premiums written constant $ |
128.7% | 102.9% | 119.8% | -4.7% | -3.5% | 53.1% | ||||||||||||||||||
Net premiums earned constant $ |
137.2% | 106.7% | 124.4% | -4.8% | -4.7% | 55.2% |
International life insurance net premiums written and deposits breakdown (excludes Combined North America and Life reinsurance businesses):
As Adjusted | Constant $ | |||||||||||||||
1Q-23 | 1Q-22 | % Change | % Change | |||||||||||||
International life insurance net premiums written |
$ | 1,045 | $ | 309 | 237.7 | % | 246.5 | % | ||||||||
International life insurance deposits (1) |
309 | 557 | -44.4 | % | -39.5 | % | ||||||||||
|
|
|
|
|
|
|||||||||||
Total international life insurance net premiums written and deposits |
$ | 1,354 | $ | 866 | 56.4 | % | 66.6 | % | ||||||||
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|||||||||||
International life insurance segment income |
$ | 198 | $ | 61 | 227.7 | % | 236.6 | % | ||||||||
|
|
|
|
|
|
(1) 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 14 |
Chubb Limited
Segment Results - Consecutive Quarters
(in millions of U.S. dollars)
(Unaudited)
As Adjusted | ||||||||||||||||||||||||
Corporate | Full Year | |||||||||||||||||||||||
1Q-23 | 4Q-22 | 3Q-22 | 2Q-22 | 1Q-22 | 2022 | |||||||||||||||||||
Gross premiums written |
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Net premiums written |
- | - | - | - | - | - | ||||||||||||||||||
Net premiums earned |
- | - | - | - | - | - | ||||||||||||||||||
Loss and loss expenses |
11 | 88 | 74 | 191 | 10 | 363 | ||||||||||||||||||
Policy acquisition costs |
- | - | - | - | - | - | ||||||||||||||||||
Administrative expenses |
97 | 121 | 91 | 90 | 83 | 385 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Underwriting loss |
(108 | ) | (209 | ) | (165 | ) | (281 | ) | (93 | ) | (748 | ) | ||||||||||||
Adjusted net investment income |
13 | 9 | 11 | 10 | 11 | 41 | ||||||||||||||||||
Other income (expense) - operating |
(24 | ) | (12 | ) | (10 | ) | - | (8 | ) | (30 | ) | |||||||||||||
Adjusted interest expense |
(165 | ) | (159 | ) | (156 | ) | (139 | ) | (137 | ) | (591 | ) | ||||||||||||
Amortization expense of purchased intangibles |
(42 | ) | (45 | ) | (46 | ) | (45 | ) | (46 | ) | (182 | ) | ||||||||||||
Income tax expense |
(406 | ) | (350 | ) | (316 | ) | (382 | ) | (332 | ) | (1,380 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Core operating loss |
(732 | ) | (766 | ) | (682 | ) | (837 | ) | (605 | ) | (2,890 | ) | ||||||||||||
Cigna integration expenses, net of tax |
(19 | ) | (18 | ) | (18 | ) | (2 | ) | - | (38 | ) | |||||||||||||
Amortization of fair value adjustment of acquired invested assets and long-term debt, net of tax |
2 | (6 | ) | 1 | (5 | ) | (9 | ) | (19 | ) | ||||||||||||||
Adjusted net realized gains (losses), net of tax |
182 | (334 | ) | (574 | ) | (564 | ) | 266 | (1,206 | ) | ||||||||||||||
Market risk benefits gains (losses), net of tax |
(115 | ) | (5 | ) | 69 | (33 | ) | 49 | 80 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Net loss |
$ | (682 | ) | $ | (1,129 | ) | $ | (1,204 | ) | $ | (1,441 | ) | $ | (299 | ) | $ | (4,073 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Unfavorable prior period development (PPD) - pre-tax |
$ | 10 | $ | 87 | $ | 73 | $ | 191 | $ | 8 | $ | 359 |
Corporate | Page 15 |
Chubb Limited
Loss Reserve Rollforward
(in millions of U.S. dollars, except ratios)
(Unaudited)
Unpaid Losses | Net Paid to | |||||||||||||||||||
Gross | Ceded | Net | Incurred Ratio | |||||||||||||||||
Balance at December 31, 2021 |
$ | 72,330 | $ | 16,132 | $ | 56,198 | ||||||||||||||
Losses and loss expenses incurred |
5,991 | 1,427 | 4,564 | |||||||||||||||||
Losses and loss expenses paid |
(5,071 | ) | (909 | ) | (4,162 | ) | 91% | |||||||||||||
Other (incl. foreign exch. revaluation) |
(54 | ) | (57 | ) | 3 | |||||||||||||||
Balance at March 31, 2022 |
$ | 73,196 | $ | 16,593 | $ | 56,603 | ||||||||||||||
Losses and loss expenses incurred |
6,485 | 1,279 | 5,206 | |||||||||||||||||
Losses and loss expenses paid |
(5,445 | ) | (1,160 | ) | (4,285 | ) | 82% | |||||||||||||
Other (incl. foreign exch. revaluation) |
(788 | ) | (208 | ) | (580 | ) | ||||||||||||||
Balance at June 30, 2022 |
$ | 73,448 | $ | 16,504 | $ | 56,944 | ||||||||||||||
Losses and loss expenses incurred |
9,602 | 2,539 | 7,063 | |||||||||||||||||
Losses and loss expenses paid |
(6,769 | ) | (1,488 | ) | (5,281 | ) | 75% | |||||||||||||
Other (incl. foreign exch. revaluation) |
(945 | ) | (242 | ) | (703 | ) | ||||||||||||||
Balance at September 30, 2022 |
$ | 75,336 | $ | 17,313 | $ | 58,023 | ||||||||||||||
Losses and loss expenses incurred |
7,346 | 1,607 | 5,739 | |||||||||||||||||
Losses and loss expenses paid |
(7,885 | ) | (2,076 | ) | (5,809 | ) | 101% | |||||||||||||
Other (incl. foreign exch. revaluation) |
950 | 242 | 708 | |||||||||||||||||
Balance at December 31, 2022 |
$ | 75,747 | $ | 17,086 | $ | 58,661 | ||||||||||||||
Losses and loss expenses incurred |
6,306 | 1,158 | 5,148 | |||||||||||||||||
Losses and loss expenses paid |
(6,315 | ) | (1,599 | ) | (4,716 | ) | 92% | |||||||||||||
Other (incl. foreign exch. revaluation) |
(321 | ) | (125 | ) | (196 | ) | ||||||||||||||
Balance at March 31, 2023 |
$ | 75,417 | $ | 16,520 | $ | 58,897 | ||||||||||||||
Add net recoverable on paid losses |
- | 1,621 | (1,621 | ) | ||||||||||||||||
Balance including net recoverable on paid losses |
$ | 75,417 | $ | 18,141 | $ | 57,276 | ||||||||||||||
*2021 and 2022 financial data are adjusted for LDTI.
Loss Reserve Rollforward | Page 16 |
Chubb Limited
Reinsurance Recoverable Analysis
(in millions of U.S. dollars)
(Unaudited)
Net Reinsurance Recoverable by Division | As Adjusted | |||||||
March 31 | December 31 | |||||||
2023 | 2022 | |||||||
Reinsurance recoverable on paid losses and loss expenses |
||||||||
Active operations |
$ | 1,350 | $ | 1,561 | ||||
Brandywine and Other Run-off |
328 | 290 | ||||||
|
|
|
|
|
| |||
Total |
$ | 1,678 | $ | 1,851 | ||||
|
|
|
|
|
| |||
Reinsurance recoverable on unpaid losses and loss expenses |
||||||||
Active operations |
$ | 15,541 | $ | 16,009 | ||||
Brandywine and Other Run-off |
1,273 | 1,350 | ||||||
|
|
|
|
|
| |||
Total |
$ | 16,814 | $ | 17,359 | ||||
|
|
|
|
|
| |||
Gross reinsurance recoverable |
||||||||
Active operations |
$ | 16,891 | $ | 17,570 | ||||
Brandywine and Other Run-off |
1,601 | 1,640 | ||||||
|
|
|
|
|
| |||
Total |
$ | 18,492 | $ | 19,210 | ||||
|
|
|
|
|
| |||
Provision for uncollectible reinsurance (1) |
||||||||
Active operations |
$ | (228 | ) | $ | (223 | ) | ||
Brandywine and Other Run-off |
(123 | ) | (128 | ) | ||||
|
|
|
|
|
| |||
Total |
$ | (351 | ) | $ | (351 | ) | ||
|
|
|
|
|
| |||
Net reinsurance recoverable |
||||||||
Active operations |
$ | 16,663 | $ | 17,347 | ||||
Brandywine and Other Run-off |
1,478 | 1,512 | ||||||
|
|
|
|
|
| |||
Total |
$ | 18,141 | $ | 18,859 | ||||
|
|
|
|
|
|
(1) The provision for uncollectible reinsurance is based on a default analysis applied to gross reinsurance, net of usable collateral of approximately $4.1 billion.
Reinsurance Recoverable | Page 17 |
Chubb Limited
Investment Portfolio
(in millions of U.S. dollars)
(Unaudited)
March 31 | December 31 | |||||||||||||||
2023 | 2022 | |||||||||||||||
Market Value |
||||||||||||||||
Fixed maturities available for sale |
$ | 88,364 | $ | 85,220 | ||||||||||||
Fixed maturities held to maturity |
8,109 | 8,439 | ||||||||||||||
Short-term investments |
3,693 | 4,960 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
Total fixed maturities |
$ | 100,166 | $ | 98,619 | ||||||||||||
|
|
|
|
|
|
|||||||||||
Asset Allocation by Market Value |
||||||||||||||||
U.S. Treasury / Agency |
$ | 4,019 | 4% | $ | 3,996 | 4% | ||||||||||
Corporate and asset-backed securities |
40,036 | 40% | 38,535 | 40% | ||||||||||||
Mortgage-backed securities |
17,384 | 17% | 17,202 | 17% | ||||||||||||
Municipal |
6,606 | 7% | 6,964 | 7% | ||||||||||||
Non-U.S. |
28,428 | 28% | 26,962 | 27% | ||||||||||||
Short-term investments |
3,693 | 4% | 4,960 | 5% | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total fixed maturities |
$ | 100,166 | 100% | $ | 98,619 | 100% | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Credit Quality by Market Value |
||||||||||||||||
AAA |
$ | 13,679 | 14% | $ | 14,779 | 15% | ||||||||||
AA |
31,505 | 32% | 31,195 | 32% | ||||||||||||
A |
18,971 | 19% | 18,366 | 19% | ||||||||||||
BBB |
17,837 | 18% | 16,802 | 17% | ||||||||||||
BB |
9,245 | 9% | 8,722 | 9% | ||||||||||||
B |
8,465 | 8% | 8,347 | 8% | ||||||||||||
Other |
464 | 0% | 408 | 0% | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total fixed maturities |
$ | 100,166 | 100% | $ | 98,619 | 100% | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Cost/Amortized Cost, net |
||||||||||||||||
Fixed maturities available for sale |
$ | 94,541 | $ | 93,186 | ||||||||||||
Fixed maturities held to maturity |
8,425 | 8,848 | ||||||||||||||
Short-term investments |
3,695 | 4,962 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
Subtotal fixed maturities (1) |
106,661 | 106,996 | ||||||||||||||
Equity securities |
942 | 827 | ||||||||||||||
Other investments |
14,192 | 13,696 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
Total investment portfolio |
$ | 121,795 | $ | 121,519 | ||||||||||||
|
|
|
|
|
|
|||||||||||
Avg. duration of fixed maturities |
4.7 years | 4.5 years | ||||||||||||||
Avg. market yield of fixed maturities |
5.5% | 5.6% | ||||||||||||||
Avg. credit quality |
A/A | A/A | ||||||||||||||
Avg. yield on invested assets (2) |
3.8% | 3.6% |
(1) Net of valuation allowance for expected credit losses.
(2) Calculated using adjusted net investment income.
Investments | Page 18 |
Chubb Limited
Investment Portfolio - 2
(in millions of U.S. dollars)
(Unaudited)
Mortgage-backed Fixed Income Portfolio | ||||||||||||||||||||||||
Mortgage-backed securities | ||||||||||||||||||||||||
S&P Credit Rating | ||||||||||||||||||||||||
AAA | AA | A | BBB | BB and below | Total | |||||||||||||||||||
Market Value at March 31, 2023 |
||||||||||||||||||||||||
Agency residential mortgage-backed securities (RMBS) |
$ | 7 | $ | 14,390 | $ | - | $ | - | $ | - | $ | 14,397 | ||||||||||||
Non-agency RMBS |
550 | 47 | 47 | 34 | 7 | 685 | ||||||||||||||||||
Commercial mortgage-backed securities |
1,958 | 196 | 132 | 13 | 3 | 2,302 | ||||||||||||||||||
Total mortgage-backed securities at market value |
$ | 2,515 | $ | 14,633 | $ | 179 | $ | 47 | $ | 10 | $ | 17,384 | ||||||||||||
U.S. Corporate and Asset-backed Fixed Income Portfolios | ||||||||||||||||||||||||
Market Value at March 31, 2023 | S&P Credit Rating | |||||||||||||||||||||||
Investment Grade | ||||||||||||||||||||||||
AAA | AA | A | BBB | Total | ||||||||||||||||||||
Asset-backed |
$ | 4,859 | $ | 924 | $ | 59 | $ | 62 | $ | 5,904 | ||||||||||||||
Banks |
- | 6 | 2,596 | 1,947 | 4,549 | |||||||||||||||||||
Basic Materials |
- | - | 100 | 252 | 352 | |||||||||||||||||||
Communications |
- | 161 | 347 | 1,285 | 1,793 | |||||||||||||||||||
Consumer, Cyclical |
- | 143 | 497 | 731 | 1,371 | |||||||||||||||||||
Consumer, Non-Cyclical |
37 | 460 | 1,559 | 1,838 | 3,894 | |||||||||||||||||||
Diversified Financial Services |
1 | 134 | 434 | 372 | 941 | |||||||||||||||||||
Energy |
- | 70 | 266 | 909 | 1,245 | |||||||||||||||||||
Industrial |
- | 10 | 772 | 831 | 1,613 | |||||||||||||||||||
Utilities |
129 | 2 | 963 | 762 | 1,856 | |||||||||||||||||||
All Others |
145 | 363 | 1,500 | 1,884 | 3,892 | |||||||||||||||||||
Total |
$ | 5,171 | $ | 2,273 | $ | 9,093 | $ | 10,873 | $ | 27,410 | ||||||||||||||
Market Value at March 31, 2023 | S&P Credit Rating | |||||||||||||||||||||||
Below Investment Grade | ||||||||||||||||||||||||
BB | B | CCC | Total | |||||||||||||||||||||
Asset-backed |
$ | 24 | $ | 29 | $ | 2 | $ | 55 | ||||||||||||||||
Banks |
- | - | - | - | ||||||||||||||||||||
Basic Materials |
356 | 249 | 3 | 608 | ||||||||||||||||||||
Communications |
719 | 943 | 74 | 1,736 | ||||||||||||||||||||
Consumer, Cyclical |
1,099 | 1,203 | 31 | 2,333 | ||||||||||||||||||||
Consumer, Non-Cyclical |
1,068 | 1,335 | 65 | 2,468 | ||||||||||||||||||||
Diversified Financial Services |
231 | 226 | 12 | 469 | ||||||||||||||||||||
Energy |
562 | 334 | 1 | 897 | ||||||||||||||||||||
Industrial |
719 | 869 | 41 | 1,629 | ||||||||||||||||||||
Utilities |
193 | 129 | - | 322 | ||||||||||||||||||||
All Others |
1,007 | 1,059 | 43 | 2,109 | ||||||||||||||||||||
Total |
$ | 5,978 | $ | 6,376 | $ | 272 | $ | 12,626 | ||||||||||||||||
Investments 2 | Page 19 |
Chubb Limited
Investment Portfolio - 3
(in millions of U.S. dollars)
(Unaudited)
Non-U.S. Fixed Income Portfolio
March 31, 2023
Non-U.S. Government Securities | Market Value by S&P Credit Rating | |||||||||||||||||||||||
|
|
|||||||||||||||||||||||
AAA | AA | A | BBB | BB and below | Total | |||||||||||||||||||
|
|
|||||||||||||||||||||||
Republic of Korea |
$ | - | $ | 1,700 | $ | - | $ | - | $ | - | $ | 1,700 | ||||||||||||
Taiwan |
- | 943 | - | - | - | 943 | ||||||||||||||||||
Canada |
925 | - | - | - | - | 925 | ||||||||||||||||||
Province of Ontario |
- | - | 593 | - | - | 593 | ||||||||||||||||||
United Mexican States |
- | - | - | 549 | - | 549 | ||||||||||||||||||
Federative Republic of Brazil |
- | - | - | - | 537 | 537 | ||||||||||||||||||
Kingdom of Thailand |
- | - | 536 | - | - | 536 | ||||||||||||||||||
Commonwealth of Australia |
478 | - | 1 | - | - | 479 | ||||||||||||||||||
Socialist Republic of Vietnam |
- | - | - | - | 439 | 439 | ||||||||||||||||||
United Kingdom |
- | 398 | - | - | - | 398 | ||||||||||||||||||
Other Non-U.S. Government Securities |
463 | 2,026 | 903 | 725 | 864 | 4,981 | ||||||||||||||||||
|
|
|||||||||||||||||||||||
Total |
$ | 1,866 | $ | 5,067 | $ | 2,033 | $ | 1,274 | $ | 1,840 | $ | 12,080 | ||||||||||||
|
|
|||||||||||||||||||||||
Non-U.S. Corporate Securities | Market Value by S&P Credit Rating | |||||||||||||||||||||||
|
|
|||||||||||||||||||||||
AAA | AA | A | BBB | BB and below | Total | |||||||||||||||||||
|
|
|||||||||||||||||||||||
United Kingdom |
$ | 38 | $ | 28 | $ | 825 | $ | 949 | $ | 513 | $ | 2,353 | ||||||||||||
Canada |
84 | 90 | 766 | 552 | 472 | 1,964 | ||||||||||||||||||
South Korea |
- | 488 | 457 | 369 | 7 | 1,321 | ||||||||||||||||||
United States (1) |
- | 15 | 172 | 284 | 728 | 1,199 | ||||||||||||||||||
France |
5 | 40 | 648 | 368 | 106 | 1,167 | ||||||||||||||||||
Australia |
56 | 203 | 332 | 373 | 12 | 976 | ||||||||||||||||||
Japan |
- | - | 592 | 137 | 12 | 741 | ||||||||||||||||||
Netherlands |
49 | - | 284 | 85 | 118 | 536 | ||||||||||||||||||
Germany |
61 | 30 | 117 | 256 | 46 | 510 | ||||||||||||||||||
Switzerland |
52 | 12 | 262 | 130 | 14 | 470 | ||||||||||||||||||
Other Non-U.S. Corporate Securities |
209 | 406 | 1,457 | 1,728 | 1,311 | 5,111 | ||||||||||||||||||
|
|
|||||||||||||||||||||||
Total |
$ | 554 | $ | 1,312 | $ | 5,912 | $ | 5,231 | $ | 3,339 | $ | 16,348 | ||||||||||||
|
|
(1) Countries represent the ultimate parent companys country of risk. Non-U.S. corporate securities could be issued by foreign subsidiaries of U.S. corporations.
Investments 3 | Page 20 |
Chubb Limited
Investment Portfolio - 4
(in millions of U.S. dollars)
(Unaudited)
Fixed Maturity Investment Portfolio
Top 10 Global Corporate Exposures
March 31, 2023 | Market Value | Rating | ||||||||
|
|
| ||||||||
1 |
Bank of America Corp | $ | 763 | A- | ||||||
2 |
Morgan Stanley | 688 | A- | |||||||
3 |
JP Morgan Chase & Co | 672 | A- | |||||||
4 |
Wells Fargo & Co | 594 | BBB+ | |||||||
5 |
Citigroup Inc | 535 | BBB+ | |||||||
6 |
Goldman Sachs Group Inc | 528 | BBB+ | |||||||
7 |
Verizon Communications Inc | 382 | BBB+ | |||||||
8 |
HSBC Holdings Plc | 367 | A- | |||||||
9 |
Comcast Corp | 355 | A- | |||||||
10 |
Anheuser-Busch InBev SA/NV | 328 | BBB+ |
Investments 4 | Page 21 |
Chubb Limited
Net Realized and Unrealized Gains (Losses)
(in millions of U.S. dollars)
(Unaudited)
Three months ended March 31, 2023 | ||||||||||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||||||
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 income investments (1) |
$ | (226 | ) | $ | 26 | $ | (200) | $ | 1,786 | $ | (166 | ) | $ | 1,620 | $ | 1,560 | $ | (140 | ) | $ | 1,420 | |||||||||||||||
Public equity: |
||||||||||||||||||||||||||||||||||||
Realized gains (losses) on sales |
(5 | ) | 1 | (4) | - | - | - | (5 | ) | 1 | (4) | |||||||||||||||||||||||||
Mark-to-market |
16 | (2 | ) | 14 | - | - | - | 16 | (2 | ) | 14 | |||||||||||||||||||||||||
Private equity: Mark-to-market |
257 | 11 | 268 | - | - | - | 257 | 11 | 268 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Total investment portfolio |
42 | 36 | 78 | 1,786 | (166 | ) | 1,620 | 1,828 | (130 | ) | 1,698 | |||||||||||||||||||||||||
Foreign exchange |
131 | (18 | ) | 113 | (177 | ) | 7 | (170) | (46 | ) | (11 | ) | (57) | |||||||||||||||||||||||
Partially-owned entities (2) |
(4 | ) | - | (4) | - | - | - | (4 | ) | - | (4) | |||||||||||||||||||||||||
Current discount rate on future policy benefits |
- | - | - | (151 | ) | 21 | (130) | (151 | ) | 21 | (130) | |||||||||||||||||||||||||
Instrument-specific credit risk - market risk benefits |
- | - | - | (3 | ) | - | (3) | (3 | ) | - | (3) | |||||||||||||||||||||||||
Other |
(7 | ) | 2 | (5) | (33 | ) | 6 | (27) | (40 | ) | 8 | (32) | ||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Net gains (losses) |
$ | 162 | $ | 20 | $ | 182 | $ | 1,422 | $ | (132 | ) | $ | 1,290 | $ | 1,584 | $ | (112 | ) | $ | 1,472 | ||||||||||||||||
|
|
|
|
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|
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(1) The quarter includes pre-tax realized losses on investment derivatives of $46 million, a net reduction of the valuation allowance of expected credit losses of $2 million, and impairments of $25 million for fixed maturities.
(2) Partially-owned entities are investments where we hold more than an insignificant percentage of the investees shares. Refer to the Non-GAAP financial measures section for additional details. |
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As Adjusted | ||||||||||||||||||||||||||||||||||||
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Three months ended March 31, 2022 | ||||||||||||||||||||||||||||||||||||
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Realized Gains (Losses) | Unrealized Gains (Losses) | Realized and Unrealized Gains (Losses) | ||||||||||||||||||||||||||||||||||
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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 |
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Fixed income investments (3) |
$ | (89 | ) | $ | 22 | $ | (67) | $ | (4,652 | ) | $ | 812 | $ | (3,840) | $ | (4,741 | ) | $ | 834 | $ | (3,907) | |||||||||||||||
Public equity: |
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Realized gains (losses) on sales |
255 | (57 | ) | 198 | - | - | - | 255 | (57 | ) | 198 | |||||||||||||||||||||||||
Mark-to-market |
(199 | ) | 36 | (163) | - | - | - | (199 | ) | 36 | (163) | |||||||||||||||||||||||||
Private equity: Mark-to-market |
310 | (6 | ) | 304 | - | - | - | 310 | (6 | ) | 304 | |||||||||||||||||||||||||
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Total investment portfolio |
277 | (5 | ) | 272 | (4,652 | ) | 812 | (3,840) | (4,375 | ) | 807 | (3,568) | ||||||||||||||||||||||||
Foreign exchange |
74 | (19 | ) | 55 | 67 | 4 | 71 | 141 | (15 | ) | 126 | |||||||||||||||||||||||||
Partially-owned entities (4) |
12 | - | 12 | - | - | - | 12 | - | 12 | |||||||||||||||||||||||||||
Current discount rate on future policy benefits |
- | - | - | 435 | (33 | ) | 402 | 435 | (33 | ) | 402 | |||||||||||||||||||||||||
Instrument-specific credit risk - market risk benefits |
- | - | - | 23 | - | 23 | 23 | - | 23 | |||||||||||||||||||||||||||
Other (5) |
(74 | ) | 1 | (73) | 19 | (4 | ) | 15 | (55 | ) | (3 | ) | (58) | |||||||||||||||||||||||
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Net gains (losses) |
$ | 289 | $ | (23 | ) | $ | 266 | $ | (4,108 | ) | $ | 779 | $ | (3,329) | $ | (3,819 | ) | $ | 756 | $ | (3,063) | |||||||||||||||
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(3) The quarter includes pre-tax realized gains on fixed income derivatives of $47 million, a net increase of the valuation allowance of expected credit losses of $12 million, and impairments of $36 million for fixed maturities.
(4) Partially-owned entities are investments where we hold more than an insignificant percentage of the investees shares. Refer to the Non-GAAP financial measures section for additional details.
(5) Other realized losses include impairment of assets related to the companys Russian entities.
Net Gains (Losses) | Page 22 |
Chubb Limited
Debt and Capital
(in millions of U.S. dollars, except ratios)
(Unaudited)
As Adjusted | ||||||||||||
March 31 | December 31 | December 31 | ||||||||||
2023 | 2022 | 2021 | ||||||||||
Financial Debt: |
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Total short-term debt (1) |
$ | - | $ | 475 | $ | 999 | ||||||
Total long-term debt |
14,375 | 14,402 | 15,169 | |||||||||
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Total financial debt |
$ | 14,375 | $ | 14,877 | $ | 16,168 | ||||||
Hybrid debt: |
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Total trust preferred securities |
308 | 308 | 308 | |||||||||
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Total |
$ | 14,683 | $ | 15,185 | $ | 16,476 | ||||||
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Capitalization: |
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Shareholders equity |
$ | 52,987 | $ | 50,519 | $ | 58,328 | ||||||
Hybrid debt |
308 | 308 | 308 | |||||||||
Financial debt |
14,375 | 14,877 | 16,168 | |||||||||
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Total capitalization |
$ | 67,670 | $ | 65,704 | $ | 74,804 | ||||||
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Leverage ratios (based on total capital): |
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Hybrid debt |
0.5% | 0.5% | 0.4% | |||||||||
Financial debt |
21.2% | 22.6% | 21.6% | |||||||||
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Total hybrid & financial debt |
21.7% | 23.1% | 22.0% |
Note: As of March 31, 2023, there was $1.4 billion usage of credit facilities on total capacity of $4.0 billion.
(1) During Q1 2023, the $475 million 2.7% senior notes matured and were fully paid.
Debt and Capital | Page 23 |
Chubb Limited
Computation of Basic and Diluted Earnings Per Share
(in millions of U.S. dollars, except share and per share data)
(Unaudited)
As Adjusted | ||||||||||||
Three months ended March 31 | ||||||||||||
2023 | 2022 | |||||||||||
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Numerator |
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Core operating income to common shares |
$ | 1,842 | $ | 1,647 | ||||||||
Amortization of fair value adjustment of acquired invested assets and long-term debt, pre-tax |
3 | (11 | ) | |||||||||
Tax benefit on amortization adjustment |
(1 | ) | 2 | |||||||||
Cigna integration expenses, pre-tax |
(22 | ) | - | |||||||||
Tax benefit on Cigna integration expenses |
3 | - | ||||||||||
Adjusted net realized gains (losses), pre-tax |
162 | 289 | ||||||||||
Tax (expense) benefit on adjusted net realized gains (losses) |
20 | (23 | ) | |||||||||
Market risk benefits gains (losses), pre- and after-tax |
(115 | ) | 49 | |||||||||
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Net income |
$ | 1,892 | $ | 1,953 | ||||||||
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Rollforward of Common Shares Outstanding |
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Shares - beginning of period |
414,594,856 | 426,572,612 | ||||||||||
Repurchase of shares |
(2,010,400 | ) | (4,869,900 | ) | ||||||||
Shares issued (canceled), excluding option exercises |
1,105,813 | 991,772 | ||||||||||
Issued for option exercises |
468,411 | 980,843 | ||||||||||
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Shares - end of period |
414,158,680 | 423,675,327 | ||||||||||
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Denominator |
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Weighted average shares outstanding (1) |
414,289,150 | 425,805,105 | ||||||||||
Effect of other dilutive securities |
3,639,042 | 3,985,729 | ||||||||||
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Adj. wtd. avg. shares outstanding and assumed conversions |
417,928,192 | 429,790,834 | ||||||||||
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Basic earnings per share |
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Core operating income |
$ | 4.45 | $ | 3.87 | ||||||||
Amortization of fair value adjustment of acquired invested assets and long-term debt, net of tax |
- | (0.02 | ) | |||||||||
Cigna integration expenses, net of tax |
(0.05 | ) | - | |||||||||
Adjusted net realized gains (losses), net of tax |
0.45 | 0.62 | ||||||||||
Market risk benefits gains (losses), net of tax |
(0.28 | ) | 0.12 | |||||||||
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Net income |
$ | 4.57 | $ | 4.59 | ||||||||
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Diluted earnings per share |
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Core operating income |
$ | 4.41 | $ | 3.83 | ||||||||
Amortization of fair value adjustment of acquired invested assets and long-term debt, net of tax |
- | (0.02 | ) | |||||||||
Cigna integration expenses, net of tax |
(0.05 | ) | - | |||||||||
Adjusted net realized gains (losses), net of tax |
0.45 | 0.63 | ||||||||||
Market risk benefits gains (losses), net of tax |
(0.28 | ) | 0.11 | |||||||||
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Net income |
$ | 4.53 | $ | 4.55 | ||||||||
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(1) 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 24 |
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
As Adjusted | ||||||||||||
March 31 | December 31 | March 31 | ||||||||||
2023 | 2022 | 2022 | ||||||||||
Shareholders equity |
$ | 52,987 | $ | 50,519 | $ | 55,716 | ||||||
Less: goodwill and other intangible assets, net of tax |
20,333 | 20,455 | 19,443 | |||||||||
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Numerator for tangible book value per share |
$ | 32,654 | $ | 30,064 | $ | 36,273 | ||||||
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Book value - % change over prior quarter |
4.9% | 6.0% | -4.5% | |||||||||
Tangible book value - % change over prior quarter |
8.6% | 8.8% | -6.7% | |||||||||
Denominator: shares outstanding |
414,158,680 | 414,594,856 | 423,675,327 | |||||||||
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Book value per common share |
$ | 127.94 | $ | 121.85 | $ | 131.51 | ||||||
Tangible book value per common share |
$ | 78.84 | $ | 72.51 | $ | 85.62 | ||||||
Reconciliation of Book Value |
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Shareholders equity, beginning of quarter |
$ | 50,519 | $ | 47,675 | $ | 58,328 | ||||||
Core operating income |
1,842 | 1,674 | 1,647 | |||||||||
Amortization of fair value adjustment of acquired invested assets and long-term debt |
2 | (6 | ) | (9 | ) | |||||||
Cigna integration expenses |
(19 | ) | (18 | ) | - | |||||||
Adjusted net realized gains (losses) (1) |
182 | (334 | ) | 266 | ||||||||
Market risk benefits gains (losses) |
(115 | ) | (5 | ) | 49 | |||||||
Net unrealized gains (losses) on investments |
1,620 | 1,332 | (3,840 | ) | ||||||||
Repurchase of shares |
(428 | ) | (199 | ) | (1,001 | ) | ||||||
Dividend declared on common shares |
(344 | ) | (345 | ) | (340 | ) | ||||||
Cumulative translation gains (losses) |
(170 | ) | 737 | 71 | ||||||||
Postretirement benefit liability |
(1 | ) | (36 | ) | 15 | |||||||
Current discount rate on future policy benefits |
(130 | ) | (70 | ) | 402 | |||||||
Instrument-specific credit risk - market risk benefits |
(3 | ) | (15 | ) | 23 | |||||||
Other (2) |
32 | 129 | 105 | |||||||||
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$ | 52,987 | $ | 50,519 | $ | 55,716 | |||||||
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(1) Includes net realized gains (losses) related to unconsolidated entities.
(2) 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 25 |
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).
Throughout this document there are various measures presented on a constant-dollar basis (i.e., excludes the impact of foreign exchange). We believe it is useful to evaluate the trends in our results 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.
P&C underwriting income (loss) excludes the Life Insurance segment and is calculated by subtracting adjusted losses and loss expenses, adjusted policy benefits, policy acquisition costs and administrative expenses from net premiums earned. We use underwriting income (loss) and operating ratios to monitor the results of our operations without the impact of certain factors, including net investment income, other income (expense), interest expense, amortization expense of purchased intangibles, Cigna integration expense, income tax expense, adjusted net realized gains (losses), and market risk benefit gains (losses).
P&C CAY underwriting income excluding catastrophe losses (Cats) is P&C underwriting income (loss) adjusted to exclude P&C Cats and prior period development (PPD). We believe it is useful to exclude Cats, 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 current underwriting performance. We believe the use of these measures enhances the understanding of our results of operations by highlighting the underlying profitability of our insurance business.
Adjusted losses and loss expenses include 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.
Adjusted policy benefits includes gains and losses from fair value changes in separate account assets, as well as the offsetting movement in separate account liabilities, for purposes of reporting Life Insurance underwriting income. The gains and 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. We view gains and losses from fair value changes in both separate account assets and liabilities as part of the results of our underwriting operations, and therefore these gains and losses are reclassified to adjusted policy benefits.
Adjusted net investment income is net investment income excluding the amortization of the fair value adjustment on acquired invested assets from the acquisitions of The Chubb Corporation (Chubb Corp) and Cigna business in Asia, and including investment income from partially-owned investment companies (private equity partnerships) where our ownership interest is in excess of 3% that are accounted for under the equity method. The mark-to-market movement on these private equity partnerships are included in adjusted net realized gains (losses) as described below. 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.
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.
Adjusted interest expense is interest expense excluding the amortization of the fair value adjustment on acquired long-term debt, related to the Chubb Corp acquisition due to the size and complexity of this acquisition.
Other income (expense) - operating excludes from consolidated Other income (expense) the portion of net realized gains and losses related to unconsolidated entities, other income (expense) from private equity partnerships, and gains and losses from fair value changes in separate account assets that do not qualify for separate account reporting under GAAP. Net realized gains (losses) related to unconsolidated entities is excluded from core operating income (loss) in order to enhance the understanding of our results of underwriting operations as they are heavily influenced by, and fluctuate in part according to, market conditions. Other income (expense) from private equity partnerships and net realized gains and losses related to unconsolidated entities are recorded to Other income (expense) in our income statement on a GAAP basis.
P&C combined ratio excludes the Life Insurance segment. P&C loss and loss expense ratio and P&C combined ratio include adjusted losses and loss expenses and adjusted policy benefits in the ratio numerator. P&C expense ratio 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 pages 29-30.
CAY P&C combined ratio excluding catastrophe losses excludes Cats and PPD from the P&C combined ratio. We exclude Cats 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 current underwriting performance. The combined ratio numerator is adjusted to exclude Cats, net premiums earned adjustments on PPD, prior period expense adjustments and reinstatement premiums on PPD, and the denominator is adjusted to exclude net premiums earned adjustments on PPD and reinstatement premiums on Cats and PPD. In periods where there are adjustments on loss sensitive policies, these adjustments are excluded from PPD and net premiums earned when calculating the ratios. We believe this measure provides a better evaluation of our underwriting performance and enhances the understanding of the trends in our P&C business that may be obscured by these items. This measure is commonly reported among our peer companies and allows for a better comparison.
Expense ratio excluding accident and health (A&H) 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 comprise consolidated operating results (including corporate) and exclude the operating results of the companys Life Insurance and North America Agricultural Insurance segments. The agriculture insurance business is a different business in that it is a public sector and private sector partnership in which insurance rates, premium growth, and risk-sharing is not market-driven like the remainder of the companys P&C insurance business. We believe that these measures are useful and meaningful to investors as they are used by management to assess the companys 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.
Core operating income, net of tax, excludes from net income the after-tax impact of adjusted net realized gains (losses), market risk benefit gains (losses), Cigna integration expenses, and the amortization of fair value adjustment of acquired invested assets and long-term debt related to the Chubb Corp acquisition and Cigna business. We believe this presentation enhances the understanding of our results of operations by highlighting the underlying profitability of our insurance business. We exclude adjusted net realized gains (losses) and market risk benefit gains (losses) because the amounts of these gains (losses) are heavily influenced by, and fluctuate in part according to, the availability of market opportunities. We exclude the amortization of the fair value adjustments related to purchased invested assets and long-term debt, related to the Chubb Corp acquisition and Cigna business, due to the size and complexity of these acquisitions. We also exclude Cigna integration expenses due to the size and complexity of this acquisition. Cigna integration expenses are incurred by the overall company and are therefore included in Corporate. The costs are not related to the ongoing activities of the individual segments and are therefore excluded from our definition of segment income as well. These integration expenses are distortive to our results and are not indicative of our underlying profitability. We believe that excluding these integration expenses facilitate the comparison of our financial results to our historical operating results. These expenses include legal and professional fees and all other costs directly related to the integration activities of the Cigna acquisition. References to core operating income measures mean net of tax, whether or not noted.
Core operating effective tax rate is income tax expense (benefit) 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 Cigna integration expenses, divided by income excluding adjusted net realized gains (losses) before tax, market risk benefit gains (losses) before tax, amortization of fair value of acquired invested assets and debt before tax, and Cigna integration expenses before tax. We believe the use of this measure is meaningful to show the tax on the underlying performance of our insurance business, by excluding the taxes on adjusted net realized gains (losses), market risk benefit gains (losses), amortization of the fair value adjustments related to purchased invested assets and long-term debt and Cigna integration expenses. Refer to the definition of core operating income (loss), net of tax above for more information on these adjustments.
Book value per common share is shareholders equity divided by the shares outstanding. Tangible book value per common share 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. Book value per share and tangible book value per share excluding accumulated other comprehensive income (loss) (AOCI), excludes AOCI from the numerator because it eliminates the effect of items that can fluctuate significantly from period to period, primarily based on changes in interest rates and foreign currency movement, to highlight underlying growth in book and tangible book value.
International life insurance net premiums written and deposits collected includes deposits collected on universal life and investment contracts (life deposits). 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.
Reconciliation Non-GAAP | Page 26 |
Chubb Limited
Non-GAAP Financial Measures - 2
(in millions of U.S. dollars, except per share data and ratios)
(Unaudited)
Regulation G - Non-GAAP Financial Measures (continued)
Core operating effective tax rate |
As Adjusted | |||||||||||||||||||||||
The following table presents the reconciliation of effective tax rate to the Core operating effective tax rate: | 1Q-23 | 4Q-22 | 3Q-22 | 2Q-22 | 1Q-22 | Full Year 2022 | ||||||||||||||||||
Tax expense, as reported |
$ | 384 | $ | 332 | $ | 263 | $ | 291 | $ | 353 | $ | 1,239 | ||||||||||||
Less: tax expense (benefit) on amortization of fair value of acquired invested assets and debt |
1 | 6 | (1 | ) | (4 | ) | (2 | ) | (1 | ) | ||||||||||||||
Less: tax benefit on Cigna integration expenses |
(3 | ) | (4 | ) | (5 | ) | (1 | ) | - | (10 | ) | |||||||||||||
Less: tax expense (benefit) on adjusted net realized gains (losses) |
(20 | ) | (20 | ) | (47 | ) | (86 | ) | 23 | (130 | ) | |||||||||||||
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Tax expense, adjusted |
$ | 406 | $ | 350 | $ | 316 | $ | 382 | $ | 332 | $ | 1,380 | ||||||||||||
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Income before tax, as reported |
$ | 2,276 | $ | 1,643 | $ | 1,055 | $ | 1,481 | $ | 2,306 | $ | 6,485 | ||||||||||||
Less: amortization of fair value of acquired invested assets and debt |
3 | - | - | (9 | ) | (11 | ) | (20 | ) | |||||||||||||||
Less: Cigna integration expenses |
(22 | ) | (22 | ) | (23 | ) | (3 | ) | - | (48 | ) | |||||||||||||
Less: adjusted realized gains (losses) |
(76 | ) | (147 | ) | (437 | ) | (512 | ) | 22 | (1,074 | ) | |||||||||||||
Less: realized gains (losses) related to unconsolidated entities |
238 | (207 | ) | (184 | ) | (138 | ) | 267 | (262 | ) | ||||||||||||||
Less: market risk benefits gains (losses) |
(115 | ) | (5 | ) | 69 | (33 | ) | 49 | 80 | |||||||||||||||
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Core operating income before tax |
$ | 2,248 | $ | 2,024 | $ | 1,630 | $ | 2,176 | $ | 1,979 | $ | 7,809 | ||||||||||||
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Effective tax rate |
16.9% | 20.2% | 24.9% | 19.6% | 15.3% | 19.1% | ||||||||||||||||||
Adjustment for tax impact of amortization of fair value of acquired invested assets and debt |
0.0% | -0.3% | 0.1% | 0.1% | 0.0% | 0.0% | ||||||||||||||||||
Adjustment for tax impact of Cigna integration expenses |
0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | ||||||||||||||||||
Adjustment for tax impact of adjusted net realized gains (losses) |
2.2% | -2.6% | -6.4% | -1.9% | 1.1% | -1.6% | ||||||||||||||||||
Adjustment for tax impact of market risk benefits gains (losses) |
-1.0% | 0.0% | 0.8% | -0.3% | 0.4% | 0.2% | ||||||||||||||||||
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Core operating effective tax rate |
18.1% | 17.3% | 19.4% | 17.5% | 16.8% | 17.7% | ||||||||||||||||||
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Core operating income |
As Adjusted | |||||||||||||||||||||||
The following table presents the reconciliation of Net income to Core operating income: | 1Q-23 | 4Q-22 | 3Q-22 | 2Q-22 | 1Q-22 | Full Year 2022 | ||||||||||||||||||
Net income, as reported |
$ | 1,892 | $ | 1,311 | $ | 792 | $ | 1,190 | $ | 1,953 | $ | 5,246 | ||||||||||||
Amortization of fair value adjustment of acquired invested assets and long-term debt, pre-tax |
3 | - | - | (9 | ) | (11 | ) | (20 | ) | |||||||||||||||
Tax (expense) benefit on amortization adjustment |
(1 | ) | (6 | ) | 1 | 4 | 2 | 1 | ||||||||||||||||
Cigna integration expenses, pre-tax |
(22 | ) | (22 | ) | (23 | ) | (3 | ) | - | (48 | ) | |||||||||||||
Tax benefit on Cigna integration expenses |
3 | 4 | 5 | 1 | - | 10 | ||||||||||||||||||
Adjusted realized gains (losses), pre-tax |
(76 | ) | (147 | ) | (437 | ) | (512 | ) | 22 | (1,074 | ) | |||||||||||||
Net realized gains (losses) related to unconsolidated entities, pre-tax (1) |
238 | (207 | ) | (184 | ) | (138 | ) | 267 | (262 | ) | ||||||||||||||
Tax (expense) benefit on adjusted net realized gains (losses) |
20 | 20 | 47 | 86 | (23 | ) | 130 | |||||||||||||||||
Market risk benefits gains (losses), pre- and after-tax |
(115 | ) | (5 | ) | 69 | (33 | ) | 49 | 80 | |||||||||||||||
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Core operating income |
$ | 1,842 | $ | 1,674 | $ | 1,314 | $ | 1,794 | $ | 1,647 | $ | 6,429 | ||||||||||||
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Catastrophe losses - after-tax |
$ | 382 | $ | 323 | $ | 949 | $ | 241 | $ | 290 | $ | 1,803 | ||||||||||||
Favorable prior period development (PPD) - after-tax |
$ | (149 | ) | $ | (167 | ) | $ | (162 | ) | $ | (205 | ) | $ | (195 | ) | $ | (729 | ) | ||||||
Core operating income per share |
$ | 4.41 | $ | 4.00 | $ | 3.13 | $ | 4.22 | $ | 3.83 | $ | 15.18 | ||||||||||||
Impact of Cats on Core operating income per share - Unfavorable |
$ | (0.91 | ) | $ | (0.77 | ) | $ | (2.25 | ) | $ | (0.55 | ) | $ | (0.68 | ) | $ | (4.26 | ) | ||||||
Impact of PPD on Core operating income per share - Favorable |
$ | 0.36 | $ | 0.40 | $ | 0.37 | $ | 0.47 | $ | 0.45 | $ | 1.72 | ||||||||||||
Impact of Cats and PPD on Core operating income per share - Unfavorable |
$ | (0.55 | ) | $ | (0.37 | ) | $ | (1.88 | ) | $ | (0.08 | ) | $ | (0.23 | ) | $ | (2.54 | ) | ||||||
P&C Underwriting income and P&C CAY underwriting income ex Cats |
As Adjusted | |||||||||||||||||||||||
The following table presents the reconciliation of Net income to P&C CAY underwriting income ex Cats: | 1Q-23 | 4Q-22 | 3Q-22 | 2Q-22 | 1Q-22 | Full Year 2022 | ||||||||||||||||||
Net income, as reported |
$ | 1,892 | $ | 1,311 | $ | 792 | $ | 1,190 | $ | 1,953 | $ | 5,246 | ||||||||||||
Less: Income tax expense |
(384 | ) | (332 | ) | (263 | ) | (291 | ) | (353 | ) | (1,239 | ) | ||||||||||||
Amortization expense of purchased intangibles |
(72 | ) | (74 | ) | (69 | ) | (71 | ) | (71 | ) | (285 | ) | ||||||||||||
Other income (expense) |
296 | (98 | ) | (202 | ) | (101 | ) | 312 | (89 | ) | ||||||||||||||
Interest expense |
(160 | ) | (154 | ) | (150 | ) | (134 | ) | (132 | ) | (570 | ) | ||||||||||||
Net investment income |
1,107 | 1,053 | 979 | 888 | 822 | 3,742 | ||||||||||||||||||
Net realized gains (losses) |
(77 | ) | (149 | ) | (456 | ) | (503 | ) | 23 | (1,085 | ) | |||||||||||||
Market risk benefits gains (losses) |
(115 | ) | (5 | ) | 69 | (33 | ) | 49 | 80 | |||||||||||||||
Cigna integration expenses |
(22 | ) | (22 | ) | (23 | ) | (3 | ) | - | (48 | ) | |||||||||||||
Life Insurance underlying income (loss) (2) |
105 | (31 | ) | 178 | 6 | 21 | 174 | |||||||||||||||||
Add: Realized gains (losses) on crop derivatives |
(1 | ) | (2 | ) | (19 | ) | 9 | 1 | (11 | ) | ||||||||||||||
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P&C underwriting income |
$ | 1,213 | $ | 1,121 | $ | 710 | $ | 1,441 | $ | 1,283 | $ | 4,555 | ||||||||||||
Add: Catastrophe losses (including reinstatement premiums) - pre-tax |
458 | 400 | 1,158 | 291 | 333 | 2,182 | ||||||||||||||||||
Favorable prior period development (PPD) - pre-tax |
(196 | ) | (167 | ) | (222 | ) | (247 | ) | (240 | ) | (876 | ) | ||||||||||||
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P&C CAY underwriting income ex Cats |
$ | 1,475 | $ | 1,354 | $ | 1,646 | $ | 1,485 | $ | 1,376 | $ | 5,861 | ||||||||||||
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(1) Realized gains (losses) on partially-owned entities, which are investments where we hold more than an insignificant percentage of the investees shares. The net income or loss is included in other income (expense).
(2) Life Insurance underlying income (loss) is calculated by subtracting losses and loss expenses, policy benefits, policy acquisition costs and administrative expenses from net premiums earned related to the Life Insurance segment.
Reconciliation Non-GAAP 2 | Page 27 |
Chubb Limited
Non-GAAP Financial Measures - 3
(in millions of U.S. dollars, except share, per share data, and ratios)
(Unaudited)
Regulation G - Non-GAAP Financial Measures (continued)
Core operating ROE and Core operating ROTE
Core operating return on equity (ROE) and Core operating return on tangible equity (ROTE) are annualized non-GAAP financial measures. The numerator includes core operating income (loss), net of tax. The denominator includes the average shareholders equity for the period adjusted to exclude unrealized gains (losses) on investments, current discount rate on future policy benefits (FPB), and instrument-specific credit risk market risk benefits (MRB), all net of tax. For the ROTE calculation, the denominator is also adjusted to exclude goodwill and other intangible assets, net of tax. These measures enhance the understanding of the return on shareholders equity by highlighting the underlying profitability relative to shareholders equity and tangible equity excluding the effect of these items as these are heavily influenced by changes in market conditions. We believe ROTE is meaningful because it measures the performance of our operations without the impact of goodwill and other intangible assets.
As Adjusted | ||||||||||||
1Q-23 | 1Q-22 | Full Year 2022 | ||||||||||
Net income |
$ | 1,892 | $ | 1,953 | $ | 5,246 | ||||||
Core operating income |
$ | 1,842 | $ | 1,647 | $ | 6,429 | ||||||
Equity - beginning of period, as reported |
$ | 50,519 | $ | 58,328 | $ | 58,328 | ||||||
Less: unrealized gains (losses) on investments, net of deferred tax |
(7,279 | ) | 2,256 | 2,256 | ||||||||
Less: changes in current discount rate on FPB, net of deferred tax |
(75 | ) | (1,399 | ) | (1,399 | ) | ||||||
Less: changes in instrument-specific credit risk on MRB, net of deferred tax |
(24 | ) | (57 | ) | (57 | ) | ||||||
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Equity - beginning of period, as adjusted |
$ | 57,897 | $ | 57,528 | $ | 57,528 | ||||||
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Less: goodwill and other intangible assets, net of tax |
20,455 | $ | 19,456 | 19,456 | ||||||||
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Equity - beginning of period, as adjusted ex goodwill and other intangible assets |
$ | 37,442 | $ | 38,072 | $ | 38,072 | ||||||
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Equity - end of period, as reported |
$ | 52,987 | $ | 55,716 | $ | 50,519 | ||||||
Less: unrealized gains (losses) on investments, net of deferred tax |
(5,659 | ) | (1,584 | ) | (7,279 | ) | ||||||
Less: changes in current discount rate on FPB, net of deferred tax |
(205 | ) | (997 | ) | (75 | ) | ||||||
Less: changes in instrument-specific credit risk on MRB, net of deferred tax |
(27 | ) | (34 | ) | (24 | ) | ||||||
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Equity - end of period, as adjusted |
$ | 58,878 | $ | 58,331 | $ | 57,897 | ||||||
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Less: goodwill and other intangible assets, net of tax |
20,333 | 19,443 | 20,455 | |||||||||
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Equity - end of period, as adjusted ex goodwill and other intangible assets |
$ | 38,545 | $ | 38,888 | $ | 37,442 | ||||||
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Weighted average equity, as reported |
$ | 51,753 | $ | 57,022 | $ | 54,424 | ||||||
Weighted average equity, as adjusted |
$ | 58,388 | $ | 57,930 | $ | 57,713 | ||||||
Weighted average equity, as adjusted ex goodwill and other intangible assets |
$ | 37,994 | $ | 38,480 | $ | 37,757 | ||||||
ROE |
14.6% | 13.7% | 9.6% | |||||||||
Core operating ROTE |
19.4% | 17.1% | 17.0% | |||||||||
Core operating ROE |
12.6% | 11.4% | 11.1% | |||||||||
Private equities realized gains (losses), after-tax (1) |
$ | 268 | $ | 304 | $ | (274 | ) | |||||
Impact of Private equities if included in Core operating ROE - Favorable (unfavorable) (1) |
1.8 pts | 2.1 pts | -0.4 pts |
Reconciliation of Book Value and Tangible Book Value per Share to adjusted measures
As Adjusted | ||||||||||||
March 31 2023 |
December 31 2022 |
% Change | ||||||||||
Book value |
$ | 52,987 | $ | 50,519 | ||||||||
Less: AOCI |
(8,895 | ) | (10,185 | ) | ||||||||
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Book value excluding AOCI |
61,882 | 60,704 | ||||||||||
Tangible book value |
32,654 | 30,064 | ||||||||||
Less: Tangible AOCI |
(7,941 | ) | (9,279 | ) | ||||||||
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Tangible book value excluding tangible AOCI |
$ | 40,595 | $ | 39,343 | ||||||||
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Denominator: shares outstanding |
414,158,680 | 414,594,856 | ||||||||||
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Book value per share excluding AOCI |
$ | 149.42 | $ | 146.42 | 2.0% | |||||||
Tangible book value per share excluding tangible AOCI |
$ | 98.02 | $ | 94.90 | 3.3% |
(1) We record the change in the fair value mark and gains (losses) on sales of private equity funds as realized gains (losses) instead of investment income.
Reconciliation Non-GAAP 3 | Page 28 |
Chubb Limited
Non-GAAP Financial Measures - 4
(in millions of U.S. dollars, except ratios)
(Unaudited)
Regulation G - 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 prior period development (PPD).
Q1 2023 |
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 | |||||||||||||||||||||||||
Numerator |
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Losses and loss expenses |
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Losses and loss expenses/policy benefits |
$ | 2,729 | $ | 888 | $ | 139 | $ | 1,347 | $ | 112 | $ | 11 | $ | 5,226 | ||||||||||||||||||
Realized (gains) losses on crop derivatives |
- | - | 1 | - | - | - | 1 | |||||||||||||||||||||||||
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Adjusted losses and loss expenses/policy benefits |
A | $ | 2,729 | $ | 888 | $ | 140 | $ | 1,347 | $ | 112 | $ | 11 | $ | 5,227 | |||||||||||||||||
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Catastrophe losses and related adjustments |
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Catastrophe losses, net of related adjustments |
(162 | ) | (159 | ) | (24 | ) | (113 | ) | - | - | (458 | ) | ||||||||||||||||||||
Reinstatement premiums collected (expensed) on catastrophe losses |
- | - | - | - | - | - | - | |||||||||||||||||||||||||
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Catastrophe losses, gross of related adjustments |
(162 | ) | (159 | ) | (24 | ) | (113 | ) | - | - | (458 | ) | ||||||||||||||||||||
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PPD and related adjustments |
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PPD, net of related adjustments - favorable (unfavorable) |
72 | (17 | ) | - | 143 | 8 | (10 | ) | 196 | |||||||||||||||||||||||
Net premiums earned adjustments on PPD - unfavorable (favorable) |
- | - | - | - | - | - | - | |||||||||||||||||||||||||
Expense adjustments - unfavorable (favorable) |
3 | - | - | - | - | - | 3 | |||||||||||||||||||||||||
PPD reinstatement premiums - unfavorable (favorable) |
- | (1 | ) | - | - | - | - | (1 | ) | |||||||||||||||||||||||
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PPD, gross of related adjustments - favorable (unfavorable) |
75 | (18 | ) | - | 143 | 8 | (10 | ) | 198 | |||||||||||||||||||||||
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CAY loss and loss expense ex Cats |
B | $ | 2,642 | $ | 711 | $ | 116 | $ | 1,377 | $ | 120 | $ | 1 | $ | 4,967 | |||||||||||||||||
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Policy acquisition costs and administrative expenses |
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Policy acquisition costs and administrative expenses |
C | $ | 908 | $ | 351 | $ | 18 | $ | 993 | $ | 71 | $ | 97 | $ | 2,438 | |||||||||||||||||
Expense adjustments - favorable (unfavorable) |
(3 | ) | - | - | - | - | - | (3 | ) | |||||||||||||||||||||||
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Policy acquisition costs and administrative expenses, adjusted |
D | $ | 905 | $ | 351 | $ | 18 | $ | 993 | $ | 71 | $ | 97 | $ | 2,435 | |||||||||||||||||
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Denominator |
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Net premiums earned |
E | $ | 4,369 | $ | 1,320 | $ | 159 | $ | 2,786 | $ | 244 | $ | 8,878 | |||||||||||||||||||
Reinstatement premiums (collected) expensed on catastrophe losses |
- | - | - | - | - | - | ||||||||||||||||||||||||||
Net premiums earned adjustments on PPD - unfavorable (favorable) |
- | - | - | - | - | - | ||||||||||||||||||||||||||
PPD reinstatement premiums - unfavorable (favorable) |
- | (1 | ) | - | - | - | (1 | ) | ||||||||||||||||||||||||
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Net premiums earned excluding adjustments |
F | $ | 4,369 | $ | 1,319 | $ | 159 | $ | 2,786 | $ | 244 | $ | 8,877 | |||||||||||||||||||
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P&C combined ratio |
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Loss and loss expense ratio |
A/E | 62.5% | 67.3% | 88.5% | 48.4% | 45.7% | 58.9% | |||||||||||||||||||||||||
Policy acquisition cost and administrative expense ratio |
C/E | 20.7% | 26.6% | 10.7% | 35.6% | 29.4% | 27.4% | |||||||||||||||||||||||||
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P&C combined ratio |
83.2% | 93.9% | 99.2% | 84.0% | 75.1% | 86.3% | ||||||||||||||||||||||||||
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CAY P&C combined ratio ex Cats |
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Loss and loss expense ratio, adjusted |
B/F | 60.5% | 53.9% | 73.1% | 49.4% | 49.0% | 55.9% | |||||||||||||||||||||||||
Policy acquisition cost and administrative expense ratio, adjusted |
D/F | 20.7% | 26.7% | 10.8% | 35.7% | 29.4% | 27.5% | |||||||||||||||||||||||||
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CAY P&C combined ratio ex Cats |
81.2% | 80.6% | 83.9% | 85.1% | 78.4% | 83.4% | ||||||||||||||||||||||||||
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Combined ratio |
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Combined ratio |
86.3% | |||||||||||||||||||||||||||||||
Add: impact of gains and losses on crop derivatives |
0.0% | |||||||||||||||||||||||||||||||
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P&C combined ratio |
86.3% | |||||||||||||||||||||||||||||||
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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 29 |
Chubb Limited
Non-GAAP Financial Measures - 5
(in millions of U.S. dollars, except ratios)
(Unaudited)
Regulation G - Non-GAAP Financial Measures (continued)
P&C combined ratio (continued)
Q1 2022 |
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 | |||||||||||||||||||||||
Numerator |
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Losses and loss expenses |
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Losses and loss expenses/policy benefits |
$ | 2,497 | $ | 713 | $ | (91 | ) | $ | 1,389 | $ | 115 | $ | 10 | $ | 4,633 | |||||||||||||||
Realized (gains) losses on crop derivatives |
- | - | (1 | ) | - | - | - | (1 | ) | |||||||||||||||||||||
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Adjusted losses and loss expenses/policy benefits |
A | $ | 2,497 | $ | 713 | $ | (92 | ) | $ | 1,389 | $ | 115 | $ | 10 | $ | 4,632 | ||||||||||||||
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Catastrophe losses and related adjustments |
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Catastrophe losses, net of related adjustments |
(81 | ) | (100 | ) | - | (151 | ) | (1 | ) | - | (333 | ) | ||||||||||||||||||
Reinstatement premiums collected (expensed) on catastrophe losses |
- | - | - | - | - | - | - | |||||||||||||||||||||||
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Catastrophe losses, gross of related adjustments |
(81 | ) | (100 | ) | - | (151 | ) | (1 | ) | - | (333 | ) | ||||||||||||||||||
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PPD and related adjustments |
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PPD, net of related adjustments - favorable (unfavorable) |
108 | 51 | 26 | 60 | 3 | (8 | ) | 240 | ||||||||||||||||||||||
Net premiums earned adjustments on PPD - unfavorable (favorable) |
- | - | 159 | - | - | - | 159 | |||||||||||||||||||||||
Expense adjustments - unfavorable (favorable) |
6 | - | (1 | ) | - | - | - | 5 | ||||||||||||||||||||||
PPD reinstatement premiums - unfavorable (favorable) |
- | - | - | - | 1 | - | 1 | |||||||||||||||||||||||
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PPD, gross of related adjustments - favorable (unfavorable) |
114 | 51 | 184 | 60 | 4 | (8 | ) | 405 | ||||||||||||||||||||||
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CAY loss and loss expense ex Cats |
B | $ | 2,530 | $ | 664 | $ | 92 | $ | 1,298 | $ | 118 | $ | 2 | $ | 4,704 | |||||||||||||||
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Policy acquisition costs and administrative expenses |
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Policy acquisition costs and administrative expenses |
C | $ | 838 | $ | 329 | $ | 11 | $ | 948 | $ | 71 | $ | 83 | $ | 2,280 | |||||||||||||||
Expense adjustments - favorable (unfavorable) |
(6 | ) | - | 1 | - | - | - | (5 | ) | |||||||||||||||||||||
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Policy acquisition costs and administrative expenses, adjusted |
D | $ | 832 | $ | 329 | $ | 12 | $ | 948 | $ | 71 | $ | 83 | $ | 2,275 | |||||||||||||||
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Denominator |
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Net premiums earned |
E | $ | 4,114 | $ | 1,247 | $ | (29 | ) | $ | 2,628 | $ | 235 | $ | 8,195 | ||||||||||||||||
Reinstatement premiums (collected) expensed on catastrophe losses |
- | - | - | - | - | - | ||||||||||||||||||||||||
Net premiums earned adjustments on PPD - unfavorable (favorable) |
- | - | 159 | - | - | 159 | ||||||||||||||||||||||||
PPD reinstatement premiums - unfavorable (favorable) |
- | - | - | - | 1 | 1 | ||||||||||||||||||||||||
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Net premiums earned excluding adjustments |
F | $ | 4,114 | $ | 1,247 | $ | 130 | $ | 2,628 | $ | 236 | $ | 8,355 | |||||||||||||||||
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P&C combined ratio |
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Loss and loss expense ratio |
A/E | 60.7% | 57.2% | 318.4% | 52.9% | 48.8% | 56.5% | |||||||||||||||||||||||
Policy acquisition cost and administrative expense ratio |
C/E | 20.4% | 26.3% | -36.8% | 36.0% | 30.2% | 27.8% | |||||||||||||||||||||||
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P&C combined ratio |
81.1% | 83.5% | 281.6% | 88.9% | 79.0% | 84.3% | ||||||||||||||||||||||||
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CAY P&C combined ratio ex Cats |
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Loss and loss expense ratio, adjusted |
B/F | 61.5% | 53.3% | 70.6% | 49.4% | 49.9% | 56.3% | |||||||||||||||||||||||
Policy acquisition cost and administrative expense ratio, adjusted |
D/F | 20.2% | 26.3% | 8.9% | 36.1% | 30.0% | 27.2% | |||||||||||||||||||||||
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CAY P&C combined ratio ex Cats |
81.7% | 79.6% | 79.5% | 85.5% | 79.9% | 83.5% | ||||||||||||||||||||||||
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Combined ratio |
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Combined ratio |
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Add: impact of gains and losses on crop derivatives |
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P&C combined ratio |
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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 5 | Page 30 |
Chubb Limited
Accounting Adoption
(in millions of U.S. dollars, except per share data)
New U.S. GAAP Accounting Standard Adopted in 2023
The company adopted the Long Duration Targeted Improvements (LDTI) standard applicable to its long-duration contracts, as required, on January 1, 2023, with a transition date of January 1, 2021. The company applied the modified retrospective transition method relating to its future policy benefits liabilities, and the associated deferred policy acquisition costs (DAC), and applied the retrospective basis to its liabilities for market risk benefits (MRB).
This financial supplement adjusts previously reported financial information for the quarters and years ended 2021 and 2022 for the implementation of LDTI. This guidance primarily impacted the companys Life Insurance segment results, with key impacts to book value and net income reflecting the following provisions of the guidance:
1. Future policy benefits (FPB) - an annual review of cash flow assumptions used to measure the FPB, and periodic updates for historical experience, with updates recorded within the income statement. Additionally, FPBs are discounted using an upper-medium grade fixed income instrument yield, updated quarterly, with related changes in discounting the liability recognized in other comprehensive income (OCI);
2. Market risk benefits (MRB) - Under LDTI, the companys reinsurance programs covering variable annuity guarantees (principally guaranteed minimum death benefits and guaranteed minimum income benefits) meet the definition of market-risk benefits (MRB). MRBs are required to be carried at fair value and the changes in fair value are presented separately within the income statement, with the exception of changes in fair value due to the companys own credit (or non-performance) risk, which are recognized in OCI; and
3. Deferred policy acquisition costs (DAC) / VOBA - DAC is amortized on a constant-level basis, independent of profitability on the underlying business. Additionally, the company also elected to amortize VOBA on the same basis.
As Adjusted results: results for prior periods presented in this report are in accordance with the new guidance.
The following tables presents a summary of the impact of LDTI on our previously reported results:
Consolidated Balance Sheets (As Adjusted vs. Reported) |
December 31 2022 |
December 31 2021 |
January 1 2021 |
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Retained earnings |
$ | (29 | ) | $ | 38 | $ | 53 | |||||||||||||||||
AOCI |
8 | (1,424 | ) | (1,803 | ) | |||||||||||||||||||
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Total shareholders equity |
$ | (21 | ) | $ | (1,386 | ) | $ | (1,750 | ) | |||||||||||||||
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Book value per common share |
$ | (0.05 | ) | $ | (3.25 | ) | $ | (3.89 | ) | |||||||||||||||
Statement of Operations (As Adjusted) |
4Q-22 | 3Q-22 | 2Q-22 | 1Q-22 | Full Year 2022 |
Full Year 2021 | ||||||||||||||||||
Net income |
$ | 1,311 | $ | 792 | $ | 1,190 | $ | 1,953 | $ | 5,246 | $ | 8,525 | ||||||||||||
Core operating income |
$ | 1,674 | $ | 1,314 | $ | 1,794 | $ | 1,647 | $ | 6,429 | $ | 5,586 | ||||||||||||
Life Insurance segment income |
$ | 182 | $ | 252 | $ | 106 | $ | 121 | $ | 661 | $ | 427 | ||||||||||||
Diluted earnings per share: |
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Net income |
$ | 3.13 | $ | 1.89 | $ | 2.80 | $ | 4.55 | $ | 12.39 | $ | 19.24 | ||||||||||||
Core operating income |
$ | 4.00 | $ | 3.13 | $ | 4.22 | $ | 3.83 | $ | 15.18 | $ | 12.60 | ||||||||||||
Statement of Operations (Reported) |
4Q-22 | 3Q-22 | 2Q-22 | 1Q-22 | Full Year 2022 |
Full Year 2021 | ||||||||||||||||||
Net income |
$ | 1,312 | $ | 812 | $ | 1,215 | $ | 1,974 | $ | 5,313 | $ | 8,539 | ||||||||||||
Core operating income |
$ | 1,699 | $ | 1,331 | $ | 1,787 | $ | 1,640 | $ | 6,457 | $ | 5,569 | ||||||||||||
Life Insurance segment income |
$ | 217 | $ | 271 | $ | 101 | $ | 115 | $ | 704 | $ | 418 | ||||||||||||
Diluted earnings per share: |
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Net income |
$ | 3.13 | $ | 1.94 | $ | 2.86 | $ | 4.59 | $ | 12.55 | $ | 19.27 | ||||||||||||
Core operating income |
$ | 4.05 | $ | 3.17 | $ | 4.20 | $ | 3.82 | $ | 15.24 | $ | 12.56 | ||||||||||||
Statement of Operations (As Adjusted vs. Reported) |
4Q-22 | 3Q-22 | 2Q-22 | 1Q-22 | Full Year 2022 |
Full Year 2021 | ||||||||||||||||||
Net income |
$ | (1 | ) | $ | (20 | ) | $ | (25 | ) | $ | (21 | ) | $ | (67 | ) | $ | (14 | ) | ||||||
Core operating income |
$ | (25 | ) | $ | (17 | ) | $ | 7 | $ | 7 | $ | (28 | ) | $ | 17 | |||||||||
Life Insurance segment income |
$ | (35 | ) | $ | (19 | ) | $ | 5 | $ | 6 | $ | (43 | ) | $ | 9 | |||||||||
Diluted earnings per share: |
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Net income |
$ | - | $ | (0.05 | ) | $ | (0.06 | ) | $ | (0.04 | ) | $ | (0.16 | ) | $ | (0.03 | ) | |||||||
Core operating income |
$ | (0.05 | ) | $ | (0.04 | ) | $ | 0.02 | $ | 0.01 | $ | (0.06 | ) | $ | 0.04 |
Accounting Adoption | Page 31 |
Chubb Limited
Glossary
Chubb Limited Consolidated comprises all segments including Corporate. |
P&C combined ratio: The sum of the loss and loss expense ratio, policy acquisition cost ratio and the administrative expense ratio excluding the life insurance segment and including the realized gains and losses on the crop derivatives.
Book value per common share: Shareholders equity divided by the shares outstanding.
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 maturity of our fixed income portfolio based on the market prices of the holdings as of that date.
Average yield on invested assets: Adjusted net investment income divided by average cost of fixed maturities and other investments, and average market value of equity securities.
Total capitalization: The sum of the short-term debt, long-term debt, trust preferreds, and shareholders equity.
Cigna integration expenses: Cigna integration expenses comprise legal and professional fees and all other costs directly related to the integration activities of the Cigna acquisition. Cigna integration expenses are incurred by the overall company and are therefore included in Corporate. These costs are not related to the on-going business activities of the segments and are therefore excluded from our definition of segment income.
Catastrophe losses (Cats): We generally define catastrophe loss events consistent with the definition of the Property Claims Service (PCS) for events in the U.S. and Canada. PCS defines a catastrophe as an event that causes damage of $25 million or more in insured losses and affects a significant number of insureds, including from pandemics such as COVID-19. For events outside of the U.S. and Canada, we generally use a similar definition. Catastrophe loss events are events that occurred in the current calendar year only. Changes in catastrophe loss estimates in the current calendar year that relate to loss events that occurred in previous calendar years are considered prior period development.
Prior period development (PPD) arises from changes to loss estimates recognized in the current year that relate to loss events that occurred in previous calendar years and excludes the effect of losses from the development of earned premium from previous accident years.
Reinstatement premiums are additional premiums paid on certain reinsurance agreements in order to reinstate coverage that had been exhausted by loss occurrences. The reinstatement premium amount is typically a pro rata portion of the original ceded premium paid based on how much of the reinsurance limit had been exhausted.
Net premiums earned adjustments within prior period development are adjustments to the initial premium earned on retrospectively rated policies based on actual claim experience that develops after the policy period ends. The premium adjustments correlate to the prior period loss development on these same policies and are fully earned in the period the adjustments are recorded.
Prior period expense adjustments typically relate to either profit commission reserves or policyholder dividend reserves based on actual claim experience that develops after the policy period ends. The expense adjustments correlate to the prior period loss development on these same policies.
Segment income (loss) includes underwriting income (loss), adjusted net investment income, other income (expense) operating, and amortization expense of purchased intangibles.
NM: Not meaningful.
Glossary | Page 32 |