Unpaid losses and loss expenses, and Future policy benefits

6 Months Ended

Jun. 30, 2024

Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract]

Liability for Future Policy Benefits and Unpaid Claims Disclosure [Text Block]

Unpaid losses and loss expenses

The following table presents a reconciliation of beginning and ending Unpaid losses and loss expenses:

	Six Months Ended
	June 30
(in millions of U.S. dollars)	2024		2023
Gross unpaid losses and loss expenses – beginning of period	$	80,122	$	75,747
Reinsurance recoverable on unpaid losses – beginning of period (1)	(17,884)		(17,086)
Net unpaid losses and loss expenses – beginning of period	62,238		58,661
Net losses and loss expenses incurred in respect of losses occurring in:
Current year	12,604		11,227
Prior years (2)	(446)		(396)
Total	12,158		10,831
Net losses and loss expenses paid in respect of losses occurring in:
Current year	2,492		2,264
Prior years	6,918		7,527
Total	9,410		9,791
Foreign currency revaluation and other	(204)		171
Net unpaid losses and loss expenses – end of period	64,782		59,872
Reinsurance recoverable on unpaid losses (1)	17,409		16,608
Gross unpaid losses and loss expenses – end of period	$	82,191	$	76,480

(1)    Net of valuation allowance for uncollectible reinsurance.

(2)    Relates to prior period loss reserve development only and excludes prior period development related to reinstatement premiums, expense adjustments, earned premiums, and A&H long-duration lines totaling $47 million and nil for the six months ended June 30, 2024 and 2023, respectively.

Net unpaid losses and loss expenses increased $2,544 million for the six months ended June 30, 2024, principally reflecting underlying exposure growth and the impact of a reinsurance commutation in connection with a large structured transaction during the first quarter, partially offset by the impact of favorable prior period development.

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. Long-tail lines include lines such as workers' compensation, general liability, and financial lines; while short-tail lines include lines such as most property lines, energy, personal accident, and agriculture. The following table summarizes (favorable) and adverse PPD by segment:

	Three Months Ended June 30						Six Months Ended June 30
(in millions of U.S. dollars)	Long-tail		Short-tail		Total		Long-tail		Short-tail		Total
2024
North America Commercial P&C Insurance	$	(142)	$	(2)	$	(144)	$	(46)	$	(146)	$	(192)
North America Personal P&C Insurance	—		(64)		(64)		—		(116)		(116)
North America Agricultural Insurance	—		—		—		—		(28)		(28)
Overseas General Insurance	36		(97)		(61)		35		(185)		(150)
Global Reinsurance	5		(21)		(16)		5		(20)		(15)
Corporate	93		—		93		102		—		102
Total	$	(8)	$	(184)	$	(192)	$	96	$	(495)	$	(399)
2023
North America Commercial P&C Insurance	$	(139)	$	(7)	$	(146)	$	(130)	$	(88)	$	(218)
North America Personal P&C Insurance	—		(33)		(33)		—		(16)		(16)
North America Agricultural Insurance	—		(3)		(3)		—		(3)		(3)
Overseas General Insurance	—		(61)		(61)		—		(204)		(204)
Global Reinsurance	7		(24)		(17)		7		(32)		(25)
Corporate	60		—		60		70		—		70
Total	$	(72)	$	(128)	$	(200)	$	(53)	$	(343)	$	(396)

Significant prior period movements by segment, principally driven by reserve reviews completed during each respective period, are discussed in more detail below. The remaining net development for long-tail lines and short-tail business for each segment and Corporate comprises numerous favorable and adverse movements across a number of lines and accident years, none of which is significant individually or in the aggregate.

North America Commercial P&C Insurance. Net favorable development for the three and six months ended June 30, 2024, included $288 million and $338 million, respectively, from workers' compensation due to lower-than-expected loss experience and our annual assessment of multi-claimant events, including industrial accidents. The favorable development was partially offset by net adverse development of $117 million and $167 million, respectively, in commercial auto liability mainly due to higher-than-expected loss development and severity trend. Development for the six months ended June 30, 2024, included $144 million of favorable development in surety, property and marine lines, partially offset by net adverse development of $97 million in commercial excess and umbrella lines.

Net favorable development for the three and six months ended June 30, 2023 included $264 million and $308 million, respectively, from workers' compensation lines due to lower-than-expected loss experience and our annual assessment of multi-claimant events, including industrial accidents. The favorable development was partially offset by net adverse development of $119 million and $125 million, respectively, in commercial auto liability due to adverse reported loss experience.

Overseas General Insurance. Net favorable development for the three months ended June 30, 2024 included favorable claim development, mainly in marine and property lines. Net favorable development for the six months ended June 30, 2024 included favorable development of $85 million in property and $73 million in marine.

Net favorable development for the three months ended June 30, 2023 included favorable claim development in short-tail property and casualty and A&H. Net favorable development for the six months ended June 30, 2023 included $110 million of favorable catastrophe development and non-catastrophe property loss emergence.

Corporate. Net adverse development for the three and six months ended June 30, 2024 and 2023 was driven primarily by molestation-related claims development.

Future policy benefits

The following tables present a roll-forward of the liability for future policy benefits included in the Life Insurance segment:

Present Value of Expected Net Premiums	Six Months Ended June 30, 2024
(in millions of U.S. dollars)	Term Life		Whole Life		A&H		Other		Total
Balance – beginning of period	$	1,590	$	3,950	$	10,432	$	64	$	16,036
Beginning balance at original discount rate	1,992		3,945		10,692		64		16,693
Effect of changes in cash flow assumptions	6		70		111		—		187
Effect of actual variances from expected experience	(12)		21		(129)		(1)		(121)
Adjusted beginning of period balance	1,986		4,036		10,674		63		16,759
Issuances	111		620		1,196		39		1,966
Interest accrual	26		55		239		2		322
Net premiums collected (1)	(122)		(603)		(729)		(20)		(1,474)
Other (including foreign exchange)	(25)		(77)		(273)		10		(365)
Ending balance at original discount rate	1,976		4,031		11,107		94		17,208
Effect of changes in discount rate assumptions	(397)		17		(162)		—		(542)
Balance – end of period	$	1,579	$	4,048	$	10,945	$	94	$	16,666

(1)Net premiums collected represent the portion of gross premiums collected from policyholders that is used to fund expected benefit.

Present Value of Expected Future Policy Benefits	Six Months Ended June 30, 2024
(in millions of U.S. dollars)	Term Life		Whole Life		A&H		Other		Total
Balance – beginning of period	$	2,254	$	10,063	$	14,650	$	495	$	27,462
Beginning balance at original discount rate	2,749		9,991		15,071		492		28,303
Effect of changes in cash flow assumptions	8		85		102		—		195
Effect of actual variances from expected experience	(9)		31		(129)		—		(107)
Adjusted beginning of period balance	2,748		10,107		15,044		492		28,391
Issuances	111		620		1,196		39		1,966
Interest accrual	35		151		300		8		494
Benefits payments	(115)		(179)		(789)		(10)		(1,093)
Other (including foreign exchange)	(3)		(169)		(356)		9		(519)
Ending balance at original discount rate	2,776		10,530		15,395		538		29,239
Effect of changes in discount rate assumptions	(512)		129		(337)		17		(703)
Balance – end of period	$	2,264	$	10,659	$	15,058	$	555	$	28,536

Liability for Future Policy Benefits, Life Insurance Segment	June 30, 2024
(in millions of U.S. dollars)	Term Life		Whole Life		A&H		Other		Total
Net liability for future policy benefits	$	685	$	6,611	$	4,113	$	461	$	11,870
Deferred profit liability	268		986		174		24		1,452
Net liability for future policy benefits, before reinsurance recoverable	953		7,597		4,287		485		13,322
Less: Reinsurance recoverable on future policy benefits	103		44		110		—		257
Net liability for future policy benefits, after reinsurance recoverable	$	850	$	7,553	$	4,177	$	485	$	13,065
Weighted average duration (years)	10.2		25.0		10.0		16.3		19.1

Present Value of Expected Net Premiums	Six Months Ended June 30, 2023
(in millions of U.S. dollars)	Term Life		Whole Life		A&H		Other		Total
Balance – beginning of period	$	1,806	$	2,308	$	10,711	$	42	$	14,867
Beginning balance at original discount rate	1,867		2,361		11,258		43		15,529
Effect of changes in cash flow assumptions	16		(1)		(772)		1		(756)
Effect of actual variances from expected experience	(6)		41		(79)		(1)		(45)
Adjusted beginning of period balance	1,877		2,401		10,407		43		14,728
Issuances	63		123		540		3		729
Interest accrual	37		34		226		1		298
Net premiums collected (1)	(87)		(170)		(654)		(11)		(922)
Other (including foreign exchange)	78		11		(150)		1		(60)
Ending balance at original discount rate	1,968		2,399		10,369		37		14,773
Effect of changes in discount rate assumptions	(54)		(21)		(346)		—		(421)
Balance – end of period	$	1,914	$	2,378	$	10,023	$	37	$	14,352

(1)Net premiums collected represent the portion of gross premiums collected from policyholders that is used to fund expected benefit.

Present Value of Expected Future Policy Benefits	Six Months Ended June 30, 2023
(in millions of U.S. dollars)	Term Life		Whole Life		A&H		Other		Total
Balance – beginning of period	$	2,321	$	5,696	$	15,038	$	269	$	23,324
Beginning balance at original discount rate	2,447		5,874		15,855		280		24,456
Effect of changes in cash flow assumptions	19		(1)		(782)		3		(761)
Effect of actual variances from expected experience	(6)		46		(75)		(1)		(36)
Adjusted beginning of period balance	2,460		5,919		14,998		282		23,659
Issuances	63		123		540		3		729
Interest accrual	43		105		289		3		440
Benefit payments	(85)		(130)		(707)		(5)		(927)
Other (including foreign exchange)	184		423		(507)		(22)		78
Ending balance at original discount rate	2,665		6,440		14,613		261		23,979
Effect of changes in discount rate assumptions	(127)		(76)		(575)		(4)		(782)
Balance – end of period	$	2,538	$	6,364	$	14,038	$	257	$	23,197

Liability for Future Policy Benefits, Life Insurance Segment	June 30, 2023
(in millions of U.S. dollars)	Term Life		Whole Life		A&H		Other		Total
Net liability for future policy benefits	$	624	$	3,986	$	4,015	$	220	$	8,845
Deferred profit liability	243		640		148		13		1,044
Net liability for future policy benefits, before reinsurance recoverable	867		4,626		4,163		233		9,889
Less: Reinsurance recoverable on future policy benefits	110		42		119		1		272
Net liability for future policy benefits, after reinsurance recoverable	$	757	$	4,584	$	4,044	$	232	$	9,617
Weighted average duration (years)	9.4		25.3		10.5		14.0		17.6

The following table presents a reconciliation of the roll-forwards above to the Future policy benefits liability presented in the Consolidated balance sheets.

	June 30
(in millions of U.S. dollars)	2024		2023
Net liability for future policy benefits, Life Insurance segment	$	11,870	$	8,845
Other (1)	1,341		1,175
Deferred profit liability	1,452		1,044
Liability for future policy benefits, per consolidated balance sheet	$	14,663	$	11,064

(1)Other business principally comprises certain Overseas General Insurance accident and health (A&H) policies and certain Chubb Life Re business.

The following table presents the amount of undiscounted and discounted expected gross premiums and expected future policy benefit payments included in the Life Insurance segment:

	June 30		June 30
(in millions of U.S. dollars)	2024		2023
Term Life
Undiscounted expected future benefit payments	$	4,334	$	4,085
Undiscounted expected future gross premiums	7,223		6,543
Discounted expected future benefit payments	2,264		2,538
Discounted expected future gross premiums	4,776		3,779
Whole Life
Undiscounted expected future benefit payments	25,052		16,759
Undiscounted expected future gross premiums	9,555		6,972
Discounted expected future benefit payments	10,659		6,364
Discounted expected future gross premiums	7,744		5,455
A&H
Undiscounted expected future benefit payments	26,037		23,661
Undiscounted expected future gross premiums	38,166		34,381
Discounted expected future benefit payments	15,058		14,038
Discounted expected future gross premiums	22,556		21,019
Other
Undiscounted expected future benefit payments	956		346
Undiscounted expected future gross premiums	174		94
Discounted expected future benefit payments	555		257
Discounted expected future gross premiums	$	155	$	84

The following table presents the amount of revenue and interest recognized in the Consolidated statement of operations for the Life Insurance segment:

	Gross Premiums or Assessments				Interest Accretion
	Six Months Ended				Six Months Ended
	June 30				June 30
(in millions of U.S. dollars)	2024		2023		2024		2023
Life Insurance
Term Life	$	337	$	322	$	9	$	6
Whole Life	1,008		475		96		71
A&H	1,525		1,422		61		63
Other	32		21		6		2
Total	$	2,902	$	2,240	$	172	$	142

The following table presents the weighted-average interest rates for the Life Insurance segment:

	Interest Accretion Rate				Current Discount Rate
	June 30				June 30
	2024		2023		2024		2023
Life Insurance
Term Life	2.9	%	2.9	%	5.7	%	5.9	%
Whole Life	3.2	%	4.0	%	4.6	%	5.3	%
A&H	3.7	%	3.8	%	6.3	%	6.4	%
Other	2.7	%	3.8	%	4.2	%	5.1	%