UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant To Section 13 or 15 (d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 26, 2017
Chubb Limited
(Exact name of registrant as specified in its charter)
Switzerland | 1-11778 | 98-0091805 | ||
(State or other jurisdiction of Incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
Baerengasse 32
CH-8001 Zurich, Switzerland
Telephone: +41 (0)43 456 76 00
(Address of principal executive offices)
Not applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. | Results of Operations and Financial Condition |
On October 26, 2017, Chubb Limited issued a Press Release reporting its third quarter 2017 results and the availability of its third quarter 2017 Financial Supplement. The Press Release and the Financial Supplement are attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively, and are hereby incorporated herein by reference.
Item 9.01. | Financial Statements and Exhibits |
(d) | Exhibits |
Exhibit |
Description | |
99.1 | Press Release, Dated October 26, 2017, Reporting Third Quarter 2017 Results | |
99.2 | Third Quarter 2017 Financial Supplement |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Chubb Limited | ||
By: | /s/ Philip V. Bancroft | |
Philip V. Bancroft | ||
Executive Vice President and Chief Financial Officer |
DATE: October 26, 2017
Exhibit 99.1
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Chubb Limited Bärengasse 32 CH-8001 Zurich Switzerland |
www.chubb.com @Chubb |
News Release
Chubb Reports Third Quarter Per Share Net Loss and Operating Loss of $(0.15) and $(0.13), Respectively, Including Catastrophe Losses of $3.27 Per Share, in Line with Midpoint of Preannounced Estimates; Book and Tangible Book Value per Share Essentially Unchanged
| Pre-tax catastrophe losses, net of reinsurance and including reinstatement premiums, were $1,893 million in the quarter, including $650 million, $891 million, and $220 million from hurricanes Harvey, Irma, and Maria, respectively; $25 million from the earthquakes in Mexico; and $107 million from other catastrophe losses. After-tax catastrophe losses were $1,525 million in the quarter, or $3.27 per share. |
| Net loss was $(70) million in the quarter compared with net income of $1,360 million in the prior year. Operating loss was $(60) million in the quarter compared with operating income of $1,356 million in the prior year. |
| Excluding catastrophe losses, operating income was $1,465 million, or $3.12 per share, (1) compared with $1,463 million, or $3.10 per share, in the prior year. |
| Consolidated and P&C net premiums written were up 4.3% and 4.6%, respectively, to $7.9 billion and $7.4 billion. On a constant-dollar basis and excluding merger-related underwriting actions, (2) P&C net premiums written were up 4.0%. |
| The P&C combined ratio was 110.8%, compared with 86.0% in 2016. The P&C combined ratio excluding catastrophe losses was 84.7%. The P&C current accident year combined ratio excluding catastrophe losses was 88.5%, compared with 88.9% in 2016. P&C current accident year underwriting income excluding catastrophe losses was $839 million, up 5.6%. |
| Adjusted net investment income was a record $893 million, up 7.5%. |
| Operating cash flow was a record $1.8 billion. |
| Book value per share is up 0.5% from the prior quarter and 5.0% for the year. Tangible book value per share is down (0.3)% from the prior quarter and up 7.3% for the year. |
(1) | Weighted-average shares outstanding used in calculating net loss and operating loss per share exclude the effect of dilutive securities of 3.8 million shares. The operating income excluding catastrophe loss per share measure includes the effect of these dilutive securities. Refer to page 13 for additional information. |
(2) | Merger-related underwriting actions include the cancellation of certain portfolios or lines of business that do not meet company underwriting standards, and a one-time unearned premium reserve (UPR) transfer in 2016 (further detailed below under operating highlights). |
Chubb®, Chubb logo® and Chubb. Insured.SM are trademarks of Chubb. | 1 |
Chubb Limited News Release
ZURICH October 26, 2017 Chubb Limited (NYSE: CB) today reported a net loss for the quarter ended September 30, 2017 of $(70) million, or $(0.15) per share, compared with net income of $1,360 million, or $2.88 per share, for the same quarter last year. Operating loss was $(60) million, or $(0.13) per share, compared with operating income of $1,356 million, or $2.88 per share, for the same quarter last year. The property and casualty (P&C) combined ratio was 110.8% for the quarter driven by significant catastrophe losses. Book value per share increased 0.5% and tangible book value per share decreased (0.3)% from June 30, 2017 and now stand at $108.74 and $65.06, respectively. Book value and tangible book value were favorably impacted by net realized and unrealized gains of $162 million after-tax in the companys investment portfolio. Additionally, foreign currency movement favorably impacted book value by $675 million after-tax and tangible book value by $337 million after-tax.
Chubb Limited
Third Quarter Summary
(in millions, except per share amounts)
(Unaudited)
(Per Share - Diluted) | ||||||||||||||||||||||||
2017 | 2016 | Change | 2017 | 2016 | Change | |||||||||||||||||||
Net (loss) income |
$ | (70 | ) | $ | 1,360 | NM | $ | (0.15 | ) | $ | 2.88 | NM | ||||||||||||
Chubb one-time integration and merger-related expenses, net of tax |
36 | 85 | (57.6 | )% | 0.08 | 0.18 | (55.6 | )% | ||||||||||||||||
Amortization of fair value adjustment of acquired invested assets and long-term debt, net of tax |
50 | 53 | (5.7 | )% | 0.11 | 0.11 | 0.0 | % | ||||||||||||||||
Adjusted net realized (gains) losses, net of tax |
(76 | ) | (142 | ) | 46.5 | % | (0.17 | ) | (0.29 | ) | 41.4 | % | ||||||||||||
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Operating (loss) income, net of tax |
$ | (60 | ) | $ | 1,356 | NM | $ | (0.13 | ) | $ | 2.88 | NM | ||||||||||||
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For the three months ended September 30, 2017 and 2016, the tax expenses (benefits) related to the table above were $(14) million and $(30) million, respectively, for Chubb one-time integration and merger-related expenses; $(18) million and $(26) million, respectively, for amortization of fair value adjustment of acquired invested assets and long-term debt; $8 million and $27 million, respectively, for adjusted net realized gains and losses; and $(61) million and $306 million, respectively, for operating income.
For the nine months ended September 30, 2017, net income was $2,328 million, or $4.94 per share, compared with $2,525 million, or $5.44 per share, for 2016. Operating income was $2,295 million, or $4.87 per share, compared with $3,433 million, or $7.40 per share, for 2016. The P&C combined ratio for the nine months ended September 30, 2017 was 96.0%. Book value per share increased 5.0% and tangible book value per share increased 7.3% from December 31, 2016. Book value and tangible book value were favorably impacted by net realized and unrealized gains of $835 million after-tax in the companys investment portfolio and $96 million of after-tax realized gains in the companys variable annuity reinsurance business. Additionally, foreign currency movement favorably impacted book value by $902 million after-tax and tangible book value by $459 million after-tax. Annualized ROE and operating ROE were 6.3% and 6.4%, respectively, for the year.
Chubb®, Chubb logo® and Chubb. Insured.SM are trademarks of Chubb. | 2 |
Chubb Limited News Release
Chubb Limited
Nine Months Ended Summary
(in millions, except per share amounts)
(Unaudited)
(Per Share - Diluted) | ||||||||||||||||||||||||
2017 | 2016 | Change | 2017 | 2016 | Change | |||||||||||||||||||
Net income |
$ | 2,328 | $ | 2,525 | (7.8 | )% | $ | 4.94 | $ | 5.44 | (9.2 | )% | ||||||||||||
Chubb one-time integration and merger-related expenses, net of tax |
160 | 262 | (38.9 | )% | 0.34 | 0.56 | (39.3 | )% | ||||||||||||||||
Amortization of fair value adjustment of acquired invested assets and long-term debt, net of tax |
157 | 178 | (11.8 | )% | 0.33 | 0.39 | (15.4 | )% | ||||||||||||||||
Adjusted net realized (gains) losses, net of tax |
(350 | ) | 468 | NM | (0.74 | ) | 1.01 | NM | ||||||||||||||||
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Operating income, net of tax |
$ | 2,295 | $ | 3,433 | (33.2 | )% | $ | 4.87 | $ | 7.40 | (34.2 | )% | ||||||||||||
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For the nine months ended September 30, 2017 and 2016, the tax expenses (benefits) related to the table above were $(73) million and $(106) million, respectively, for Chubb one-time integration and merger-related expenses; $(62) million and $(79) million, respectively, for amortization of fair value adjustment of acquired invested assets and long-term debt; $25 million and $22 million, respectively, for adjusted net realized gains and losses; and $353 million and $719 million, respectively, for operating income.
Evan G. Greenberg, Chairman and Chief Executive Officer of Chubb Limited, commented: While it was a tough quarter for CATs, its the business were in. We experienced a series of significant natural catastrophes, including three hurricanes and two earthquakes, which will likely produce the third $100 billion-plus year for insured catastrophe losses globally for the industry in the last 12 years. We ran a 111% combined ratio and produced a loss of 13 cents per share, or essentially a quarter of our annual earnings, which is within our tolerance for risk and the amount of loss we would expect for these events. Im proud of our claims and loss prevention organizations response serving our customers in their time of need. They continue to distinguish our company. The Chubb brand is all about service we truly aim to serve our customers and go beyond their expectations.
Our underlying operating results demonstrate the strength and vitality of the company. P&C net premiums written grew about 4.5% in the quarter. Excluding the catastrophe losses, both operating earnings and underwriting results were simply excellent. Our two sources of income were both records in the quarter net investment income, up 7.5%, and P&C current accident year underwriting income excluding catastrophe losses, up about 5.5%, with a current accident year combined ratio excluding catastrophes of 88.5%. We also had record operating cash flow of $1.8 billion.
I believe we are at the beginning of a firming price environment, driven by years of soft pricing that has resulted in inadequate rates in many classes. The magnitude of this years CAT losses, which on a worldwide aggregate basis was between a one-in-five and one-in-10 year industry event, simply adds to the pressure to return to pricing that produces an adequate risk-adjusted return. In that regard, we intend as usual to demonstrate leadership.
Our company is in great shape from the perspectives of risk management, growth opportunity and financial efficiency. We are investing aggressively in our future while delivering results to shareholders today, and we are optimistic about the future.
Chubb®, Chubb logo® and Chubb. Insured.SM are trademarks of Chubb. | 3 |
Chubb Limited News Release
Operating highlights for the quarter ended September 30, 2017 were as follows:
Chubb Limited | Q3 | Q3 | ||||||||||
(in millions of U.S. dollars except for percentages) | 2017 | 2016 | Change | |||||||||
Consolidated |
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Net premiums written |
$ | 7,902 | $ | 7,573 | 4.3 | % | ||||||
Net (loss) income |
$ | (70 | ) | $ | 1,360 | NM | ||||||
P&C |
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Net premiums written |
$ | 7,363 | $ | 7,041 | 4.6 | % | ||||||
Net premiums written constant-dollar |
$ | 7,039 | 4.6 | % | ||||||||
Net premiums written constant-dollar excluding merger-related underwriting actions (1.3 pts) and one-time UPR transfer in 2016 (-1.9 pts) |
4.0 | % | ||||||||||
Underwriting (loss) income |
$ | (784 | ) | $ | 1,002 | NM | ||||||
Combined ratio |
110.8 | % | 86.0 | % | ||||||||
Current accident year underwriting income excluding catastrophe losses |
$ | 839 | $ | 797 | 5.6 | % | ||||||
Current accident year combined ratio excluding catastrophe losses |
88.5 | % | 88.9 | % | ||||||||
Global P&C (excludes Agriculture) |
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Net premiums written |
$ | 6,437 | $ | 6,192 | 4.0 | % | ||||||
Net premiums written constant-dollar |
$ | 6,189 | 4.0 | % | ||||||||
Net premiums written constant-dollar excluding merger-related underwriting actions (1.4 pts) and one-time UPR transfer in 2016 (-2.1 pts) |
3.3 | % | ||||||||||
Underwriting (loss) income |
$ | (870 | ) | $ | 912 | NM | ||||||
Combined ratio |
113.6 | % | 85.7 | % | ||||||||
Current accident year underwriting income excluding catastrophe losses |
$ | 752 | $ | 717 | 5.3 | % | ||||||
Current accident year combined ratio excluding catastrophe losses |
88.2 | % | 88.8 | % |
| Merger-related underwriting actions adversely impacted P&C net premiums written growth by $87 million, or 1.3 percentage points. In addition, net premiums written growth was favorably impacted by $128 million, or 1.9 percentage points, from a one-time unearned premium reserve (UPR) transfer in 2016 which reduced net premiums written in the prior year. Excluding merger-related underwriting actions and the one-time UPR transfer, P&C net premiums written increased 4.0%. |
| Net premiums earned increased 1.5%. Excluding merger-related underwriting actions, P&C net premiums earned were up 2.9% compared to prior year. |
| The P&C current accident year combined ratio excluding catastrophe losses was 88.5%, compared to 88.9% in the prior year, which included an adverse impact of 0.5 percentage points from initial year purchase accounting adjustments related to the acquisition of The Chubb Corporation (Chubb Corp). Excluding the purchase accounting adjustments, the P&C current accident year combined ratio excluding catastrophe losses were virtually flat with the prior year. |
| Total pre-tax and after-tax catastrophe losses for the quarter were $1,893 million (26.0 percentage points of the combined ratio) and $1,525 million, respectively, compared with $144 million (2.0 percentage points of the combined ratio) and $107 million, respectively, last year. |
Chubb®, Chubb logo® and Chubb. Insured.SM are trademarks of Chubb. | 4 |
Chubb Limited News Release
| Total pre-tax and after-tax favorable prior period development for the quarter were $270 million (3.7 percentage points of the combined ratio) and $206 million, respectively, compared with $349 million (4.9 percentage points of the combined ratio) and $252 million, respectively, last year. Favorable prior period development is net of a pre-tax environmental liability run-off charge in the companys Brandywine operations of $77 million in the current quarter and $52 million in the prior year. Additionally, the prior year included a reserve take-down of $25 million related to an individual legacy liability case. |
| Adjusted net investment income, which excludes a purchase accounting adjustment of $80 million, was a record $893 million. Adjusted net investment income for the quarter included a $44 million final distribution related to a co-investment by Chubb with one of the companys private equity fund partners. |
| Share repurchases totaled $232 million, or approximately 1.6 million shares, during the quarter. The company has repurchased approximately 5.0 million shares for $707 million through September 30, 2017. |
| Net loss reserves increased $2,318 million in the quarter, primarily reflecting the significant catastrophe loss events in the period. |
Chubb®, Chubb logo® and Chubb. Insured.SM are trademarks of Chubb. | 5 |
Chubb Limited News Release
Details of financial results by business segment are available in the Chubb Limited Financial Supplement. Key segment items for the quarter ended September 30, 2017 are presented below:
Chubb Limited | Q3 | Q3 | ||||||||||
(in millions of U.S. dollars except for percentages) | 2017 | 2016 | Change | |||||||||
North America Commercial P&C Insurance |
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Net premiums written |
$ | 3,089 | $ | 3,110 | (0.6 | )% | ||||||
Net premiums written excluding merger-related underwriting actions (1.8 pts) |
1.2 | % | ||||||||||
Combined ratio |
109.6 | % | 86.2 | % | ||||||||
Current accident year combined ratio excluding catastrophe losses |
88.7 | % | 89.4 | % | ||||||||
North America Personal P&C Insurance |
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Net premiums written |
$ | 1,194 | $ | 1,011 | 18.0 | % | ||||||
Net premiums written excluding one-time UPR transfer in 2016 (-13.2 pts) (1) |
4.8 | % | ||||||||||
Combined ratio |
120.8 | % | 84.4 | % | ||||||||
Current accident year combined ratio excluding catastrophe losses |
77.5 | % | 78.8 | % | ||||||||
Overseas General Insurance |
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Net premiums written |
$ | 1,963 | $ | 1,940 | 1.2 | % | ||||||
Net premiums written constant-dollar |
$ | 1,941 | 1.2 | % | ||||||||
Net premiums written constant-dollar excluding merger-related underwriting actions (1.5 pts) |
2.7 | % | ||||||||||
Combined ratio |
101.6 | % | 81.2 | % | ||||||||
Current accident year combined ratio excluding catastrophe losses |
90.6 | % | 91.1 | % |
(1) | The prior year included a one-time unearned premium reserve (UPR) transfer of $128 million which reduced net premiums written in Q3 2016. |
| North America Agricultural Insurance: Net premiums written increased 9.0%. The combined ratio was 90.4%, compared with 88.9%. The current accident year combined ratio excluding catastrophe losses was 90.3%, compared with 90.1%. |
| Global Reinsurance: Net premiums written increased 47.1%, or 47.9% in constant dollars, primarily due to net reinstatement premiums collected of $37 million related to catastrophe loss events in the quarter as well as a new treaty written of $14 million. The combined ratio was 187.4%, compared with 66.3%. The current accident year combined ratio excluding catastrophe losses was 82.2%, compared with 78.1%. |
| Life Insurance: Segment income was $64 million, compared with $69 million. International life insurance net premiums written and deposits collected increased 28.1% in constant dollars. |
Chubb®, Chubb logo® and Chubb. Insured.SM are trademarks of Chubb. | 6 |
Chubb Limited News Release
Please refer to the Chubb Limited Financial Supplement, dated September 30, 2017, which is posted on the companys investor relations website, investors.chubb.com, in the Financials section for more detailed information on individual segment performance, together with additional disclosure on reinsurance recoverable, loss reserves, investment portfolio, and debt and capital.
Chubb Limited will hold its third quarter earnings conference call on Friday, October 27, 2017, beginning at 8:30 a.m. Eastern. The earnings conference call will be available via live webcast at investors.chubb.com or by dialing 888-395-3241 (within the United States) or 719-325-2402 (international), passcode 7430195. Please refer to the Chubb investor relations website under Events and Presentations for details. A replay of the call will be available until Friday, November 10, 2017, and the archived webcast will be available for approximately one month. To listen to the replay, please click here to register and receive dial-in numbers.
About Chubb
Chubb is the worlds largest publicly traded property and casualty insurance company. With operations in 54 countries, Chubb provides commercial and personal property and casualty insurance, personal accident and supplemental health insurance, reinsurance and life insurance to a diverse group of clients. As an underwriting company, we assess, assume and manage risk with insight and discipline. We service and pay our claims fairly and promptly. The company is also defined by its extensive product and service offerings, broad distribution capabilities, exceptional financial strength and local operations globally. Parent company Chubb Limited is listed on the New York Stock Exchange (NYSE: CB) and is a component of the S&P 500 index. Chubb maintains executive offices in Zurich, New York, London and other locations, and employs approximately 31,000 people worldwide. Additional information can be found at: www.chubb.com.
Investor Contact
Helen Wilson: (441) 299-9283; helen.wilson@chubb.com
Media Contact
Jeffrey Zack: (212) 827-4444; jeffrey.zack@chubb.com
All comparisons are with the same period last year unless otherwise specifically stated.
Chubb®, Chubb logo® and Chubb. Insured.SM are trademarks of Chubb. | 7 |
Chubb Limited News Release
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.
Adjusted net investment income is net investment income excluding the amortization of the fair value adjustment on acquired invested assets. 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. 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. The P&C combined ratio includes adjusted losses and loss expenses in the ratio numerator.
Underwriting income, P&C underwriting income and Global P&C underwriting income are calculated by subtracting losses and loss expenses, policy benefits, policy acquisition costs and administrative expenses from net premiums earned. P&C underwriting income also includes gains (losses) on crop derivatives. We use underwriting income and operating ratios to monitor the results of our operations without the impact of certain factors, including net investment income, other income (expense), interest and income tax expense and adjusted net realized gains (losses). Current accident year underwriting income excluding catastrophe losses is underwriting income adjusted to exclude catastrophe losses and prior period development (PPD). We believe it is useful to exclude catastrophe losses, 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.
Segment income (loss) includes underwriting income, adjusted net investment income, other income (expense) operating, and amortization expense of purchased intangibles.
Operating income, net of tax, excludes adjusted realized gains and losses, Chubb integration and related expenses, and the amortization of the fair value adjustments of acquired debt and invested assets related to the Chubb Corp acquisition. 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) because the amount of these gains (losses) is heavily influenced by the availability of market opportunities. We also exclude Chubb integration and related expenses related to the acquisition due to the size, complexity, and volume of this acquisition, which may not be
Chubb®, Chubb logo® and Chubb. Insured.SM are trademarks of Chubb. | 8 |
Chubb Limited News Release
indicative of such future costs. We believe that excluding the Chubb integration and related expenses facilitates the comparison of our financial results to our historical operating results.
Operating income excluding catastrophe losses excludes the impact of catastrophe losses due to the significant size and number of these events in the third quarter of 2017 which could obscure the underlying operating results. We believe this measure provides a better evaluation of our operating performance and enhances the understanding of the trends in our property and casualty business. Operating income and Operating income excluding catastrophe losses should not be viewed as a substitute for net income determined in accordance with GAAP. References to operating income mean net of tax, whether or not noted.
P&C combined ratio is the sum of the loss and loss expense ratio, acquisition cost ratio and the administrative expense ratio excluding the life business and including the realized gains and loss on the crop derivatives.
Current accident year P&C combined ratio excluding catastrophe losses excludes the impact of catastrophe losses and PPD. We believe this measure provides a better evaluation of our underwriting performance and enhances the understanding of the trends in our property and casualty business that may be obscured by these items.
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. 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.
International life 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.
Operating return on equity (ROE) or ROE calculated using operating income are annualized financial measures. The ROE numerator includes income adjusted to exclude after-tax adjusted net realized gains (losses), Chubb integration and related expenses, and the amortization of the fair value adjustment of acquired invested assets and long-term debt. The ROE denominator includes the average shareholders equity for the period adjusted to exclude unrealized gains (losses) on investments, net of tax. In addition, for 2016, the denominator was adjusted to account for the weighted-average impact of the $15,527 million issuance of common shares and equity awards related to the Chubb Corp acquisition on January 14, 2016. Operating ROE is a useful measure as it enhances the understanding of the return on shareholders equity by highlighting the underlying profitability relative to shareholders equity excluding the effect of unrealized gains and losses on our investments.
Net premiums written excluding merger-related underwriting actions and one-time unearned premium reserve (UPR) transfer in 2016 is a non-GAAP performance measure. Since the acquisition of the Chubb Corp, we have entered into new reinsurance agreements with third-party reinsurers for the Chubb Corp businesses and have taken other merger-related underwriting actions, including exiting certain types of business that do not meet our underwriting standards or adhere to our risk diversification strategy. We also excluded the net premiums written related to a one-time UPR transfer in 2016
Chubb®, Chubb logo® and Chubb. Insured.SM are trademarks of Chubb. | 9 |
Chubb Limited News Release
that reduced premiums in the prior year. We believe that this measure is meaningful to evaluate trends in our underlying business on a comparable basis.
Tangible book value per common share is shareholders equity less goodwill and other intangible assets divided by the shares outstanding. The intangibles related to the Chubb Corp acquisition are excluded from the tangible book value per share calculation net of tax. 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. In addition, we disclose per share measures for book value and tangible book value that exclude the impact of foreign currency fluctuations in order to adjust for the distortive effects of fluctuations in exchange rates.
Other income (expense) operating excludes from consolidated Other income (expense) the portion of net realized gains and losses related to unconsolidated entities 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 operating income 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.
Chubb integration and related expenses include all internal and external costs directly related to the integration activities of the Chubb Corp acquisition, consisting primarily of personnel-related expenses, including severance and employee retention and relocation; consulting fees; and advisor fees. Chubb integration and related expenses also include interest expense related to the $5.3 billion senior notes issued in November 2015 in order to finance a portion of the Chubb Corp acquisition. We exclude this pre-acquisition interest expense from operating income because the operations for which the debt was issued were not part of our operating activities prior to the completion of the acquisition. Effective with the close of the Chubb Corp acquisition (January 14, 2016), the interest on this debt was considered a cost of our operations and is included within operating income.
See reconciliation of Non-GAAP Financial Measures on pages 32-37 in the Financial Supplement. These measures should not be viewed as a substitute for measures determined in accordance with GAAP, including premium, net income, return on equity, net investment income, and effective tax rate.
NM - not meaningful comparison
Chubb®, Chubb logo® and Chubb. Insured.SM are trademarks of Chubb. | 10 |
Chubb Limited News Release
Cautionary Statement Regarding Forward-Looking Statements:
Forward-looking statements made in this press release, such as those related to company performance, pricing, and our expectations and intentions and other statements that are not historical facts reflect our 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 that could cause actual results to differ materially, including without limitation, the following: competition, pricing and policy term trends, the levels of new and renewal business achieved, the frequency of unpredictable catastrophic events, actual loss experience, uncertainties in the reserving or settlement process, integration activities and performance of acquired companies, loss of key employees or disruptions to our operations, 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 recoverable, credit developments among reinsurers, rating agency action, possible terrorism or the outbreak and effects of war, economic, political, regulatory, insurance and reinsurance business conditions, potential strategic opportunities including acquisitions and our ability to achieve and integrate them, as well as managements response to these factors, and other factors identified in our filings with the Securities and Exchange Commission (SEC).
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®, Chubb logo® and Chubb. Insured.SM are trademarks of Chubb. | 11 |
Chubb Limited News Release
Chubb Limited
Summary Consolidated Balance Sheets
(in millions of U.S. dollars, except per share data)
(Unaudited)
September 30 2017 |
December 31 2016 |
|||||||
Assets |
| |||||||
Investments |
$ | 102,424 | $ | 99,094 | ||||
Cash |
1,088 | 985 | ||||||
Insurance and reinsurance balances receivable |
9,551 | 8,970 | ||||||
Reinsurance recoverable on losses and loss expenses |
14,799 | 13,577 | ||||||
Goodwill and other intangible assets |
22,265 | 22,095 | ||||||
Other assets |
17,292 | 15,065 | ||||||
|
|
|
|
|||||
Total assets |
$ | 167,419 | $ | 159,786 | ||||
|
|
|
|
|||||
Liabilities |
| |||||||
Unpaid losses and loss expenses |
$ | 64,153 | $ | 60,540 | ||||
Unearned premiums |
15,456 | 14,779 | ||||||
Other liabilities |
37,339 | 36,192 | ||||||
|
|
|
|
|||||
Total liabilities |
$ | 116,948 | $ | 111,511 | ||||
|
|
|
|
|||||
Shareholders equity |
| |||||||
Total shareholders equity |
50,471 | 48,275 | ||||||
|
|
|
|
|||||
Total liabilities and shareholders equity |
$ | 167,419 | $ | 159,786 | ||||
|
|
|
|
|||||
Book value per common share |
$ | 108.74 | $ | 103.60 | ||||
Tangible book value per common share |
$ | 65.06 | $ | 60.64 | ||||
Book value per common share excluding cumulative translation losses (1) |
$ | 110.41 | $ | 107.17 | ||||
Tangible book value per common share excluding cumulative translation losses (1) |
$ | 66.57 | $ | 63.10 |
(1) | Cumulative translation losses were $776 million in 2017 ($702 million on tangible and $74 million on intangible net assets) and $1.7 billion in 2016 ($1,147 million on tangible and $516 million on intangible net assets) |
Chubb®, Chubb logo® and Chubb. Insured.SM are trademarks of Chubb. | 12 |
Chubb Limited News Release
Chubb Limited
Summary Consolidated Financial Data
(in millions of U.S. dollars, except share, per share data, and ratios)
(Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30 | September 30 | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Gross premiums written |
$ | 9,710 | $ | 9,483 | $ | 27,416 | $ | 26,146 | ||||||||
Net premiums written |
7,902 | 7,573 | 22,193 | 21,207 | ||||||||||||
Net premiums earned |
7,807 | 7,688 | 21,816 | 21,690 | ||||||||||||
Losses and loss expenses |
6,247 | 4,269 | 14,182 | 12,197 | ||||||||||||
Policy benefits |
169 | 155 | 500 | 427 | ||||||||||||
Policy acquisition costs |
1,488 | 1,514 | 4,334 | 4,487 | ||||||||||||
Administrative expenses |
714 | 772 | 2,096 | 2,373 | ||||||||||||
Net investment income |
813 | 739 | 2,328 | 2,121 | ||||||||||||
Net realized gains (losses) |
(10 | ) | 100 | 84 | (510 | ) | ||||||||||
Interest expense |
150 | 152 | 451 | 451 | ||||||||||||
Other income (expense): |
||||||||||||||||
Gains (losses) from separate account assets |
24 | 22 | 70 | 22 | ||||||||||||
Other |
94 | 69 | 263 | 70 | ||||||||||||
Amortization of purchased intangibles |
65 | 4 | 194 | 16 | ||||||||||||
Chubb integration expenses |
50 | 115 | 233 | 361 | ||||||||||||
Income tax expense (benefit) |
(85 | ) | 277 | 243 | 556 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) |
$ | (70 | ) | $ | 1,360 | $ | 2,328 | $ | 2,525 | |||||||
|
|
|
|
|
|
|
|
|||||||||
Diluted earnings per share: |
||||||||||||||||
Operating income (loss) |
$ | (0.13 | ) (1) | $ | 2.88 | $ | 4.87 | $ | 7.40 | |||||||
Net income (loss) |
$ | (0.15 | ) (1) | $ | 2.88 | $ | 4.94 | $ | 5.44 | |||||||
Weighted average diluted shares outstanding |
466.4 | (1) | 471.4 | 471.6 | 464.1 |
(1) | For the three months ended September 30, 2017, weighted-average shares outstanding used in calculating net loss and operating loss per share excludes the effect of dilutive securities of 3,820,673 shares. In periods where a net loss or operating loss is recognized, inclusion of incremental dilution is antidilutive. |
P&C combined ratio | ||||||||||||||||
Loss and loss expense ratio |
83.4 | % | 57.0 | % | 67.3 | % | 58.0 | % | ||||||||
Policy acquisition cost ratio |
18.6 | % | 19.3 | % | 19.5 | % | 20.3 | % | ||||||||
Administrative expense ratio |
8.8 | % | 9.7 | % | 9.2 | % | 10.7 | % | ||||||||
|
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|
|
|
|
|
|
|||||||||
P&C combined ratio |
110.8 | % | 86.0 | % | 96.0 | % | 89.0 | % | ||||||||
P&C underwriting income (loss) |
$ | (784 | ) | $ | 1,002 | $ | 807 | $ | 2,223 |
Chubb®, Chubb logo® and Chubb. Insured.SM are trademarks of Chubb. | 13 |
Chubb Limited News Release
Chubb Limited
Consolidated Supplemental Segment Information
(in millions of U.S. dollars)
(Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30 | September 30 | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Gross Premiums Written |
||||||||||||||||
North America Commercial P&C Insurance |
$ | 3,922 | $ | 3,832 | $ | 11,665 | $ | 10,877 | ||||||||
North America Personal P&C Insurance |
1,338 | 1,323 | 3,892 | 3,666 | ||||||||||||
North America Agricultural Insurance |
1,303 | 1,240 | 2,039 | 1,921 | ||||||||||||
Overseas General Insurance |
2,377 | 2,383 | 7,503 | 7,393 | ||||||||||||
Global Reinsurance |
202 | 143 | 642 | 624 | ||||||||||||
Life Insurance |
568 | 562 | 1,675 | 1,665 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 9,710 | $ | 9,483 | $ | 27,416 | $ | 26,146 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net Premiums Written |
||||||||||||||||
North America Commercial P&C Insurance |
$ | 3,089 | $ | 3,110 | $ | 9,035 | $ | 8,657 | ||||||||
North America Personal P&C Insurance |
1,194 | 1,011 | 3,433 | 3,113 | ||||||||||||
North America Agricultural Insurance |
926 | 849 | 1,390 | 1,288 | ||||||||||||
Overseas General Insurance |
1,963 | 1,940 | 6,169 | 6,012 | ||||||||||||
Global Reinsurance |
191 | 131 | 580 | 562 | ||||||||||||
Life Insurance |
539 | 532 | 1,586 | 1,575 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 7,902 | $ | 7,573 | $ | 22,193 | $ | 21,207 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net Premiums Earned |
||||||||||||||||
North America Commercial P&C Insurance |
$ | 3,016 | $ | 3,086 | $ | 9,156 | $ | 9,130 | ||||||||
North America Personal P&C Insurance |
1,117 | 1,081 | 3,296 | 3,245 | ||||||||||||
North America Agricultural Insurance |
898 | 819 | 1,256 | 1,169 | ||||||||||||
Overseas General Insurance |
2,064 | 2,034 | 6,018 | 6,082 | ||||||||||||
Global Reinsurance |
185 | 156 | 542 | 543 | ||||||||||||
Life Insurance |
527 | 512 | 1,548 | 1,521 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 7,807 | $ | 7,688 | $ | 21,816 | $ | 21,690 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Segment income (loss) |
||||||||||||||||
North America Commercial P&C Insurance |
$ | 212 | $ | 900 | $ | 2,101 | $ | 2,537 | ||||||||
North America Personal P&C Insurance |
(180 | ) | 216 | 206 | 440 | |||||||||||
North America Agricultural Insurance |
84 | 88 | 197 | 150 | ||||||||||||
Overseas General Insurance |
131 | 530 | 756 | 1,167 | ||||||||||||
Global Reinsurance |
(81 | ) | 120 | 146 | 338 | |||||||||||
Life Insurance |
64 | 69 | 178 | 203 | ||||||||||||
Corporate |
(189 | ) | (97 | ) | (448 | ) | (204 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 41 | $ | 1,826 | $ | 3,136 | $ | 4,631 | ||||||||
|
|
|
|
|
|
|
|
Chubb®, Chubb logo® and Chubb. Insured.SM are trademarks of Chubb. | 14 |
Exhibit 99.2
Chubb Limited
Financial Supplement
for the Quarter Ended September 30, 2017
Investor Contact
Helen M. Wilson
Phone: (441) 299-9283
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 as indicated by such statements. For example, forward-looking statements related to financial performance including exposures, reserves and recoverables could be affected by the frequency 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, credit developments among reinsurers, and activities and expenses related to our post-acquisition integration of The Chubb Corporation.
Our forward-looking statements could also be affected by 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. 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 - 2 | |||||
II. |
Consolidated Results |
|||||
- Consolidated Statement of Operations |
3 | |||||
- P&C Results - Consecutive Quarters |
4 | |||||
- Catastrophe Losses |
5 | |||||
- Summary Consolidated Balance Sheets |
6 | |||||
- Line of Business |
7 | |||||
- Consolidated Results by Segment |
8 - 11 | |||||
III. |
Global P&C Results |
|||||
- Global P&C Underwriting Results - Consecutive Quarters |
12 | |||||
IV. |
Segment Results |
|||||
- North America Commercial P&C Insurance |
13 | |||||
- North America Personal P&C Insurance |
14 | |||||
- North America Agricultural Insurance |
15 | |||||
- Overseas General Insurance |
16 - 17 | |||||
- Global Reinsurance |
18 | |||||
- Life Insurance |
19 | |||||
- Corporate |
20 | |||||
V. |
Balance Sheet Details |
|||||
- Loss Reserve Rollforward |
21 | |||||
- Reinsurance Recoverable Analysis |
22 | |||||
- Investment Portfolio |
23 - 26 | |||||
- Net Realized and Unrealized Gains (Losses) |
27 - 28 | |||||
- Debt and Capital |
29 | |||||
- Computation of Basic and Diluted Earnings Per Share |
30 | |||||
- Book Value and Book Value per Common Share |
31 | |||||
VI. |
Other Disclosures |
|||||
- Non-GAAP Financial Measures |
32 - 37 | |||||
- Glossary |
38 |
Note: The results herein are presented on an as-reported basis unless otherwise indicated.
For comparison purposes, key 2016 As If results, which include the results of operations of The Chubb Corporation (Chubb Corp) for the first 14 days of January 2016 prior to the acquisition closing date and exclude purchase accounting adjustments in underwriting income, are also included within the as-reported pages. These results are calculated on the same basis as presented in prior reports, are unaudited and are provided for informational purposes only. For more detailed 2016 results presented on an As If basis, refer to the Chubb Limited Financial Supplement for the quarter and year ended December 31, 2016.
Chubb Limited
Consolidated Financial Highlights - Quarter
(in millions of U.S. dollars, except share, per share data, and ratios)
(Unaudited)
Three months ended September 30 | % Change 3Q-17 vs. |
Constant $ | Constant $ % Change 3Q-17 vs. |
|||||||||||||||||
2017 | 2016 | 3Q-16 | 2016 | 3Q-16 | ||||||||||||||||
Gross premiums written |
$ | 9,710 | $ | 9,483 | 2.4 | % | $ | 9,478 | 2.5 | % | ||||||||||
Net premiums written |
$ | 7,902 | $ | 7,573 | 4.3 | % | $ | 7,571 | 4.3 | % | ||||||||||
P&C net premiums written |
$ | 7,363 | $ | 7,041 | 4.6 | % | $ | 7,039 | 4.6 | % | ||||||||||
Global P&C net premiums written |
$ | 6,437 | $ | 6,192 | 4.0 | % | $ | 6,189 | 4.0 | % | ||||||||||
Net premiums earned |
$ | 7,807 | $ | 7,688 | 1.5 | % | $ | 7,698 | 1.4 | % | ||||||||||
Net investment income |
$ | 813 | $ | 739 | 9.8 | % | $ | 739 | 9.8 | % | ||||||||||
Adjusted net investment income |
$ | 893 | $ | 830 | 7.5 | % | $ | 830 | 7.5 | % | ||||||||||
Operating income (loss) |
$ | (60 | ) | $ | 1,356 | NM | $ | 1,364 | NM | |||||||||||
Net income (loss) |
$ | (70 | ) | $ | 1,360 | NM | ||||||||||||||
Operating cash flow |
$ | 1,771 | $ | 1,684 | ||||||||||||||||
P&C combined ratio |
||||||||||||||||||||
Loss and loss expense ratio |
83.4 | % | 57.0 | % | ||||||||||||||||
Underwriting and administrative expense ratio |
27.4 | % | 29.0 | % | ||||||||||||||||
|
|
|
|
|||||||||||||||||
Combined ratio |
110.8 | % | 86.0 | % | ||||||||||||||||
P&C combined ratio - ex Cats and PPD |
||||||||||||||||||||
Loss and loss expense ratio - ex Cats and PPD |
61.3 | % | 60.0 | % | ||||||||||||||||
Underwriting and administrative expense ratio - ex Cats and PPD |
27.2 | % | 28.9 | % | ||||||||||||||||
|
|
|
|
|||||||||||||||||
Combined ratio excluding catastrophe losses and PPD |
88.5 | % | 88.9 | % | ||||||||||||||||
Operating return on equity (ROE) |
-0.5 | % | 12.0 | % | ||||||||||||||||
ROE |
-0.6 | % | 11.4 | % | ||||||||||||||||
Operating effective tax rate |
50.9 | % | 18.4 | % | ||||||||||||||||
Effective tax rate |
54.7 | % | 17.0 | % | ||||||||||||||||
Diluted earnings per share |
||||||||||||||||||||
Operating income (loss) (1) |
$ | (0.13 | ) | $ | 2.88 | NM | ||||||||||||||
Net income (loss) (1) |
$ | (0.15 | ) | $ | 2.88 | NM | ||||||||||||||
Weighted average basic common shares outstanding |
466.4 | 468.0 | ||||||||||||||||||
Weighted average diluted common shares outstanding (1) |
466.4 | 471.4 |
(1) | For the three months ended September 30, 2017, weighted-average shares outstanding used in calculating net loss and operating loss per share excludes the effect of dilutive securities of 3,820,673 shares. In periods where a net loss or operating loss is recognized, inclusion of incremental dilution is antidilutive. |
Financial Highlights - QTR | Page 1 |
Chubb Limited
Consolidated Financial Highlights - Year to Date
(in millions of U.S. dollars, except share, per share data, and ratios)
(Unaudited)
As If | ||||||||||||||||||||||||||||||||||||
Nine months ended September 30 | % Change YTD-17 vs |
Constant $ | Constant $ % Change YTD-17 vs |
YTD | % Change YTD-17 vs |
Constant $ | Constant $ % Change YTD-17 vs |
|||||||||||||||||||||||||||||
2017 | 2016 | YTD-16 | 2016 | YTD-16 | 2016 | YTD-16 | 2016 | YTD-16 | ||||||||||||||||||||||||||||
Gross premiums written |
$ | 27,416 | $ | 26,146 | 4.9 | % | $ | 26,074 | 5.1 | % | $ | 27,078 | 1.2 | % | $ | 27,007 | 1.5 | % | ||||||||||||||||||
Net premiums written |
$ | 22,193 | $ | 21,207 | 4.7 | % | $ | 21,141 | 5.0 | % | $ | 22,062 | 0.6 | % | $ | 21,996 | 0.9 | % | ||||||||||||||||||
P&C net premiums written |
$ | 20,607 | $ | 19,632 | 5.0 | % | $ | 19,561 | 5.3 | % | $ | 20,486 | 0.6 | % | $ | 20,415 | 0.9 | % | ||||||||||||||||||
Global P&C net premiums written |
$ | 19,217 | $ | 18,344 | 4.8 | % | $ | 18,273 | 5.2 | % | $ | 19,198 | 0.1 | % | $ | 19,126 | 0.5 | % | ||||||||||||||||||
Net premiums earned |
$ | 21,816 | $ | 21,690 | 0.6 | % | $ | 21,662 | 0.7 | % | ||||||||||||||||||||||||||
Net investment income |
$ | 2,328 | $ | 2,121 | 9.7 | % | $ | 2,113 | 10.1 | % | ||||||||||||||||||||||||||
Adjusted net investment income |
$ | 2,584 | $ | 2,413 | 7.0 | % | $ | 2,405 | 7.4 | % | ||||||||||||||||||||||||||
Operating income |
$ | 2,295 | $ | 3,433 | -33.2 | % | $ | 3,434 | -33.2 | % | ||||||||||||||||||||||||||
Net income |
$ | 2,328 | $ | 2,525 | -7.8 | % | ||||||||||||||||||||||||||||||
Operating cash flow |
$ | 3,411 | $ | 3,837 | ||||||||||||||||||||||||||||||||
P&C combined ratio |
||||||||||||||||||||||||||||||||||||
Loss and loss expense ratio |
67.3 | % | 58.0 | % | 58.0 | % | ||||||||||||||||||||||||||||||
Underwriting and administrative expense ratio |
28.7 | % | 31.0 | % | 30.2 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Combined ratio |
96.0 | % | 89.0 | % | 88.2 | % | ||||||||||||||||||||||||||||||
P&C combined ratio - ex Cats and PPD |
||||||||||||||||||||||||||||||||||||
Loss and loss expense ratio - ex Cats and PPD |
59.4 | % | 58.7 | % | ||||||||||||||||||||||||||||||||
Underwriting and administrative expense ratio - ex Cats and PPD |
28.6 | % | 30.8 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||||||||
Combined ratio excluding catastrophe losses and PPD |
88.0 | % | 89.5 | % | ||||||||||||||||||||||||||||||||
Operating return on equity (ROE) |
6.4 | % | 10.4 | % | ||||||||||||||||||||||||||||||||
ROE |
6.3 | % | 7.4 | % | ||||||||||||||||||||||||||||||||
Operating effective tax rate |
13.3 | % | 17.3 | % | ||||||||||||||||||||||||||||||||
Effective tax rate |
9.4 | % | 18.1 | % | ||||||||||||||||||||||||||||||||
Diluted earnings per share |
||||||||||||||||||||||||||||||||||||
Operating income |
$ | 4.87 | $ | 7.40 | -34.2 | % | ||||||||||||||||||||||||||||||
Net income |
$ | 4.94 | $ | 5.44 | -9.2 | % | ||||||||||||||||||||||||||||||
Full nine months diluted earnings per share (1) |
||||||||||||||||||||||||||||||||||||
Operating income |
$ | 7.42 | ||||||||||||||||||||||||||||||||||
Net income |
$ | 5.49 | ||||||||||||||||||||||||||||||||||
December 31 2016 |
% Change 3Q-17 vs 4Q-16 |
|||||||||||||||||||||||||||||||||||
Book value per common share |
$ | 108.74 | $ | 103.60 | 5.0 | % | ||||||||||||||||||||||||||||||
Book value per common share excluding foreign currency (2) |
$ | 106.79 | $ | 103.60 | 3.1 | % | ||||||||||||||||||||||||||||||
Tangible book value per common share |
$ | 65.06 | $ | 60.64 | 7.3 | % | ||||||||||||||||||||||||||||||
Tangible book value per common share excluding foreign currency (2) |
$ | 64.07 | $ | 60.64 | 5.7 | % | ||||||||||||||||||||||||||||||
Weighted average basic common shares outstanding |
467.7 | 460.6 | ||||||||||||||||||||||||||||||||||
Weighted average diluted common shares outstanding |
471.6 | 464.1 | ||||||||||||||||||||||||||||||||||
Total hybrid & financial debt/capitalization |
20.4 | % | 21.7 | % | 21.8 | % |
(1) | Full nine months diluted earnings per share includes the combined company results inclusive of the first 14 days of January 2016 and includes the impact of purchase accounting adjustments related to The Chubb Corporation acquisition. |
(2) | For 2017, book value per common share and tangible book value per common share exclude the impact of foreign currency movement during the year. |
Financial Highlights - YTD | Page 2 |
Chubb Limited
Statement of Operations - Consecutive Quarters
(in millions of U.S. dollars)
(Unaudited)
YTD | YTD | Full Year | ||||||||||||||||||||||||||||||
3Q-17 | 2Q-17 | 1Q-17 | 4Q-16 | 3Q-16 | 2017 | 2016 | 2016 | |||||||||||||||||||||||||
Consolidated Statements of Operations |
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Gross premiums written |
$ | 9,710 | $ | 9,305 | $ | 8,401 | $ | 8,837 | $ | 9,483 | $ | 27,416 | $ | 26,146 | $ | 34,983 | ||||||||||||||||
Net premiums written |
7,902 | 7,581 | 6,710 | 6,938 | 7,573 | 22,193 | 21,207 | 28,145 | ||||||||||||||||||||||||
Net premiums earned |
7,807 | 7,237 | 6,772 | 7,059 | 7,688 | 21,816 | 21,690 | 28,749 | ||||||||||||||||||||||||
(1) Adjusted losses and loss expenses |
6,252 | 4,148 | 3,789 | 3,884 | 4,266 | 14,189 | 12,196 | 16,080 | ||||||||||||||||||||||||
Realized (gains) losses on crop derivatives |
5 | 2 | | 6 | (3 | ) | 7 | (1 | ) | 5 | ||||||||||||||||||||||
Pension curtailment benefit |
| | | (23 | ) | | | | (23 | ) | ||||||||||||||||||||||
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Losses and loss expenses |
6,247 | 4,146 | 3,789 | 3,855 | 4,269 | 14,182 | 12,197 | 16,052 | ||||||||||||||||||||||||
Policy benefits |
169 | 163 | 168 | 161 | 155 | 500 | 427 | 588 | ||||||||||||||||||||||||
Policy acquisition costs |
1,488 | 1,449 | 1,397 | 1,417 | 1,514 | 4,334 | 4,487 | 5,904 | ||||||||||||||||||||||||
(2) Adjusted administrative expenses |
714 | 706 | 676 | 798 | 772 | 2,096 | 2,373 | 3,171 | ||||||||||||||||||||||||
Pension curtailment benefit |
| | | (90 | ) | | | | (90 | ) | ||||||||||||||||||||||
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Administrative expenses |
714 | 706 | 676 | 708 | 772 | 2,096 | 2,373 | 3,081 | ||||||||||||||||||||||||
(3) Adjusted net investment income |
893 | 855 | 836 | 845 | 830 | 2,584 | 2,413 | 3,258 | ||||||||||||||||||||||||
Amortization expense of fair value adjustment on acquired invested assets |
(80 | ) | (85 | ) | (91 | ) | (101 | ) | (91 | ) | (256 | ) | (292 | ) | (393 | ) | ||||||||||||||||
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Net investment income |
813 | 770 | 745 | 744 | 739 | 2,328 | 2,121 | 2,865 | ||||||||||||||||||||||||
(4) Adjusted realized gains (losses) |
(5 | ) | 103 | (7 | ) | 371 | 97 | 91 | (511 | ) | (140 | ) | ||||||||||||||||||||
Realized gains (losses) on crop derivatives |
(5 | ) | (2 | ) | | (6 | ) | 3 | (7 | ) | 1 | (5 | ) | |||||||||||||||||||
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Net realized gains (losses) |
(10 | ) | 101 | (7 | ) | 365 | 100 | 84 | (510 | ) | (145 | ) | ||||||||||||||||||||
(5) Adjusted interest expense |
162 | 160 | 166 | 167 | 164 | 488 | 479 | 646 | ||||||||||||||||||||||||
Interest expense related to pre-acquisition debt |
| | | | | | 7 | 7 | ||||||||||||||||||||||||
Amortization benefit of fair value adjustment on acquired long term debt |
(12 | ) | (13 | ) | (12 | ) | (13 | ) | (12 | ) | (37 | ) | (35 | ) | (48 | ) | ||||||||||||||||
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Interest expense |
150 | 147 | 154 | 154 | 152 | 451 | 451 | 605 | ||||||||||||||||||||||||
Gains (losses) from fair value changes in separate account assets |
24 | 16 | 30 | (11 | ) | 22 | 70 | 22 | 11 | |||||||||||||||||||||||
Net realized gains (losses) related to unconsolidated entities |
89 | 143 | 52 | 162 | 72 | 284 | 65 | 227 | ||||||||||||||||||||||||
Other income (expense) - operating |
5 | (14 | ) | (12 | ) | (21 | ) | (3 | ) | (21 | ) | 5 | (16 | ) | ||||||||||||||||||
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Other income (expense) |
118 | 145 | 70 | 130 | 91 | 333 | 92 | 222 | ||||||||||||||||||||||||
Amortization expense of purchased intangibles |
65 | 65 | 64 | 3 | 4 | 194 | 16 | 19 | ||||||||||||||||||||||||
Chubb integration expenses |
50 | 72 | 111 | 131 | 115 | 233 | 361 | 492 | ||||||||||||||||||||||||
Income tax expense (benefit) |
(85 | ) | 200 | 128 | 259 | 277 | 243 | 556 | 815 | |||||||||||||||||||||||
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Net income (loss) |
$ | (70 | ) | $ | 1,305 | $ | 1,093 | $ | 1,610 | $ | 1,360 | $ | 2,328 | $ | 2,525 | $ | 4,135 | |||||||||||||||
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(1) | Adjusted losses and loss expenses used throughout this report exclude a portion of the one-time pension curtailment benefit, recorded in Corporate, and include realized gains and losses on crop derivatives. |
(2) | Adjusted administrative expenses used throughout this report exclude a portion of the one-time pension curtailment benefit. |
(3) | Adjusted net investment income used throughout this report excludes amortization of the fair value adjustment on acquired invested assets. |
(4) | Adjusted realized gains and losses used throughout this report excludes realized gains and losses on crop derivatives. |
(5) | Adjusted interest expense used throughout this report excludes interest expense related to pre-acquisition debt and amortization benefit of the fair value adjustment on acquired long term debt. |
Statement of Operations | Page 3 |
Chubb Limited
P&C Underwriting Results - Consecutive Quarters
(in millions of U.S. dollars, except ratios)
(Unaudited)
YTD | YTD | Full Year | ||||||||||||||||||||||||||||||
3Q-17 | 2Q-17 | 1Q-17 | 4Q-16 | 3Q-16 | 2017 | 2016 | 2016 | |||||||||||||||||||||||||
Chubb Limited P&C Underwriting Results |
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P&C Underwriting income (Including Corporate and excluding Life Insurance) |
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Gross premiums written |
$ | 9,142 | $ | 8,748 | $ | 7,851 | $ | 8,260 | $ | 8,921 | $ | 25,741 | $ | 24,481 | $ | 32,741 | ||||||||||||||||
Net premiums written |
7,363 | 7,058 | 6,186 | 6,389 | 7,041 | 20,607 | 19,632 | 26,021 | ||||||||||||||||||||||||
Net premiums earned |
7,280 | 6,722 | 6,266 | 6,525 | 7,176 | 20,268 | 20,169 | 26,694 | ||||||||||||||||||||||||
Adjusted losses and loss expenses |
6,071 | 3,966 | 3,596 | 3,719 | 4,092 | 13,633 | 11,698 | 15,417 | ||||||||||||||||||||||||
Policy acquisition costs (excluding amortization of acquired UPR intangible) |
1,356 | 1,319 | 1,283 | 1,150 | 1,067 | 3,958 | 2,686 | 3,836 | ||||||||||||||||||||||||
Amortization of acquired UPR intangible - Chubb Corp |
| | | 144 | 320 | | 1,415 | 1,559 | ||||||||||||||||||||||||
Adjusted administrative expenses |
637 | 629 | 604 | 717 | 695 | 1,870 | 2,147 | 2,864 | ||||||||||||||||||||||||
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P&C Underwriting income (loss) |
$ | (784 | ) | $ | 808 | $ | 783 | $ | 795 | $ | 1,002 | $ | 807 | $ | 2,223 | $ | 3,018 | |||||||||||||||
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P&C Underwriting income - As If |
$ | 812 | $ | 1,041 | $ | 2,436 | $ | 3,248 | ||||||||||||||||||||||||
% Change versus prior year period |
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Net premiums written |
4.6 | % | -0.8 | % | 12.9 | % | 76.1 | % | 67.0 | % | 5.0 | % | 62.4 | % | 65.6 | % | ||||||||||||||||
Net premiums earned |
1.5 | % | -2.5 | % | 2.7 | % | 76.3 | % | 69.3 | % | 0.5 | % | 74.4 | % | 74.8 | % | ||||||||||||||||
Net premiums written constant $ |
4.6 | % | -0.2 | % | 13.4 | % | 77.1 | % | 68.8 | % | 5.3 | % | 66.6 | % | 69.1 | % | ||||||||||||||||
Net premiums earned constant $ |
1.3 | % | -2.0 | % | 2.8 | % | 77.1 | % | 71.0 | % | 0.7 | % | 78.6 | % | 78.2 | % | ||||||||||||||||
% Change versus prior year period - As If * |
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Net premiums written |
4.6 | % | -0.8 | % | -2.3 | % | -4.2 | % | -4.5 | % | 0.6 | % | -5.4 | % | -5.1 | % | ||||||||||||||||
Net premiums written constant $ |
4.6 | % | -0.2 | % | -1.9 | % | -3.5 | % | -3.4 | % | 0.9 | % | -3.2 | % | -3.3 | % | ||||||||||||||||
Net premiums written constant $ excluding merger-related underwriting actions, accounting policy alignment, and one-time UPR transfer in 2016 (1) |
4.0 | % | 2.6 | % | 2.2 | % | -0.4 | % | 1.1 | % | 3.0 | % | -1.2 | % | -1.0 | % | ||||||||||||||||
P&C combined ratio |
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Loss and loss expense ratio |
83.4 | % | 59.0 | % | 57.4 | % | 57.0 | % | 57.0 | % | 67.3 | % | 58.0 | % | 57.8 | % | ||||||||||||||||
Policy acquisition cost ratio |
18.6 | % | 19.6 | % | 20.5 | % | 19.8 | % | 19.3 | % | 19.5 | % | 20.3 | % | 20.2 | % | ||||||||||||||||
Administrative expense ratio |
8.8 | % | 9.4 | % | 9.6 | % | 11.0 | % | 9.7 | % | 9.2 | % | 10.7 | % | 10.7 | % | ||||||||||||||||
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Combined ratio |
110.8 | % | 88.0 | % | 87.5 | % | 87.8 | % | 86.0 | % | 96.0 | % | 89.0 | % | 88.7 | % | ||||||||||||||||
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Combined ratio excluding catastrophe losses and PPD |
88.5 | % | 87.5 | % | 88.0 | % | 87.4 | % | 88.9 | % | 88.0 | % | 89.5 | % | 89.0 | % | ||||||||||||||||
P&C Combined ratio - As If |
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Loss and loss expense ratio - As If |
57.0 | % | 57.0 | % | 58.0 | % | 57.7 | % | ||||||||||||||||||||||||
Policy acquisition cost ratio - As If |
19.6 | % | 18.8 | % | 19.4 | % | 19.5 | % | ||||||||||||||||||||||||
Administrative expense ratio - As If |
11.0 | % | 9.7 | % | 10.8 | % | 10.8 | % | ||||||||||||||||||||||||
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Combined ratio - As If |
87.6 | % | 85.5 | % | 88.2 | % | 88.0 | % | ||||||||||||||||||||||||
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Combined ratio excluding catastrophe losses and PPD - As If |
87.1 | % | 88.4 | % | 88.7 | % | 88.3 | % | ||||||||||||||||||||||||
Other ratios |
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Net premiums written/gross premiums written |
81 | % | 81 | % | 79 | % | 77 | % | 79 | % | 80 | % | 80 | % | 79 | % | ||||||||||||||||
P&C expense ratio |
27.4 | % | 29.0 | % | 30.1 | % | 30.8 | % | 29.0 | % | 28.7 | % | 31.0 | % | 30.9 | % | ||||||||||||||||
P&C expense ratio excluding A&H |
25.1 | % | 27.1 | % | 28.0 | % | 28.8 | % | 27.0 | % | 26.6 | % | 29.1 | % | 29.0 | % | ||||||||||||||||
Catastrophe reinstatement premiums collected - pre-tax |
$ | 22 | $ | | $ | | $ | 1 | $ | | $ | 22 | $ | 6 | $ | 7 | ||||||||||||||||
Catastrophe losses - pre-tax |
$ | 1,915 | $ | 200 | $ | 206 | $ | 269 | $ | 144 | $ | 2,321 | $ | 798 | $ | 1,067 | ||||||||||||||||
Favorable prior period development (PPD) - pre-tax |
$ | (270 | ) | $ | (170 | ) | $ | (231 | ) | $ | (238 | ) | $ | (349 | ) | $ | (671 | ) | $ | (897 | ) | $ | (1,135 | ) | ||||||||
Loss and loss expense ratio excluding catastrophe losses and PPD |
61.3 | % | 58.6 | % | 58.1 | % | 56.4 | % | 60.0 | % | 59.4 | % | 58.7 | % | 58.1 | % |
(1) | Net premiums written were adversely impacted by merger-related underwriting actions of $87 million in Q3 2017 and $472 million for YTD 2017, and by accounting policy alignment of $73 million for YTD 2017. In addition, Q3 2016 and YTD 2016 included a one-time unearned premium reserve (UPR) transfer of $128 million that reduced net premiums written in the prior year. |
* | Comparisons to 2015 are as if ACE and Chubb were one company. |
Note: See Glossary on page 38 for further information on the calculation of the components of combined ratios.
P&C Results | Page 4 |
Chubb Limited
Segments results - Catastrophe Loss Charges
(in millions of U.S. dollars)
(Unaudited)
Total | Total | |||||||||||||||||||||||||||||||
North | North | North | Consolidated | Reinstatement | Consolidated | |||||||||||||||||||||||||||
America | America | America | Overseas | Excluding | premiums | including | ||||||||||||||||||||||||||
Commercial P&C | Personal P&C | Agricultural | General | Global | Reinstatement | collected | Reinstatement | |||||||||||||||||||||||||
Insurance | Insurance | Insurance | Insurance | Reinsurance | premiums | (expensed) | premiums | |||||||||||||||||||||||||
Chubb Limited Catastrophe Loss Charges - Q3 2017 |
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Catastrophe Loss Charges by Event - Gross |
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Hurricane Harvey |
$ | 547 | $ | 250 | $ | 1 | $ | 140 | $ | 50 | $ | 988 | ||||||||||||||||||||
Hurricane Irma |
618 | 214 | 2 | 120 | 325 | 1,279 | ||||||||||||||||||||||||||
Hurricane Maria |
| | | 500 | 59 | 559 | ||||||||||||||||||||||||||
Mexico Earthquakes |
| | | 40 | | 40 | ||||||||||||||||||||||||||
Other |
38 | 44 | 2 | 24 | 10 | 118 | ||||||||||||||||||||||||||
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Total |
$ | 1,203 | $ | 508 | $ | 5 | $ | 824 | $ | 444 | $ | 2,984 | ||||||||||||||||||||
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Catastrophe Loss Charges by Event - Net |
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Hurricane Harvey |
$ | 366 | $ | 200 | $ | 1 | $ | 40 | $ | 48 | $ | 655 | $ | 5 | $ | 650 | ||||||||||||||||
Hurricane Irma |
464 | 206 | 2 | 90 | 159 | 921 | 30 | 891 | ||||||||||||||||||||||||
Hurricane Maria |
| | | 152 | 55 | 207 | (13 | ) | 220 | |||||||||||||||||||||||
Mexico Earthquakes |
| | | 25 | | 25 | | 25 | ||||||||||||||||||||||||
Other |
38 | 42 | 2 | 19 | 6 | 107 | | 107 | ||||||||||||||||||||||||
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Total |
$ | 868 | $ | 448 | $ | 5 | $ | 326 | $ | 268 | $ | 1,915 | ||||||||||||||||||||
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Reinstatement premiums collected (expensed) |
(3 | ) | (3 | ) | | (9 | ) | 37 | $ | 22 | ||||||||||||||||||||||
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Total impact before income tax |
$ | 871 | $ | 451 | $ | 5 | $ | 335 | $ | 231 | $ | 1,893 | ||||||||||||||||||||
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Income tax benefit |
368 | |||||||||||||||||||||||||||||||
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Total impact after income tax |
$ | 1,525 | ||||||||||||||||||||||||||||||
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Note: The above table represents initial catastrophe losses estimated based on modeled information, underwriter analysis, preliminary assessments, and an analysis of exposed limits within each region. These estimates, as well as the allocation of these losses by segment, may change as additional information emerges.
At this time there is the potential that approximately $20 million of net catastrophe losses associated with hurricane Maria may be re-allocated from Overseas General Insurance segment to North America Commercial P&C Insurance segment as further claim detail are reported. There would be no impact to consolidated net losses from such a re-allocation.
Catastrophe Losses | Page 5 |
Chubb Limited
Summary Consolidated Balance Sheets
(in millions of U.S. dollars, except per share data)
(Unaudited)
September 30 | June 30 | March 31 | December 31 | |||||||||||||
2017 | 2017 | 2017 | 2016 | |||||||||||||
Assets |
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Fixed maturities available for sale, at fair value |
$ | 83,686 | $ | 81,645 | $ | 80,806 | $ | 80,115 | ||||||||
Fixed maturities held to maturity, at amortized cost |
10,160 | 10,371 | 10,519 | 10,644 | ||||||||||||
Equity securities, at fair value |
910 | 856 | 835 | 814 | ||||||||||||
Short-term investments, at fair value |
2,991 | 2,651 | 2,780 | 3,002 | ||||||||||||
Other investments |
4,677 | 4,685 | 4,551 | 4,519 | ||||||||||||
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Total investments |
102,424 | 100,208 | 99,491 | 99,094 | ||||||||||||
Cash |
1,088 | 1,297 | 1,063 | 985 | ||||||||||||
Securities lending collateral |
1,757 | 1,545 | 1,071 | 1,092 | ||||||||||||
Insurance and reinsurance balances receivable |
9,551 | 9,662 | 8,880 | 8,970 | ||||||||||||
Reinsurance recoverable on losses and loss expenses |
14,799 | 13,358 | 13,769 | 13,577 | ||||||||||||
Deferred policy acquisition costs |
4,691 | 4,546 | 4,406 | 4,314 | ||||||||||||
Value of business acquired |
339 | 337 | 345 | 355 | ||||||||||||
Prepaid reinsurance premiums |
2,506 | 2,592 | 2,549 | 2,448 | ||||||||||||
Goodwill and other intangible assets |
22,265 | 22,013 | 22,061 | 22,095 | ||||||||||||
Investments in partially-owned insurance companies |
652 | 662 | 666 | 666 | ||||||||||||
Other assets |
7,347 | 6,768 | 6,666 | 6,190 | ||||||||||||
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Total assets |
$ | 167,419 | $ | 162,988 | $ | 160,967 | $ | 159,786 | ||||||||
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Liabilities |
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Unpaid losses and loss expenses |
$ | 64,153 | $ | 60,394 | $ | 60,579 | $ | 60,540 | ||||||||
Unearned premiums |
15,456 | 15,289 | 14,857 | 14,779 | ||||||||||||
Future policy benefits |
5,307 | 5,190 | 5,086 | 5,036 | ||||||||||||
Insurance and reinsurance balances payable |
5,827 | 5,841 | 5,797 | 5,637 | ||||||||||||
Securities lending payable |
1,757 | 1,546 | 1,072 | 1,093 | ||||||||||||
Accounts payable, accrued expenses, and other liabilities |
10,422 | 10,360 | 10,477 | 10,020 | ||||||||||||
Deferred tax liabilities |
1,139 | 1,122 | 967 | 988 | ||||||||||||
Short-term debt |
1,020 | 922 | 300 | 500 | ||||||||||||
Long-term debt |
11,559 | 11,667 | 12,300 | 12,610 | ||||||||||||
Trust preferred securities |
308 | 308 | 308 | 308 | ||||||||||||
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Total liabilities |
116,948 | 112,639 | 111,743 | 111,511 | ||||||||||||
Shareholders equity |
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Total shareholders equity, excl. AOCI |
49,402 | 49,979 | 49,224 | 48,589 | ||||||||||||
Accumulated other comprehensive income (loss) (AOCI) |
1,069 | 370 | | (314 | ) | |||||||||||
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Total shareholders equity |
50,471 | 50,349 | 49,224 | 48,275 | ||||||||||||
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Total liabilities and shareholders equity |
$ | 167,419 | $ | 162,988 | $ | 160,967 | $ | 159,786 | ||||||||
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Book value per common share |
$ | 108.74 | $ | 108.19 | $ | 105.35 | $ | 103.60 | ||||||||
% change over prior quarter |
0.5 | % | 2.7 | % | 1.7 | % | -0.3 | % | ||||||||
Tangible book value per common share |
$ | 65.06 | $ | 65.23 | $ | 62.52 | $ | 60.64 | ||||||||
% change over prior quarter |
-0.3 | % | 4.3 | % | 3.1 | % | 0.6 | % |
Consol Bal Sheet | Page 6 |
Chubb Limited
Consolidated Net Premiums Written by Line of Business
(in millions of U.S. dollars)
(Unaudited)
C$ % Change | ||||||||||||||||||||||||||||||||||||
As If ex | ||||||||||||||||||||||||||||||||||||
C$ % Change ex | Merger Actions, | |||||||||||||||||||||||||||||||||||
Merger Actions | Acct Policy | |||||||||||||||||||||||||||||||||||
& one-time UPR | & one-time UPR | |||||||||||||||||||||||||||||||||||
% Change | Transfer (1) | % Change | As If | Transfer (1) | ||||||||||||||||||||||||||||||||
3Q-17 vs. | 3Q-17 vs. | YTD | YTD | YTD-17 vs | YTD | YTD-17 vs | ||||||||||||||||||||||||||||||
3Q-17 | 3Q-16 | 3Q-16 | 3Q-16 | 2017 | 2016 | YTD-16 | 2016 | YTD-16 | ||||||||||||||||||||||||||||
Net premiums written |
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Commercial multiple peril (2) |
$ | 233 | $ | 228 | 2.2 | % | 1.8 | % | $ | 661 | $ | 596 | 10.9 | % | $ | 676 | -1.6 | % | ||||||||||||||||||
Commercial casualty |
992 | 966 | 2.7 | % | 4.9 | % | 2,680 | 2,502 | 7.1 | % | 2,620 | 5.3 | % | |||||||||||||||||||||||
Workers compensation |
470 | 471 | -0.2 | % | 4.5 | % | 1,536 | 1,467 | 4.7 | % | 1,606 | -0.4 | % | |||||||||||||||||||||||
Professional liability |
906 | 947 | -4.3 | % | -4.4 | % | 2,600 | 2,552 | 1.9 | % | 2,688 | -1.5 | % | |||||||||||||||||||||||
Surety |
158 | 158 | 0.0 | % | 0.6 | % | 461 | 441 | 4.5 | % | 450 | 3.6 | % | |||||||||||||||||||||||
Property and other short-tail lines |
888 | 905 | -1.9 | % | -0.4 | % | 2,974 | 2,935 | 1.3 | % | 3,072 | 0.4 | % | |||||||||||||||||||||||
International other casualty |
237 | 239 | -0.8 | % | -1.3 | % | 801 | 771 | 3.9 | % | 827 | 2.0 | % | |||||||||||||||||||||||
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Total Commercial P&C (1) |
3,884 | 3,914 | -0.8 | % | 0.6 | % | 11,713 | 11,264 | 4.0 | % | 11,939 | 1.0 | % | |||||||||||||||||||||||
Agriculture |
926 | 849 | 9.0 | % | 9.0 | % | 1,390 | 1,288 | 7.9 | % | 1,288 | 7.9 | % | |||||||||||||||||||||||
Personal automobile - North America |
204 | 188 | 8.5 | % | 8.5 | % | 578 | 520 | 11.2 | % | 534 | 8.2 | % | |||||||||||||||||||||||
Personal automobile - International |
195 | 154 | 26.6 | % | 30.7 | % | 569 | 499 | 14.0 | % | 499 | 17.1 | % | |||||||||||||||||||||||
Personal homeowners |
877 | 712 | 23.2 | % | 4.4 | % | 2,499 | 2,281 | 9.6 | % | 2,347 | 6.0 | % | |||||||||||||||||||||||
Personal other |
355 | 367 | -3.3 | % | 0.5 | % | 1,080 | 1,048 | 3.1 | % | 1,088 | 6.5 | % | |||||||||||||||||||||||
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Total Personal lines (1) |
1,631 | 1,421 | 14.8 | % | 6.6 | % | 4,726 | 4,348 | 8.7 | % | 4,468 | 7.6 | % | |||||||||||||||||||||||
Total Property and Casualty lines |
6,441 | 6,184 | 4.2 | % | 3.2 | % | 17,829 | 16,900 | 5.5 | % | 17,695 | 3.2 | % | |||||||||||||||||||||||
Global A&H lines (1) (3) |
1,014 | 990 | 2.4 | % | 3.7 | % | 3,033 | 2,955 | 2.6 | % | 2,994 | 2.4 | % | |||||||||||||||||||||||
Reinsurance lines (1) |
191 | 131 | 47.1 | % | 47.9 | % | 580 | 562 | 3.3 | % | 582 | 2.6 | % | |||||||||||||||||||||||
Life (1) |
256 | 268 | -4.5 | % | -1.1 | % | 751 | 790 | -4.9 | % | 791 | -1.5 | % | |||||||||||||||||||||||
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Total consolidated |
$ | 7,902 | $ | 7,573 | 4.3 | % | 3.9 | % | $ | 22,193 | $ | 21,207 | 4.7 | % | $ | 22,062 | 2.9 | % | ||||||||||||||||||
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(1) | Q3 2017 and YTD 2017 include the adverse impact of merger-related underwriting actions, respectively, as follows: Commercial P&C $52 million and $233 million; Personal lines $22 million and $197 million; Global A&H lines $13 million and $32 million; Reinsurance lines $nil and $10 million; and Life $9 million and $33 million. YTD 2017 also include the adverse impact of accounting policy alignment as follows: Commercial P&C $66 million, Personal lines $6 million and Global A&H lines $1 million. In addition, Q3 2016 and YTD 2016 included a one-time unearned premium reserve (UPR) transfer of $128 million that reduced net premiums written in the prior year. |
(2) | Commercial multiple peril represents retail package business (property and general liability). |
(3) | For purposes of this schedule only, A&H results from our Combined North America and International businesses, normally included in the Life Insurance and Overseas General Insurance segments, respectively, as well as the A&H results of our North America Commercial P&C segment, are included within the Global A&H lines above. |
Line of Business | Page 7 |
Chubb Limited
Consolidated Results - Three months ended September 30, 2017
(in millions of U.S. dollars, except ratios)
(Unaudited)
North | North | North | ||||||||||||||||||||||||||||||||||
America | America | America | Overseas | |||||||||||||||||||||||||||||||||
Commercial P&C | Personal P&C | Agricultural | General | Global | Total | Life | Total | |||||||||||||||||||||||||||||
Insurance | Insurance | Insurance | Insurance | Reinsurance | Corporate | P&C | Insurance | Consolidated | ||||||||||||||||||||||||||||
Q3 2017 |
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Net premiums written |
$ | 3,089 | $ | 1,194 | $ | 926 | $ | 1,963 | $ | 191 | $ | | $ | 7,363 | $ | 539 | $ | 7,902 | ||||||||||||||||||
Net premiums earned |
3,016 | 1,117 | 898 | 2,064 | 185 | | 7,280 | 527 | 7,807 | |||||||||||||||||||||||||||
Adjusted losses and loss expenses |
2,580 | 1,062 | 764 | 1,281 | 295 | 89 | 6,071 | 181 | 6,252 | |||||||||||||||||||||||||||
Policy benefits |
| | | | | | | 169 | 169 | |||||||||||||||||||||||||||
(Gains) losses from fair value changes in separate account assets (1) |
| | | | | | | (24 | ) | (24 | ) | |||||||||||||||||||||||||
Policy acquisition costs |
469 | 226 | 49 | 569 | 43 | | 1,356 | 132 | 1,488 | |||||||||||||||||||||||||||
Administrative expenses |
256 | 61 | (1 | ) | 246 | 11 | 64 | 637 | 77 | 714 | ||||||||||||||||||||||||||
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Underwriting income (loss) |
(289 | ) | (232 | ) | 86 | (32 | ) | (164 | ) | (153 | ) | (784 | ) | (8 | ) | (792 | ) | |||||||||||||||||||
Adjusted net investment income |
497 | 57 | 6 | 164 | 80 | 11 | 815 | 78 | 893 | |||||||||||||||||||||||||||
Other income (expense) - operating (1) |
4 | (1 | ) | | 10 | 3 | (6 | ) | 10 | (5 | ) | 5 | ||||||||||||||||||||||||
Amortization expense of purchased intangibles |
| (4 | ) | (8 | ) | (11 | ) | | (41 | ) | (64 | ) | (1 | ) | (65 | ) | ||||||||||||||||||||
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Segment income (loss) |
$ | 212 | $ | (180 | ) | $ | 84 | $ | 131 | $ | (81 | ) | $ | (189 | ) | $ | (23 | ) | $ | 64 | $ | 41 | ||||||||||||||
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Adjusted interest expense |
(162 | ) | (162 | ) | ||||||||||||||||||||||||||||||||
Income tax benefit |
61 | 61 | ||||||||||||||||||||||||||||||||||
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Operating loss |
(290 | ) | (60 | ) | ||||||||||||||||||||||||||||||||
Chubb integration expenses, net of $14 million tax benefit |
(36 | ) | (36 | ) | ||||||||||||||||||||||||||||||||
Amortization of fair value adjustment of acquired invested assets and long-term debt, net of $18 million tax benefit (2) |
(50 | ) | (50 | ) | ||||||||||||||||||||||||||||||||
Adjusted net realized gains (losses), net of $8 million tax (3) |
76 | 76 | ||||||||||||||||||||||||||||||||||
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Net loss |
$ | (300 | ) | $ | (70 | ) | ||||||||||||||||||||||||||||||
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Combined ratio |
109.6 | % | 120.8 | % | 90.4 | % | 101.6 | % | 187.4 | % | 110.8 | % | ||||||||||||||||||||||||
Combined ratio excluding catastrophe losses and PPD |
88.7 | % | 77.5 | % | 90.3 | % | 90.6 | % | 82.2 | % | 88.5 | % |
(1) | For the Life Insurance segment, (gains) losses from fair value changes in separate account assets that do not qualify for separate account reporting under GAAP have been reclassified for underwriting income presentation from Other income (expense). |
(2) | Related to the acquisition of The Chubb Corporation. |
(3) | Includes net realized gains (losses) related to unconsolidated entities. |
Consol Results - QTD 2017 | Page 8 |
Chubb Limited
Consolidated Results - Nine months ended September 30, 2017
(in millions of U.S. dollars, except ratios)
(Unaudited)
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 |
||||||||||||||||||||||||||||
YTD 2017 |
||||||||||||||||||||||||||||||||||||
Net premiums written |
$ | 9,035 | $ | 3,433 | $ | 1,390 | $ | 6,169 | $ | 580 | $ | | $ | 20,607 | $ | 1,586 | $ | 22,193 | ||||||||||||||||||
Net premiums earned |
9,156 | 3,296 | 1,256 | 6,018 | 542 | | 20,268 | 1,548 | 21,816 | |||||||||||||||||||||||||||
Adjusted losses and loss expenses |
6,376 | 2,378 | 983 | 3,316 | 435 | 145 | 13,633 | 556 | 14,189 | |||||||||||||||||||||||||||
Policy benefits |
| | | | | | | 500 | 500 | |||||||||||||||||||||||||||
(Gains) losses from fair value changes in separate account assets (1) |
| | | | | | | (70 | ) | (70 | ) | |||||||||||||||||||||||||
Policy acquisition costs |
1,420 | 673 | 75 | 1,653 | 137 | | 3,958 | 376 | 4,334 | |||||||||||||||||||||||||||
Administrative expenses |
728 | 192 | (4 | ) | 734 | 33 | 187 | 1,870 | 226 | 2,096 | ||||||||||||||||||||||||||
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Underwriting income (loss) |
632 | 53 | 202 | 315 | (63 | ) | (332 | ) | 807 | (40 | ) | 767 | ||||||||||||||||||||||||
Adjusted net investment income |
1,465 | 168 | 18 | 460 | 207 | 36 | 2,354 | 230 | 2,584 | |||||||||||||||||||||||||||
Other income (expense) - operating (1) |
4 | (3 | ) | (1 | ) | 14 | 2 | (27 | ) | (11 | ) | (10 | ) | (21 | ) | |||||||||||||||||||||
Amortization expense of purchased intangibles |
| (12 | ) | (22 | ) | (33 | ) | | (125 | ) | (192 | ) | (2 | ) | (194 | ) | ||||||||||||||||||||
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Segment income (loss) |
$ | 2,101 | $ | 206 | $ | 197 | $ | 756 | $ | 146 | $ | (448 | ) | $ | 2,958 | $ | 178 | $ | 3,136 | |||||||||||||||||
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Adjusted interest expense |
(488 | ) | (488 | ) | ||||||||||||||||||||||||||||||||
Income tax expense |
(353 | ) | (353 | ) | ||||||||||||||||||||||||||||||||
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Operating income (loss) |
(1,289 | ) | 2,295 | |||||||||||||||||||||||||||||||||
Chubb integration expenses, net of $73 million tax benefit |
(160 | ) | (160 | ) | ||||||||||||||||||||||||||||||||
Amortization of fair value adjustment of acquired invested assets and long-term debt, net of $62 million tax benefit (2) |
(157 | ) | (157 | ) | ||||||||||||||||||||||||||||||||
Adjusted net realized gains (losses), net of $25 million tax (3) |
350 | 350 | ||||||||||||||||||||||||||||||||||
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Net income (loss) |
$ | (1,256 | ) | $ | 2,328 | |||||||||||||||||||||||||||||||
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Combined ratio |
93.1 | % | 98.4 | % | 83.9 | % | 94.8 | % | 111.5 | % | 96.0 | % | ||||||||||||||||||||||||
Combined ratio excluding catastrophe losses and PPD |
87.6 | % | 78.3 | % | 89.6 | % | 91.3 | % | 78.6 | % | 88.0 | % |
(1) | For the Life Insurance segment, (gains) losses from fair value changes in separate account assets that do not qualify for separate account reporting under GAAP have been reclassified for underwriting income presentation from Other income (expense). |
(2) | Related to the acquisition of The Chubb Corporation. |
(3) | Includes net realized gains (losses) related to unconsolidated entities. |
Consol Results - YTD 2017 | Page 9 |
Chubb Limited
Consolidated Results - Three months ended September 30, 2016
(in millions of U.S. dollars, except ratios)
(Unaudited)
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 |
||||||||||||||||||||||||||||
Q3 2016 |
||||||||||||||||||||||||||||||||||||
Net premiums written |
$ | 3,110 | $ | 1,011 | $ | 849 | $ | 1,940 | $ | 131 | $ | | $ | 7,041 | $ | 532 | $ | 7,573 | ||||||||||||||||||
Net premiums earned |
3,086 | 1,081 | 819 | 2,034 | 156 | | 7,176 | 512 | 7,688 | |||||||||||||||||||||||||||
Adjusted losses and loss expenses |
1,863 | 594 | 680 | 843 | 49 | 63 | 4,092 | 174 | 4,266 | |||||||||||||||||||||||||||
Policy benefits |
| | | | | | | 155 | 155 | |||||||||||||||||||||||||||
(Gains) losses from fair value changes in separate account assets (1) |
| | | | | | | (22 | ) | (22 | ) | |||||||||||||||||||||||||
Policy acquisition costs (excluding amortization of acquired UPR intangible) |
346 | 128 | 48 | 503 | 42 | | 1,067 | 127 | 1,194 | |||||||||||||||||||||||||||
Amortization of acquired UPR intangible - Chubb Corp |
176 | 101 | | 43 | | | 320 | | 320 | |||||||||||||||||||||||||||
Administrative expenses |
275 | 89 | 1 | 261 | 12 | 57 | 695 | 77 | 772 | |||||||||||||||||||||||||||
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Underwriting income (loss) |
426 | 169 | 90 | 384 | 53 | (120 | ) | 1,002 | 1 | 1,003 | ||||||||||||||||||||||||||
Adjusted net investment income |
477 | 53 | 5 | 152 | 67 | 5 | 759 | 71 | 830 | |||||||||||||||||||||||||||
Other income (expense) - operating (1) |
(3 | ) | (2 | ) | | 6 | | (2 | ) | (1 | ) | (2 | ) | (3 | ) | |||||||||||||||||||||
Amortization (expense) benefit of purchased intangibles |
| (4 | ) | (7 | ) | (12 | ) | | 20 | (3 | ) | (1 | ) | (4 | ) | |||||||||||||||||||||
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Segment income (loss) |
$ | 900 | $ | 216 | $ | 88 | $ | 530 | $ | 120 | $ | (97 | ) | $ | 1,757 | $ | 69 | $ | 1,826 | |||||||||||||||||
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Adjusted interest expense |
(164 | ) | (164 | ) | ||||||||||||||||||||||||||||||||
Income tax expense |
(306 | ) | (306 | ) | ||||||||||||||||||||||||||||||||
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Operating income (loss) |
(567 | ) | 1,356 | |||||||||||||||||||||||||||||||||
Chubb integration and related expenses, net of $30 million tax benefit |
(85 | ) | (85 | ) | ||||||||||||||||||||||||||||||||
Amortization of fair value adjustment of acquired invested assets and long-term debt, net of $26 million tax benefit (2) |
(53 | ) | (53 | ) | ||||||||||||||||||||||||||||||||
Adjusted net realized gains (losses), net of $27 million tax (3) |
142 | 142 | ||||||||||||||||||||||||||||||||||
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Net income (loss) |
$ | (563 | ) | $ | 1,360 | |||||||||||||||||||||||||||||||
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Combined ratio |
86.2 | % | 84.4 | % | 88.9 | % | 81.2 | % | 66.3 | % | 86.0 | % | ||||||||||||||||||||||||
Combined ratio excluding catastrophe losses and PPD |
89.4 | % | 78.8 | % | 90.1 | % | 91.1 | % | 78.1 | % | 88.9 | % | ||||||||||||||||||||||||
Underwriting income (loss) - As If |
$ | 452 | $ | 187 | $ | 90 | $ | 379 | $ | 53 | $ | (120 | ) | $ | 1,041 | $ | 1 | $ | 1,042 | |||||||||||||||||
Combined ratio - As If |
85.3 | % | 82.8 | % | 88.9 | % | 81.4 | % | 66.3 | % | 85.5 | % | ||||||||||||||||||||||||
Combined ratio excluding catastrophe losses and PPD - As If |
88.6 | % | 77.2 | % | 90.1 | % | 91.3 | % | 78.1 | % | 88.4 | % |
(1) | For the Life Insurance segment, (gains) losses from fair value changes in separate account assets that do not qualify for separate account reporting under GAAP have been reclassified for underwriting income presentation from Other income (expense). |
(2) | Related to the acquisition of The Chubb Corporation. |
(3) | Includes net realized gains (losses) related to unconsolidated entities. |
Consol Results - QTD 2016 | Page 10 |
Chubb Limited
Consolidated Results - Nine months ended September 30, 2016
(in millions of U.S. dollars, except ratios)
(Unaudited)
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 |
||||||||||||||||||||||||||||
YTD 2016 |
||||||||||||||||||||||||||||||||||||
Net premiums written |
$ | 8,657 | $ | 3,113 | $ | 1,288 | $ | 6,012 | $ | 562 | $ | | $ | 19,632 | $ | 1,575 | $ | 21,207 | ||||||||||||||||||
Net premiums earned |
9,130 | 3,245 | 1,169 | 6,082 | 543 | | 20,169 | 1,521 | 21,690 | |||||||||||||||||||||||||||
Adjusted losses and loss expenses |
5,581 | 1,916 | 936 | 2,953 | 225 | 87 | 11,698 | 498 | 12,196 | |||||||||||||||||||||||||||
Policy benefits |
| | | | | | | 427 | 427 | |||||||||||||||||||||||||||
(Gains) losses from fair value changes in separate account assets (1) |
| | | | | | | (22 | ) | (22 | ) | |||||||||||||||||||||||||
Policy acquisition costs (excluding amortization of acquired UPR intangible) |
768 | 300 | 77 | 1,399 | 142 | | 2,686 | 386 | 3,072 | |||||||||||||||||||||||||||
Amortization of acquired UPR intangible - Chubb Corp |
781 | 447 | | 187 | | | 1,415 | | 1,415 | |||||||||||||||||||||||||||
Administrative expenses |
840 | 275 | (1 | ) | 801 | 40 | 192 | 2,147 | 226 | 2,373 | ||||||||||||||||||||||||||
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Underwriting income (loss) |
1,160 | 307 | 157 | 742 | 136 | (279 | ) | 2,223 | 6 | 2,229 | ||||||||||||||||||||||||||
Adjusted net investment income |
1,371 | 155 | 15 | 445 | 199 | 21 | 2,206 | 207 | 2,413 | |||||||||||||||||||||||||||
Other income (expense) - operating (1) |
6 | (6 | ) | | 16 | 3 | (6 | ) | 13 | (8 | ) | 5 | ||||||||||||||||||||||||
Amortization (expense) benefit of purchased intangibles |
| (16 | ) | (22 | ) | (36 | ) | | 60 | (14 | ) | (2 | ) | (16 | ) | |||||||||||||||||||||
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Segment income (loss) |
$ | 2,537 | $ | 440 | $ | 150 | $ | 1,167 | $ | 338 | $ | (204 | ) | $ | 4,428 | $ | 203 | $ | 4,631 | |||||||||||||||||
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Adjusted interest expense |
(479 | ) | (479 | ) | ||||||||||||||||||||||||||||||||
Income tax expense |
(719 | ) | (719 | ) | ||||||||||||||||||||||||||||||||
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Operating income (loss) |
(1,402 | ) | 3,433 | |||||||||||||||||||||||||||||||||
Chubb integration and related expenses, net of $106 million tax benefit |
(262 | ) | (262 | ) | ||||||||||||||||||||||||||||||||
Amortization of fair value adjustment of acquired invested assets and long-term debt, net of $79 million tax benefit (2) |
(178 | ) | (178 | ) | ||||||||||||||||||||||||||||||||
Adjusted net realized gains (losses), net of $22 million tax (3) |
(468 | ) | (468 | ) | ||||||||||||||||||||||||||||||||
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Net income (loss) |
$ | (2,310 | ) | $ | 2,525 | |||||||||||||||||||||||||||||||
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Combined ratio |
87.3 | % | 90.5 | % | 86.6 | % | 87.8 | % | 75.0 | % | 89.0 | % | ||||||||||||||||||||||||
Combined ratio excluding catastrophe losses and PPD |
89.5 | % | 81.4 | % | 90.0 | % | 91.5 | % | 78.5 | % | 89.5 | % | ||||||||||||||||||||||||
Underwriting income (loss) - As If |
$ | 1,291 | $ | 415 | $ | 157 | $ | 719 | $ | 136 | $ | (282 | ) | $ | 2,436 | $ | 6 | $ | 2,442 | |||||||||||||||||
Combined ratio - As If |
86.2 | % | 87.6 | % | 86.6 | % | 88.3 | % | 75.0 | % | 88.2 | % | ||||||||||||||||||||||||
Combined ratio excluding catastrophe losses and PPD - As If |
88.4 | % | 78.8 | % | 90.0 | % | 92.0 | % | 78.5 | % | 88.7 | % |
(1) | For the Life Insurance segment, (gains) losses from fair value changes in separate account assets that do not qualify for separate account reporting under GAAP have been reclassified for underwriting income presentation from Other income (expense). |
(2) | Related to the acquisition of The Chubb Corporation. |
(3) | Includes net realized gains (losses) related to unconsolidated entities. |
Consol Results - YTD 2016 | Page 11 |
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 13), North America Personal P&C Insurance segment (refer to page 14), Overseas General Insurance segment (refer to page 16), Global Reinsurance segment (refer to page 18), and Corporate (refer to page 20). Global P&C excludes the North America Agricultural Insurance and Life Insurance segments.
YTD | YTD | Full Year | ||||||||||||||||||||||||||||||
3Q-17 | 2Q-17 | 1Q-17 | 4Q-16 | 3Q-16 | 2017 | 2016 | 2016 | |||||||||||||||||||||||||
Global P&C (Including Corporate and excluding Agriculture) |
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Global P&C Underwriting income |
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Gross premiums written |
$ | 7,839 | $ | 8,179 | $ | 7,684 | $ | 7,994 | $ | 7,681 | $ | 23,702 | $ | 22,560 | $ | 30,554 | ||||||||||||||||
Net premiums written |
6,437 | 6,655 | 6,125 | 6,349 | 6,192 | 19,217 | 18,344 | 24,693 | ||||||||||||||||||||||||
Net premiums earned |
6,382 | 6,378 | 6,252 | 6,378 | 6,357 | 19,012 | 19,000 | 25,378 | ||||||||||||||||||||||||
Adjusted losses and loss expenses |
5,307 | 3,674 | 3,669 | 3,757 | 3,412 | 12,650 | 10,762 | 14,519 | ||||||||||||||||||||||||
Policy acquisition costs (excluding amortization of acquired UPR intangible) |
1,307 | 1,292 | 1,284 | 1,144 | 1,019 | 3,883 | 2,609 | 3,753 | ||||||||||||||||||||||||
Amortization of acquired UPR intangible - Chubb Corp |
| | | 144 | 320 | | 1,415 | 1,559 | ||||||||||||||||||||||||
Adjusted administrative expenses |
638 | 627 | 609 | 722 | 694 | 1,874 | 2,148 | 2,870 | ||||||||||||||||||||||||
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Global P&C Underwriting income (loss) |
$ | (870 | ) | $ | 785 | $ | 690 | $ | 611 | $ | 912 | $ | 605 | $ | 2,066 | $ | 2,677 | |||||||||||||||
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Global P&C Underwriting income - As If |
$ | 628 | $ | 951 | $ | 2,279 | $ | 2,907 | ||||||||||||||||||||||||
% Change versus prior year period |
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Net premiums written |
4.0 | % | -1.2 | % | 13.1 | % | 82.0 | % | 78.0 | % | 4.8 | % | 68.6 | % | 71.8 | % | ||||||||||||||||
Net premiums earned |
0.4 | % | -2.9 | % | 2.9 | % | 84.3 | % | 81.6 | % | 0.1 | % | 82.0 | % | 82.6 | % | ||||||||||||||||
Net premiums written constant $ |
4.0 | % | -0.6 | % | 13.7 | % | 83.1 | % | 80.3 | % | 5.2 | % | 73.4 | % | 75.8 | % | ||||||||||||||||
Net premiums earned constant $ |
0.3 | % | -2.3 | % | 3.0 | % | 85.3 | % | 83.8 | % | 0.3 | % | 86.8 | % | 86.4 | % | ||||||||||||||||
% Change versus prior year period - As If * |
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Net premiums written |
4.0 | % | -1.2 | % | -2.3 | % | -2.8 | % | -6.7 | % | 0.1 | % | -6.1 | % | -5.3 | % | ||||||||||||||||
Net premiums written constant $ |
4.0 | % | -0.6 | % | -1.9 | % | -2.0 | % | -5.5 | % | 0.5 | % | -3.9 | % | -3.4 | % | ||||||||||||||||
Net premiums written constant $ excluding merger-related underwriting actions, accounting policy alignment, and one-time UPR transfer in 2016 (1) |
3.3 | % | 2.4 | % | 2.3 | % | 1.2 | % | -0.5 | % | 2.7 | % | -1.6 | % | -1.0 | % | ||||||||||||||||
Combined ratio |
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Loss and loss expense ratio |
83.1 | % | 57.6 | % | 58.7 | % | 58.9 | % | 53.7 | % | 66.5 | % | 56.6 | % | 57.2 | % | ||||||||||||||||
Policy acquisition cost ratio |
20.5 | % | 20.3 | % | 20.5 | % | 20.2 | % | 21.1 | % | 20.4 | % | 21.2 | % | 20.9 | % | ||||||||||||||||
Administrative expense ratio |
10.0 | % | 9.8 | % | 9.8 | % | 11.3 | % | 10.9 | % | 9.9 | % | 11.3 | % | 11.4 | % | ||||||||||||||||
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Combined ratio |
113.6 | % | 87.7 | % | 89.0 | % | 90.4 | % | 85.7 | % | 96.8 | % | 89.1 | % | 89.5 | % | ||||||||||||||||
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Combined ratio excluding catastrophe losses and PPD |
88.2 | % | 87.4 | % | 88.2 | % | 89.7 | % | 88.8 | % | 87.9 | % | 89.5 | % | 89.5 | % | ||||||||||||||||
Combined ratio - As If |
||||||||||||||||||||||||||||||||
Loss and loss expense ratio - As If |
58.9 | % | 53.7 | % | 56.6 | % | 57.2 | % | ||||||||||||||||||||||||
Policy acquisition cost ratio - As If |
20.0 | % | 20.4 | % | 20.2 | % | 20.1 | % | ||||||||||||||||||||||||
Administrative expense ratio - As If |
11.3 | % | 10.9 | % | 11.4 | % | 11.4 | % | ||||||||||||||||||||||||
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Combined ratio - As If |
90.2 | % | 85.0 | % | 88.2 | % | 88.7 | % | ||||||||||||||||||||||||
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Combined ratio excluding catastrophe losses and PPD - As If |
89.4 | % | 88.2 | % | 88.6 | % | 88.8 | % | ||||||||||||||||||||||||
Other ratios |
||||||||||||||||||||||||||||||||
Net premiums written/gross premiums written |
82 | % | 81 | % | 80 | % | 79 | % | 81 | % | 81 | % | 81 | % | 81 | % | ||||||||||||||||
Expense ratio |
30.5 | % | 30.1 | % | 30.3 | % | 31.5 | % | 32.0 | % | 30.3 | % | 32.5 | % | 32.3 | % | ||||||||||||||||
Expense ratio excluding A&H |
28.3 | % | 28.2 | % | 28.1 | % | 29.5 | % | 30.0 | % | 28.2 | % | 30.7 | % | 30.4 | % | ||||||||||||||||
Catastrophe reinstatement premiums collected - pre-tax |
$ | 22 | $ | | $ | | $ | 1 | $ | | $ | 22 | $ | 6 | $ | 7 | ||||||||||||||||
Catastrophe losses - pre-tax |
$ | 1,910 | $ | 192 | $ | 201 | $ | 267 | $ | 143 | $ | 2,303 | $ | 781 | $ | 1,048 | ||||||||||||||||
Favorable prior period development (PPD) - pre-tax |
$ | (266 | ) | $ | (170 | ) | $ | (152 | ) | $ | (218 | ) | $ | (338 | ) | $ | (588 | ) | $ | (845 | ) | $ | (1,063 | ) | ||||||||
Loss and loss expense ratio excluding catastrophe losses and PPD |
58.0 | % | 57.3 | % | 57.9 | % | 58.2 | % | 56.9 | % | 57.7 | % | 57.1 | % | 57.4 | % |
(1) | Net premiums written were adversely impacted by merger-related underwriting actions of $87 million in Q3 2017 and $472 million for YTD 2017, and by accounting policy alignment of $73 million for YTD 2017. In addition, Q3 2016 and YTD 2016 included a one-time unearned premium reserve (UPR) transfer of $128 million that reduced net premiums written in the prior year. |
* | Comparisons to 2015 are as if ACE and Chubb were one company. |
Global P&C | Page 12 |
Chubb Limited
Segment Results - Consecutive Quarters
(in millions of U.S. dollars, except ratios)
(Unaudited)
3Q-17 | 2Q-17 | 1Q-17 | 4Q-16 | 3Q-16 | YTD 2017 |
YTD 2016 |
Full Year 2016 |
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North America Commercial P&C Insurance |
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Gross premiums written |
$ | 3,922 | $ | 4,078 | $ | 3,665 | $ | 4,109 | $ | 3,832 | $ | 11,665 | $ | 10,877 | $ | 14,986 | ||||||||||||||||
Net premiums written |
3,089 | 3,204 | 2,742 | 3,083 | 3,110 | 9,035 | 8,657 | 11,740 | ||||||||||||||||||||||||
Net premiums earned |
3,016 | 3,099 | 3,041 | 3,087 | 3,086 | 9,156 | 9,130 | 12,217 | ||||||||||||||||||||||||
Losses and loss expenses |
2,580 | 1,936 | 1,860 | 1,858 | 1,863 | 6,376 | 5,581 | 7,439 | ||||||||||||||||||||||||
Policy acquisition costs (excluding amortization of acquired UPR intangible) |
469 | 464 | 487 | 396 | 346 | 1,420 | 768 | 1,164 | ||||||||||||||||||||||||
Amortization of acquired UPR intangible - Chubb Corp |
| | | 78 | 176 | | 781 | 859 | ||||||||||||||||||||||||
Administrative expenses |
256 | 241 | 231 | 285 | 275 | 728 | 840 | 1,125 | ||||||||||||||||||||||||
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Underwriting income (loss) |
(289 | ) | 458 | 463 | 470 | 426 | 632 | 1,160 | 1,630 | |||||||||||||||||||||||
Net investment income |
497 | 490 | 478 | 489 | 477 | 1,465 | 1,371 | 1,860 | ||||||||||||||||||||||||
Other income (expense) - operating |
4 | 4 | (4 | ) | (4 | ) | (3 | ) | 4 | 6 | 2 | |||||||||||||||||||||
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Segment income |
$ | 212 | $ | 952 | $ | 937 | $ | 955 | $ | 900 | $ | 2,101 | $ | 2,537 | $ | 3,492 | ||||||||||||||||
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Underwriting income - As If |
$ | 482 | $ | 452 | $ | 1,291 | $ | 1,773 | ||||||||||||||||||||||||
Combined ratio |
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Loss and loss expense ratio |
85.5 | % | 62.5 | % | 61.2 | % | 60.2 | % | 60.4 | % | 69.6 | % | 61.1 | % | 60.9 | % | ||||||||||||||||
Policy acquisition cost ratio |
15.5 | % | 15.0 | % | 16.0 | % | 15.3 | % | 16.9 | % | 15.5 | % | 17.0 | % | 16.6 | % | ||||||||||||||||
Administrative expense ratio |
8.6 | % | 7.7 | % | 7.6 | % | 9.3 | % | 8.9 | % | 8.0 | % | 9.2 | % | 9.2 | % | ||||||||||||||||
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Combined ratio |
109.6 | % | 85.2 | % | 84.8 | % | 84.8 | % | 86.2 | % | 93.1 | % | 87.3 | % | 86.7 | % | ||||||||||||||||
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Combined ratio excluding catastrophe losses and PPD |
88.7 | % | 86.1 | % | 87.9 | % | 88.9 | % | 89.4 | % | 87.6 | % | 89.5 | % | 89.4 | % | ||||||||||||||||
Combined ratio - As If |
||||||||||||||||||||||||||||||||
Loss and loss expense ratio - As If |
60.2 | % | 60.4 | % | 61.1 | % | 60.9 | % | ||||||||||||||||||||||||
Policy acquisition cost ratio - As If |
14.9 | % | 16.0 | % | 15.7 | % | 15.5 | % | ||||||||||||||||||||||||
Administrative expense ratio - As If |
9.3 | % | 8.9 | % | 9.4 | % | 9.3 | % | ||||||||||||||||||||||||
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Combined ratio - As If |
84.4 | % | 85.3 | % | 86.2 | % | 85.7 | % | ||||||||||||||||||||||||
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Combined ratio excluding catastrophe losses and PPD - As If |
88.5 | % | 88.6 | % | 88.4 | % | 88.4 | % | ||||||||||||||||||||||||
Catastrophe reinstatement premiums expensed - pre-tax |
$ | (3 | ) | $ | | $ | | $ | | $ | | $ | (3 | ) | $ | | $ | | ||||||||||||||
Catastrophe losses - pre-tax |
$ | 868 | $ | 102 | $ | 83 | $ | 117 | $ | 90 | $ | 1,053 | $ | 331 | $ | 448 | ||||||||||||||||
Favorable prior period development (PPD) - pre-tax (1) |
$ | (236 | ) | $ | (131 | ) | $ | (179 | ) | $ | (245 | ) | $ | (187 | ) | $ | (546 | ) | $ | (533 | ) | $ | (778 | ) | ||||||||
Loss and loss expense ratio excluding catastrophe losses and PPD |
65.2 | % | 63.4 | % | 64.4 | % | 64.4 | % | 63.8 | % | 64.3 | % | 63.5 | % | 63.7 | % | ||||||||||||||||
% Change versus prior year period |
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Net premiums written |
-0.6 | % | -1.3 | % | 19.1 | % | 97.9 | % | 117.1 | % | 4.4 | % | 108.2 | % | 105.4 | % | ||||||||||||||||
Net premiums earned |
-2.3 | % | -1.6 | % | 5.0 | % | 116.6 | % | 119.1 | % | 0.3 | % | 117.0 | % | 116.9 | % | ||||||||||||||||
% Change versus prior year period - As If * |
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Net premiums written |
-0.6 | % | -1.3 | % | -2.8 | % | -5.1 | % | -2.4 | % | -1.5 | % | -2.0 | % | -2.8 | % | ||||||||||||||||
Net premiums written excluding merger-related underwriting actions (2) |
1.2 | % | 1.3 | % | 0.2 | % | -2.5 | % | 0.0 | % | 0.9 | % | -0.3 | % | -0.9 | % | ||||||||||||||||
Other ratios |
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Net premiums written/gross premiums written |
79 | % | 79 | % | 75 | % | 75 | % | 81 | % | 77 | % | 80 | % | 78 | % | ||||||||||||||||
Production by Size |
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Net Premiums Written |
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Major account & specialty (3) |
$ | 1,792 | $ | 1,959 | $ | 1,568 | $ | 1,880 | $ | 1,841 | $ | 5,319 | $ | 5,269 | $ | 7,149 | ||||||||||||||||
Commercial (3) |
1,297 | 1,245 | 1,174 | 1,203 | 1,269 | 3,716 | 3,388 | 4,591 | ||||||||||||||||||||||||
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Total |
$ | 3,089 | $ | 3,204 | $ | 2,742 | $ | 3,083 | $ | 3,110 | $ | 9,035 | $ | 8,657 | $ | 11,740 | ||||||||||||||||
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(1) | For Q3 2017, favorable prior period development is net of $39 million unfavorable net earned premium adjustments and $6 million of unfavorable expense adjustments. For YTD 2017, favorable prior period development is net of $42 million of unfavorable net earned premium adjustments, $6 million of unfavorable expense adjustments, and $9M of unfavorable reinstatement premium adjustments. |
(2) | Net premiums written were adversely impacted by merger-related underwriting actions of $57 million in Q3 2017 and $225 million for YTD 2017. |
(3) | Major account & specialty: principally large corporate accounts and wholesale business. Commercial: principally middle market and small commercial accounts. |
* | Comparisons to 2015 are as if ACE and Chubb were one company. |
NA Commercial | Page 13 |
Chubb Limited
Segment Results - Consecutive Quarters
(in millions of U.S. dollars, except ratios)
(Unaudited)
YTD | YTD | Full Year | ||||||||||||||||||||||||||||||
3Q-17 | 2Q-17 | 1Q-17 | 4Q-16 | 3Q-16 | 2017 | 2016 | 2016 | |||||||||||||||||||||||||
North America Personal P&C Insurance |
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Gross premiums written |
$ | 1,338 | $ | 1,409 | $ | 1,145 | $ | 1,228 | $ | 1,323 | $ | 3,892 | $ | 3,666 | $ | 4,894 | ||||||||||||||||
Net premiums written |
1,194 | 1,255 | 984 | 1,040 | 1,011 | 3,433 | 3,113 | 4,153 | ||||||||||||||||||||||||
Net premiums earned |
1,117 | 1,093 | 1,086 | 1,074 | 1,081 | 3,296 | 3,245 | 4,319 | ||||||||||||||||||||||||
Losses and loss expenses |
1,062 | 683 | 633 | 642 | 594 | 2,378 | 1,916 | 2,558 | ||||||||||||||||||||||||
Policy acquisition costs (excluding amortization of acquired UPR intangible) |
226 | 230 | 217 | 174 | 128 | 673 | 300 | 474 | ||||||||||||||||||||||||
Amortization of acquired UPR intangible - Chubb Corp |
| | | 45 | 101 | | 447 | 492 | ||||||||||||||||||||||||
Administrative expenses |
61 | 66 | 65 | 88 | 89 | 192 | 275 | 363 | ||||||||||||||||||||||||
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Underwriting income (loss) |
(232 | ) | 114 | 171 | 125 | 169 | 53 | 307 | 432 | |||||||||||||||||||||||
Net investment income |
57 | 56 | 55 | 52 | 53 | 168 | 155 | 207 | ||||||||||||||||||||||||
Other expense - operating |
(1 | ) | (1 | ) | (1 | ) | | (2 | ) | (3 | ) | (6 | ) | (6 | ) | |||||||||||||||||
Amortization expense of purchased intangibles |
(4 | ) | (5 | ) | (3 | ) | (3 | ) | (4 | ) | (12 | ) | (16 | ) | (19 | ) | ||||||||||||||||
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Segment income (loss) |
$ | (180 | ) | $ | 164 | $ | 222 | $ | 174 | $ | 216 | $ | 206 | $ | 440 | $ | 614 | |||||||||||||||
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Underwriting income - As If |
$ | 133 | $ | 187 | $ | 415 | $ | 548 | ||||||||||||||||||||||||
Combined ratio |
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Loss and loss expense ratio |
95.1 | % | 62.4 | % | 58.3 | % | 59.7 | % | 54.9 | % | 72.2 | % | 59.1 | % | 59.2 | % | ||||||||||||||||
Policy acquisition cost ratio |
20.2 | % | 21.1 | % | 20.0 | % | 20.4 | % | 21.2 | % | 20.4 | % | 23.0 | % | 22.4 | % | ||||||||||||||||
Administrative expense ratio |
5.5 | % | 6.1 | % | 5.9 | % | 8.2 | % | 8.3 | % | 5.8 | % | 8.4 | % | 8.4 | % | ||||||||||||||||
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Combined ratio |
120.8 | % | 89.6 | % | 84.2 | % | 88.3 | % | 84.4 | % | 98.4 | % | 90.5 | % | 90.0 | % | ||||||||||||||||
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Combined ratio excluding catastrophe losses and PPD |
77.5 | % | 79.3 | % | 78.3 | % | 82.9 | % | 78.8 | % | 78.3 | % | 81.4 | % | 81.8 | % | ||||||||||||||||
Combined ratio - As If |
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Loss and loss expense ratio - As If |
59.7 | % | 54.9 | % | 58.7 | % | 58.9 | % | ||||||||||||||||||||||||
Policy acquisition cost ratio - As If |
19.7 | % | 19.6 | % | 20.4 | % | 20.2 | % | ||||||||||||||||||||||||
Administrative expense ratio - As If |
8.2 | % | 8.3 | % | 8.5 | % | 8.5 | % | ||||||||||||||||||||||||
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Combined ratio - As If |
87.6 | % | 82.8 | % | 87.6 | % | 87.6 | % | ||||||||||||||||||||||||
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Combined ratio excluding catastrophe losses and PPD - As If |
82.1 | % | 77.2 | % | 78.8 | % | 79.6 | % | ||||||||||||||||||||||||
Catastrophe reinstatement premiums expensed - pre-tax |
$ | (3 | ) | $ | | $ | | $ | | $ | | $ | (3 | ) | $ | | $ | | ||||||||||||||
Catastrophe losses - pre-tax |
$ | 448 | $ | 77 | $ | 68 | $ | 51 | $ | 22 | $ | 593 | $ | 275 | $ | 326 | ||||||||||||||||
Unfavorable (favorable) prior period development (PPD) - pre-tax |
$ | 32 | $ | 37 | $ | (3 | ) | $ | 7 | $ | 38 | $ | 66 | $ | 20 | $ | 27 | |||||||||||||||
Loss and loss expense ratio excluding catastrophe losses and PPD |
51.9 | % | 52.1 | % | 52.4 | % | 54.3 | % | 49.3 | % | 52.1 | % | 50.0 | % | 51.0 | % | ||||||||||||||||
% Change versus prior year period |
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Net premiums written |
18.0 | % | 2.0 | % | 13.0 | % | 344.7 | % | 263.4 | % | 10.3 | % | 225.0 | % | 248.4 | % | ||||||||||||||||
Net premiums earned |
3.4 | % | -4.0 | % | 6.0 | % | 311.9 | % | 296.3 | % | 1.6 | % | 372.1 | % | 355.5 | % | ||||||||||||||||
% Change versus prior year period - As If * |
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Net premiums written |
18.0 | % | 2.0 | % | 1.3 | % | -4.8 | % | -16.4 | % | 6.8 | % | -12.4 | % | -10.7 | % | ||||||||||||||||
Net premiums written excluding merger-related underwriting actions, and one-time UPR transfer in 2016 (1) |
4.8 | % | 8.0 | % | 6.6 | % | 1.8 | % | 0.1 | % | 6.5 | % | -7.0 | % | 1.5 | % | ||||||||||||||||
Other ratios |
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Net premiums written/gross premiums written |
89 | % | 89 | % | 86 | % | 85 | % | 76 | % | 88 | % | 85 | % | 85 | % |
(1) | Net premiums written were adversely impacted by merger-related underwriting actions of $126 million for YTD 2017. In addition, Q3 2016 and YTD 2016 included a one-time unearned premium reserve (UPR) transfer of $128 million that reduced net premiums written in the prior year. |
* | Comparisons to 2015 are as if ACE and Chubb were one company. |
NA Personal | Page 14 |
Chubb Limited
Segment Results - Consecutive Quarters
(in millions of U.S. dollars, except ratios)
(Unaudited)
YTD | YTD | Full Year | ||||||||||||||||||||||||||||||
3Q-17 | 2Q-17 | 1Q-17 | 4Q-16 | 3Q-16 | 2017 | 2016 | 2016 | |||||||||||||||||||||||||
North America Agricultural Insurance |
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Gross premiums written |
$ | 1,303 | $ | 569 | $ | 167 | $ | 266 | $ | 1,240 | $ | 2,039 | $ | 1,921 | $ | 2,187 | ||||||||||||||||
Net premiums written |
926 | 403 | 61 | 40 | 849 | 1,390 | 1,288 | 1,328 | ||||||||||||||||||||||||
Net premiums earned |
898 | 344 | 14 | 147 | 819 | 1,256 | 1,169 | 1,316 | ||||||||||||||||||||||||
Adjusted losses and loss expenses (1) |
764 | 292 | (73 | ) | (38 | ) | 680 | 983 | 936 | 898 | ||||||||||||||||||||||
Policy acquisition costs |
49 | 27 | (1 | ) | 6 | 48 | 75 | 77 | 83 | |||||||||||||||||||||||
Administrative expenses |
(1 | ) | 2 | (5 | ) | (5 | ) | 1 | (4 | ) | (1 | ) | (6 | ) | ||||||||||||||||||
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Underwriting income |
86 | 23 | 93 | 184 | 90 | 202 | 157 | 341 | ||||||||||||||||||||||||
Net investment income |
6 | 6 | 6 | 5 | 5 | 18 | 15 | 20 | ||||||||||||||||||||||||
Other expense - operating |
| (1 | ) | | (1 | ) | | (1 | ) | | (1 | ) | ||||||||||||||||||||
Amortization expense of purchased intangibles |
(8 | ) | (7 | ) | (7 | ) | (7 | ) | (7 | ) | (22 | ) | (22 | ) | (29 | ) | ||||||||||||||||
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Segment income |
$ | 84 | $ | 21 | $ | 92 | $ | 181 | $ | 88 | $ | 197 | $ | 150 | $ | 331 | ||||||||||||||||
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Combined ratio |
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Loss and loss expense ratio |
85.1 | % | 85.2 | % | NM | -26.0 | % | 83.0 | % | 78.3 | % | 80.1 | % | 68.3 | % | |||||||||||||||||
Policy acquisition cost ratio |
5.4 | % | 7.7 | % | NM | 3.9 | % | 5.9 | % | 6.0 | % | 6.6 | % | 6.3 | % | |||||||||||||||||
Administrative expense ratio |
-0.1 | % | 0.4 | % | NM | -3.3 | % | 0.0 | % | -0.4 | % | -0.1 | % | -0.5 | % | |||||||||||||||||
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Combined ratio |
90.4 | % | 93.3 | % | NM | -25.4 | % | 88.9 | % | 83.9 | % | 86.6 | % | 74.1 | % | |||||||||||||||||
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Combined ratio excluding catastrophe losses and PPD |
90.3 | % | 91.1 | % | 74.6 | % | -10.9 | % | 90.1 | % | 89.6 | % | 90.0 | % | 78.9 | % | ||||||||||||||||
Catastrophe losses - pre-tax |
$ | 5 | $ | 8 | $ | 5 | $ | 2 | $ | 1 | $ | 18 | $ | 17 | $ | 19 | ||||||||||||||||
Favorable prior period development (PPD) - pre-tax (2) |
$ | (4 | ) | $ | | $ | (79 | ) | $ | (20 | ) | $ | (11 | ) | $ | (83 | ) | $ | (52 | ) | $ | (72 | ) | |||||||||
Loss and loss expense ratio excluding catastrophe losses and PPD |
84.9 | % | 83.0 | % | 75.8 | % | -16.9 | % | 84.2 | % | 83.9 | % | 83.4 | % | 72.4 | % | ||||||||||||||||
% Change versus prior year period |
||||||||||||||||||||||||||||||||
Net premiums written |
9.0 | % | 7.7 | % | -4.6 | % | -71.6 | % | 15.2 | % | 7.9 | % | 6.9 | % | -1.3 | % | ||||||||||||||||
Net premiums earned |
9.6 | % | 5.4 | % | -41.6 | % | -39.1 | % | 10.9 | % | 7.4 | % | 4.0 | % | -3.6 | % | ||||||||||||||||
Other ratios |
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Net premiums written/gross premiums written |
71 | % | 71 | % | 37 | % | 15 | % | 68 | % | 68 | % | 67 | % | 61 | % |
(1) | Includes realized gains/losses on crop derivatives. |
(2) | For YTD 2017, favorable prior period development is net of $61 million of unfavorable net earned premium adjustments and $4 million of favorable profit-sharing commissions. |
NA Agriculture | Page 15 |
Chubb Limited
Segment Results - Consecutive Quarters
(in millions of U.S. dollars, except ratios)
(Unaudited)
YTD | YTD | Full Year | ||||||||||||||||||||||||||||||
3Q-17 | 2Q-17 | 1Q-17 | 4Q-16 | 3Q-16 | 2017 | 2016 | 2016 | |||||||||||||||||||||||||
Overseas General Insurance |
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Gross premiums written |
$ | 2,377 | $ | 2,464 | $ | 2,662 | $ | 2,542 | $ | 2,383 | $ | 7,503 | $ | 7,393 | $ | 9,935 | ||||||||||||||||
Net premiums written |
1,963 | 2,006 | 2,200 | 2,112 | 1,940 | 6,169 | 6,012 | 8,124 | ||||||||||||||||||||||||
Net premiums earned |
2,064 | 2,018 | 1,936 | 2,050 | 2,034 | 6,018 | 6,082 | 8,132 | ||||||||||||||||||||||||
Losses and loss expenses |
1,281 | 964 | 1,071 | 1,052 | 843 | 3,316 | 2,953 | 4,005 | ||||||||||||||||||||||||
Policy acquisition costs (excluding amortization of acquired UPR intangible) |
569 | 555 | 529 | 529 | 503 | 1,653 | 1,399 | 1,928 | ||||||||||||||||||||||||
Amortization of acquired UPR intangible - Chubb Corp |
| | | 21 | 43 | | 187 | 208 | ||||||||||||||||||||||||
Administrative expenses |
246 | 243 | 245 | 256 | 261 | 734 | 801 | 1,057 | ||||||||||||||||||||||||
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Underwriting income (loss) |
(32 | ) | 256 | 91 | 192 | 384 | 315 | 742 | 934 | |||||||||||||||||||||||
Net investment income |
164 | 148 | 148 | 155 | 152 | 460 | 445 | 600 | ||||||||||||||||||||||||
Other income (expense) - operating |
10 | 3 | 1 | (5 | ) | 6 | 14 | 16 | 11 | |||||||||||||||||||||||
Amortization expense of purchased intangibles |
(11 | ) | (11 | ) | (11 | ) | (12 | ) | (12 | ) | (33 | ) | (36 | ) | (48 | ) | ||||||||||||||||
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Segment income |
$ | 131 | $ | 396 | $ | 229 | $ | 330 | $ | 530 | $ | 756 | $ | 1,167 | $ | 1,497 | ||||||||||||||||
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Underwriting income - As If |
$ | 189 | $ | 379 | $ | 719 | $ | 908 | ||||||||||||||||||||||||
Combined ratio |
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Loss and loss expense ratio |
62.1 | % | 47.8 | % | 55.3 | % | 51.3 | % | 41.5 | % | 55.1 | % | 48.6 | % | 49.3 | % | ||||||||||||||||
Policy acquisition cost ratio |
27.6 | % | 27.5 | % | 27.3 | % | 26.9 | % | 26.8 | % | 27.5 | % | 26.1 | % | 26.3 | % | ||||||||||||||||
Administrative expense ratio |
11.9 | % | 12.0 | % | 12.7 | % | 12.4 | % | 12.9 | % | 12.2 | % | 13.1 | % | 12.9 | % | ||||||||||||||||
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Combined ratio |
101.6 | % | 87.3 | % | 95.3 | % | 90.6 | % | 81.2 | % | 94.8 | % | 87.8 | % | 88.5 | % | ||||||||||||||||
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Combined ratio excluding catastrophe losses and PPD |
90.6 | % | 91.2 | % | 92.1 | % | 91.2 | % | 91.1 | % | 91.3 | % | 91.5 | % | 91.5 | % | ||||||||||||||||
Combined ratio - As If |
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Loss and loss expense ratio - As If |
51.3 | % | 41.5 | % | 48.7 | % | 49.3 | % | ||||||||||||||||||||||||
Policy acquisition cost ratio - As If |
27.1 | % | 27.0 | % | 26.4 | % | 26.6 | % | ||||||||||||||||||||||||
Administrative expense ratio - As If |
12.4 | % | 12.9 | % | 13.2 | % | 13.0 | % | ||||||||||||||||||||||||
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Combined ratio - As If |
90.8 | % | 81.4 | % | 88.3 | % | 88.9 | % | ||||||||||||||||||||||||
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Combined ratio excluding catastrophe losses and PPD - As If |
91.4 | % | 91.3 | % | 92.0 | % | 91.9 | % | ||||||||||||||||||||||||
Catastrophe reinstatement premiums expensed - pre-tax |
$ | (9 | ) | $ | | $ | | $ | | $ | | $ | (9 | ) | $ | | $ | | ||||||||||||||
Catastrophe losses - pre-tax |
$ | 326 | $ | 10 | $ | 50 | $ | 72 | $ | 20 | $ | 386 | $ | 111 | $ | 183 | ||||||||||||||||
Unfavorable (favorable) prior period development (PPD) - pre-tax |
$ | (108 | ) | $ | (88 | ) | $ | 12 | $ | (85 | ) | $ | (223 | ) | $ | (184 | ) | $ | (338 | ) | $ | (423 | ) | |||||||||
Loss and loss expense ratio excluding catastrophe losses and PPD |
51.3 | % | 51.6 | % | 52.1 | % | 51.9 | % | 51.4 | % | 51.7 | % | 52.3 | % | 52.2 | % | ||||||||||||||||
% Change versus prior year period |
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Net premiums written |
1.2 | % | -1.2 | % | 7.8 | % | 33.2 | % | 22.5 | % | 2.6 | % | 19.1 | % | 22.5 | % | ||||||||||||||||
Net premiums earned |
1.4 | % | -3.6 | % | -0.9 | % | 30.2 | % | 26.0 | % | -1.1 | % | 24.2 | % | 25.7 | % | ||||||||||||||||
Net premiums written constant $ |
1.2 | % | 0.3 | % | 9.4 | % | 34.7 | % | 25.8 | % | 3.7 | % | 26.2 | % | 28.3 | % | ||||||||||||||||
Net premiums earned constant $ |
0.9 | % | -2.3 | % | -0.3 | % | 31.4 | % | 29.0 | % | -0.6 | % | 30.9 | % | 31.0 | % | ||||||||||||||||
% Change versus prior year period - As If * |
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Net premiums written |
1.2 | % | -1.2 | % | -2.5 | % | 1.6 | % | -5.7 | % | -0.9 | % | -6.7 | % | -4.7 | % | ||||||||||||||||
Net premiums written constant $ |
1.2 | % | 0.3 | % | -1.2 | % | 4.0 | % | -1.7 | % | 0.0 | % | 0.2 | % | 1.2 | % | ||||||||||||||||
Net premiums written constant $ excluding merger-related underwriting actions & accounting policy alignment (1) |
2.7 | % | 2.3 | % | 4.2 | % | 6.5 | % | 0.7 | % | 3.1 | % | 1.3 | % | 2.6 | % | ||||||||||||||||
Other ratios |
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Net premiums written/gross premiums written |
83 | % | 81 | % | 83 | % | 83 | % | 81 | % | 82 | % | 81 | % | 82 | % |
(1) | Net premiums written were adversely impacted by merger-related underwriting actions of $30 million in Q3 2017 and $111 million for YTD 2017, and by accounting policy alignment of $73 million for YTD 2017. |
* | Comparisons to 2015 are as if ACE and Chubb were one company. |
Overseas General Insurance | Page 16 |
Chubb Limited
Segment Results
(in millions of U.S. dollars)
(Unaudited)
3Q-17 | 3Q-16 | % Change | Constant $ 3Q-16 (1) |
C$ % Change ex Merger Actions (2) |
YTD-17 | YTD-16 | % Change | Constant $ As If YTD-16 (1) |
C$ % Change As If ex Merger Actions & Acct Policy (2) |
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Overseas General Insurance - Production by Region |
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Gross premiums written |
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Europe |
$ | 904 | $ | 945 | -4.3 | % | $ | 939 | -2.5 | % | $ | 3,227 | $ | 3,232 | -0.2 | % | $ | 3,304 | -0.6 | % | ||||||||||||||||||||
Latin America |
619 | 593 | 4.4 | % | 600 | 7.0 | % | 1,858 | 1,791 | 3.7 | % | 1,855 | 5.3 | % | ||||||||||||||||||||||||||
Asia |
771 | 760 | 1.4 | % | 755 | 1.7 | % | 2,179 | 2,112 | 3.2 | % | 2,144 | 3.2 | % | ||||||||||||||||||||||||||
Other (3) |
83 | 85 | -2.4 | % | 87 | -4.6 | % | 239 | 258 | -7.4 | % | 258 | -7.4 | % | ||||||||||||||||||||||||||
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Total |
$ | 2,377 | $ | 2,383 | -0.3 | % | $ | 2,381 | 1.2 | % | $ | 7,503 | $ | 7,393 | 1.5 | % | $ | 7,561 | 1.7 | % | ||||||||||||||||||||
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Net premiums written |
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Europe |
$ | 691 | $ | 712 | -2.9 | % | $ | 706 | -0.4 | % | $ | 2,447 | $ | 2,418 | 1.2 | % | $ | 2,497 | 0.2 | % | ||||||||||||||||||||
Latin America |
514 | 470 | 9.4 | % | 480 | 11.9 | % | 1,519 | 1,435 | 5.9 | % | 1,486 | 8.8 | % | ||||||||||||||||||||||||||
Asia |
681 | 663 | 2.7 | % | 659 | 2.8 | % | 1,931 | 1,874 | 3.0 | % | 1,903 | 3.6 | % | ||||||||||||||||||||||||||
Other (3) |
77 | 95 | -18.9 | % | 96 | -19.8 | % | 272 | 285 | -4.6 | % | 280 | -2.9 | % | ||||||||||||||||||||||||||
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Total |
$ | 1,963 | $ | 1,940 | 1.2 | % | $ | 1,941 | 2.7 | % | $ | 6,169 | $ | 6,012 | 2.6 | % | $ | 6,166 | 3.1 | % | ||||||||||||||||||||
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(1) | Prior periods on a constant dollar basis. |
(2) | Gross premiums written and net premiums written were adversely impacted by merger-related underwriting actions of $30 million each in Q3 2017, and by $104 million and $111 million, respectively, for YTD 2017. Additionally, accounting policy alignment adversely impacted YTD 2017 gross premiums written and net premiums written by $73 million each. |
(3) | Primarily includes Eurasia and Africa, and the companys international supplemental A&H business of Combined Insurance. |
Overseas General Ins. - Region | Page 17 |
Chubb Limited
Segment Results - Consecutive Quarters
(in millions of U.S. dollars, except ratios)
(Unaudited)
3Q-17 | 2Q-17 | 1Q-17 | 4Q-16 | 3Q-16 | YTD 2017 |
YTD 2016 |
Full Year 2016 |
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Global Reinsurance |
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Gross premiums written |
$ | 202 | $ | 228 | $ | 212 | $ | 115 | $ | 143 | $ | 642 | $ | 624 | $ | 739 | ||||||||||||||||
Net premiums written |
191 | 190 | 199 | 114 | 131 | 580 | 562 | 676 | ||||||||||||||||||||||||
Net premiums earned |
185 | 168 | 189 | 167 | 156 | 542 | 543 | 710 | ||||||||||||||||||||||||
Losses and loss expenses |
295 | 46 | 94 | 100 | 49 | 435 | 225 | 325 | ||||||||||||||||||||||||
Policy acquisition costs |
43 | 43 | 51 | 45 | 42 | 137 | 142 | 187 | ||||||||||||||||||||||||
Administrative expenses |
11 | 12 | 10 | 12 | 12 | 33 | 40 | 52 | ||||||||||||||||||||||||
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Underwriting income (loss) (1) |
(164 | ) | 67 | 34 | 10 | 53 | (63 | ) | 136 | 146 | ||||||||||||||||||||||
Net investment income |
80 | 65 | 62 | 64 | 67 | 207 | 199 | 263 | ||||||||||||||||||||||||
Other income (expense) - operating |
3 | (1 | ) | | 1 | | 2 | 3 | 4 | |||||||||||||||||||||||
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Segment income (loss) |
$ | (81 | ) | $ | 131 | $ | 96 | $ | 75 | $ | 120 | $ | 146 | $ | 338 | $ | 413 | |||||||||||||||
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Combined ratio |
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Loss and loss expense ratio |
158.2 | % | 27.8 | % | 49.6 | % | 59.7 | % | 31.3 | % | 80.1 | % | 41.5 | % | 45.7 | % | ||||||||||||||||
Policy acquisition cost ratio |
23.4 | % | 25.7 | % | 26.8 | % | 26.6 | % | 27.1 | % | 25.3 | % | 26.3 | % | 26.3 | % | ||||||||||||||||
Administrative expense ratio |
5.8 | % | 6.7 | % | 5.7 | % | 7.7 | % | 7.9 | % | 6.1 | % | 7.2 | % | 7.5 | % | ||||||||||||||||
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Combined ratio (1) |
187.4 | % | 60.2 | % | 82.1 | % | 94.0 | % | 66.3 | % | 111.5 | % | 75.0 | % | 79.5 | % | ||||||||||||||||
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Combined ratio excluding catastrophe losses and PPD (1) |
82.2 | % | 77.0 | % | 77.0 | % | 78.8 | % | 78.1 | % | 78.6 | % | 78.5 | % | 78.6 | % | ||||||||||||||||
Catastrophe reinstatement premiums collected - pre-tax |
$ | 37 | $ | | $ | | $ | 1 | $ | | $ | 37 | $ | 6 | $ | 7 | ||||||||||||||||
Catastrophe losses - pre-tax |
$ | 268 | $ | 3 | $ | | $ | 27 | $ | 11 | $ | 271 | $ | 64 | $ | 91 | ||||||||||||||||
Unfavorable (favorable) prior period development (PPD) - pre-tax (2) |
$ | (41 | ) | $ | (31 | ) | $ | 8 | $ | | $ | (28 | ) | $ | (64 | ) | $ | (78 | ) | $ | (78 | ) | ||||||||||
Loss and loss expense ratio excluding catastrophe losses and PPD |
46.5 | % | 44.4 | % | 43.2 | % | 44.2 | % | 44.2 | % | 44.6 | % | 45.3 | % | 45.0 | % | ||||||||||||||||
% Change versus prior year period |
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Net premiums written as reported |
47.1 | % | -17.7 | % | -0.9 | % | 4.0 | % | -29.4 | % | 3.3 | % | -21.9 | % | -18.4 | % | ||||||||||||||||
Net premiums earned as reported |
20.4 | % | -9.6 | % | -6.4 | % | -16.9 | % | -23.5 | % | 0.0 | % | -16.4 | % | -16.5 | % | ||||||||||||||||
Net premiums written constant $ |
47.9 | % | -16.5 | % | 0.2 | % | 6.5 | % | -28.1 | % | 4.5 | % | -20.7 | % | -17.1 | % | ||||||||||||||||
Net premiums earned constant $ |
20.0 | % | -8.1 | % | -5.5 | % | -15.6 | % | -22.2 | % | 1.0 | % | -15.2 | % | -15.3 | % | ||||||||||||||||
% Change versus prior year period - As If * |
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Net premiums written |
47.1 | % | -17.7 | % | -9.8 | % | 3.0 | % | -29.8 | % | -0.2 | % | -22.0 | % | -18.8 | % | ||||||||||||||||
Net premiums written constant $ |
47.9 | % | -16.5 | % | -8.9 | % | 5.5 | % | -28.5 | % | 0.9 | % | -20.9 | % | -17.5 | % | ||||||||||||||||
Net premiums written constant $ excluding merger-related underwriting actions (3) |
47.9 | % | -16.5 | % | -4.3 | % | 5.5 | % | -25.0 | % | 2.6 | % | -18.7 | % | -15.6 | % | ||||||||||||||||
Other ratios |
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Net premiums written/gross premiums written |
95 | % | 83 | % | 94 | % | 99 | % | 91 | % | 91 | % | 90 | % | 91 | % |
(1) | Underwriting income, Combined ratio, and Combined ratio excluding catastrophe losses and PPD on an As If basis are the same as those presented above. |
(2) | For Q3 2017, favorable prior period development is net of $3 million of net earned premium adjustments. For YTD 2017, favorable prior period development is gross of $4 million of net earned premium adjustments. |
(3) | Net premiums written were adversely impacted by merger-related underwriting actions of $10 million for YTD 2017. |
* | Comparisons to 2015 are as if ACE and Chubb were one company. |
Global Reinsurance | Page 18 |
Chubb Limited
Segment Results - Consecutive Quarters
(in millions of U.S. dollars)
(Unaudited)
3Q-17 | 2Q-17 | 1Q-17 | 4Q-16 | 3Q-16 | YTD 2017 |
YTD 2016 |
Full Year 2016 |
|||||||||||||||||||||||||
Life Insurance |
||||||||||||||||||||||||||||||||
Gross premiums written |
$ | 568 | $ | 557 | $ | 550 | $ | 577 | $ | 562 | $ | 1,675 | $ | 1,665 | $ | 2,242 | ||||||||||||||||
Net premiums written |
539 | 523 | 524 | 549 | 532 | 1,586 | 1,575 | 2,124 | ||||||||||||||||||||||||
Net premiums earned |
527 | 515 | 506 | 534 | 512 | 1,548 | 1,521 | 2,055 | ||||||||||||||||||||||||
Losses and loss expenses |
181 | 182 | 193 | 165 | 174 | 556 | 498 | 663 | ||||||||||||||||||||||||
Policy benefits (1) |
169 | 163 | 168 | 161 | 155 | 500 | 427 | 588 | ||||||||||||||||||||||||
(Gains) losses from fair value changes in separate account assets (1) |
(24 | ) | (16 | ) | (30 | ) | 11 | (22 | ) | (70 | ) | (22 | ) | (11 | ) | |||||||||||||||||
Policy acquisition costs |
132 | 130 | 114 | 123 | 127 | 376 | 386 | 509 | ||||||||||||||||||||||||
Administrative expenses |
77 | 77 | 72 | 81 | 77 | 226 | 226 | 307 | ||||||||||||||||||||||||
Net investment income |
78 | 77 | 75 | 76 | 71 | 230 | 207 | 283 | ||||||||||||||||||||||||
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Life Insurance underwriting income (2) (3) |
70 | 56 | 64 | 69 | 72 | 190 | 213 | 282 | ||||||||||||||||||||||||
Other expense - operating |
(5 | ) | (4 | ) | (1 | ) | (8 | ) | (2 | ) | (10 | ) | (8 | ) | (16 | ) | ||||||||||||||||
Amortization expense of purchased intangibles |
(1 | ) | | (1 | ) | (1 | ) | (1 | ) | (2 | ) | (2 | ) | (3 | ) | |||||||||||||||||
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Segment income |
$ | 64 | $ | 52 | $ | 62 | $ | 60 | $ | 69 | $ | 178 | $ | 203 | $ | 263 | ||||||||||||||||
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% Change versus prior year period |
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Net premiums written |
1.1 | % | -0.7 | % | 1.6 | % | 6.5 | % | 8.1 | % | 0.6 | % | 6.2 | % | 6.3 | % | ||||||||||||||||
Net premiums earned |
2.8 | % | 0.8 | % | 1.6 | % | 5.7 | % | 6.7 | % | 1.8 | % | 5.5 | % | 5.6 | % | ||||||||||||||||
Net premiums written constant $ |
1.1 | % | -1.0 | % | 0.9 | % | 6.9 | % | 9.1 | % | 0.3 | % | 9.1 | % | 8.5 | % | ||||||||||||||||
Net premiums earned constant $ |
2.8 | % | 0.5 | % | 0.7 | % | 6.0 | % | 7.6 | % | 1.3 | % | 8.4 | % | 7.8 | % | ||||||||||||||||
% Change versus prior year period - As If * |
||||||||||||||||||||||||||||||||
Net premiums written |
1.1 | % | -0.7 | % | 1.3 | % | 2.1 | % | 3.4 | % | 0.6 | % | 1.4 | % | 1.6 | % | ||||||||||||||||
Net premiums written constant $ |
1.1 | % | -1.0 | % | 0.6 | % | 2.4 | % | 4.3 | % | 0.3 | % | 4.1 | % | 3.7 | % | ||||||||||||||||
Net premiums written constant $ excluding merger-related underwriting actions (4) |
2.9 | % | 0.5 | % | 3.7 | % | 2.4 | % |
(1) | (Gains) 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) for purposes of presenting Life Insurance underwriting income. The offsetting movement in the separate account liabilities is included in Policy benefits. |
(2) | We assess the performance of our Life Insurance business based on Life Insurance underwriting income which includes Net investment income and (Gains) losses from fair value changes in separate account assets. |
(3) | Life Insurance underwriting income on an As If basis is the same as reported Life Insurance underwriting income shown above. |
(4) | Net premiums written were adversely impacted by merger-related underwriting actions of $9 million in Q3 2017 and $33 million for YTD 2017. |
International life insurance net premiums written and deposits breakdown (excludes Combined North America and Life reinsurance businesses):
3Q-17 | Constant $ 3Q-16 (6) |
Constant $ % Change 3Q-17 vs. 3Q-16 (6) |
YTD-17 | Constant $ YTD-16 (6) |
Constant $ % Change YTD-17 vs. YTD-16 (6) |
|||||||||||||||||||
International life insurance net premiums written |
$ | 203 | $ | 209 | -3.0 | % | $ | 600 | $ | 620 | -3.2 | % | ||||||||||||
International life insurance deposits (5) |
422 | 279 | 51.4 | % | 1,048 | 767 | 36.7 | % | ||||||||||||||||
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Total international life insurance net premiums written and deposits |
$ | 625 | $ | 488 | 28.1 | % | $ | 1,648 | $ | 1,387 | 18.9 | % | ||||||||||||
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(5) | 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. |
(6) | Prior periods on a constant dollar basis. |
* | Comparisons to 2015 are as if ACE and Chubb were one company. |
Life Insurance | Page 19 |
Chubb Limited
Segment Results - Consecutive Quarters
(in millions of U.S. dollars)
(Unaudited)
3Q-17 | 2Q-17 | 1Q-17 | 4Q-16 | 3Q-16 | YTD 2017 |
YTD 2016 |
Full Year 2016 |
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Corporate |
||||||||||||||||||||||||||||||||
Gross premiums written |
$ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||||
Net premiums written |
| | | | | | | | ||||||||||||||||||||||||
Net premiums earned |
| | | | | | | | ||||||||||||||||||||||||
Adjusted losses and loss expenses (1) |
89 | 45 | 11 | 105 | 63 | 145 | 87 | 192 | ||||||||||||||||||||||||
Policy acquisition costs |
| | | | | | | | ||||||||||||||||||||||||
Adjusted administrative expenses (1) |
64 | 65 | 58 | 81 | 57 | 187 | 192 | 273 | ||||||||||||||||||||||||
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Underwriting loss |
(153 | ) | (110 | ) | (69 | ) | (186 | ) | (120 | ) | (332 | ) | (279 | ) | (465 | ) | ||||||||||||||||
Adjusted net investment income |
11 | 13 | 12 | 4 | 5 | 36 | 21 | 25 | ||||||||||||||||||||||||
Other expense - operating |
(6 | ) | (14 | ) | (7 | ) | (4 | ) | (2 | ) | (27 | ) | (6 | ) | (10 | ) | ||||||||||||||||
Adjusted interest expense (1) |
(162 | ) | (160 | ) | (166 | ) | (167 | ) | (164 | ) | (488 | ) | (479 | ) | (646 | ) | ||||||||||||||||
Amortization (expense) benefit of purchased intangibles (2) |
(41 | ) | (42 | ) | (42 | ) | 20 | 20 | (125 | ) | 60 | 80 | ||||||||||||||||||||
Pension curtailment benefit (1) |
| | | 113 | | | | 113 | ||||||||||||||||||||||||
Income tax (expense) benefit |
61 | (223 | ) | (191 | ) | (272 | ) | (306 | ) | (353 | ) | (719 | ) | (991 | ) | |||||||||||||||||
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Operating loss |
(290 | ) | (536 | ) | (463 | ) | (492 | ) | (567 | ) | (1,289 | ) | (1,402 | ) | (1,894 | ) | ||||||||||||||||
Chubb integration and related expenses, net of tax |
(36 | ) | (50 | ) | (74 | ) | (94 | ) | (85 | ) | (160 | ) | (262 | ) | (356 | ) | ||||||||||||||||
Amortization of fair value adjustment of acquired invested assets and long-term debt, net of tax |
(50 | ) | (52 | ) | (55 | ) | (66 | ) | (53 | ) | (157 | ) | (178 | ) | (244 | ) | ||||||||||||||||
Adjusted net realized gains (losses), net of tax (3) |
76 | 227 | 47 | 487 | 142 | 350 | (468 | ) | 19 | |||||||||||||||||||||||
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Net loss |
$ | (300 | ) | $ | (411 | ) | $ | (545 | ) | $ | (165 | ) | $ | (563 | ) | $ | (1,256 | ) | $ | (2,310 | ) | $ | (2,475 | ) | ||||||||
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Unfavorable prior period development (PPD) - pre-tax |
$ | 87 | $ | 43 | $ | 10 | $ | 105 | $ | 62 | $ | 140 | $ | 84 | $ | 189 | ||||||||||||||||
Underwriting loss - As If |
$ | (186 | ) | $ | (120 | ) | $ | (282 | ) | $ | (468 | ) |
(1) | See non-GAAP financial measures. |
(2) | Related to the acquisition of The Chubb Corporation. |
(3) | Includes net realized gains (losses) related to unconsolidated entities. |
Corporate |
Page 20 |
Chubb Limited
Loss Reserve Rollforward
(in millions of U.S. dollars, except ratios)
(Unaudited)
Unpaid Losses | Net Paid to Incurred Ratio |
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Gross | Ceded | Net | ||||||||||||||
Balance at December 31, 2015 |
$ | 37,303 | $ | 10,741 | $ | 26,562 | ||||||||||
Losses and loss expenses incurred |
4,663 | 989 | 3,674 | |||||||||||||
Losses and loss expenses paid |
(4,692 | ) | (1,143 | ) | (3,549 | ) | 97 | % | ||||||||
Acquired reserve (Legacy Chubb) |
22,878 | 1,515 | 21,363 | |||||||||||||
Other (incl. foreign exch. revaluation) |
54 | 25 | 29 | |||||||||||||
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Balance at March 31, 2016 |
$ | 60,206 | $ | 12,127 | $ | 48,079 | ||||||||||
Losses and loss expenses incurred |
5,239 | 985 | 4,254 | |||||||||||||
Losses and loss expenses paid |
(4,708 | ) | (752 | ) | (3,956 | ) | 93 | % | ||||||||
Other (incl. foreign exch. revaluation) |
82 | 36 | 46 | |||||||||||||
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Balance at June 30, 2016 |
$ | 60,819 | $ | 12,396 | $ | 48,423 | ||||||||||
Losses and loss expenses incurred |
5,335 | 1,066 | 4,269 | |||||||||||||
Losses and loss expenses paid |
(4,612 | ) | (782 | ) | (3,830 | ) | 90 | % | ||||||||
Other (incl. foreign exch. revaluation) |
(195 | ) | (4 | ) | (191 | ) | ||||||||||
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Balance at September 30, 2016 |
$ | 61,347 | $ | 12,676 | $ | 48,671 | ||||||||||
Losses and loss expenses incurred |
4,960 | 1,105 | 3,855 | |||||||||||||
Losses and loss expenses paid |
(5,425 | ) | (1,045 | ) | (4,380 | ) | 114 | % | ||||||||
Other (incl. foreign exch. revaluation) |
(342 | ) | (28 | ) | (314 | ) | ||||||||||
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Balance at December 31, 2016 |
$ | 60,540 | $ | 12,708 | $ | 47,832 | ||||||||||
Losses and loss expenses incurred |
4,752 | 963 | 3,789 | |||||||||||||
Losses and loss expenses paid |
(4,830 | ) | (923 | ) | (3,907 | ) | 103 | % | ||||||||
Other (incl. foreign exch. revaluation) |
117 | 63 | 54 | |||||||||||||
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Balance at March 31, 2017 |
$ | 60,579 | $ | 12,811 | $ | 47,768 | ||||||||||
Losses and loss expenses incurred |
5,016 | 870 | 4,146 | |||||||||||||
Losses and loss expenses paid |
(5,356 | ) | (1,234 | ) | (4,122 | ) | 99 | % | ||||||||
Other (incl. foreign exch. revaluation) |
155 | 38 | 117 | |||||||||||||
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Balance at June 30, 2017 |
$ | 60,394 | $ | 12,485 | $ | 47,909 | ||||||||||
Losses and loss expenses incurred |
8,410 | 2,163 | 6,247 | |||||||||||||
Losses and loss expenses paid |
(5,207 | ) | (909 | ) | (4,298 | ) | 69 | % (1) | ||||||||
Other (incl. foreign exch. revaluation) |
556 | 131 | 425 | |||||||||||||
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Balance at September 30, 2017 |
$ | 64,153 | $ | 13,870 | $ | 50,283 | ||||||||||
Add net recoverable on paid losses |
| 929 | (929 | ) | ||||||||||||
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Balance including net recoverable on paid losses |
$ | 64,153 | $ | 14,799 | $ | 49,354 | ||||||||||
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(1) | The losses and loss expenses incurred increased $2.1 billion in the quarter, reflecting the significant catastrophe events in the period and resulting in the 69% net paid to incurred ratio for Q3 2017. |
Loss Reserve Rollforward |
Page 21 |
Chubb Limited
Reinsurance Recoverable Analysis
(in millions of U.S. dollars)
(Unaudited)
September 30 | June 30 | March 31 | December 31 | |||||||||||||
2017 | 2017 | 2017 | 2016 | |||||||||||||
Net Reinsurance Recoverable by Division |
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Reinsurance recoverable on paid losses and loss expenses |
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Active operations |
$ | 760 | $ | 690 | $ | 793 | $ | 686 | ||||||||
Brandywine and Other Run-off |
264 | 275 | 256 | 274 | ||||||||||||
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Total |
$ | 1,024 | $ | 965 | $ | 1,049 | $ | 960 | ||||||||
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Reinsurance recoverable on unpaid losses and loss expenses |
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Active operations |
$ | 12,844 | $ | 11,536 | $ | 11,799 | $ | 11,632 | ||||||||
Brandywine and Other Run-off |
1,269 | 1,192 | 1,255 | 1,285 | ||||||||||||
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Total |
$ | 14,113 | $ | 12,728 | $ | 13,054 | $ | 12,917 | ||||||||
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Gross reinsurance recoverable |
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Active operations |
$ | 13,604 | $ | 12,226 | $ | 12,592 | $ | 12,318 | ||||||||
Brandywine and Other Run-off |
1,533 | 1,467 | 1,511 | 1,559 | ||||||||||||
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Total |
$ | 15,137 | $ | 13,693 | $ | 14,103 | $ | 13,877 | ||||||||
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Provision for uncollectible reinsurance (1) |
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Active operations |
$ | (195 | ) | $ | (192 | ) | $ | (191 | ) | $ | (159 | ) | ||||
Brandywine and Other Run-off |
(143 | ) | (143 | ) | (143 | ) | (141 | ) | ||||||||
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Total |
$ | (338 | ) | $ | (335 | ) | $ | (334 | ) | $ | (300 | ) | ||||
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Net reinsurance recoverable |
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Active operations |
$ | 13,409 | $ | 12,034 | $ | 12,401 | $ | 12,159 | ||||||||
Brandywine and Other Run-off |
1,390 | 1,324 | 1,368 | 1,418 | ||||||||||||
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Total |
$ | 14,799 | $ | 13,358 | $ | 13,769 | $ | 13,577 | ||||||||
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(1) | The provision for uncollectible reinsurance is based on a default analysis applied to gross reinsurance, net of usable collateral of approximately $3.4 billion. |
Reinsurance Recoverable | Page 22 |
Chubb Limited
Investment Portfolio
(in millions of U.S. dollars)
(Unaudited)
September 30 | June 30 | March 31 | December 31 | |||||||||||||||||||||||||||||
2017 | 2017 | 2017 | 2016 | |||||||||||||||||||||||||||||
Market Value |
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Fixed maturities available for sale |
$ | 83,686 | $ | 81,645 | $ | 80,806 | $ | 80,115 | ||||||||||||||||||||||||
Fixed maturities held to maturity |
10,365 | 10,560 | 10,604 | 10,670 | ||||||||||||||||||||||||||||
Short-term investments |
2,991 | 2,651 | 2,780 | 3,002 | ||||||||||||||||||||||||||||
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Total fixed maturities |
$ | 97,042 | $ | 94,856 | $ | 94,190 | $ | 93,787 | ||||||||||||||||||||||||
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Asset Allocation by Market Value |
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Treasury |
$ | 3,607 | 4 | % | $ | 3,117 | 3 | % | $ | 2,843 | 3 | % | $ | 2,832 | 3 | % | ||||||||||||||||
Agency |
596 | 1 | % | 632 | 1 | % | 664 | 1 | % | 699 | 1 | % | ||||||||||||||||||||
Corporate and asset-backed |
27,815 | 29 | % | 28,064 | 30 | % | 27,582 | 30 | % | 26,944 | 29 | % | ||||||||||||||||||||
Mortgage-backed |
16,669 | 17 | % | 15,777 | 17 | % | 15,500 | 16 | % | 15,435 | 16 | % | ||||||||||||||||||||
Municipal |
21,621 | 22 | % | 22,263 | 23 | % | 22,803 | 24 | % | 22,768 | 24 | % | ||||||||||||||||||||
Non-U.S. |
23,743 | 24 | % | 22,352 | 23 | % | 22,018 | 23 | % | 22,107 | 24 | % | ||||||||||||||||||||
Short-term investments |
2,991 | 3 | % | 2,651 | 3 | % | 2,780 | 3 | % | 3,002 | 3 | % | ||||||||||||||||||||
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Total fixed maturities |
$ | 97,042 | 100 | % | $ | 94,856 | 100 | % | $ | 94,190 | 100 | % | $ | 93,787 | 100 | % | ||||||||||||||||
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Credit Quality by Market Value |
||||||||||||||||||||||||||||||||
AAA |
$ | 15,411 | 16 | % | $ | 15,411 | 16 | % | $ | 15,523 | 16 | % | $ | 15,746 | 17 | % | ||||||||||||||||
AA |
36,947 | 38 | % | 36,107 | 38 | % | 35,866 | 39 | % | 36,235 | 39 | % | ||||||||||||||||||||
A |
18,427 | 19 | % | 18,011 | 19 | % | 17,700 | 19 | % | 17,519 | 19 | % | ||||||||||||||||||||
BBB |
12,862 | 13 | % | 12,513 | 13 | % | 12,524 | 13 | % | 12,237 | 13 | % | ||||||||||||||||||||
BB |
7,421 | 8 | % | 7,151 | 8 | % | 7,203 | 8 | % | 6,993 | 7 | % | ||||||||||||||||||||
B |
5,694 | 6 | % | 5,390 | 6 | % | 5,087 | 5 | % | 4,814 | 5 | % | ||||||||||||||||||||
Other |
280 | 0 | % | 273 | 0 | % | 287 | 0 | % | 243 | 0 | % | ||||||||||||||||||||
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Total fixed maturities |
$ | 97,042 | 100 | % | $ | 94,856 | 100 | % | $ | 94,190 | 100 | % | $ | 93,787 | 100 | % | ||||||||||||||||
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Cost/Amortized Cost |
||||||||||||||||||||||||||||||||
Fixed maturities available for sale |
$ | 82,254 | $ | 80,363 | $ | 79,957 | $ | 79,536 | ||||||||||||||||||||||||
Fixed maturities held to maturity |
10,160 | 10,371 | 10,519 | 10,644 | ||||||||||||||||||||||||||||
Short-term investments |
2,991 | 2,651 | 2,780 | 3,002 | ||||||||||||||||||||||||||||
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|||||||||||||||||||||||||
Subtotal fixed maturities |
95,405 | 93,385 | 93,256 | 93,182 | ||||||||||||||||||||||||||||
Equity securities |
723 | 697 | 699 | 706 | ||||||||||||||||||||||||||||
Other investments |
4,429 | 4,410 | 4,271 | 4,270 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total investment portfolio |
$ | 100,557 | $ | 98,492 | $ | 98,226 | $ | 98,158 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Avg. duration of fixed maturities |
4.2 years | 4.2 years | 4.2 years | 4.2 years | ||||||||||||||||||||||||||||
Avg. market yield of fixed maturities |
2.7 | % | 2.7 | % | 2.8 | % | 2.8 | % | ||||||||||||||||||||||||
Avg. credit quality |
A/Aa | A/Aa | A/Aa | A/Aa | ||||||||||||||||||||||||||||
Avg. yield on invested assets (1) |
3.5 | % | 3.4 | % | 3.4 | % | 3.4 | % |
(1) | Calculated using adjusted net investment income. |
Investments | Page 23 |
Chubb Limited
Investment Portfolio - 2
(in millions of U.S. dollars)
(Unaudited)
S&P Credit Rating | ||||||||||||||||||||||||
AAA | AA | A | BBB | BB and below | Total | |||||||||||||||||||
Mortgage-backed Fixed Income Portfolio |
||||||||||||||||||||||||
Mortgage-backed securities |
||||||||||||||||||||||||
Market Value at September 30, 2017 |
||||||||||||||||||||||||
Agency residential mortgage-backed (RMBS) |
$ | | $ | 13,744 | $ | | $ | | $ | | $ | 13,744 | ||||||||||||
Non-agency RMBS |
2 | 4 | 58 | 4 | 27 | 95 | ||||||||||||||||||
Commercial mortgage-backed |
2,817 | 13 | | | | 2,830 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total mortgage-backed securities at market value |
$ | 2,819 | $ | 13,761 | $ | 58 | $ | 4 | $ | 27 | $ | 16,669 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
S&P Credit Rating | ||||||||||||||||||||
Investment Grade | ||||||||||||||||||||
AAA | AA | A | BBB | Total | ||||||||||||||||
U.S. Corporate and Asset-backed Fixed Income Portfolios |
||||||||||||||||||||
Market Value at September 30, 2017 |
||||||||||||||||||||
Asset-backed |
$ | 841 | $ | 59 | $ | | $ | | $ | 900 | ||||||||||
Banks |
| 19 | 1,647 | 1,742 | 3,408 | |||||||||||||||
Basic Materials |
| | 104 | 235 | 339 | |||||||||||||||
Communications |
| 165 | 281 | 1,308 | 1,754 | |||||||||||||||
Consumer, Cyclical |
| 240 | 522 | 698 | 1,460 | |||||||||||||||
Consumer, Non-Cyclical |
109 | 534 | 1,780 | 1,252 | 3,675 | |||||||||||||||
Diversified Financial Services |
7 | 15 | 496 | 204 | 722 | |||||||||||||||
Energy |
| 50 | 75 | 582 | 707 | |||||||||||||||
Industrial |
| 326 | 513 | 543 | 1,382 | |||||||||||||||
Utilities |
| 7 | 1,062 | 390 | 1,459 | |||||||||||||||
All Others |
165 | 448 | 996 | 673 | 2,282 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 1,122 | $ | 1,863 | $ | 7,476 | $ | 7,627 | $ | 18,088 | ||||||||||
|
|
|
|
|
|
|
|
|
|
S&P Credit Rating | ||||||||||||||||
Below Investment Grade | ||||||||||||||||
BB | B | CCC | Total | |||||||||||||
Market Value at September 30, 2017 |
||||||||||||||||
Asset-backed |
$ | 3 | $ | 2 | $ | 10 | $ | 15 | ||||||||
Banks |
23 | | | 23 | ||||||||||||
Basic Materials |
290 | 171 | | 461 | ||||||||||||
Communications |
930 | 719 | 4 | 1,653 | ||||||||||||
Consumer, Cyclical |
1,129 | 668 | 67 | 1,864 | ||||||||||||
Consumer, Non-Cyclical |
756 | 1,279 | 43 | 2,078 | ||||||||||||
Diversified Financial Services |
168 | 130 | 8 | 306 | ||||||||||||
Energy |
462 | 232 | 5 | 699 | ||||||||||||
Industrial |
440 | 564 | 29 | 1,033 | ||||||||||||
Utilities |
260 | 93 | 3 | 356 | ||||||||||||
All Others |
554 | 658 | 27 | 1,239 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 5,015 | $ | 4,516 | $ | 196 | $ | 9,727 | ||||||||
|
|
|
|
|
|
|
|
Investments 2 | Page 24 |
Chubb Limited
Investment Portfolio - 3
(in millions of U.S. dollars)
(Unaudited)
Market Value by S&P Credit Rating | ||||||||||||||||||||||||
AAA | AA | A | BBB | BB and below | Total | |||||||||||||||||||
Non-U.S. Fixed Income Portfolio |
||||||||||||||||||||||||
September 30, 2017 |
||||||||||||||||||||||||
Non-U.S. Government Securities |
||||||||||||||||||||||||
United Kingdom |
$ | | $ | 1,494 | $ | | $ | | $ | | $ | 1,494 | ||||||||||||
Republic of Korea |
| 1,045 | | | | 1,045 | ||||||||||||||||||
Canada |
973 | | | | | 973 | ||||||||||||||||||
Federative Republic of Brazil |
| | | | 848 | 848 | ||||||||||||||||||
Province of Ontario |
| 9 | 666 | | | 675 | ||||||||||||||||||
United Mexican States |
| | 435 | 121 | | 556 | ||||||||||||||||||
Province of Quebec |
| 545 | | | | 545 | ||||||||||||||||||
Kingdom of Thailand |
| | 517 | | | 517 | ||||||||||||||||||
Federal Republic of Germany |
423 | | | | | 423 | ||||||||||||||||||
French Republic |
| 345 | | | | 345 | ||||||||||||||||||
Other Non-U.S. Government Securities |
1,101 | 1,139 | 940 | 607 | 864 | 4,651 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
$ | 2,497 | $ | 4,577 | $ | 2,558 | $ | 728 | $ | 1,712 | $ | 12,072 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Market Value by S&P Credit Rating | ||||||||||||||||||||||||
AAA | AA | A | BBB | BB and below | Total | |||||||||||||||||||
Non-U.S. Corporate Securities |
||||||||||||||||||||||||
United Kingdom |
$ | 137 | $ | 96 | $ | 631 | $ | 963 | $ | 247 | $ | 2,074 | ||||||||||||
Canada |
86 | 181 | 384 | 492 | 331 | 1,474 | ||||||||||||||||||
United States (1) |
2 | 85 | 158 | 343 | 370 | 958 | ||||||||||||||||||
France |
10 | 31 | 504 | 261 | 31 | 837 | ||||||||||||||||||
Australia |
107 | 153 | 367 | 145 | 21 | 793 | ||||||||||||||||||
Netherlands |
83 | 11 | 381 | 208 | 45 | 728 | ||||||||||||||||||
Germany |
167 | 50 | 119 | 250 | 24 | 610 | ||||||||||||||||||
Switzerland |
38 | 19 | 127 | 154 | 19 | 357 | ||||||||||||||||||
Japan |
| 34 | 275 | 11 | 3 | 323 | ||||||||||||||||||
China |
| | 259 | 51 | 11 | 321 | ||||||||||||||||||
Other Non-U.S. Corporate Securities |
404 | 386 | 875 | 936 | 595 | 3,196 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
$ | 1,034 | $ | 1,046 | $ | 4,080 | $ | 3,814 | $ | 1,697 | $ | 11,671 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(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 25 |
Chubb Limited
Investment Portfolio - 4
(in millions of U.S. dollars)
(Unaudited)
Fixed Maturity Investment Portfolio
Top 10 Global Corporate Exposures
September 30, 2017 |
Market Value | Rating | ||||||
1 |
Wells Fargo & Co |
$ | 594 | A | ||||
2 |
JP Morgan Chase & Co |
509 | A- | |||||
3 |
Anheuser-Busch InBev NV |
447 | A- | |||||
4 |
Goldman Sachs Group Inc |
440 | BBB+ | |||||
5 |
AT&T Inc |
408 | BBB+ | |||||
6 |
General Electric Co |
397 | AA- | |||||
7 |
Verizon Communications Inc |
372 | BBB+ | |||||
8 |
Citigroup Inc |
345 | BBB+ | |||||
9 |
Morgan Stanley |
343 | BBB+ | |||||
10 |
Bank of America Corp |
331 | BBB+ |
Investments 4 | Page 26 |
Chubb Limited
Net Realized and Unrealized Gains (Losses)
(in millions of U.S. dollars)
(Unaudited)
Three months ended September 30, 2017 | ||||||||||||||||||||||||||||||||||||
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 maturities |
$ | 6 | $ | | $ | 6 | $ | 134 | $ | (39 | ) | $ | 95 | $ | 140 | $ | (39 | ) | $ | 101 | ||||||||||||||||
Fixed income derivatives |
(14 | ) | 5 | (9 | ) | | | | (14 | ) | 5 | (9 | ) | |||||||||||||||||||||||
Public equity |
4 | | 4 | 36 | (11 | ) | 25 | 40 | (11 | ) | 29 | |||||||||||||||||||||||||
Private equity |
84 | (15 | ) | 69 | (27 | ) | (1 | ) | (28 | ) | 57 | (16 | ) | 41 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total investment portfolio (1) |
80 | (10 | ) | 70 | 143 | (51 | ) | 92 | 223 | (61 | ) | 162 | ||||||||||||||||||||||||
Mark-to-market from variable annuity reinsurance derivative transactions, net of applicable hedges (2) |
(3 | ) | | (3 | ) | | | | (3 | ) | | (3 | ) | |||||||||||||||||||||||
Foreign exchange |
15 | 2 | 17 | 665 | (7 | ) | 658 | 680 | (5 | ) | 675 | |||||||||||||||||||||||||
Partially-owned entities (3) |
2 | | 2 | | | | 2 | | 2 | |||||||||||||||||||||||||||
Other (4) |
(10 | ) | | (10 | ) | (63 | ) | 12 | (51 | ) | (73 | ) | 12 | (61 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net gains (losses) |
$ | 84 | $ | (8 | ) | $ | 76 | $ | 745 | $ | (46 | ) | $ | 699 | $ | 829 | $ | (54 | ) | $ | 775 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Other-than-temporary impairments for the quarter in realized gains (losses) include $5 million for fixed maturities, $1 million for public equity and $2 million for private equity. |
(2) | The quarter includes $57 million of losses on applicable hedges. These losses are both pre-tax and after-tax. |
(3) | 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. |
(4) | Other unrealized losses are primarily related to the companys post-retirement programs. |
Three months ended September 30, 2016 | ||||||||||||||||||||||||||||||||||||
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 maturities |
$ | 27 | $ | (8 | ) | $ | 19 | 195 | (67 | ) | $ | 128 | $ | 222 | $ | (75 | ) | $ | 147 | |||||||||||||||||
Fixed income derivatives |
1 | 2 | 3 | | | | 1 | 2 | 3 | |||||||||||||||||||||||||||
Public equity |
6 | (3 | ) | 3 | 23 | (1 | ) | 22 | 29 | (4 | ) | 25 | ||||||||||||||||||||||||
Private equity |
59 | (12 | ) | 47 | (4 | ) | (3 | ) | (7 | ) | 55 | (15 | ) | 40 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total investment portfolio (5) |
93 | (21 | ) | 72 | 214 | (71 | ) | 143 | 307 | (92 | ) | 215 | ||||||||||||||||||||||||
Mark-to-market from variable annuity reinsurance derivative transactions, net of applicable hedges (6) |
44 | | 44 | | | | 44 | | 44 | |||||||||||||||||||||||||||
Foreign exchange |
29 | (6 | ) | 23 | (124 | ) | (7 | ) | (131 | ) | (95 | ) | (13 | ) | (108 | ) | ||||||||||||||||||||
Partially-owned entities (7) |
| | | | | | | | | |||||||||||||||||||||||||||
Other |
3 | | 3 | 5 | (1 | ) | 4 | 8 | (1 | ) | 7 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net gains (losses) |
$ | 169 | $ | (27 | ) | $ | 142 | $ | 95 | $ | (79 | ) | $ | 16 | $ | 264 | $ | (106 | ) | $ | 158 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5) | Other-than-temporary impairments for the quarter in realized gains (losses) include $7 million for fixed maturities, $1 million for public equity and $4 million for private equity. |
(6) | The quarter includes $45 million of losses on applicable hedges. These losses are both pre-tax and after-tax. |
(7) | 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. |
Net Gains (Losses) | Page 27 |
Chubb Limited
Net Realized and Unrealized Gains (Losses)
(in millions of U.S. dollars)
(Unaudited)
Nine months ended September 30, 2017 | ||||||||||||||||||||||||||||||||||||
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 maturities |
$ | 17 | $ | (2 | ) | $ | 15 | $ | 813 | $ | (275 | ) | $ | 538 | $ | 830 | $ | (277 | ) | $ | 553 | |||||||||||||||
Fixed income derivatives |
(24 | ) | 13 | (11 | ) | | | | (24 | ) | 13 | (11 | ) | |||||||||||||||||||||||
Public equity |
10 | (1 | ) | 9 | 79 | (25 | ) | 54 | 89 | (26 | ) | 63 | ||||||||||||||||||||||||
Private equity |
279 | (42 | ) | 237 | | (7 | ) | (7 | ) | 279 | (49 | ) | 230 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total investment portfolio (1) |
282 | (32 | ) | 250 | 892 | (307 | ) | 585 | 1,174 | (339 | ) | 835 | ||||||||||||||||||||||||
Mark-to-market from variable annuity reinsurance derivative transactions, net of applicable hedges (2) |
96 | | 96 | | | | 96 | | 96 | |||||||||||||||||||||||||||
Foreign exchange |
10 | 5 | 15 | 901 | (14 | ) | 887 | 911 | (9 | ) | 902 | |||||||||||||||||||||||||
Partially-owned entities (3) |
(6 | ) | 2 | (4 | ) | | | | (6 | ) | 2 | (4 | ) | |||||||||||||||||||||||
Other (4) |
(7 | ) | | (7 | ) | (118 | ) | 29 | (89 | ) | (125 | ) | 29 | (96 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net gains (losses) |
$ | 375 | $ | (25 | ) | $ | 350 | $ | 1,675 | $ | (292 | ) | $ | 1,383 | $ | 2,050 | $ | (317 | ) | $ | 1,733 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Year to date other-than-temporary impairments in realized gains (losses) include $15 million for fixed maturities, $9 million for public equity and $11 million for private equity. |
(2) | Year to date includes $169 million of losses on applicable hedges. These losses are both pre-tax and after-tax. |
(3) | 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. |
(4) | Other unrealized losses are primarily related to the companys post-retirement programs. |
Nine months ended September 30, 2016 | ||||||||||||||||||||||||||||||||||||
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 maturities |
$ | (156 | ) | $ | (2 | ) | $ | (158 | ) | $ | 2,237 | $ | (533 | ) | $ | 1,704 | $ | 2,081 | $ | (535 | ) | $ | 1,546 | |||||||||||||
Fixed income derivatives |
(85 | ) | 14 | (71 | ) | | | | (85 | ) | 14 | (71 | ) | |||||||||||||||||||||||
Public equity |
39 | (14 | ) | 25 | 52 | (10 | ) | 42 | 91 | (24 | ) | 67 | ||||||||||||||||||||||||
Private equity |
73 | (9 | ) | 64 | (73 | ) | | (73 | ) | | (9 | ) | (9 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total investment portfolio (5) |
(129 | ) | (11 | ) | (140 | ) | 2,216 | (543 | ) | 1,673 | 2,087 | (554 | ) | 1,533 | ||||||||||||||||||||||
Mark-to-market from variable annuity reinsurance derivative transactions, net of applicable hedges (6) |
(358 | ) | | (358 | ) | | | | (358 | ) | | (358 | ) | |||||||||||||||||||||||
Foreign exchange |
46 | (12 | ) | 34 | 269 | (18 | ) | 251 | 315 | (30 | ) | 285 | ||||||||||||||||||||||||
Partially-owned entities (7) |
(5 | ) | 1 | (4 | ) | | | | (5 | ) | 1 | (4 | ) | |||||||||||||||||||||||
Other |
| | | 8 | | 8 | 8 | | 8 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net gains (losses) |
$ | (446 | ) | $ | (22 | ) | $ | (468 | ) | $ | 2,493 | $ | (561 | ) | $ | 1,932 | $ | 2,047 | $ | (583 | ) | $ | 1,464 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5) | Year to date other-than-temporary impairments in realized gains (losses) include $77 million for fixed maturities, $7 million for public equity and $7 million for private equity. |
(6) | Year to date includes $88 million of losses on applicable hedges. These losses are both pre-tax and after-tax. |
(7) | 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. |
Net Gains (Losses) 2 | Page 28 |
Chubb Limited
Debt and Capital
(in millions of U.S. dollars, except ratios)
(Unaudited)
Legacy ACE | ||||||||||||||||||||
September 30 | June 30 | March 31 | December 31 | December 31 | ||||||||||||||||
2017 | 2017 | 2017 | 2016 | 2015 | ||||||||||||||||
Financial Debt: |
||||||||||||||||||||
Total short-term debt |
$ | 1,020 | $ | 922 | $ | 300 | $ | 500 | $ | | ||||||||||
Total long-term debt (1) |
11,559 | 11,667 | 12,300 | 12,610 | 9,389 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total financial debt |
$ | 12,579 | $ | 12,589 | $ | 12,600 | $ | 13,110 | $ | 9,389 | ||||||||||
Hybrid debt: |
||||||||||||||||||||
Total trust preferred securities |
308 | 308 | 308 | 308 | 307 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 12,887 | $ | 12,897 | $ | 12,908 | $ | 13,418 | $ | 9,696 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Capitalization: |
||||||||||||||||||||
Shareholders equity |
$ | 50,471 | $ | 50,349 | $ | 49,224 | $ | 48,275 | $ | 29,135 | ||||||||||
Hybrid debt |
308 | 308 | 308 | 308 | 307 | |||||||||||||||
Financial debt |
12,579 | 12,589 | 12,600 | 13,110 | 9,389 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total capitalization |
$ | 63,358 | $ | 63,246 | $ | 62,132 | $ | 61,693 | $ | 38,831 | ||||||||||
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Leverage ratios (based on total capital): |
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Hybrid debt |
0.5 | % | 0.5 | % | 0.5 | % | 0.5 | % | 0.8 | % | ||||||||||
Financial debt |
19.9 | % | 19.9 | % | 20.3 | % | 21.3 | % | 24.2 | % | ||||||||||
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Total hybrid & financial debt |
20.4 | % | 20.4 | % | 20.8 | % | 21.8 | % | 25.0 | % |
Note: As of September 30, 2017, there was $0.2 billion usage of credit facilities on a total commitment of $1.5 billion.
(1) | In connection with our acquisition of The Chubb Corporation, we assumed $3.3 billion par value of Legacy Chubbs debt, fair valued at $3.8 billion for purchase accounting purposes. This included $1 billion of junior subordinated capital securities. |
Debt and Capital | Page 29 |
Chubb Limited
Computation of Basic and Diluted Earnings Per Share
(in millions of U.S. dollars, except share and per share data)
(Unaudited)
Three months ended September 30 |
Nine months ended September 30 |
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2017 | 2016 | 2017 | 2016 | |||||||||||||
Numerator |
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Operating income (loss) to common shares |
$ | (60 | ) | $ | 1,356 | $ | 2,295 | $ | 3,433 | |||||||
Amortization of fair value adjustment of acquired invested assets and long-term debt, pre-tax (1) |
(68 | ) | (79 | ) | (219 | ) | (257 | ) | ||||||||
Tax benefit on amortization adjustment |
18 | 26 | 62 | 79 | ||||||||||||
Chubb integration and related expenses, pre-tax |
(50 | ) | (115 | ) | (233 | ) | (368 | ) | ||||||||
Tax benefit on Chubb integration and related expenses |
14 | 30 | 73 | 106 | ||||||||||||
Adjusted net realized gains (losses), pre-tax |
84 | 169 | 375 | (446 | ) | |||||||||||
Tax (expense) benefit on adjusted net realized gains (losses) |
(8 | ) | (27 | ) | (25 | ) | (22 | ) | ||||||||
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Net income (loss) |
$ | (70 | ) | $ | 1,360 | $ | 2,328 | $ | 2,525 | |||||||
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Rollforward of Common Shares Outstanding |
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Shares - beginning of period |
465,375,141 | 465,012,980 | 465,968,716 | 324,563,441 | ||||||||||||
Share Issuance for Chubb Acquisition |
| | | 136,950,381 | ||||||||||||
Repurchase of shares |
(1,615,383 | ) | | (5,033,013 | ) | | ||||||||||
Shares issued, excluding option exercises |
148,087 | 34,510 | 1,939,627 | 2,504,257 | ||||||||||||
Issued for option exercises |
250,674 | 238,620 | 1,283,189 | 1,268,031 | ||||||||||||
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Shares - end of period |
464,158,519 | 465,286,110 | 464,158,519 | 465,286,110 | ||||||||||||
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Denominator |
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Weighted average shares outstanding (2) |
466,370,784 | 468,021,093 | 467,658,334 | 460,631,794 | ||||||||||||
Effect of other dilutive securities (3) |
| 3,375,269 | 3,961,572 | 3,439,017 | ||||||||||||
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Adj. wtd. avg. shares outstanding and assumed conversions |
466,370,784 | 471,396,362 | 471,619,906 | 464,070,811 | ||||||||||||
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Basic earnings per share |
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Operating income (loss) |
$ | (0.13 | ) | $ | 2.90 | $ | 4.91 | $ | 7.45 | |||||||
Amortization of fair value adjustment of acquired invested assets and long-term debt, net of tax (1) |
(0.11 | ) | (0.11 | ) | (0.34 | ) | (0.39 | ) | ||||||||
Chubb integration and related expenses, net of tax |
(0.08 | ) | (0.18 | ) | (0.34 | ) | (0.57 | ) | ||||||||
Adjusted net realized gains (losses), net of tax |
0.17 | 0.29 | 0.75 | (1.01 | ) | |||||||||||
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Net income (loss) |
$ | (0.15 | ) | $ | 2.90 | $ | 4.98 | $ | 5.48 | |||||||
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Diluted earnings per share |
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Operating income (loss) (3) |
$ | (0.13 | ) | $ | 2.88 | $ | 4.87 | $ | 7.40 | |||||||
Amortization of fair value adjustment of acquired invested assets and long-term debt, net of tax (1) |
(0.11 | ) | (0.11 | ) | (0.33 | ) | (0.39 | ) | ||||||||
Chubb integration and related expenses, net of tax |
(0.08 | ) | (0.18 | ) | (0.34 | ) | (0.56 | ) | ||||||||
Adjusted net realized gains (losses), net of tax |
0.17 | 0.29 | 0.74 | (1.01 | ) | |||||||||||
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Net income (loss) (3) |
$ | (0.15 | ) | $ | 2.88 | $ | 4.94 | $ | 5.44 | |||||||
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(1) | Related to the acquisition of The Chubb Corporation. |
(2) | 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). |
(3) | For the three months ended September 30, 2017, weighted-average shares outstanding used to calculate operating loss and net loss per share excludes the effect of dilutive securities of 3,820,673 shares. In periods where operating loss and net loss is recognized, inclusion of incremental dilution is anti-dilutive. |
Earnings per share | Page 30 |
Chubb Limited
Book Value and Book Value per Common Share
(in millions of U.S. dollars, except share and per share data)
(Unaudited)
September 30 2017 |
June 30 2017 |
March 31 2017 |
December 31 2016 |
September 30 2016 |
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Reconciliation of Book Value per Common Share |
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Shareholders equity |
$ | 50,471 | $ | 50,349 | $ | 49,224 | $ | 48,275 | $ | 48,372 | ||||||||||
Less: goodwill and other intangible assets, net of tax |
20,274 | 19,994 | 20,013 | 20,019 | 20,332 | |||||||||||||||
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Numerator for tangible book value per share |
$ | 30,197 | $ | 30,355 | $ | 29,211 | $ | 28,256 | $ | 28,040 | ||||||||||
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Book value - % change over prior quarter |
0.2 | % | 2.3 | % | 2.0 | % | -0.2 | % | 2.4 | % | ||||||||||
Tangible book value - % change over prior quarter |
-0.5 | % | 3.9 | % | 3.4 | % | 0.8 | % | 5.5 | % | ||||||||||
Denominator |
464,158,519 | 465,375,141 | 467,223,019 | 465,968,716 | 465,286,110 | |||||||||||||||
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Book value per common share |
$ | 108.74 | $ | 108.19 | $ | 105.35 | $ | 103.60 | $ | 103.96 | ||||||||||
Tangible book value per common share |
$ | 65.06 | $ | 65.23 | $ | 62.52 | $ | 60.64 | $ | 60.26 | ||||||||||
Reconciliation of Book Value |
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Shareholders equity, beginning of quarter |
$ | 50,349 | $ | 49,224 | $ | 48,275 | $ | 48,372 | $ | 47,226 | ||||||||||
Operating income (loss) |
(60 | ) | 1,180 | 1,175 | 1,283 | 1,356 | ||||||||||||||
Amortization of fair value adjustment of acquired invested assets and long-term debt, net of tax (1) |
(50 | ) | (52 | ) | (55 | ) | (66 | ) | (53 | ) | ||||||||||
Chubb integration and related expenses, net of tax |
(36 | ) | (50 | ) | (74 | ) | (94 | ) | (85 | ) | ||||||||||
Adjusted net realized gains (losses), net of tax (2) |
76 | 227 | 47 | 487 | 142 | |||||||||||||||
Net unrealized gains (losses) on the investment portfolio |
92 | 286 | 207 | (1,487 | ) | 143 | ||||||||||||||
Repurchase of shares |
(232 | ) | (335 | ) | (140 | ) | | | ||||||||||||
Dividend declared on common shares |
(331 | ) | (332 | ) | (324 | ) | (324 | ) | (323 | ) | ||||||||||
Cumulative translation |
658 | 98 | 131 | (375 | ) | (131 | ) | |||||||||||||
Postretirement benefit liability |
(51 | ) | (14 | ) | (24 | ) | 353 | 4 | ||||||||||||
Other (3) |
56 | 117 | 6 | 126 | 93 | |||||||||||||||
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$ | 50,471 | $ | 50,349 | $ | 49,224 | $ | 48,275 | $ | 48,372 | |||||||||||
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(1) | Related to the acquisition of The Chubb Corporation. |
(2) | Includes net realized gains (losses) related to unconsolidated entities. |
(3) | Other primarily includes proceeds from exercise of stock options and stock compensation. |
Reconciliation Book Value | Page 31 |
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).
We provide financial measures such as gross premiums written, net premiums written, net premiums earned, and operating income (loss) on a constant-dollar basis. We believe it is useful to evaluate the trends in these measures 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.
Adjusted losses and loss expenses and adjusted administrative expenses are non-GAAP financial measures that exclude the one-time curtailment benefit related to the harmonization of the companys U.S. pension plans. During the fourth quarter of 2016, the company harmonized and amended several U.S. retirement programs to create a unified retirement savings program which resulted in the one-time pension curtailment benefit. The portion of the benefit related to claims staff is excluded from adjusted losses and loss expenses with the remainder excluded from adjusted administrative expenses. We believe that excluding the impact of the one-time pension curtailment benefit provides a better evaluation of our underwriting performance and enhances the understanding of the trends in our property & casualty business that may be obscured by this item. Adjusted losses and loss expenses also includes realized gains and losses on crop derivatives. The crop derivatives are 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 and therefore realized gains and losses from these derivatives are reclassified from adjusted net realized gains (losses), also a non-GAAP financial measure.
In presenting our segment income results, we have shown our performance with reference to underwriting results. Underwriting results are calculated by subtracting adjusted losses and loss expenses, policy benefits, policy acquisition costs, and adjusted administrative expenses from net premiums earned. We use underwriting results and operating ratios to monitor the results of our operations without the impact of certain factors, including investment income, other income and expenses, interest and income tax expense, and adjusted net realized gains (losses). P&C underwriting income is a non-GAAP financial measure which excludes the Life Insurance segment. P&C loss and loss expense ratio and P&C combined ratio (both non-GAAP financial measures) include adjusted losses and loss expenses in the ratio numerator. P&C expense ratio (a non-GAAP financial measure) and P&C combined ratio include policy acquisition costs and adjusted administrative expenses in the ratio numerator. A reconciliation of combined ratio to P&C combined ratio is provided on page 35.
P&C combined ratio excluding the impact of catastrophe losses and prior period development (PPD) and the P&C loss and loss expense ratio excluding the impact of catastrophe losses and PPD are non-GAAP financial measures. The loss ratio numerator includes adjusted losses and loss expenses and excludes catastrophe losses and PPD. The combined ratio numerator includes adjusted losses and loss expenses, policy acquisition costs, and adjusted administrative expenses. The denominator for both ratios includes net premiums earned adjusted to exclude the amount of reinstatement premiums (expensed) collected. In periods where there are adjustments on loss sensitive policies, these adjustments are excluded from PPD and net earned premiums when calculating the ratios. We believe that excluding the impact of catastrophe losses and PPD provides a better evaluation of our underwriting performance and enhances the understanding of the trends in our property & casualty business that may be obscured by these items.
P&C expense ratio excluding accident and health (A&H) is a non-GAAP financial measure and excludes the impact of our A&H business from our P&C 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 are non-GAAP financial measures and comprise consolidated operating results (including corporate) and exclude the operating results of the companys Life Insurance and North America Agricultural Insurance segments. 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.
Adjusted net investment income is net investment income excluding the amortization of the fair value adjustment of acquired invested assets. Adjusted interest expense is interest expense excluding the amortization of the fair value adjustment of acquired debt and the interest expense on the $5.3 billion senior notes issued in November 2015 until the closing of the Chubb Corp acquisition on January 14, 2016. We believe that excluding these items are meaningful in order to present the underlying economics of the companys business.
Other income (expense) operating is a non-GAAP financial measure and excludes the portion of net realized gains and losses related to unconsolidated entities from other income (expense). These gains and losses are reported as net realized gains (losses) and represent the non-operating activities of entities where we hold more than an insignificant percentage of the investees shares. We exclude these gains and losses from other income (expense) to enhance the understanding of our segments operations as they are heavily influenced by, and fluctuate in part according to market conditions. Other income (expense) operating and net realized gains and losses related to unconsolidated entities are recorded to Other income (expense) in our income statement on a GAAP basis.
Operating income (loss) is a non-GAAP financial measure that excludes the after-tax impact of adjusted net realized gains (losses), net realized gains (losses) included in other income (expense) related to partially owned entities, Chubb integration and related expenses, and the amortization of the fair value adjustments related to purchased invested assets and long-term debt from the Chubb Corp acquisition. We exclude realized gains and losses because the amount of these gains (losses) are heavily influenced by, and fluctuate in part according to the availability of market opportunities. We exclude Chubb integration and related expenses due to the size and complexity of this acquisition. These integration and related expenses are distortive to our results and are not indicative of our underlying profitability. We believe that excluding these integration and related expenses facilitates the comparison of our financial results to our historical operating results. Chubb integration expenses are incurred by the overall company and are therefore included in Corporate. The costs are not related to the on-going activities of the individual segments and are therefore excluded from our definition of segment income, as well. We believe this presentation enhances the understanding of our results of operations by highlighting the underlying profitability of our insurance business. Operating income (loss) should not be viewed as a substitute for net income (loss) determined in accordance with GAAP.
Operating effective tax rate is a non-GAAP financial measure. The numerator excludes tax on adjusted net realized gains (losses), tax on net realized gains (losses) included in other income (expense) related to partially owned entities, tax on Chubb integration and related expenses, and tax on the amortization of the fair value adjustments related to purchased invested assets and long-term debt from the Chubb Corp acquisition. The denominator excludes these same items, before tax. Operating effective tax rate should not be viewed as a substitute for effective tax rate determined in accordance with GAAP.
Tangible book value per common share is a non-GAAP financial measure and 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. A reconciliation of tangible book value per share is provided on page 31. In addition, we disclose per share measures that exclude the impact of foreign currency fluctuations during 2016 in order to adjust for the distortive effects of fluctuations in exchange rates.
International life insurance net premiums written and deposits collected, is a non-GAAP financial measure. Deposits collected on universal life and investment contracts (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.
2016 As If company measures presented throughout this section are prepared inclusive of the first 14 days of January 2016 prior to the acquisition close and exclusive of the impact of the unearned premium reserves intangible amortization and the elimination of the historical policy acquisition costs as a result of purchase accounting in order to present the underlying profitability of our insurance business. We believe these non-GAAP measures provide visibility into our results and trends in our business by allowing for a better assessment and comparability to our historical results. These measures are consistent with how management evaluates results.
Net premiums written excluding merger-related underwriting actions, accounting policy alignment, and one-time UPR transfer in 2016 is a non-GAAP performance measure. Since the acquisition of The Chubb Corporation, we have entered into new reinsurance agreements with third-party reinsurers for the Chubb Corp businesses and have taken other merger-related underwriting actions, including exiting certain types of business that do not meet our underwriting standards or adhere to our risk diversification strategy. We also exclude a merger-related accounting policy alignment adjustment and a one-time unearned premium reserve (UPR) transfer in 2016. We believe that these measures are meaningful to evaluate trends in our underlying business on a comparable basis.
Reconciliation Non-GAAP | Page 32 |
Chubb Limited
Non-GAAP Financial Measures - 2
(in millions of U.S. dollars)
(Unaudited)
Regulation G - Non-GAAP Financial Measures (continued)
Operating income (loss)
The following table presents the reconciliation of Net income (loss) to Operating income (loss):
YTD | YTD | Full Year | ||||||||||||||||||||||||||||||
3Q-17 | 2Q-17 | 1Q-17 | 4Q-16 | 3Q-16 | 2017 | 2016 | 2016 | |||||||||||||||||||||||||
Net income (loss), as reported |
$ | (70 | ) | $ | 1,305 | $ | 1,093 | $ | 1,610 | $ | 1,360 | $ | 2,328 | $ | 2,525 | $ | 4,135 | |||||||||||||||
Amortization of fair value adjustment of acquired invested assets and long-term debt, pre-tax (1) |
(68 | ) | (72 | ) | (79 | ) | (88 | ) | (79 | ) | (219 | ) | (257 | ) | (345 | ) | ||||||||||||||||
Tax benefit on amortization adjustment |
18 | 20 | 24 | 22 | 26 | 62 | 79 | 101 | ||||||||||||||||||||||||
Chubb integration and related expenses, pre tax |
(50 | ) | (72 | ) | (111 | ) | (131 | ) | (115 | ) | (233 | ) | (368 | ) | (499 | ) | ||||||||||||||||
Tax benefit on Chubb integration and related expenses |
14 | 22 | 37 | 37 | 30 | 73 | 106 | 143 | ||||||||||||||||||||||||
Adjusted net realized gains (losses) |
(5 | ) | 103 | (7 | ) | 371 | 97 | 91 | (511 | ) | (140 | ) | ||||||||||||||||||||
Net realized gains (losses) related to unconsolidated entities (2) |
89 | 143 | 52 | 162 | 72 | 284 | 65 | 227 | ||||||||||||||||||||||||
Tax (expense) benefit on adjusted net realized gains (losses) |
(8 | ) | (19 | ) | 2 | (46 | ) | (27 | ) | (25 | ) | (22 | ) | (68 | ) | |||||||||||||||||
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Operating income (loss) |
$ | (60 | ) | $ | 1,180 | $ | 1,175 | $ | 1,283 | $ | 1,356 | $ | 2,295 | $ | 3,433 | $ | 4,716 | |||||||||||||||
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(1) | Related to the acquisition of The Chubb Corporation. |
(2) | 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). |
The following table presents the reconciliation of Net income (loss) to P&C and Global P&C Underwriting income (loss):
YTD | YTD | Full Year | ||||||||||||||||||||||||||||||
3Q-17 | 2Q-17 | 1Q-17 | 4Q-16 | 3Q-16 | 2017 | 2016 | 2016 | |||||||||||||||||||||||||
Net income (loss) |
$ | (70 | ) | $ | 1,305 | $ | 1,093 | $ | 1,610 | $ | 1,360 | $ | 2,328 | $ | 2,525 | $ | 4,135 | |||||||||||||||
Income tax expense (benefit) |
(85 | ) | 200 | 128 | 259 | 277 | 243 | 556 | 815 | |||||||||||||||||||||||
Net realized (gains) losses related to unconsolidated entities |
(89 | ) | (143 | ) | (52 | ) | (162 | ) | (72 | ) | (284 | ) | (65 | ) | (227 | ) | ||||||||||||||||
Adjusted realized (gains) losses |
5 | (103 | ) | 7 | (371 | ) | (97 | ) | (91 | ) | 511 | 140 | ||||||||||||||||||||
Amortization of fair value adjustment of acquired invested assets and long-term debt |
68 | 72 | 79 | 88 | 79 | 219 | 257 | 345 | ||||||||||||||||||||||||
Chubb integration and related expenses |
50 | 72 | 111 | 131 | 115 | 233 | 368 | 499 | ||||||||||||||||||||||||
Adjusted interest expense |
162 | 160 | 166 | 167 | 164 | 488 | 479 | 646 | ||||||||||||||||||||||||
Pension curtailment benefit |
| | | (113 | ) | | | | (113 | ) | ||||||||||||||||||||||
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Consolidated segment income |
41 | 1,563 | 1,532 | 1,609 | 1,826 | 3,136 | 4,631 | 6,240 | ||||||||||||||||||||||||
Less: Life Insurance segment income |
64 | 52 | 62 | 60 | 69 | 178 | 203 | 263 | ||||||||||||||||||||||||
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P&C segment income (loss) |
(23 | ) | 1,511 | 1,470 | 1,549 | 1,757 | 2,958 | 4,428 | 5,977 | |||||||||||||||||||||||
Less: amortization expense of purchased intangibles (excluding Life Insurance) |
64 | 65 | 63 | 2 | 3 | 192 | 14 | 16 | ||||||||||||||||||||||||
Less: other (income) expense - operating (excluding Life Insurance) |
(10 | ) | 10 | 11 | 13 | 1 | 11 | (13 | ) | | ||||||||||||||||||||||
Less: adjusted net investment income (excluding Life Insurance) |
(815 | ) | (778 | ) | (761 | ) | (769 | ) | (759 | ) | (2,354 | ) | (2,206 | ) | (2,975 | ) | ||||||||||||||||
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P&C Underwriting income (loss) (Including Corporate and excluding Life Insurance) |
(784 | ) | 808 | 783 | 795 | 1,002 | 807 | 2,223 | 3,018 | |||||||||||||||||||||||
Less: Agricultural Insurance Underwriting income |
86 | 23 | 93 | 184 | 90 | 202 | 157 | 341 | ||||||||||||||||||||||||
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Global P&C Underwriting income (loss) (Including Corporate and excluding Agriculture) |
$ | (870 | ) | $ | 785 | $ | 690 | $ | 611 | $ | 912 | $ | 605 | $ | 2,066 | $ | 2,677 | |||||||||||||||
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Reconciliation Non-GAAP 2 | Page 33 |
Chubb Limited
Non-GAAP Financial Measures - 3
(in millions of U.S. dollars, except ratios)
(Unaudited)
Regulation G - Non-GAAP Financial Measures (continued)
Operating ROE
Operating return on equity (ROE) or ROE calculated using operating income (loss): The ROE numerator includes income adjusted to exclude after-tax adjusted net realized gains (losses), Chubb integration and related expenses, and the amortization of the fair value adjustment of acquired invested assets and long-term debt. The ROE denominator includes the average shareholders equity for the period adjusted to exclude unrealized gains (losses) on investments, net of tax. In addition, for 2016, the denominator was adjusted to account for the weighted-average impact of the $15,527 million issuance of common shares and equity awards related to The Chubb Corp acquisition on January 14, 2016. Operating ROE is a useful measure as it enhances the understanding of the return on shareholders equity by highlighting the underlying profitability relative to shareholders equity excluding the effect of unrealized gains and losses on our investments.
3Q-17 | 3Q-16 | YTD 2017 |
YTD 2016 |
Full Year 2016 |
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Net income (loss) |
$ | (70 | ) | $ | 1,360 | $ | 2,328 | $ | 2,525 | $ | 4,135 | |||||||||
Operating income (loss) |
$ | (60 | ) | $ | 1,356 | $ | 2,295 | $ | 3,433 | $ | 4,716 | |||||||||
Equity - beginning of period, as reported |
$ | 50,349 | $ | 47,226 | $ | 48,275 | $ | 29,135 | $ | 29,135 | ||||||||||
Add: weighted average impact of equity issuance |
| | | 14,734 | 14,931 | |||||||||||||||
Less: unrealized gains (losses) on investments, net of deferred tax |
1,551 | 2,404 | 1,058 | 874 | 874 | |||||||||||||||
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Equity - beginning of period, as adjusted |
$ | 48,798 | $ | 44,822 | $ | 47,217 | $ | 42,995 | $ | 43,192 | ||||||||||
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Equity - end of period, as reported |
$ | 50,471 | $ | 48,372 | $ | 50,471 | $ | 48,372 | $ | 48,275 | ||||||||||
Less: weighted average impact of equity issuance |
| | | 793 | 596 | |||||||||||||||
Less: unrealized gains (losses) on investments, net of deferred tax |
1,643 | 2,547 | 1,643 | 2,547 | 1,058 | |||||||||||||||
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Equity - end of period, as adjusted |
$ | 48,828 | $ | 45,825 | $ | 48,828 | $ | 45,032 | $ | 46,621 | ||||||||||
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Weighted average equity, as reported |
$ | 50,410 | $ | 47,799 | $ | 49,373 | $ | 45,724 | $ | 45,873 | ||||||||||
Weighted average equity, as adjusted |
$ | 48,813 | $ | 45,324 | $ | 48,023 | $ | 44,014 | $ | 44,907 | ||||||||||
Operating ROE |
-0.5 | % | 12.0 | % | 6.4 | % | 10.4 | % | 10.5 | % | ||||||||||
ROE |
-0.6 | % | 11.4 | % | 6.3 | % | 7.4 | % | 9.0 | % |
Operating effective tax rate
The following table presents the reconciliation of effective tax rate to the operating effective tax rate:
3Q-17 | 2Q-17 | 1Q-17 | 4Q-16 | 3Q-16 | YTD 2017 |
YTD 2016 |
Full Year 2016 |
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Tax expense (benefit), as reported |
$ | (85 | ) | $ | 200 | $ | 128 | $ | 259 | $ | 277 | $ | 243 | $ | 556 | $ | 815 | |||||||||||||||
Tax benefit on amortization of fair value of acquired invested assets and debt (1) |
(18 | ) | (20 | ) | (24 | ) | (22 | ) | (26 | ) | (62 | ) | (79 | ) | (101 | ) | ||||||||||||||||
Tax benefit on Chubb integration and related expenses |
(14 | ) | (22 | ) | (37 | ) | (37 | ) | (30 | ) | (73 | ) | (106 | ) | (143 | ) | ||||||||||||||||
Tax expense (benefit) on adjusted net realized gains (losses) |
8 | 19 | (2 | ) | 46 | 27 | 25 | 22 | 68 | |||||||||||||||||||||||
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Tax expense (benefit), adjusted |
$ | (61 | ) | $ | 223 | $ | 191 | $ | 272 | $ | 306 | $ | 353 | $ | 719 | $ | 991 | |||||||||||||||
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Income (loss) before tax, as reported |
$ | (155 | ) | $ | 1,505 | $ | 1,221 | $ | 1,869 | $ | 1,637 | $ | 2,571 | $ | 3,081 | $ | 4,950 | |||||||||||||||
Less: amortization of fair value of acquired invested assets and debt (1) |
(68 | ) | (72 | ) | (79 | ) | (88 | ) | (79 | ) | (219 | ) | (257 | ) | (345 | ) | ||||||||||||||||
Less: Chubb integration and related expenses |
(50 | ) | (72 | ) | (111 | ) | (131 | ) | (115 | ) | (233 | ) | (368 | ) | (499 | ) | ||||||||||||||||
Less: adjusted realized gains (losses) |
(5 | ) | 103 | (7 | ) | 371 | 97 | 91 | (511 | ) | (140 | ) | ||||||||||||||||||||
Less: realized gains (losses) related to unconsolidated entities |
89 | 143 | 52 | 162 | 72 | 284 | 65 | 227 | ||||||||||||||||||||||||
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Operating income (loss) before tax |
$ | (121 | ) | $ | 1,403 | $ | 1,366 | $ | 1,555 | $ | 1,662 | $ | 2,648 | $ | 4,152 | $ | 5,707 | |||||||||||||||
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Effective tax rate |
54.7 | % | 13.3 | % | 10.5 | % | 13.8 | % | 17.0 | % | 9.4 | % | 18.1 | % | 16.5 | % | ||||||||||||||||
Adjustment for tax impact of amortization of fair value of acquired invested assets and debt (1) |
8.6 | % | 0.6 | % | 1.0 | % | 0.5 | % | 0.7 | % | 1.4 | % | 0.9 | % | 0.8 | % | ||||||||||||||||
Adjustment for tax impact of Chubb integration and related expenses |
6.6 | % | 0.8 | % | 1.7 | % | 1.0 | % | 0.6 | % | 1.7 | % | 1.1 | % | 1.1 | % | ||||||||||||||||
Adjustment for tax impact of adjusted net realized gains (losses) |
-19.0 | % | 1.3 | % | 0.8 | % | 2.3 | % | 0.1 | % | 0.8 | % | -2.8 | % | -1.0 | % | ||||||||||||||||
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Operating effective tax rate |
50.9 | % | 16.0 | % | 14.0 | % | 17.6 | % | 18.4 | % | 13.3 | % | 17.3 | % | 17.4 | % | ||||||||||||||||
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(1) | Related to the acquisition of The Chubb Corporation |
Reconciliation Non-GAAP 3 | Page 34 |
Chubb Limited
Non-GAAP Financial Measures - 4
(in millions of U.S. dollars, except ratios)
(Unaudited)
Regulation G - Non-GAAP Financial Measures (continued)
Chubb integration and related expenses, net of tax
Chubb integration and related expenses is a non-GAAP financial measure and includes all internal and external costs directly related to the integration activities of The Chubb Corp acquisition, consisting primarily of personnel-related expenses, including severance and employee retention and relocation; consulting fees; and advisor fees. Chubb integration and related expenses also include interest expense on the $5.3 billion senior notes issued in November 2015. We exclude Chubb integration expenses related to The Chubb Corp acquisition from operating income (loss) due to the size and complexity of this acquisition. We exclude the pre-acquisition interest expense from operating income (loss) because the operations for which the debt was issued were not part of our operating activities prior to the completion of the acquisition. Effective with the close of The Chubb Corp acquisition (January 14, 2016), the interest on this debt was considered a cost of our operations and is included within operating income (loss). These integration and related expenses are distortive to our results and are not indicative of our underlying profitability. We believe that excluding these integration and related expenses facilitate the comparison of our financial results to our historical operating results. The following table presents the reconciliation of Chubb integration expenses on a GAAP basis to Chubb integration and related expenses.
3Q-17 | 2Q-17 | 1Q-17 | 4Q-16 | 3Q-16 | YTD 2017 |
YTD 2016 |
Full Year 2016 |
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Chubb integration expenses, net of tax |
$ | 36 | $ | 50 | $ | 74 | $ | 94 | $ | 85 | $ | 160 | $ | 258 | $ | 352 | ||||||||||||||||
Add: pre-acquisition interest expense related to $5.3 billion senior notes, net of tax |
| | | | | | 4 | 4 | ||||||||||||||||||||||||
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Chubb integration and related expenses, net of tax |
36 | 50 | 74 | 94 | 85 | 160 | 262 | 356 | ||||||||||||||||||||||||
Tax benefit |
14 | 22 | 37 | 37 | 30 | 73 | 106 | 143 | ||||||||||||||||||||||||
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Chubb integration and related expenses, pre-tax |
$ | 50 | $ | 72 | $ | 111 | $ | 131 | $ | 115 | $ | 233 | $ | 368 | $ | 499 | ||||||||||||||||
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P&C combined ratio
The following table presents the reconciliation of combined ratio to 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 P&C combined ratio also excludes the one-time pension curtailment benefit of $113 million recognized in the fourth quarter of 2016. We believe that excluding the impact of the one-time pension curtailment provides a better evaluation of our underwriting performance and enhances the understanding of the trends in our property & casualty business that may be obscured by this item.
3Q-17 | 2Q-17 | 1Q-17 | 4Q-16 | 3Q-16 | YTD 2017 |
YTD 2016 |
Full Year 2016 |
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Combined ratio |
110.7 | % | 88.0 | % | 87.5 | % | 86.0 | % | 86.0 | % | 96.0 | % | 89.0 | % | 88.3 | % | ||||||||||||||||
Less: impact of pension curtailment benefit |
0.0 | % | 0.0 | % | 0.0 | % | 1.7 | % | 0.0 | % | 0.0 | % | 0.0 | % | 0.4 | % | ||||||||||||||||
Add: impact of gains and losses on crop derivatives |
0.1 | % | 0.0 | % | 0.0 | % | 0.1 | % | 0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | ||||||||||||||||
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P&C combined ratio |
110.8 | % | 88.0 | % | 87.5 | % | 87.8 | % | 86.0 | % | 96.0 | % | 89.0 | % | 88.7 | % |
Reconciliation Non-GAAP 4 | Page 35 |
Chubb Limited
Non-GAAP Financial Measures - 5
(in millions of U.S. dollars, except share and per share data)
(Unaudited)
Regulation G - Non-GAAP Financial Measures (continued)
The following presents the reconciliation of earnings per share to earnings per share, including the 14 day stub period for YTD 2016:
YTD 2016 |
YTD 2016 |
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Numerator |
Denominator | |||||||||
Operating income as reported |
$ | 3,433 | Weighted average shares outstanding and assumed conversions |
464,070,811 | ||||||
Add: 14-day stub period income |
Impact of shares issued in connection with Chubb Corp acquisition |
6,719,638 | ||||||||
Underwriting income |
44 | As If adjusted weighted average shares outstanding |
470,790,449 | |||||||
Net investment income |
45 | |||||||||
Interest expense |
(9 | ) | Diluted earnings per share, including 14 day stub period |
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Income tax expense |
(20 | ) | Operating income per share |
$ | 7.42 | |||||
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Total 14-day stub period income |
60 | Net income per share |
$ | 5.49 | ||||||
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As If operating income, including 14 day stub period |
$ | 3,493 | ||||||||
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Net income as reported |
$ | 2,525 | ||||||||
Add: 14-day stub period income from above |
60 | |||||||||
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As If net income, including 14 day stub period |
$ | 2,585 | ||||||||
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Reconciliation Non-GAAP 5 | Page 36 |
Chubb Limited
Non-GAAP Financial Measures - 6
(in millions of U.S. dollars)
(Unaudited)
Regulation G - Non-GAAP Financial Measures (continued)
The following tables presents the reconciliation of reported underwriting income (loss) for each segment to underwriting income (loss) on an As If basis.
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 |
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Q3 2016 |
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Underwriting income (loss) |
$ | 426 | $ | 169 | $ | 90 | $ | 384 | $ | 53 | $ | (120 | ) | $ | 1,002 | $ | 1 | $ | 1,003 | |||||||||||||||||
Less: amortization of acquired UPR intangible - Chubb Corp |
176 | 101 | | 43 | | | 320 | | 320 | |||||||||||||||||||||||||||
Add: elimination of DAC benefit - Chubb Corp |
(150 | ) | (83 | ) | | (48 | ) | | | (281 | ) | | (281 | ) | ||||||||||||||||||||||
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Underwriting income (loss) - As If |
$ | 452 | $ | 187 | $ | 90 | $ | 379 | $ | 53 | $ | (120 | ) | $ | 1,041 | $ | 1 | $ | 1,042 | |||||||||||||||||
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Q4 2016 |
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Underwriting income (loss) |
$ | 470 | $ | 125 | $ | 184 | $ | 192 | $ | 10 | $ | (186 | ) | $ | 795 | $ | (7 | ) | $ | 788 | ||||||||||||||||
Less: amortization of acquired UPR intangible - Chubb Corp |
78 | 45 | | 21 | | | 144 | | 144 | |||||||||||||||||||||||||||
Add: elimination of DAC benefit - Chubb Corp |
(66 | ) | (37 | ) | | (24 | ) | | | (127 | ) | | (127 | ) | ||||||||||||||||||||||
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Underwriting income (loss) - As If |
$ | 482 | $ | 133 | $ | 184 | $ | 189 | $ | 10 | $ | (186 | ) | $ | 812 | $ | (7 | ) | $ | 805 | ||||||||||||||||
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YTD 2016 |
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Underwriting income (loss) |
$ | 1,160 | $ | 307 | $ | 157 | $ | 742 | $ | 136 | $ | (279 | ) | $ | 2,223 | $ | 6 | $ | 2,229 | |||||||||||||||||
Add: Pre-acquisition underwriting income (loss) (14 days prior to close) |
13 | 30 | | 4 | | (3 | ) | 44 | | 44 | ||||||||||||||||||||||||||
Less: amortization of acquired UPR intangible - Chubb Corp |
781 | 447 | | 187 | | | 1,415 | | 1,415 | |||||||||||||||||||||||||||
Add: elimination of DAC benefit - Chubb Corp |
(663 | ) | (369 | ) | | (214 | ) | | | (1,246 | ) | | (1,246 | ) | ||||||||||||||||||||||
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Underwriting income (loss) - As If |
$ | 1,291 | $ | 415 | $ | 157 | $ | 719 | $ | 136 | $ | (282 | ) | $ | 2,436 | $ | 6 | $ | 2,442 | |||||||||||||||||
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Full Year 2016 |
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Underwriting income (loss) |
$ | 1,630 | $ | 432 | $ | 341 | $ | 934 | $ | 146 | $ | (465 | ) | $ | 3,018 | $ | (1 | ) | $ | 3,017 | ||||||||||||||||
Add: Pre-acquisition underwriting income (loss) (14 days prior to close) |
13 | 30 | | 4 | | (3 | ) | 44 | | 44 | ||||||||||||||||||||||||||
Less: amortization of acquired UPR intangible - Chubb Corp |
859 | 492 | | 208 | | | 1,559 | | 1,559 | |||||||||||||||||||||||||||
Add: elimination of DAC benefit - Chubb Corp |
(729 | ) | (406 | ) | | (238 | ) | | | (1,373 | ) | | (1,373 | ) | ||||||||||||||||||||||
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Underwriting income (loss) - As If |
$ | 1,773 | $ | 548 | $ | 341 | $ | 908 | $ | 146 | $ | (468 | ) | $ | 3,248 | $ | (1 | ) | $ | 3,247 | ||||||||||||||||
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Reconciliation Non-GAAP 6 | Page 37 |
Chubb Limited
Glossary
Chubb Limited Consolidated comprises all segments including Corporate.
Book value per common share: Shareholders equity divided by the shares outstanding.
P&C combined ratio: The sum of the loss and loss expense ratio, acquisition cost ratio and the administrative expense ratio excluding both the life business and the one-time pension curtailment benefit in Q4 2016 and including realized gains and losses on crop derivatives.
Operating effective tax rate: Income tax expense 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 Chubb integration and related expenses, divided by income excluding adjusted net realized gains (losses) before tax, amortization of fair value of acquired invested assets and debt before tax, and Chubb integration and related expenses before tax.
Tangible book value per common share: Shareholders equity less goodwill and other intangible assets 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: Net investment income divided by average cost of fixed maturities and other investments, and average market value of equity securities.
Tangible capital: Total capitalization less goodwill and other intangible assets.
Total capitalization: Short-term debt, long-term debt, trust preferreds, and shareholders equity.
NM: Not meaningful.
Chubb integration and related expenses: Chubb integration expenses comprise legal and professional fees and all other costs directly related to the integration activities of the Chubb Corp acquisition including the pre-acquisition interest expense on the $5.3 billion senior notes issued in November 2015. The pre-acquisition interest expense is included in operating income subsequent to January 14th, 2016, the date of the acquisition close. Chubb 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.
Glossary | Page 38 |
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