Related party transaction

12 Months Ended

Dec. 31, 2021

Starr Indemnity & Liability Company and its affiliates (collectively, Starr)

We have agency, claims services and underwriting services agreements with Starr, the Chairman of which is related to a member of our senior management team. The Board has reviewed and approved our arrangements with Starr. We have agency, claims services and underwriting services agreements with various Starr subsidiaries. Under the agency agreement, we secure the ability to sell our insurance policies through Starr as one of our non-exclusive agents for writing policies, contracts, binders, or agreements of insurance or reinsurance. Under the claims services agreements, Starr adjusts the claims under policies and arranges for third party treaty and facultative agreements covering such policies. Under the underwriting services agreements, Starr underwrites insurance policies on our behalf and we agree to reinsure such policies to Starr under quota share reinsurance agreements.

The agency agreement also contains a profit-sharing arrangement based on loss ratios, triggered if Starr underwrites a minimum of $20 million of annual program business net premiums written on our behalf. No profit share commission has been payable yet under this arrangement. Transactions generated under Starr agreements were as follows:


	Year Ended December 31
(in millions of U.S. dollars)	2021		2020		2019
Consolidated statement of operations
Gross premiums written	$	592	$	507	$	394
Ceded premiums written	$	321	$	253	$	207
Commissions paid	$	114	$	97	$	77
Commissions received	$	73	$	59	$	46
Losses and loss expenses	$	157	$	170	$	185
Consolidated balance sheets
Reinsurance recoverable on losses and loss expenses	$	516	$	432
Ceded reinsurance premium payable	$	88	$	80

ABR Re

At December 31, 2021, we own 17.1 percent of the common equity of ABR Reinsurance Capital Holdings Ltd. and warrants to acquire 0.5 percent of additional equity. ABR Reinsurance Capital Holdings Ltd., is the parent company of ABR Reinsurance Ltd. (ABR Re), an independent reinsurance company. Through long-term arrangements, Chubb will be the sole source of reinsurance risks ceded to ABR Re, and BlackRock, Inc. will be ABR Re’s exclusive investment management service provider. As an investor, Chubb is expected to benefit from underwriting profit generated by ABR Re’s reinsuring a wide range of Chubb’s primary insurance business and the income and capital appreciation BlackRock, Inc. seeks to deliver through its investment management services. In addition, Chubb has entered into an arrangement with BlackRock, Inc. under which both Chubb and BlackRock, Inc. will be entitled to an equal share of the aggregate amount of certain fees, including underwriting and investment management performance related fees, in connection with their respective reinsurance and investment management arrangements with ABR Re. In connection with this arrangement with BlackRock, Inc., we recorded income of $11 million in 2021, which is recorded in Other (income) expense on the Consolidated statements of operations.

ABR Re is a variable interest entity; however, Chubb is not the primary beneficiary and does not consolidate ABR Re because Chubb does not have the power to control and direct ABR Re’s most significant activities, including investing and underwriting. Our ownership interest is accounted for under the equity method of accounting. Chubb cedes premiums to ABR Re and recognizes the associated commissions.

Transactions generated under ABR Re agreements were as follows:


	Year Ended December 31
(in millions of U.S. dollars)	2021		2020		2019
Consolidated statement of operations
Ceded premiums written	$	442	$	350	$	321
Commissions received	$	133	$	100	$	92

Consolidated balance sheets
Reinsurance recoverable on losses and loss expenses	$	963	$	806
Ceded reinsurance premium payable	$	107	$	67