Segment information

Effective the first quarter of 2016, we are reporting our financial results within the following business segments: North America Commercial P&C Insurance, North America Personal P&C Insurance, North America Agricultural Insurance, Overseas General Insurance, Global Reinsurance, and Life Insurance. We have also redefined Corporate to include all run-off asbestos and environmental (A&E) exposures, the results of run-off Brandywine business, the results of Westchester specialty operations for 1996 and prior years and certain mass tort exposures. All legacy ACE prior period amounts (i.e., legacy Chubb Corp prior period results are not included in the prior period amounts in the tables below) have been adjusted to conform to the new segment presentation.

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The North America Commercial P&C Insurance segment includes the business written by Chubb divisions that provide property and casualty (P&C) insurance and services to large, middle market and small commercial businesses in the U.S., Bermuda and Canada. These divisions write a variety of coverages, including traditional commercial property, marine, general casualty, workers’ compensation, package policies, and risk management; specialty categories such as professional lines, marine and construction risk, environmental and cyber risk, excess casualty, as well as group accident and health (A&H) insurance. The divisions included in this segment are North America Major Accounts, North America Commercial Insurance, Westchester and North America Small Commercial.


•	The North America Personal P&C Insurance segment includes the business written by Chubb’s North America Personal Risk Services division, which provides affluent and high net worth individuals and families with homeowners, automobile, valuables, umbrella and recreational marine insurance and services.


•	The North America Agricultural Insurance segment continues to include the business written by Rain and Hail Service, Inc. which provides comprehensive multiple peril crop and crop-hail insurance, and Chubb Agribusiness, which offers farm and ranch property as well as specialty P&C coverages, including commercial agriculture products.

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The Overseas General Insurance segment includes the business written by two Chubb divisions that provide P&C insurance and services in the 51 countries outside of North America where the company operates. Chubb International provides commercial P&C traditional and specialty lines serving large corporations, middle market and small customers, A&H and traditional and specialty personal lines through retail brokers, agents and other channels locally around the world. Chubb Global Markets provides commercial P&C excess and surplus lines and A&H through wholesale brokers in the London market and through Lloyd’s. These divisions write a variety of coverages, including traditional commercial property and casualty, specialty categories such as financial lines, marine, energy, aviation, political risk and construction risk, as well as group A&H and traditional and specialty personal lines.


•	The Global Reinsurance segment primarily includes the reinsurance business written by Chubb Tempest Re as well as the legacy Chubb U.K. Assumed Reinsurance business, which is active, and the legacy Chubb run-off Reinsurance business.


•	There were no material changes to the Life Insurance segment, which continues to include the business written by Chubb Life, Chubb Tempest Life Re and Combined Insurance’s North America operations. The legacy Chubb life insurance business in Latin America was also included in this segment.

Corporate primarily includes loss and loss expenses of asbestos and environmental (A&E) run-off liabilities, and the results of our non-insurance companies including Chubb Limited, Chubb Group Management and Holdings Ltd, and Chubb INA Holdings, Inc. Our exposure to A&E claims principally arises out of liabilities acquired when we purchased Westchester Specialty in 1998, CIGNA’s P&C business in 1999, and legacy Chubb Corp run-off business in 2016, and certain other mass tort exposures.

In addition, effective the first quarter of 2016, revenue and expenses managed at the corporate level, including realized gains and losses, interest expense, other income and expenses, amortization of purchased intangibles, Chubb integration expenses, and income taxes will be reported within Corporate. The amortization of purchased intangibles includes amortization of agency distribution relationships and renewal rights, internally developed technology, and the fair value adjustment on acquired loss reserves. Also the amortization of fair value adjustments on acquired invested assets and debt associated with the Chubb Corp acquisition is considered a corporate cost and is therefore included in Corporate. These items will not be allocated to the segment level; therefore, the segment income statement will only include underwriting income and net investment income. The prior period has been revised to conform to the new segment presentation. Chubb integration expenses are one-time in nature and are not related to the on-going business activities of the segments. The Chief Executive Officer does not manage segment results or allocate resources to segments when considering these costs and they are therefore excluded from our definition of segment income.

For segment reporting purposes, certain items have been presented in a different manner below than in the consolidated financial statements. Management uses underwriting income as the main measure of segment performance. Chubb calculates underwriting income by subtracting Losses and loss expenses, Policy benefits, Policy acquisition costs, and Administrative expenses from Net premiums earned. To calculate segment income, include net investment income. For the North America Agricultural segment, management includes gains and losses on crop derivatives as a component of underwriting income. For the Life Insurance segment, management includes (Gains) losses from fair value changes in separate account assets that do not qualify for separate account reporting under GAAP as components of Life Insurance segment income. For example, for the three months ended March 31, 2016, Life segment income of $64 million includes losses from fair value changes in separate account assets of $3 million (reported within Other (income) expense in the Corporate column below).

The following tables present the Statement of Operations by segment:



For the Three Months Ended	North America Commercial P&C Insurance		North America Personal P&C Insurance		North America Agricultural Insurance			Overseas General Insurance		Global Reinsurance		Life Insurance		Corporate			Chubb Consolidated
March 31, 2016
(in millions of U.S. dollars)
Net premiums written	$	2,302	$	871	$	64		$	2,041	$	201	$	516	$	—		$	5,995
Net premiums earned	2,896		1,024		23			1,955		202		497		—			6,597
Losses and loss expenses	1,747		661		(30		)	1,021		89		177		9			3,674
Policy benefits	—		—		—			—		—		126		—			126
Policy acquisition costs	482		249		4			503		53		122		—			1,413
Administrative expenses	266		88		(4		)	263		14		72		73			772
Underwriting income (loss)	401		26		53			168		46		—		(82		)	612
Net investment income (loss)	426		47		5			146		67		67		(84		)	674
Segment income (loss)	827		73		58			314		113		67		(166		)	1,286
Net realized gains (losses) including OTTI														(394		)	(394		)
Interest expense														146			146
Other (income) expense:
(Gains) losses from fair value changes in separate account assets														3			3
Other														25			25
Amortization of purchased intangibles														7			7
Chubb integration expenses														148			148
Income tax expense														124			124
Net income (loss)														$	(1,013	)	$	439



For the Three Months Ended	North America Commercial P&C Insurance		North America Personal P&C Insurance			North America Agricultural Insurance			Overseas General Insurance		Global Reinsurance		Life Insurance		Corporate			Chubb Consolidated
March 31, 2015
(in millions of U.S. dollars)
Net premiums written	$	1,297	$	133		$	88		$	1,794	$	273	$	491	$	—		$	4,076
Net premiums earned	1,380		146			64			1,637		226		474		—			3,927
Losses and loss expenses	915		111			22			814		99		152		9			2,122
Policy benefits	—		—			—			—		—		142		—			142
Policy acquisition costs	130		31			(4		)	389		54		107		—			707
Administrative expenses	151		19			(1		)	256		12		73		44			554
Underwriting income (loss)	184		(15		)	47			178		61		—		(53		)	402
Net investment income	258		5			6			138		75		66		3			551
Segment income (loss)	442		(10		)	53			316		136		66		(50		)	953
Net realized gains (losses) including OTTI															(89		)	(89		)
Interest expense															68			68
Other (income) expense:
(Gains) losses from fair value changes in separate account assets															(11		)	(11		)
Other															(24		)	(24		)
Amortization of purchased intangibles															30			30
Income tax expense															120			120
Net income (loss)															$	(322	)	$	681

Underwriting assets are reviewed in total by management for purposes of decision-making. Other than goodwill and other intangible assets, Chubb does not allocate assets to its segments.