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 23, 2018
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-2(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 23, 2018, Chubb Limited issued a Press Release reporting its third quarter 2018 results and the availability of its third quarter 2018 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 Number |
Description | |
99.1 | Press Release, Dated October 23, 2018, Reporting Third Quarter 2018 Results | |
99.2 | Third Quarter 2018 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 23, 2018
Exhibit 99.1
Chubb Limited Bärengasse 32 CH-8001 Zurich Switzerland |
www.chubb.com @Chubb |
News Release
Chubb Reports Third Quarter Net Income Per Share and Core Operating Income Per Share of $2.64 and $2.41, Respectively, Including Catastrophe Losses of $0.80 Per Share; P&C Combined Ratio of 90.9%, or 84.8% Excluding Catastrophes
| Core operating income was $1.1 billion compared with a loss of $(60) million prior year. Core operating income excluding catastrophe losses was $1.5 billion, or $3.21 per share, up 2.9% per share. On a current accident year basis, core operating income excluding catastrophe losses was $2.82 per share, up 5.2%. |
| P&C net premiums written were $7.5 billion and Global P&C net premiums written, which exclude Agriculture, were $6.7 billion, up 2.5% and 3.5%, respectively, and up 2.8% and 3.9%, respectively, on a constant-dollar basis. Excluding merger-related actions, which are substantially completed, Global P&C net premiums written were up 4.4% in constant dollars. |
| P&C underwriting income was $669 million. P&C current accident year underwriting income excluding catastrophe losses was $876 million, up 4.3%. |
| P&C current accident year combined ratio excluding catastrophe losses was 88.2% compared with 88.5% prior year. |
| Pre-tax catastrophe losses in the quarter were $450 million compared with $1,893 million prior year and $341 million on an expected basis for the third quarter 2018. |
| Adjusted net investment income was $883 million pre-tax. |
| Annualized ROE and core operating ROE were 9.7% and 8.7%, respectively. |
ZURICH October 23, 2018 Chubb Limited (NYSE: CB) today reported net income for the quarter ended September 30, 2018 of $1,231 million, or $2.64 per share, compared with a net loss of $(70) million, or $(0.15) per share, for the same quarter last year. Core operating income was $1,122 million, or $2.41 per share, compared with a core operating loss of $(60) million, or $(0.13) per share, for the same quarter last year. The property and casualty (P&C) combined ratio was 90.9%. Book and tangible book value per share increased 0.4% and 1.3%, respectively, from June 30, 2018 and now stand at $110.46 and $66.83, respectively. Foreign currency movement (FX) unfavorably impacted book value by $425 million after-tax and tangible book value by $252 million after-tax.
Chubb®, Chubb logo® and Chubb. Insured.SM are trademarks of Chubb. | 1 |
Chubb Limited News Release
Chubb Limited
Third Quarter Summary
(in millions, except per share amounts)
(Unaudited)
(Per Share - Diluted) | ||||||||||||||||||||||||||||
2018 | 2017 | Change | 2018 | 2017 | Change | |||||||||||||||||||||||
Net income (loss) |
$1,231 | $(70) | NM | $2.64 | $(0.15) | NM | ||||||||||||||||||||||
Chubb integration expenses, net of tax |
14 | 36 | (61.1)% | 0.03 | 0.08 | (62.5)% | ||||||||||||||||||||||
Amortization of fair value adjustment of acquired invested assets and long-term debt, net of tax |
42 | 50 | (16.0)% | 0.09 | 0.11 | (18.2)% | ||||||||||||||||||||||
Adjusted net realized (gains) losses, net of tax |
(165) | (76) | 117.1% | (0.35) | (0.17) | 105.9% | ||||||||||||||||||||||
Core operating income (loss), net of tax |
$1,122 | $(60) | NM | $2.41 | $(0.13) | NM |
For the three months ended September 30, 2018 and 2017, the tax expenses (benefits) related to the table above were $(2) million and $(14) million, respectively, for Chubb integration expenses; $(12) million and $(18) million, respectively, for amortization of fair value adjustment of acquired invested assets and long-term debt; $14 million and $8 million, respectively, for adjusted net realized gains and losses; and $183 million and $(61) million, respectively, for core operating income (loss).
For the nine months ended September 30, 2018, net income was $3,607 million, or $7.71 per share, compared with $2,328 million, or $4.94 per share, for 2017. Core operating income was $3,472 million, or $7.42 per share, compared with $2,295 million, or $4.87 per share, for 2017. The P&C combined ratio was 89.8% for the nine months ended September 30, 2018 compared with 96.0% prior year. The P&C current accident year combined ratio excluding catastrophe losses was 88.0% for the nine months ended September 30, 2018 and 2017. Book value per share remained essentially unchanged and tangible book value per share increased 1.5% from December 31, 2017. Book and tangible book value per share were unfavorably impacted by net realized and unrealized losses of $1,326 million after-tax in the companys investment portfolio. In addition, FX unfavorably impacted book value by $572 million after-tax and tangible book value by $316 million after-tax.
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) | ||||||||||||||||||||||||||||
2018 | 2017 | Change | 2018 | 2017 | Change | |||||||||||||||||||||||
Net income |
$3,607 | $2,328 | 55.0% | $7.71 | $4.94 | 56.1% | ||||||||||||||||||||||
Chubb integration expenses, net of tax |
32 | 160 | (80.0)% | 0.07 | 0.34 | (79.4)% | ||||||||||||||||||||||
Amortization of fair value adjustment of acquired invested assets and long-term debt, net of tax |
133 | 157 | (15.3)% | 0.29 | 0.33 | (12.1)% | ||||||||||||||||||||||
Adjusted net realized (gains) losses, net of tax |
(300) | (350) | (14.3)% | (0.65) | (0.74) | (12.2)% | ||||||||||||||||||||||
Core operating income, net of tax |
$3,472 | $2,295 | 51.3% | $7.42 | $4.87 | 52.4% |
For the nine months ended September 30, 2018 and 2017, the tax expenses (benefits) related to the table above were $(7) million and $(73) million, respectively, for Chubb integration expenses; $(32) million and $(62) million, respectively, for amortization of fair value adjustment of acquired invested assets and long-term debt; $25 million for adjusted net realized gains and losses for both periods; and $550 million and $353 million, respectively, for core operating income.
Evan G. Greenberg, Chairman and Chief Executive Officer of Chubb Limited, commented: As a global insurer with operations in 54 countries, we experienced an active quarter for natural catastrophes around the world, and Chubbs underwriting excellence once again distinguished the company. We produced core operating income of $1.1 billion, or $2.41 per share, and a P&C combined ratio of 90.9%. Excluding catastrophes, our combined ratio of 84.8% reflects strong current accident year EPS, up 5% over prior year, and a nice contribution from positive prior period reserve development. The quality and balance of our earnings this quarter were evident, with P&C underwriting income of $669 million and net investment income of $883 million.
Global P&C net premiums written, which exclude agriculture, increased 4% in the quarter in constant dollars. We had good growth in our U.S. commercial P&C divisions and simply excellent growth in our international P&C business. In our U.S. commercial P&C business excluding agriculture, net premiums increased 3.6%, or 4.6% excluding merger-related actions, which are now substantially completed and will be behind us after one more quarter. We achieved even stronger growth in our Overseas General operations, which include both commercial and consumer lines, with premiums up 7.5% in constant dollars. Our global presence and the expanded capabilities of todays Chubb allow us to take advantage of growth opportunities in many areas without sacrificing underwriting standards.
Commercial P&C pricing for the business we wrote was consistent with the prior quarter. Given market conditions, we are trading some growth for an underwriting profit a proven strategy that requires discipline. Were confident and optimistic about our ability to outperform the balance of the year and beyond.
Chubb®, Chubb logo® and Chubb. Insured.SM are trademarks of Chubb. | 3 |
Chubb Limited News Release
Operating highlights for the quarter ended September 30, 2018 were as follows:
Chubb Limited (in millions of U.S. dollars except for percentages) |
|
Q3 2018 |
|
|
Q3 2017 |
|
Change | |||||
P&C |
||||||||||||
Net premiums written (increase of 2.8% in constant dollars) |
$ | 7,546 | $ | 7,363 | 2.5% | |||||||
Net premiums written excluding merger-related actions (increase of 3.3% in constant dollars) |
2.9% | |||||||||||
Underwriting income (loss) |
$ | 669 | $ | (784) | NM | |||||||
Combined ratio |
90.9% | 110.8% | ||||||||||
Current accident year underwriting income excluding catastrophe losses |
$ | 876 | $ | 839 | 4.3% | |||||||
Current accident year combined ratio excluding catastrophe losses |
88.2% | 88.5% | ||||||||||
Global P&C (excludes Agriculture) |
||||||||||||
Net premiums written (increase of 3.9% in constant dollars) |
$ | 6,662 | $ | 6,437 | 3.5% | |||||||
Net premiums written excluding merger-related actions (increase of 4.4% in constant dollars) |
4.0% | |||||||||||
Underwriting income (loss) |
$ | 590 | $ | (870) | NM | |||||||
Combined ratio |
90.9% | 113.6% | ||||||||||
Current accident year underwriting income excluding catastrophe losses |
$ | 790 | $ | 752 | 4.9% | |||||||
Current accident year combined ratio excluding catastrophe losses |
87.9% | 88.2% |
| Net premiums earned increased 1.3%, or 1.6% in constant-dollar. |
| Total pre-tax and after-tax catastrophe losses were $450 million (6.1 percentage points of the combined ratio) and $372 million, respectively, compared with $1,893 million (26.0 percentage points of the combined ratio) and $1,525 million, respectively, last year. |
| Core operating income with an expected level of catastrophe losses was $1.2 billion, or $2.60 per share, up 1.6% per share on the same basis from last year. P&C combined ratio with an expected level of catastrophe losses was 89.4% compared with 89.3% prior year. |
| Total pre-tax and after-tax favorable prior period development were $243 million (3.4 percentage points of the combined ratio) and $180 million, respectively, compared with $270 million (3.7 percentage points of the combined ratio) and $206 million, respectively, last year. |
| Operating cash flow was $1.7 billion. |
| Share repurchases totaled $379 million, or approximately 2.8 million shares, during the quarter and $703 million, or approximately 5.2 million shares, through September 30, 2018. |
| Net loss reserves increased $269 million adjusted for foreign exchange. |
Chubb®, Chubb logo® and Chubb. Insured.SM are trademarks of Chubb. | 4 |
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, 2018 are presented below:
Chubb Limited (in millions of U.S. dollars except for percentages) |
|
Q3 2018 |
|
|
Q3 2017 |
|
Change | |||||
Total North America P&C Insurance |
||||||||||||
Net premiums written (increase of 2.4% excluding merger-related actions) |
$ | 5,301 | $ | 5,206 | 1.8% | |||||||
Combined ratio |
89.9% | 108.7% | ||||||||||
Current accident year combined ratio excluding catastrophe losses |
86.4% | 86.5% | ||||||||||
North America Commercial P&C Insurance |
||||||||||||
Net premiums written (increase of 4.6% excluding merger-related actions) |
$ | 3,199 | $ | 3,086 | 3.6% | |||||||
Net premiums written Major accounts retail and excess and surplus (E&S) wholesale (increase of 5.4% excluding merger-related actions) |
1,852 | 1,786 | 3.6% | |||||||||
Net premiums written Middle market and small commercial |
1,347 | 1,300 | 3.6% | |||||||||
Combined ratio |
85.8% | 109.6% | ||||||||||
Current accident year combined ratio excluding catastrophe losses |
86.7% | 88.7% | ||||||||||
North America Personal P&C Insurance |
||||||||||||
Net premiums written |
$ | 1,218 | $ | 1,194 | 2.0% | |||||||
Net premiums written adjusted for one-time accounting actions |
2.7% | |||||||||||
Combined ratio |
99.8% | 120.8% | ||||||||||
Current accident year combined ratio excluding catastrophe losses |
83.2% | 77.5% | ||||||||||
North America Agricultural Insurance |
||||||||||||
Net premiums written |
$ | 884 | $ | 926 | (4.5)% | |||||||
Combined ratio |
90.7% | 90.4% | ||||||||||
Current accident year combined ratio excluding catastrophe losses |
89.9% | 90.3% | ||||||||||
Overseas General Insurance |
||||||||||||
Net premiums written (increase of 7.5% in constant dollars) |
$ | 2,081 | $ | 1,966 | 5.9% | |||||||
Combined ratio |
90.3% | 101.6% | ||||||||||
Current accident year combined ratio excluding catastrophe losses |
90.0% | 90.6% |
| North America Commercial P&C Insurance: Net premiums written in the middle market and small commercial divisions increased 3.6%. This growth reflects a 5.2% increase in P&C lines and an increase of 0.2% in financial lines. Net premiums written in the small commercial division increased 29.8%. |
| North America Personal P&C Insurance: The current accident year combined ratio excluding catastrophe losses was 83.2% compared with 77.5%, principally reflecting increasing frequency and severity of homeowners losses, primarily non-catastrophe water and fire losses. |
| Global Reinsurance: Net premiums written decreased 14.3%, or 14.7% in constant dollars, principally due to higher reinstatement premiums collected in the prior year relating to the 2017 natural catastrophes. The combined ratio was 86.7% compared with 187.4%. The current accident year combined ratio excluding catastrophe losses was 82.8%, compared with 82.2%. |
Chubb®, Chubb logo® and Chubb. Insured.SM are trademarks of Chubb. | 5 |
Chubb Limited News Release
| Life Insurance: Segment income was $78 million, up 22.6%. International life insurance income was $29 million, up $16 million, which included a favorable reserve development of $8 million in the current quarter. Combined Insurance North America contributed segment income of $37 million, up 1.5%, and net premiums written increased 5.8%. |
Please refer to the Chubb Limited Financial Supplement, dated September 30, 2018, 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 Wednesday, October 24, 2018 beginning at 8:30 a.m. Eastern. The earnings conference call will be available via live webcast at investors.chubb.com or by dialing 888-394-8218 (within the United States) or 323-794-2588 (international), passcode 4557328. Please refer to the Chubb investor relations website under Events and Presentations for details. A replay of the call will be available until Wednesday, November 7, 2018 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 and territories, 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 Contacts
Karen Beyer: (212) 827-4445; karen.beyer@chubb.com
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. | 6 |
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 (FX)). 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, which was $60 million in Q3 2018. Refer to page 3 in the Financial Supplement for the fair value adjustment in other periods. 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 adjusted 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.
Core operating income (loss), net of tax excludes adjusted realized gains and losses, Chubb integration 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 expenses
Chubb®, Chubb logo® and Chubb. Insured.SM are trademarks of Chubb. | 7 |
Chubb Limited News Release
related to the acquisition due to the size, complexity, and volume of this acquisition, which may not be indicative of such future costs. We believe that excluding the Chubb integration expenses facilitates the comparison of our financial results to our historical operating results. References to core operating income mean net of tax, whether or not noted.
Core operating income excluding catastrophe losses excludes the impact of catastrophe losses due to the significant size and number of these events 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. Core operating income with expected level of catastrophe losses is a non-GAAP financial measure which excludes catastrophe losses above or below managements view of typical catastrophe losses for that period. The adjustment for normalized catastrophe activity reduces the unusually large impact of catastrophe activity which is not indicative of our underlying performance. We believe it is useful to exclude catastrophe losses, as they are not predictable as to timing and amount. Core operating income, Core operating income excluding catastrophe losses, and Core operating income with expected level of catastrophe losses should not be viewed as a substitute for net income determined in accordance with GAAP. References to core operating income measures 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 losses on the 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.
Current accident year P&C combined ratio excluding catastrophe losses and Current accident year core operating income 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. P&C combined ratio with expected level of catastrophe losses excludes the impact of catastrophe losses above or below managements view of typical catastrophe losses for that period. The adjustment for normalized catastrophe activity reduces the unusually large impact of catastrophe activity which is not indicative of our underlying performance.
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 gross and net premiums written and deposits collected and Life Insurance gross and net premiums written measures presented in this release 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.
Core operating return on equity (ROE) or ROE calculated using core operating income are annualized financial measures. The ROE numerator includes income adjusted to exclude after-tax adjusted net realized gains (losses), Chubb integration expenses, and the amortization of the fair value adjustment of acquired invested assets and long-term debt. The ROE
Chubb®, Chubb logo® and Chubb. Insured.SM are trademarks of Chubb. | 8 |
Chubb Limited News Release
denominator includes the average shareholders equity for the period adjusted to exclude unrealized gains (losses) on investments, net of tax. Core 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 actions 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 actions, including exiting certain types of business that do not meet our underwriting standards or adhere to our risk diversification strategy. We believe that this measure is meaningful to evaluate trends in our underlying business on a comparable basis.
Book value per common share, net of tax is shareholders equity divided by the shares outstanding. Tangible book value per common share, net of tax 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. 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 core 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 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.
See reconciliation of Non-GAAP Financial Measures on pages 32-38 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. | 9 |
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, including 2018 performance and growth opportunities, pricing, taxes, economic and market conditions, 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 and severity 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. | 10 |
Chubb Limited News Release
Chubb Limited
Summary Consolidated Balance Sheets
(in millions of U.S. dollars, except per share data)
(Unaudited)
September 30 2018 |
December 31 2017 |
|||||||
Assets |
||||||||
Investments |
$ | 101,163 | $ | 102,444 | ||||
Cash |
1,053 | 728 | ||||||
Insurance and reinsurance balances receivable |
10,193 | 9,334 | ||||||
Reinsurance recoverable on losses and loss expenses |
15,088 | 15,034 | ||||||
Goodwill and other intangible assets |
21,471 | 22,054 | ||||||
Other assets |
18,716 | 17,428 | ||||||
|
|
|
|
|||||
Total assets |
$ | 167,684 | $ | 167,022 | ||||
|
|
|
|
|||||
Liabilities |
||||||||
Unpaid losses and loss expenses |
$ | 63,029 | $ | 63,179 | ||||
Unearned premiums |
15,725 | 15,216 | ||||||
Other liabilities |
37,996 | 37,455 | ||||||
|
|
|
|
|||||
Total liabilities |
$ | 116,750 | $ | 115,850 | ||||
|
|
|
|
|||||
Shareholders equity |
||||||||
Total shareholders equity |
50,934 | 51,172 | ||||||
|
|
|
|
|||||
Total liabilities and shareholders equity |
$ | 167,684 | $ | 167,022 | ||||
|
|
|
|
|||||
Book value per common share |
$ | 110.46 | $ | 110.32 | ||||
Tangible book value per common share |
$ | 66.83 | $ | 65.87 | ||||
Book value per common share excluding cumulative translation losses (1) |
$ | 114.45 | $ | 112.88 | ||||
Tangible book value per common share excluding cumulative translation losses (1) |
$ | 69.67 | $ | 67.84 |
(1) | Cumulative translation losses were $1.8 billion in 2018 ($1.3 billion on tangible and $528 million on intangible net assets) and $1.2 billion in 2017 ($914 million on tangible and $273 million on intangible net assets). |
Chubb®, Chubb logo® and Chubb. Insured.SM are trademarks of Chubb. | 11 |
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 | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Gross premiums written |
$ | 10,054 | $ | 9,710 | $ | 28,716 | $ | 27,416 | ||||||||
Net premiums written |
8,110 | 7,902 | 23,229 | 22,193 | ||||||||||||
Net premiums earned |
7,908 | 7,807 | 22,599 | 21,816 | ||||||||||||
Losses and loss expenses |
4,868 | 6,247 | 13,457 | 14,182 | ||||||||||||
Policy benefits |
127 | 169 | 428 | 500 | ||||||||||||
Policy acquisition costs |
1,504 | 1,488 | 4,432 | 4,334 | ||||||||||||
Administrative expenses |
719 | 714 | 2,158 | 2,096 | ||||||||||||
Net investment income |
823 | 813 | 2,457 | 2,328 | ||||||||||||
Net realized gains (losses) |
19 | (10) | 35 | 84 | ||||||||||||
Interest expense |
164 | 150 | 488 | 451 | ||||||||||||
Other income (expense): |
||||||||||||||||
Gains (losses) from separate account assets |
(14 | ) | 24 | (18 | ) | 70 | ||||||||||
Other |
159 | 94 | 325 | 263 | ||||||||||||
Amortization of purchased intangibles |
83 | 65 | 253 | 194 | ||||||||||||
Chubb integration expenses |
16 | 50 | 39 | 233 | ||||||||||||
Income tax expense (benefit) |
183 | (85) | 536 | 243 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) |
$ | 1,231 | $ | (70) | $ | 3,607 | $ | 2,328 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Diluted earnings per share: |
||||||||||||||||
Net income (loss) |
$ | 2.64 | $ | (0.15) | (1) | $ | 7.71 | $ | 4.94 | |||||||
Core operating income (loss) |
$ | 2.41 | $ | (0.13) | (1) | $ | 7.42 | $ | 4.87 | |||||||
Weighted average diluted shares outstanding |
466.0 | 466.4 | (1) | 468.0 | 471.6 |
(1) | For the three months ended September 30, 2017, weighted-average shares outstanding used in calculating net loss and core operating loss per share excludes the effect of dilutive securities of 3,820,673 shares. In periods where a net loss or core operating loss is recognized, inclusion of incremental dilution is antidilutive. |
P&C combined ratio | ||||||||||||||||
Loss and loss expense ratio |
63.6% | 83.4% | 61.4% | 67.3% | ||||||||||||
Policy acquisition cost ratio |
18.6% | 18.6% | 19.2% | 19.5% | ||||||||||||
Administrative expense ratio |
8.7% | 8.8% | 9.2% | 9.2% | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
P&C combined ratio |
90.9% | 110.8% | 89.8% | 96.0% | ||||||||||||
P&C underwriting income (loss) |
$ | 669 | $ | (784) | $ | 2,135 | $ | 807 |
Chubb®, Chubb logo® and Chubb. Insured.SM are trademarks of Chubb. | 12 |
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 | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Gross Premiums Written |
| |||||||||||||||
North America Commercial P&C Insurance |
$ | 4,108 | $ | 3,919 | $ | 12,108 | $ | 11,649 | ||||||||
North America Personal P&C Insurance |
1,369 | 1,338 | 4,039 | 3,892 | ||||||||||||
North America Agricultural Insurance |
1,270 | 1,303 | 2,018 | 2,039 | ||||||||||||
Overseas General Insurance |
2,541 | 2,380 | 8,156 | 7,519 | ||||||||||||
Global Reinsurance |
167 | 202 | 605 | 642 | ||||||||||||
Life Insurance (1) |
991 | 990 | 2,953 | 2,723 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 10,446 | $ | 10,132 | $ | 29,879 | $ | 28,464 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net Premiums Written |
| |||||||||||||||
North America Commercial P&C Insurance |
$ | 3,199 | $ | 3,086 | $ | 9,342 | $ | 9,019 | ||||||||
North America Personal P&C Insurance |
1,218 | 1,194 | 3,601 | 3,433 | ||||||||||||
North America Agricultural Insurance |
884 | 926 | 1,380 | 1,390 | ||||||||||||
Overseas General Insurance |
2,081 | 1,966 | 6,664 | 6,185 | ||||||||||||
Global Reinsurance |
164 | 191 | 554 | 580 | ||||||||||||
Life Insurance (1) |
956 | 961 | 2,851 | 2,634 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 8,502 | $ | 8,324 | $ | 24,392 | $ | 23,241 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net Premiums Earned |
| |||||||||||||||
North America Commercial P&C Insurance |
$ | 3,019 | $ | 3,016 | $ | 9,325 | $ | 9,156 | ||||||||
North America Personal P&C Insurance |
1,167 | 1,117 | 3,463 | 3,296 | ||||||||||||
North America Agricultural Insurance |
857 | 898 | 1,251 | 1,256 | ||||||||||||
Overseas General Insurance |
2,157 | 2,064 | 6,425 | 6,018 | ||||||||||||
Global Reinsurance |
157 | 185 | 492 | 542 | ||||||||||||
Life Insurance |
551 | 527 | 1,643 | 1,548 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 7,908 | $ | 7,807 | $ | 22,599 | $ | 21,816 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Segment income (loss) |
| |||||||||||||||
North America Commercial P&C Insurance |
$ | 933 | $ | 212 | $ | 2,875 | $ | 2,101 | ||||||||
North America Personal P&C Insurance |
57 | (180) | 252 | 206 | ||||||||||||
North America Agricultural Insurance |
79 | 84 | 222 | 197 | ||||||||||||
Overseas General Insurance |
363 | 131 | 1,095 | 756 | ||||||||||||
Global Reinsurance |
97 | (81) | 325 | 146 | ||||||||||||
Life Insurance |
78 | 64 | 219 | 178 | ||||||||||||
Corporate |
(132) | (189) | (450) | (448) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 1,475 | $ | 41 | $ | 4,538 | $ | 3,136 | ||||||||
|
|
|
|
|
|
|
|
(1) | Life Insurance gross and net premiums written includes deposits collected on universal life and investment contracts in 2018 (Q3 $392 million, YTD $1,163 million) and 2017 (Q3 $422 million, YTD $1,048 million). |
Chubb®, Chubb logo® and Chubb. Insured.SM are trademarks of Chubb. | 13 |
Exhibit 99.2
Chubb Limited
Financial Supplement
for the Quarter Ended September 30, 2018
Investor Contacts
Karen Beyer: (212) 827-4445
Helen M. Wilson: (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 and severity of unpredictable catastrophic events, actual loss experience, uncertainties in the reserving or settlement process, currency exchange fluctuations, new theories of liability, judicial, legislative, regulatory and other governmental developments, litigation tactics and developments, investigation developments and actual settlement terms, the amount and timing of reinsurance receivable, 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 ResultsConsecutive Quarters | 4 | |||||
- Global P&C ResultsConsecutive Quarters | 5 | |||||
- Catastrophe Losses | 6 | |||||
- Summary Consolidated Balance Sheets | 7 | |||||
- Line of Business | 8 | |||||
- Consolidated Results by Segment | 9 - 12 | |||||
III. |
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 | |||||
IV. |
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 | |||||
V. |
Other Disclosures | |||||
- Non-GAAP Financial Measures | 32 - 38 | |||||
- Glossary | 39 |
The 2017 gross premiums written and net premiums written amounts for the North America Commercial P&C Insurance and Overseas General Insurance segments have been revised to reflect the transfer of certain multinational accounts between these segments to better align the reporting with the management of these businesses in 2018. The North America Commercial P&C Insurance segment transfers to (from) Overseas General Insurance segment in 2017 were: $12 million for Q1, $1 million for Q2, $3 million for Q3 and ($7) million for Q4. There is no impact on a consolidated basis.
Chubb Limited
Consolidated Financial HighlightsQuarter
(in millions of U.S. dollars, except share, per share data, and ratios)
(Unaudited)
Note: All dollar amounts in the Financial Supplement are rounded. However, percent changes and ratios are calculated using whole dollars. Accordingly, calculations using rounded dollars may differ.
% Change ex | Constant $ | C$ % Change ex | ||||||||||||||||||||||||||
% Change | Merger Actions (1) | % Change | Merger Actions (1) | |||||||||||||||||||||||||
Three months ended September 30 | 3Q-18 vs. | 3Q-18 vs. | Constant $ | 3Q-18 vs. | 3Q-18 vs. | |||||||||||||||||||||||
2018 | 2017 | 3Q-17 | 3Q-17 | 2017 | 3Q-17 | 3Q-17 | ||||||||||||||||||||||
Gross premiums written |
$ | 10,054 | $ | 9,710 | 3.5 | % | $ | 9,684 | 3.8 | % | ||||||||||||||||||
Net premiums written |
$ | 8,110 | $ | 7,902 | 2.6 | % | $ | 7,874 | 3.0 | % | ||||||||||||||||||
P&C net premiums written |
$ | 7,546 | $ | 7,363 | 2.5 | % | 2.9 | % | $ | 7,337 | 2.8 | % | 3.3 | % | ||||||||||||||
Global P&C net premiums written |
$ | 6,662 | $ | 6,437 | 3.5 | % | 4.0 | % | $ | 6,411 | 3.9 | % | 4.4 | % | ||||||||||||||
Net premiums earned |
$ | 7,908 | $ | 7,807 | 1.3 | % | $ | 7,781 | 1.6 | % | ||||||||||||||||||
Net investment income |
$ | 823 | $ | 813 | 1.3 | % | $ | 810 | 1.5 | % | ||||||||||||||||||
Adjusted net investment income |
$ | 883 | $ | 893 | -1.1 | % | $ | 890 | -0.9 | % | ||||||||||||||||||
Core operating income (loss) |
$ | 1,122 | $ | (60 | ) | NM | $ | (64 | ) | NM | ||||||||||||||||||
Net income (loss) |
$ | 1,231 | $ | (70 | ) | NM | ||||||||||||||||||||||
Operating cash flow |
$ | 1,700 | $ | 1,771 | ||||||||||||||||||||||||
P&C combined ratio |
||||||||||||||||||||||||||||
Loss and loss expense ratio |
63.6 | % | 83.4 | % | ||||||||||||||||||||||||
Policy acquisition costs and administrative expense ratio |
27.3 | % | 27.4 | % | ||||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||
Combined ratio |
90.9 | % | 110.8 | % | ||||||||||||||||||||||||
P&C Current Accident Year (CAY) combined ratio ex Catastrophe losses (Cats) |
||||||||||||||||||||||||||||
CAY loss and loss expense ratio ex Cats |
61.1 | % | 61.3 | % | ||||||||||||||||||||||||
CAY policy acquisition costs and administrative expense ratio ex Cats |
27.1 | % | 27.2 | % | ||||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||
CAY combined ratio ex Cats |
88.2 | % | 88.5 | % | ||||||||||||||||||||||||
ROE |
9.7 | % | -0.6 | % | ||||||||||||||||||||||||
Core operating return on equity (ROE) |
8.7 | % | -0.5 | % | ||||||||||||||||||||||||
Effective tax rate (2) |
12.9 | % | 54.7 | % | ||||||||||||||||||||||||
Core operating effective tax rate (2) |
14.1 | % | 50.9 | % | ||||||||||||||||||||||||
Diluted earnings per share |
||||||||||||||||||||||||||||
Net income (loss) (3) |
$ | 2.64 | $ | (0.15 | ) | NM | ||||||||||||||||||||||
Core operating income (loss) (3) |
$ | 2.41 | $ | (0.13 | ) | NM | ||||||||||||||||||||||
Weighted average basic common shares outstanding |
463.0 | 466.4 | ||||||||||||||||||||||||||
Weighted average diluted common shares outstanding (3) |
466.0 | 466.4 |
(1) | Consolidated and P&C net premiums written were adversely impacted by merger-related actions of $32 million in Q3 2018. |
(2) | For 2017, the effective tax rate reflects an income tax benefit as a result of pre-tax loss and pre-tax core operating loss. |
(3) | For the three months ended September 30, 2017, weighted-average shares outstanding used in calculating net loss and core operating loss per share excludes the effect of dilutive securities of 3,820,673 shares. In periods where a net loss or core operating loss is recognized, inclusion of incremental dilution is antidilutive. |
Financial Highlights - QTR | Page 1 |
Chubb Limited
Consolidated Financial HighlightsYear To Date
(in millions of U.S. dollars, except share, per share data, and ratios)
(Unaudited)
% Change ex | Constant $ | C$ % Change ex | ||||||||||||||||||||||||||
% Change | Merger Actions (1) | % Change | Merger Actions (1) | |||||||||||||||||||||||||
Nine months ended September 30 | YTD-18 vs | YTD-18 vs | Constant $ | YTD-18 vs | YTD-18 vs | |||||||||||||||||||||||
2018 | 2017 | YTD-17 | YTD-17 | 2017 | YTD-17 | YTD-17 | ||||||||||||||||||||||
Gross premiums written |
$ | 28,716 | $ | 27,416 | 4.7 | % | $ | 27,682 | 3.7 | % | ||||||||||||||||||
Net premiums written |
$ | 23,229 | $ | 22,193 | 4.7 | % | $ | 22,427 | 3.6 | % | ||||||||||||||||||
P&C net premiums written |
$ | 21,541 | $ | 20,607 | 4.5 | % | 5.1 | % | $ | 20,827 | 3.4 | % | 4.0 | % | ||||||||||||||
Global P&C net premiums written |
$ | 20,161 | $ | 19,217 | 4.9 | % | 5.6 | % | $ | 19,437 | 3.7 | % | 4.4 | % | ||||||||||||||
Net premiums earned |
$ | 22,599 | $ | 21,816 | 3.6 | % | $ | 22,037 | 2.5 | % | ||||||||||||||||||
Net investment income |
$ | 2,457 | $ | 2,328 | 5.5 | % | $ | 2,335 | 5.2 | % | ||||||||||||||||||
Adjusted net investment income |
$ | 2,650 | $ | 2,584 | 2.5 | % | $ | 2,591 | 2.2 | % | ||||||||||||||||||
Core operating income |
$ | 3,472 | $ | 2,295 | 51.3 | % | $ | 2,326 | 49.2 | % | ||||||||||||||||||
Net income |
$ | 3,607 | $ | 2,328 | 55.0 | % | ||||||||||||||||||||||
Operating cash flow |
$ | 3,897 | $ | 3,411 | ||||||||||||||||||||||||
P&C combined ratio |
||||||||||||||||||||||||||||
Loss and loss expense ratio |
61.4 | % | 67.3 | % | ||||||||||||||||||||||||
Policy acquisition costs and administrative expense ratio |
28.4 | % | 28.7 | % | ||||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||
Combined ratio |
89.8 | % | 96.0 | % | ||||||||||||||||||||||||
P&C Current Accident Year (CAY) combined ratio ex Catastrophe losses (Cats) |
||||||||||||||||||||||||||||
CAY loss and loss expense ratio ex Cats |
59.7 | % | 59.4 | % | ||||||||||||||||||||||||
CAY policy acquisition costs and administrative expense ratio ex Cats |
28.3 | % | 28.6 | % | ||||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||
CAY combined ratio ex Cats |
88.0 | % | 88.0 | % | ||||||||||||||||||||||||
ROE |
9.4 | % | 6.3 | % | ||||||||||||||||||||||||
Core operating return on equity (ROE) |
9.1 | % | 6.4 | % | ||||||||||||||||||||||||
Effective tax rate |
12.9 | % | 9.4 | % | ||||||||||||||||||||||||
Core operating effective tax rate |
13.7 | % | 13.3 | % | ||||||||||||||||||||||||
Diluted earnings per share |
||||||||||||||||||||||||||||
Net income |
$ | 7.71 | $ | 4.94 | 56.1 | % | ||||||||||||||||||||||
Core operating income |
$ | 7.42 | $ | 4.87 | 52.4 | % | ||||||||||||||||||||||
Weighted average basic common shares outstanding |
464.6 | 467.7 | ||||||||||||||||||||||||||
Weighted average diluted common shares outstanding |
468.0 | 471.6 | ||||||||||||||||||||||||||
% Change | ||||||||||||||||||||||||||||
December 31 | 3Q-18 vs | |||||||||||||||||||||||||||
2017 | 4Q-17 | |||||||||||||||||||||||||||
Book value per common share |
$ | 110.46 | $ | 110.32 | 0.1 | % | ||||||||||||||||||||||
Tangible book value per common share |
$ | 66.83 | $ | 65.87 | 1.5 | % | ||||||||||||||||||||||
Total hybrid & financial debt/capitalization |
20.3 | % | 20.4 | % | 20.1 | % |
(1) | Consolidated net premiums written were adversely impacted by merger-related actions of $128 million for YTD 2018, of which $125 million impacted P&C net premiums written. |
Financial Highlights - YTD | Page 2 |
Chubb Limited
Statement of OperationsConsecutive Quarters
(in millions of U.S. dollars)
(Unaudited)
Consolidated Statements of Operations | ||||||||||||||||||||||||||||||||||
3Q-18 | 2Q-18 | 1Q-18 | 4Q-17 | 3Q-17 | YTD 2018 |
YTD 2017 |
Full Year 2017 |
|||||||||||||||||||||||||||
Gross premiums written | $ | 10,054 | $ | 9,929 | $ | 8,733 | $ | 8,960 | $ | 9,710 | $ | 28,716 | $ | 27,416 | $ | 36,376 | ||||||||||||||||||
Net premiums written | 8,110 | 8,015 | 7,104 | 7,051 | 7,902 | 23,229 | 22,193 | 29,244 | ||||||||||||||||||||||||||
Net premiums earned | 7,908 | 7,664 | 7,027 | 7,218 | 7,807 | 22,599 | 21,816 | 29,034 | ||||||||||||||||||||||||||
(1) | Adjusted losses and loss expenses |
4,876 | 4,479 | 4,100 | 4,272 | 6,252 | 13,455 | 14,189 | 18,461 | |||||||||||||||||||||||||
Realized (gains) losses on crop derivatives |
8 | (8 | ) | (2 | ) | | 5 | (2 | ) | 7 | 7 | |||||||||||||||||||||||
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Losses and loss expenses | 4,868 | 4,487 | 4,102 | 4,272 | 6,247 | 13,457 | 14,182 | 18,454 | ||||||||||||||||||||||||||
Policy benefits | 127 | 150 | 151 | 176 | 169 | 428 | 500 | 676 | ||||||||||||||||||||||||||
Policy acquisition costs | 1,504 | 1,464 | 1,464 | 1,447 | 1,488 | 4,432 | 4,334 | 5,781 | ||||||||||||||||||||||||||
Administrative expenses | 719 | 747 | 692 | 737 | 714 | 2,158 | 2,096 | 2,833 | ||||||||||||||||||||||||||
(2) | Adjusted net investment income |
883 | 890 | 877 | 873 | 893 | 2,650 | 2,584 | 3,457 | |||||||||||||||||||||||||
Amortization expense of fair value adjustment on acquired invested assets |
(60 | ) | (62 | ) | (71 | ) | (76 | ) | (80 | ) | (193 | ) | (256 | ) | (332 | ) | ||||||||||||||||||
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|
|||||||||||||||||||
Net investment income | 823 | 828 | 806 | 797 | 813 | 2,457 | 2,328 | 3,125 | ||||||||||||||||||||||||||
(3) | Adjusted realized gains (losses) |
27 | 10 | (4 | ) | | (5 | ) | 33 | 91 | 91 | |||||||||||||||||||||||
Realized gains (losses) on crop derivatives |
(8 | ) | 8 | 2 | | (5 | ) | 2 | (7 | ) | (7 | ) | ||||||||||||||||||||||
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|||||||||||||||||||
Net realized gains (losses) | 19 | 18 | (2 | ) | | (10 | ) | 35 | 84 | 84 | ||||||||||||||||||||||||
(4) | Adjusted interest expense |
170 | 177 | 169 | 168 | 162 | 516 | 488 | 656 | |||||||||||||||||||||||||
Amortization benefit of fair value adjustment on acquired long term debt |
(6 | ) | (10 | ) | (12 | ) | (12 | ) | (12 | ) | (28 | ) | (37 | ) | (49 | ) | ||||||||||||||||||
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Interest expense | 164 | 167 | 157 | 156 | 150 | 488 | 451 | 607 | ||||||||||||||||||||||||||
Gains (losses) from fair value changes in separate account assets |
(14 | ) | (10 | ) | 6 | 27 | 24 | (18 | ) | 70 | 97 | |||||||||||||||||||||||
Net realized gains (losses) related to unconsolidated entities |
152 | 96 | 44 | 122 | 89 | 292 | 284 | 406 | ||||||||||||||||||||||||||
Other income (expense)operating |
7 | 29 | (3 | ) | (82 | ) | 5 | 33 | (21 | ) | (103 | ) | ||||||||||||||||||||||
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Other income (expense) | 145 | 115 | 47 | 67 | 118 | 307 | 333 | 400 | ||||||||||||||||||||||||||
Amortization expense of purchased intangibles | 83 | 85 | 85 | 66 | 65 | 253 | 194 | 260 | ||||||||||||||||||||||||||
Chubb integration expenses |
16 | 13 | 10 | 77 | 50 | 39 | 233 | 310 | ||||||||||||||||||||||||||
Income tax expense (benefit) |
183 | 218 | 135 | (382 | ) | (85 | ) | 536 | 243 | (139 | ) | |||||||||||||||||||||||
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Net income (loss) |
$ | 1,231 | $ | 1,294 | $ | 1,082 | $ | 1,533 | $ | (70 | ) | $ | 3,607 | $ | 2,328 | $ | 3,861 | |||||||||||||||||
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(1) | Adjusted losses and loss expenses used throughout this report include realized gains and losses on crop derivatives. |
(2) | Adjusted net investment income used throughout this report excludes amortization of the fair value adjustment on acquired invested assets. |
(3) | Adjusted realized gains and losses used throughout this report excludes realized gains and losses on crop derivatives. |
(4) | Adjusted interest expense used throughout this report excludes amortization benefit of the fair value adjustment on acquired long term debt. |
Statement of Operations | Page 3 |
Chubb Limited
P&C Underwriting ResultsConsecutive Quarters
(in millions of U.S. dollars, except ratios)
(Unaudited)
Chubb Limited P&C Underwriting Results | ||||||||||||||||||||||||||||||||
3Q-18 | 2Q-18 | 1Q-18 | 4Q-17 | 3Q-17 | YTD 2018 |
YTD 2017 |
Full Year 2017 |
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P&C Underwriting income (Including Corporate and excluding Life Insurance) |
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Gross premiums written |
$ | 9,455 | $ | 9,330 | $ | 8,141 | $ | 8,374 | $ | 9,142 | $ | 26,926 | $ | 25,741 | $ | 34,115 | ||||||||||||||||
Net premiums written |
7,546 | 7,450 | 6,545 | 6,496 | 7,363 | 21,541 | 20,607 | 27,103 | ||||||||||||||||||||||||
Net premiums earned |
7,357 | 7,112 | 6,487 | 6,665 | 7,280 | 20,956 | 20,268 | 26,933 | ||||||||||||||||||||||||
Adjusted losses and loss expenses |
4,681 | 4,295 | 3,895 | 4,089 | 6,071 | 12,871 | 13,633 | 17,722 | ||||||||||||||||||||||||
Policy acquisition costs |
1,365 | 1,326 | 1,336 | 1,293 | 1,356 | 4,027 | 3,958 | 5,251 | ||||||||||||||||||||||||
Administrative expenses |
642 | 667 | 614 | 660 | 637 | 1,923 | 1,870 | 2,530 | ||||||||||||||||||||||||
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P&C Underwriting income (loss) |
$ | 669 | $ | 824 | $ | 642 | $ | 623 | $ | (784 | ) | $ | 2,135 | $ | 807 | $ | 1,430 | |||||||||||||||
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P&C CAY Underwriting income ex Cats |
$ | 876 | $ | 844 | $ | 813 | $ | 912 | $ | 839 | $ | 2,533 | $ | 2,435 | $ | 3,347 | ||||||||||||||||
% Change versus prior year period |
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Net premiums written |
2.5 | % | 5.6 | % | 5.8 | % | 1.7 | % | 4.6 | % | 4.5 | % | 5.0 | % | 4.2 | % | ||||||||||||||||
Net premiums written excluding merger-related actions (1) |
2.9 | % | 6.2 | % | 6.6 | % | 3.7 | % | 3.9 | % | 5.1 | % | 7.1 | % | 6.3 | % | ||||||||||||||||
Net premiums earned |
1.0 | % | 5.8 | % | 3.5 | % | 2.2 | % | 1.5 | % | 3.4 | % | 0.5 | % | 0.9 | % | ||||||||||||||||
Net premiums written constant $ |
2.8 | % | 4.1 | % | 3.4 | % | 0.5 | % | 4.6 | % | 3.4 | % | 5.3 | % | 4.2 | % | ||||||||||||||||
Net premiums written constant $ excluding merger-related actions (1) |
3.3 | % | 4.7 | % | 4.1 | % | 2.5 | % | 4.0 | % | 4.0 | % | 7.5 | % | 6.2 | % | ||||||||||||||||
Net premiums earned constant $ |
1.4 | % | 4.0 | % | 1.6 | % | 1.0 | % | 1.3 | % | 2.3 | % | 0.7 | % | 0.7 | % | ||||||||||||||||
P&C combined ratio |
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Loss and loss expense ratio |
63.6 | % | 60.4 | % | 60.0 | % | 61.4 | % | 83.4 | % | 61.4 | % | 67.3 | % | 65.8 | % | ||||||||||||||||
Policy acquisition cost ratio |
18.6 | % | 18.6 | % | 20.6 | % | 19.4 | % | 18.6 | % | 19.2 | % | 19.5 | % | 19.5 | % | ||||||||||||||||
Administrative expense ratio |
8.7 | % | 9.4 | % | 9.5 | % | 9.9 | % | 8.8 | % | 9.2 | % | 9.2 | % | 9.4 | % | ||||||||||||||||
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Combined ratio |
90.9 | % | 88.4 | % | 90.1 | % | 90.7 | % | 110.8 | % | 89.8 | % | 96.0 | % | 94.7 | % | ||||||||||||||||
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CAY P&C combined ratio ex Cats |
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CAY loss and loss expense ratio ex Cats |
61.1 | % | 60.0 | % | 57.7 | % | 57.1 | % | 61.3 | % | 59.7 | % | 59.4 | % | 58.8 | % | ||||||||||||||||
CAY policy acquisition costs and administrative expense ratio ex Cats |
27.1 | % | 28.1 | % | 29.9 | % | 29.3 | % | 27.2 | % | 28.3 | % | 28.6 | % | 28.8 | % | ||||||||||||||||
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CAY combined ratio ex Cats |
88.2 | % | 88.1 | % | 87.6 | % | 86.4 | % | 88.5 | % | 88.0 | % | 88.0 | % | 87.6 | % | ||||||||||||||||
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Other ratios |
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Net premiums written/gross premiums written |
80 | % | 80 | % | 80 | % | 78 | % | 81 | % | 80 | % | 80 | % | 79 | % | ||||||||||||||||
Expense ratio |
27.3 | % | 28.0 | % | 30.1 | % | 29.3 | % | 27.4 | % | 28.4 | % | 28.7 | % | 28.9 | % | ||||||||||||||||
Expense ratio excluding A&H |
25.2 | % | 25.9 | % | 27.9 | % | 27.2 | % | 25.1 | % | 26.3 | % | 26.6 | % | 26.8 | % | ||||||||||||||||
Catastrophe reinstatement premiums (expenses) collectedpre-tax |
$ | 4 | $ | | $ | | $ | (15 | ) | $ | 22 | $ | 4 | $ | 22 | $ | 7 | |||||||||||||||
Catastrophe lossespre-tax |
$ | 454 | $ | 211 | $ | 380 | $ | 432 | $ | 1,915 | $ | 1,045 | $ | 2,321 | $ | 2,753 | ||||||||||||||||
Favorable prior period development (PPD)pre-tax |
$ | (243 | ) | $ | (191 | ) | $ | (209 | ) | $ | (158 | ) | $ | (270 | ) | $ | (643 | ) | $ | (671 | ) | $ | (829 | ) |
(1) | Net premiums written were adversely impacted by merger-related actions of $32 million in Q3 2018 and $125 million for YTD 2018. |
Note: Refer to the Non-GAAP financial measures section for further information on the calculation of the components of combined ratios.
P&C Results | Page 4 |
Chubb Limited
Global P&C Underwriting ResultsConsecutive 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.
Global P&C (Including Corporate and excluding Agriculture) | ||||||||||||||||||||||||||||||||
3Q-18 | 2Q-18 | 1Q-18 | 4Q-17 | 3Q-17 | YTD 2018 |
YTD 2017 |
Full Year 2017 |
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Global P&C Underwriting income |
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Gross premiums written |
$ | 8,185 | $ | 8,787 | $ | 7,936 | $ | 8,098 | $ | 7,839 | $ | 24,908 | $ | 23,702 | $ | 31,800 | ||||||||||||||||
Net premiums written |
6,662 | 7,062 | 6,437 | 6,370 | 6,437 | 20,161 | 19,217 | 25,587 | ||||||||||||||||||||||||
Net premiums earned |
6,500 | 6,761 | 6,444 | 6,413 | 6,382 | 19,705 | 19,012 | 25,425 | ||||||||||||||||||||||||
Adjusted losses and loss expenses |
3,954 | 4,014 | 3,950 | 4,029 | 5,307 | 11,918 | 12,650 | 16,679 | ||||||||||||||||||||||||
Policy acquisition costs |
1,316 | 1,300 | 1,337 | 1,287 | 1,307 | 3,953 | 3,883 | 5,170 | ||||||||||||||||||||||||
Administrative expenses |
640 | 666 | 617 | 664 | 638 | 1,923 | 1,874 | 2,538 | ||||||||||||||||||||||||
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Global P&C Underwriting income (loss) |
$ | 590 | $ | 781 | $ | 540 | $ | 433 | $ | (870 | ) | $ | 1,911 | $ | 605 | $ | 1,038 | |||||||||||||||
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Global P&C CAY Underwriting income ex Cats |
$ | 790 | $ | 799 | $ | 786 | $ | 758 | $ | 752 | $ | 2,375 | $ | 2,298 | $ | 3,056 | ||||||||||||||||
% Change versus prior year period |
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Net premiums written |
3.5 | % | 6.1 | % | 5.1 | % | 0.3 | % | 4.0 | % | 4.9 | % | 4.8 | % | 3.6 | % | ||||||||||||||||
Net premiums written excluding merger-related actions (1) |
4.0 | % | 6.8 | % | 5.9 | % | 2.3 | % | 3.3 | % | 5.6 | % | 7.0 | % | 5.8 | % | ||||||||||||||||
Net premiums earned |
1.8 | % | 6.0 | % | 3.1 | % | 0.6 | % | 0.4 | % | 3.6 | % | 0.1 | % | 0.2 | % | ||||||||||||||||
Net premiums written constant $ |
3.9 | % | 4.6 | % | 2.6 | % | -0.8 | % | 4.0 | % | 3.7 | % | 5.2 | % | 3.6 | % | ||||||||||||||||
Net premiums written constant $ excluding merger-related actions (1) |
4.4 | % | 5.2 | % | 3.4 | % | 1.2 | % | 3.3 | % | 4.4 | % | 7.4 | % | 5.8 | % | ||||||||||||||||
Net premiums earned constant $ |
2.2 | % | 4.1 | % | 1.2 | % | -0.6 | % | 0.3 | % | 2.5 | % | 0.3 | % | 0.0 | % | ||||||||||||||||
Combined ratio |
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Loss and loss expense ratio |
60.8 | % | 59.4 | % | 61.3 | % | 62.8 | % | 83.1 | % | 60.5 | % | 66.5 | % | 65.6 | % | ||||||||||||||||
Policy acquisition cost ratio |
20.2 | % | 19.2 | % | 20.8 | % | 20.1 | % | 20.5 | % | 20.0 | % | 20.4 | % | 20.3 | % | ||||||||||||||||
Administrative expense ratio |
9.9 | % | 9.8 | % | 9.5 | % | 10.4 | % | 10.0 | % | 9.8 | % | 9.9 | % | 10.0 | % | ||||||||||||||||
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Combined ratio |
90.9 | % | 88.4 | % | 91.6 | % | 93.3 | % | 113.6 | % | 90.3 | % | 96.8 | % | 95.9 | % | ||||||||||||||||
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CAY combined ratio ex Cats |
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CAY loss and loss expense ratio ex Cats |
58.1 | % | 59.0 | % | 57.6 | % | 57.9 | % | 58.0 | % | 58.2 | % | 57.7 | % | 57.8 | % | ||||||||||||||||
CAY policy acquisition costs and administrative expense ratio ex Cats |
29.8 | % | 29.2 | % | 30.2 | % | 30.3 | % | 30.2 | % | 29.8 | % | 30.2 | % | 30.2 | % | ||||||||||||||||
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CAY combined ratio ex Cats |
87.9 | % | 88.2 | % | 87.8 | % | 88.2 | % | 88.2 | % | 88.0 | % | 87.9 | % | 88.0 | % | ||||||||||||||||
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Other ratios |
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Net premiums written/gross premiums written |
81 | % | 80 | % | 81 | % | 79 | % | 82 | % | 81 | % | 81 | % | 80 | % | ||||||||||||||||
Expense ratio |
30.1 | % | 29.0 | % | 30.3 | % | 30.5 | % | 30.5 | % | 29.8 | % | 30.3 | % | 30.3 | % | ||||||||||||||||
Expense ratio excluding A&H |
28.1 | % | 27.0 | % | 28.2 | % | 28.4 | % | 28.3 | % | 27.7 | % | 28.2 | % | 28.3 | % | ||||||||||||||||
Catastrophe reinstatement premiums (expenses) collectedpre-tax |
$ | 4 | $ | | $ | | $ | (15 | ) | $ | 22 | $ | 4 | $ | 22 | $ | 7 | |||||||||||||||
Catastrophe lossespre-tax |
$ | 446 | $ | 209 | $ | 379 | $ | 432 | $ | 1,910 | $ | 1,034 | $ | 2,303 | $ | 2,735 | ||||||||||||||||
Favorable prior period development (PPD)pre-tax |
$ | (242 | ) | $ | (191 | ) | $ | (133 | ) | $ | (122 | ) | $ | (266 | ) | $ | (566 | ) | $ | (588 | ) | $ | (710 | ) |
(1) | Net premiums written were adversely impacted by merger-related actions of $32 million in Q3 2018 and $125 million for YTD 2018. |
Global P&C | Page 5 |
Chubb Limited
Segments resultsCatastrophe Loss Charges
(in millions of U.S. dollars)
(Unaudited)
Chubb Limited Catastrophe Loss ChargesQ3 2018
Total | Total | |||||||||||||||||||||||||||||||
North | North | North | Consolidated | Consolidated | ||||||||||||||||||||||||||||
America | America | America | Overseas | Excluding | Reinstatement | including | ||||||||||||||||||||||||||
Commercial P&C | Personal P&C | Agricultural | General | Global | Reinstatement | premiums | Reinstatement | |||||||||||||||||||||||||
Insurance | Insurance | Insurance | Insurance | Reinsurance | premiums | collected | premiums | |||||||||||||||||||||||||
Catastrophe Loss Charges by EventGross |
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Hurricane Florence |
$ | 152 | $ | 31 | $ | 3 | $ | 10 | $ | 13 | $ | 209 | ||||||||||||||||||||
U.S. Flooding, Hail, Tornadoes, and Wind Events (1) |
205 | 44 | 1 | | | 250 | ||||||||||||||||||||||||||
Colorado Rain and Hail Storm |
14 | 59 | | 1 | | 74 | ||||||||||||||||||||||||||
Typhoon Jebi |
1 | | | 46 | 14 | 61 | ||||||||||||||||||||||||||
Typhoon Mangkhut |
| | | 17 | | 17 | ||||||||||||||||||||||||||
Japan Flooding |
2 | | | 8 | 7 | 17 | ||||||||||||||||||||||||||
California Wildfires |
4 | 4 | | | | 8 | ||||||||||||||||||||||||||
Other |
23 | 3 | 4 | 6 | 13 | 49 | ||||||||||||||||||||||||||
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Total |
$ | 401 | $ | 141 | $ | 8 | $ | 88 | $ | 47 | $ | 685 | ||||||||||||||||||||
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Catastrophe Loss Charges by EventNet |
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Hurricane Florence |
$ | 108 | $ | 31 | $ | 3 | $ | 10 | $ | 9 | $ | 161 | $ | 1 | $ | 160 | ||||||||||||||||
U.S. Flooding, Hail, Tornadoes, and Wind Events (1) |
54 | 40 | 1 | | | 95 | | 95 | ||||||||||||||||||||||||
Colorado Rain and Hail Storm |
12 | 58 | | 1 | | 71 | | 71 | ||||||||||||||||||||||||
Typhoon Jebi |
1 | | | 39 | 12 | 52 | 2 | 50 | ||||||||||||||||||||||||
Typhoon Mangkhut |
| | | 16 | | 16 | | 16 | ||||||||||||||||||||||||
Japan Flooding |
1 | | | 8 | 4 | 13 | | 13 | ||||||||||||||||||||||||
California Wildfires |
4 | 4 | | | | 8 | | 8 | ||||||||||||||||||||||||
Other |
16 | 3 | 4 | 6 | 9 | 38 | 1 | 37 | ||||||||||||||||||||||||
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Total |
$ | 196 | $ | 136 | $ | 8 | $ | 80 | $ | 34 | $ | 454 | ||||||||||||||||||||
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Reinstatement premiums collected |
| | | | 4 | $ | 4 | |||||||||||||||||||||||||
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Total impact before income tax |
$ | 196 | $ | 136 | $ | 8 | $ | 80 | $ | 30 | $ | 450 | ||||||||||||||||||||
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Income tax benefit |
78 | |||||||||||||||||||||||||||||||
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Total impact after income tax |
$ | 372 | ||||||||||||||||||||||||||||||
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(1) | This grouping comprised of 10 separate events, principally impacting the southern and northeastern regions of the U.S. |
Note: The above table represents catastrophe loss estimates for events that occurred in the current calendar year only (i.e., loss events occurring during the third quarter of 2018 and changes to catastrophe loss estimates that occurred in the first and second quarters of 2018). Changes in catastrophe loss estimates in the current calendar year that relate to loss events that occurred in previous calendar years are considered prior period development and are excluded from the table above.
Catastrophe Losses | Page 6 |
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 | |||||||||||||
2018 | 2018 | 2018 | 2017 | |||||||||||||
Assets |
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Fixed maturities available for sale, at fair value |
$ | 77,853 | $ | 77,963 | $ | 79,111 | $ | 78,939 | ||||||||
Fixed maturities held to maturity, at amortized cost |
13,563 | 13,860 | 14,253 | 14,335 | ||||||||||||
Equity securities, at fair value |
843 | 933 | 948 | 937 | ||||||||||||
Short-term investments, at fair value |
3,479 | 3,171 | 2,874 | 3,561 | ||||||||||||
Other investments |
5,425 | 5,259 | 4,919 | 4,672 | ||||||||||||
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Total investments |
101,163 | 101,186 | 102,105 | 102,444 | ||||||||||||
Cash |
1,053 | 1,000 | 1,988 | 728 | ||||||||||||
Securities lending collateral |
2,143 | 2,355 | 2,039 | 1,737 | ||||||||||||
Insurance and reinsurance balances receivable |
10,193 | 10,341 | 9,570 | 9,334 | ||||||||||||
Reinsurance recoverable on losses and loss expenses |
15,088 | 14,792 | 14,982 | 15,034 | ||||||||||||
Deferred policy acquisition costs |
4,902 | 4,916 | 4,843 | 4,723 | ||||||||||||
Value of business acquired |
298 | 311 | 321 | 326 | ||||||||||||
Prepaid reinsurance premiums |
2,548 | 2,686 | 2,600 | 2,529 | ||||||||||||
Goodwill and other intangible assets |
21,471 | 21,759 | 22,123 | 22,054 | ||||||||||||
Investments in partially-owned insurance companies |
656 | 675 | 664 | 662 | ||||||||||||
Other assets |
8,169 | 7,513 | 7,546 | 7,451 | ||||||||||||
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Total assets |
$ | 167,684 | $ | 167,534 | $ | 168,781 | $ | 167,022 | ||||||||
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Liabilities |
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Unpaid losses and loss expenses |
$ | 63,029 | $ | 62,778 | $ | 63,139 | $ | 63,179 | ||||||||
Unearned premiums |
15,725 | 15,748 | 15,495 | 15,216 | ||||||||||||
Future policy benefits |
5,463 | 5,470 | 5,412 | 5,321 | ||||||||||||
Insurance and reinsurance balances payable |
6,313 | 6,448 | 6,148 | 5,868 | ||||||||||||
Securities lending payable |
2,143 | 2,355 | 2,039 | 1,737 | ||||||||||||
Accounts payable, accrued expenses, and other liabilities |
10,757 | 10,346 | 10,030 | 10,953 | ||||||||||||
Deferred tax liabilities |
363 | 326 | 468 | 699 | ||||||||||||
Short-term debt |
500 | 600 | 1,669 | 1,013 | ||||||||||||
Long-term debt |
12,149 | 12,184 | 12,786 | 11,556 | ||||||||||||
Trust preferred securities |
308 | 308 | 308 | 308 | ||||||||||||
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Total liabilities |
116,750 | 116,563 | 117,494 | 115,850 | ||||||||||||
Shareholders equity |
||||||||||||||||
Total shareholders equity, excl. AOCI |
53,093 | 52,491 | 51,789 | 50,629 | ||||||||||||
Accumulated other comprehensive income (loss) (AOCI) |
(2,159 | ) | (1,520 | ) | (502 | ) | 543 | |||||||||
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Total shareholders equity |
50,934 | 50,971 | 51,287 | 51,172 | ||||||||||||
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|
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|
|
|||||||||
Total liabilities and shareholders equity |
$ | 167,684 | $ | 167,534 | $ | 168,781 | $ | 167,022 | ||||||||
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Book value per common share |
$ | 110.46 | $ | 109.97 | $ | 110.10 | $ | 110.32 | ||||||||
% change over prior quarter |
0.4 | % | -0.1 | % | -0.2 | % | 1.5 | % | ||||||||
Tangible book value per common share |
$ | 66.83 | $ | 66.00 | $ | 65.65 | $ | 65.87 | ||||||||
% change over prior quarter |
1.3 | % | 0.5 | % | -0.3 | % | 1.2 | % |
Consol Bal Sheet | Page 7 |
Chubb Limited
Consolidated Net Premiums Written by Line of Business
(in millions of U.S. dollars)
(Unaudited)
Constant $ | Constant $ | |||||||||||||||||||||||||||||||
% Change | % Change | % Change | % Change | |||||||||||||||||||||||||||||
3Q-18 vs. | 3Q-18 vs. | YTD | YTD | YTD-18 vs. | YTD-18 vs. | |||||||||||||||||||||||||||
3Q-18 | 3Q-17 | 3Q-17 | 3Q-17 | 2018 | 2017 | YTD-17 | YTD-17 | |||||||||||||||||||||||||
Net premiums written |
||||||||||||||||||||||||||||||||
Commercial multiple peril (1) |
$ | 236 | $ | 233 | 1.1 | % | 1.1 | % | $ | 680 | $ | 661 | 3.0 | % | 2.9 | % | ||||||||||||||||
Commercial casualty (2) |
1,356 | 1,238 | 9.5 | % | 9.2 | % | 3,863 | 3,508 | 10.2 | % | 8.8 | % | ||||||||||||||||||||
Workers compensation (2) |
491 | 470 | 4.3 | % | 4.3 | % | 1,571 | 1,536 | 2.2 | % | 2.2 | % | ||||||||||||||||||||
Professional liability |
921 | 894 | 3.0 | % | 1.6 | % | 2,583 | 2,557 | 1.1 | % | -1.8 | % | ||||||||||||||||||||
Surety |
159 | 158 | 0.1 | % | 2.7 | % | 481 | 461 | 4.2 | % | 4.2 | % | ||||||||||||||||||||
Property and other short-tail lines (2) |
911 | 891 | 2.3 | % | 4.5 | % | 3,061 | 2,990 | 2.3 | % | 2.2 | % | ||||||||||||||||||||
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Total Commercial P&C |
4,074 | 3,884 | 4.9 | % | 5.0 | % | 12,239 | 11,713 | 4.5 | % | 3.4 | % | ||||||||||||||||||||
Agriculture |
884 | 926 | -4.5 | % | -4.5 | % | 1,380 | 1,390 | -0.7 | % | -0.7 | % | ||||||||||||||||||||
Personal automobileNorth America |
213 | 204 | 4.4 | % | 4.4 | % | 626 | 578 | 8.0 | % | 8.0 | % | ||||||||||||||||||||
Personal automobileInternational |
206 | 195 | 5.4 | % | 10.5 | % | 647 | 569 | 13.2 | % | 12.2 | % | ||||||||||||||||||||
Personal homeowners |
895 | 877 | 1.9 | % | 1.9 | % | 2,615 | 2,499 | 4.6 | % | 4.3 | % | ||||||||||||||||||||
Personal other |
362 | 355 | 2.2 | % | 3.0 | % | 1,138 | 1,080 | 5.6 | % | 3.0 | % | ||||||||||||||||||||
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Total Personal lines |
1,676 | 1,631 | 2.7 | % | 3.4 | % | 5,026 | 4,726 | 6.3 | % | 5.4 | % | ||||||||||||||||||||
Total Property and Casualty lines |
6,634 | 6,441 | 3.0 | % | 3.3 | % | 18,645 | 17,829 | 4.6 | % | 3.6 | % | ||||||||||||||||||||
Global A&H lines (3) |
1,048 | 1,014 | 3.4 | % | 4.5 | % | 3,236 | 3,033 | 6.7 | % | 4.9 | % | ||||||||||||||||||||
Reinsurance lines (4) |
164 | 191 | -14.3 | % | -14.7 | % | 554 | 580 | -4.5 | % | -5.9 | % | ||||||||||||||||||||
Life |
264 | 256 | 3.6 | % | 4.0 | % | 794 | 751 | 6.1 | % | 4.6 | % | ||||||||||||||||||||
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Total consolidated |
$ | 8,110 | $ | 7,902 | 2.6 | % | 3.0 | % | $ | 23,229 | $ | 22,193 | 4.7 | % | 3.6 | % | ||||||||||||||||
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(1) | Commercial multiple peril represents retail package business (property and general liability). |
(2) | YTD 2018 includes a reclassification of $84 million from Commercial casualty net premiums written to Property and other short-tail lines ($78 million) and Workers Compensation ($6 million) to better align the reporting with prior year. There is no impact on a consolidated basis. |
(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. |
(4) | The year-over-year decrease in net premiums written is primarily due to higher reinstatement premiums collected in the prior year relating to the 2017 natural catastrophes (year-over-year decrease of $33 million for both QTD and YTD). |
Line of Business | Page 8 |
Chubb Limited
Consolidated ResultsThree months ended September 30, 2018
(in millions of U.S. dollars, except ratios)
(Unaudited)
Q3 2018 |
North America Commercial P&C Insurance |
North America Personal P&C Insurance |
North America Agricultural Insurance |
Overseas General Insurance |
Global Reinsurance |
Corporate | Total P&C |
Life Insurance |
Total Consolidated |
|||||||||||||||||||||||||||
Net premiums written |
$ | 3,199 | $ | 1,218 | $ | 884 | $ | 2,081 | $ | 164 | $ | | $ | 7,546 | $ | 564 | $ | 8,110 | ||||||||||||||||||
Net premiums earned |
3,019 | 1,167 | 857 | 2,157 | 157 | | 7,357 | 551 | 7,908 | |||||||||||||||||||||||||||
Adjusted losses and loss expenses |
1,881 | 860 | 727 | 1,114 | 86 | 13 | 4,681 | 195 | 4,876 | |||||||||||||||||||||||||||
Policy benefits |
| | | | | | | 127 | 127 | |||||||||||||||||||||||||||
(Gains) losses from fair value changes in separate account assets (1) |
| | | | | | | 14 | 14 | |||||||||||||||||||||||||||
Policy acquisition costs |
458 | 236 | 49 | 582 | 40 | | 1,365 | 139 | 1,504 | |||||||||||||||||||||||||||
Administrative expenses |
251 | 69 | 2 | 252 | 10 | 58 | 642 | 77 | 719 | |||||||||||||||||||||||||||
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Underwriting income (loss) |
429 | 2 | 79 | 209 | 21 | (71 | ) | 669 | (1 | ) | 668 | |||||||||||||||||||||||||
Adjusted net investment income |
503 | 59 | 7 | 155 | 63 | 11 | 798 | 85 | 883 | |||||||||||||||||||||||||||
Other income (expense)operating (1) |
1 | | | 7 | 13 | (8 | ) | 13 | (6 | ) | 7 | |||||||||||||||||||||||||
Amortization expense of purchased intangibles |
| (4 | ) | (7 | ) | (8 | ) | | (64 | ) | (83 | ) | | (83 | ) | |||||||||||||||||||||
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Segment income (loss) |
$ | 933 | $ | 57 | $ | 79 | $ | 363 | $ | 97 | $ | (132 | ) | $ | 1,397 | $ | 78 | $ | 1,475 | |||||||||||||||||
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Adjusted interest expense |
(170 | ) | (170 | ) | ||||||||||||||||||||||||||||||||
Income tax expense |
(183 | ) | (183 | ) | ||||||||||||||||||||||||||||||||
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Core operating income (loss) |
(485 | ) | 1,122 | |||||||||||||||||||||||||||||||||
Chubb integration expenses, net of $2 million tax benefit |
(14 | ) | (14 | ) | ||||||||||||||||||||||||||||||||
Amortization of fair value adjustment of acquired invested assets and long-term debt, net of $12 million tax benefit (2) |
(42 | ) | (42 | ) | ||||||||||||||||||||||||||||||||
Adjusted net realized gains (losses), net of $14 million tax (3) |
165 | 165 | ||||||||||||||||||||||||||||||||||
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Net income (loss) |
$ | (376 | ) | $ | 1,231 | |||||||||||||||||||||||||||||||
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Combined ratio |
85.8 | % | 99.8 | % | 90.7 | % | 90.3 | % | 86.7 | % | 90.9 | % | ||||||||||||||||||||||||
CAY combined ratio ex Cats |
86.7 | % | 83.2 | % | 89.9 | % | 90.0 | % | 82.8 | % | 88.2 | % |
(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 (loss) 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 2018 | Page 9 |
Chubb Limited
Consolidated ResultsNine months ended September 30, 2018
(in millions of U.S. dollars, except ratios)
(Unaudited)
YTD 2018 |
North America Commercial P&C Insurance |
North America Personal P&C Insurance |
North America Agricultural Insurance |
Overseas General Insurance |
Global Reinsurance |
Corporate | Total P&C |
Life Insurance |
Total Consolidated |
|||||||||||||||||||||||||||
Net premiums written |
$ | 9,342 | $ | 3,601 | $ | 1,380 | $ | 6,664 | $ | 554 | $ | | $ | 21,541 | $ | 1,688 | $ | 23,229 | ||||||||||||||||||
Net premiums earned |
9,325 | 3,463 | 1,251 | 6,425 | 492 | | 20,956 | 1,643 | 22,599 | |||||||||||||||||||||||||||
Adjusted losses and loss expenses |
5,873 | 2,474 | 953 | 3,263 | 236 | 72 | 12,871 | 584 | 13,455 | |||||||||||||||||||||||||||
Policy benefits |
| | | | | | | 428 | 428 | |||||||||||||||||||||||||||
(Gains) losses from fair value changes in separate account assets (1) |
| | | | | | | 18 | 18 | |||||||||||||||||||||||||||
Policy acquisition costs |
1,378 | 701 | 74 | 1,754 | 120 | | 4,027 | 405 | 4,432 | |||||||||||||||||||||||||||
Administrative expenses |
735 | 202 | | 757 | 29 | 200 | 1,923 | 235 | 2,158 | |||||||||||||||||||||||||||
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Underwriting income (loss) |
1,339 | 86 | 224 | 651 | 107 | (272 | ) | 2,135 | (27 | ) | 2,108 | |||||||||||||||||||||||||
Adjusted net investment income |
1,516 | 177 | 20 | 461 | 192 | 31 | 2,397 | 253 | 2,650 | |||||||||||||||||||||||||||
Other income (expense)operating (1) |
20 | (1 | ) | (1 | ) | 12 | 26 | (17 | ) | 39 | (6 | ) | 33 | |||||||||||||||||||||||
Amortization expense of purchased intangibles |
| (10 | ) | (21 | ) | (29 | ) | | (192 | ) | (252 | ) | (1 | ) | (253 | ) | ||||||||||||||||||||
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Segment income (loss) |
$ | 2,875 | $ | 252 | $ | 222 | $ | 1,095 | $ | 325 | $ | (450 | ) | $ | 4,319 | $ | 219 | $ | 4,538 | |||||||||||||||||
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Adjusted interest expense |
(516 | ) | (516 | ) | ||||||||||||||||||||||||||||||||
Income tax expense |
(550 | ) | (550 | ) | ||||||||||||||||||||||||||||||||
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Core operating income (loss) |
(1,516 | ) | 3,472 | |||||||||||||||||||||||||||||||||
Chubb integration expenses, net of $7 million tax benefit |
(32 | ) | (32 | ) | ||||||||||||||||||||||||||||||||
Amortization of fair value adjustment of acquired invested assets and long-term debt, net of $32 million tax benefit (2) |
(133 | ) | (133 | ) | ||||||||||||||||||||||||||||||||
Adjusted net realized gains (losses), net of $25 million tax (3) |
300 | 300 | ||||||||||||||||||||||||||||||||||
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Net income (loss) |
$ | (1,381 | ) | $ | 3,607 | |||||||||||||||||||||||||||||||
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Combined ratio |
85.6 | % | 97.5 | % | 82.1 | % | 89.9 | % | 78.3 | % | 89.8 | % | ||||||||||||||||||||||||
CAY combined ratio ex Cats |
87.0 | % | 80.8 | % | 87.8 | % | 90.6 | % | 81.1 | % | 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 (loss) 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 2018 | Page 10 |
Chubb Limited
Consolidated ResultsThree months ended September 30, 2017
(in millions of U.S. dollars, except ratios)
(Unaudited)
Q3 2017 |
North America Commercial P&C Insurance |
North America Personal P&C Insurance |
North America Agricultural Insurance |
Overseas General Insurance |
Global Reinsurance |
Corporate | Total P&C |
Life Insurance |
Total Consolidated |
|||||||||||||||||||||||||||
Net premiums written |
$ | 3,086 | $ | 1,194 | $ | 926 | $ | 1,966 | $ | 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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Core 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 | % | ||||||||||||||||||||||||
CAY combined ratio ex Cats |
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 (loss) 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 11 |
Chubb Limited
Consolidated ResultsNine months ended September 30, 2017
(in millions of U.S. dollars, except ratios)
(Unaudited)
YTD 2017 |
North America Commercial P&C Insurance |
North America Personal P&C Insurance |
North America Agricultural Insurance |
Overseas General Insurance |
Global Reinsurance |
Corporate | Total P&C |
Life Insurance |
Total Consolidated |
|||||||||||||||||||||||||||
Net premiums written |
$ | 9,019 | $ | 3,433 | $ | 1,390 | $ | 6,185 | $ | 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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|
|||||||||||||||||||||||||||||||||
Core 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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|
|
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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 | % | ||||||||||||||||||||||||
CAY combined ratio ex Cats |
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 (loss) 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 12 |
Chubb Limited
Segment ResultsConsecutive Quarters
(in millions of U.S. dollars, except ratios)
(Unaudited)
North America Commercial P&C Insurance
3Q-18 | 2Q-18 | 1Q-18 | 4Q-17 | 3Q-17 | YTD 2018 |
YTD 2017 |
Full Year 2017 |
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Gross premiums written (1) |
$ | 4,108 | $ | 4,322 | $ | 3,678 | $ | 4,102 | $ | 3,919 | $ | 12,108 | $ | 11,649 | $ | 15,751 | ||||||||||||||||
Net premiums written (1) |
3,199 | 3,331 | 2,812 | 3,000 | 3,086 | 9,342 | 9,019 | 12,019 | ||||||||||||||||||||||||
Net premiums earned |
3,019 | 3,277 | 3,029 | 3,035 | 3,016 | 9,325 | 9,156 | 12,191 | ||||||||||||||||||||||||
Losses and loss expenses |
1,881 | 2,084 | 1,908 | 1,911 | 2,580 | 5,873 | 6,376 | 8,287 | ||||||||||||||||||||||||
Policy acquisition costs |
458 | 448 | 472 | 453 | 469 | 1,378 | 1,420 | 1,873 | ||||||||||||||||||||||||
Administrative expenses |
251 | 253 | 231 | 253 | 256 | 735 | 728 | 981 | ||||||||||||||||||||||||
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Underwriting income (loss) |
429 | 492 | 418 | 418 | (289 | ) | 1,339 | 632 | 1,050 | |||||||||||||||||||||||
Net investment income |
503 | 510 | 503 | 496 | 497 | 1,516 | 1,465 | 1,961 | ||||||||||||||||||||||||
Other income (expense)operating |
1 | 13 | 6 | (5 | ) | 4 | 20 | 4 | (1 | ) | ||||||||||||||||||||||
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Segment income |
$ | 933 | $ | 1,015 | $ | 927 | $ | 909 | $ | 212 | $ | 2,875 | $ | 2,101 | $ | 3,010 | ||||||||||||||||
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CAY Underwriting income ex Cats |
$ | 409 | $ | 410 | $ | 395 | $ | 386 | $ | 346 | $ | 1,214 | $ | 1,142 | $ | 1,528 | ||||||||||||||||
Combined ratio |
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Loss and loss expense ratio |
62.3 | % | 63.6 | % | 63.0 | % | 63.0 | % | 85.5 | % | 63.0 | % | 69.6 | % | 68.0 | % | ||||||||||||||||
Policy acquisition cost ratio |
15.2 | % | 13.7 | % | 15.6 | % | 14.9 | % | 15.5 | % | 14.7 | % | 15.5 | % | 15.4 | % | ||||||||||||||||
Administrative expense ratio |
8.3 | % | 7.7 | % | 7.6 | % | 8.3 | % | 8.6 | % | 7.9 | % | 8.0 | % | 8.0 | % | ||||||||||||||||
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Combined ratio |
85.8 | % | 85.0 | % | 86.2 | % | 86.2 | % | 109.6 | % | 85.6 | % | 93.1 | % | 91.4 | % | ||||||||||||||||
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CAY combined ratio ex Cats |
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CAY loss and loss expense ratio ex Cats |
63.5 | % | 66.0 | % | 64.0 | % | 64.1 | % | 65.2 | % | 64.5 | % | 64.3 | % | 64.3 | % | ||||||||||||||||
CAY policy acquisition costs and administrative expense ratio ex Cats |
23.2 | % | 21.4 | % | 23.0 | % | 23.2 | % | 23.5 | % | 22.5 | % | 23.3 | % | 23.2 | % | ||||||||||||||||
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CAY combined ratio ex Cats |
86.7 | % | 87.4 | % | 87.0 | % | 87.3 | % | 88.7 | % | 87.0 | % | 87.6 | % | 87.5 | % | ||||||||||||||||
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Catastrophe reinstatement premiums expensedpre-tax |
$ | | $ | | $ | | $ | (1 | ) | $ | (3 | ) | $ | | $ | (3 | ) | $ | (4 | ) | ||||||||||||
Catastrophe lossespre-tax |
$ | 196 | $ | 73 | $ | 78 | $ | 167 | $ | 868 | $ | 347 | $ | 1,053 | $ | 1,220 | ||||||||||||||||
Favorable prior period development (PPD)pre-tax (2) |
$ | (216 | ) | $ | (155 | ) | $ | (101 | ) | $ | (200 | ) | $ | (236 | ) | $ | (472 | ) | $ | (546 | ) | $ | (746 | ) | ||||||||
% Change versus prior year period |
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Net premiums written |
3.6 | % | 4.0 | % | 3.0 | % | -2.7 | % | -0.7 | % | 3.6 | % | 4.2 | % | 2.4 | % | ||||||||||||||||
Net premiums written excluding merger-related actions (3) |
4.6 | % | 5.4 | % | 4.4 | % | -1.0 | % | 1.1 | % | 4.8 | % | 6.8 | % | 4.7 | % | ||||||||||||||||
Net premiums earned |
0.1 | % | 5.8 | % | -0.4 | % | -1.7 | % | -2.3 | % | 1.8 | % | 0.3 | % | -0.2 | % | ||||||||||||||||
Other ratios |
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Net premiums written/gross premiums written |
78 | % | 77 | % | 76 | % | 73 | % | 79 | % | 77 | % | 77 | % | 76 | % | ||||||||||||||||
Production by Size |
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Net Premiums Written (1) |
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Major Accounts & Specialty (4) |
$ | 1,852 | $ | 2,040 | $ | 1,630 | $ | 1,753 | $ | 1,786 | $ | 5,522 | $ | 5,323 | $ | 7,076 | ||||||||||||||||
Commercial (4) |
1,347 | 1,291 | 1,182 | 1,247 | 1,300 | 3,820 | 3,696 | 4,943 | ||||||||||||||||||||||||
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Total |
$ | 3,199 | $ | 3,331 | $ | 2,812 | $ | 3,000 | $ | 3,086 | $ | 9,342 | $ | 9,019 | $ | 12,019 | ||||||||||||||||
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(1) | 2017 amounts (Q1: $12 million; Q2: $1 million; Q3: $3 million; Q4: $(7) million) have been revised to reflect the North America Commercial P&C Insurance segment transfer of certain multinational accounts to (from) the Overseas General Insurance segment to better align the reporting with the management of these businesses in 2018. There is no impact on a consolidated basis. |
(2) | For Q3 2018, favorable prior period development is net of $40 million of unfavorable net premiums earned adjustments, $1 million of unfavorable expense adjustments and $1 million of unfavorable reinstatement premium adjustments. For YTD 2018, favorable prior period development is net of $29 million of unfavorable net premiums earned adjustments, $7 million of unfavorable expense adjustments and $5 million of unfavorable reinstatement premium adjustments. |
For Q3 2017, favorable prior period development is net of $39 million of unfavorable net premiums earned adjustments and $6 million of unfavorable expense adjustments. For YTD 2017, favorable prior period development is net of $42 million of unfavorable net premiums earned adjustments, $6 million of unfavorable expense adjustments and $9 million of unfavorable reinstatement premium adjustments.
(3) | Q3 2018 and YTD 2018 include the adverse impact of merger-related actions, respectively, as follows: Major Accounts & Specialty $31 million and $110 million; Commercial $nil and $4 million. |
(4) | Major Accounts & Specialty: principally large corporate accounts and wholesale business. Commercial: principally middle market and small commercial accounts. |
NA Commercial | Page 13 |
Chubb Limited
Segment ResultsConsecutive Quarters
(in millions of U.S. dollars, except ratios)
(Unaudited)
North America Personal P&C Insurance
3Q-18 | 2Q-18 | 1Q-18 | 4Q-17 | 3Q-17 | YTD 2018 |
YTD 2017 |
Full Year 2017 |
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Gross premiums written |
$ | 1,369 | $ | 1,489 | $ | 1,181 | $ | 1,260 | $ | 1,338 | $ | 4,039 | $ | 3,892 | $ | 5,152 | ||||||||||||||||
Net premiums written |
1,218 | 1,335 | 1,048 | 1,100 | 1,194 | 3,601 | 3,433 | 4,533 | ||||||||||||||||||||||||
Net premiums earned |
1,167 | 1,156 | 1,140 | 1,103 | 1,117 | 3,463 | 3,296 | 4,399 | ||||||||||||||||||||||||
Losses and loss expenses |
860 | 728 | 886 | 887 | 1,062 | 2,474 | 2,378 | 3,265 | ||||||||||||||||||||||||
Policy acquisition costs |
236 | 228 | 237 | 226 | 226 | 701 | 673 | 899 | ||||||||||||||||||||||||
Administrative expenses |
69 | 68 | 65 | 72 | 61 | 202 | 192 | 264 | ||||||||||||||||||||||||
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Underwriting income (loss) |
2 | 132 | (48 | ) | (82 | ) | (232 | ) | 86 | 53 | (29 | ) | ||||||||||||||||||||
Net investment income |
59 | 59 | 59 | 58 | 57 | 177 | 168 | 226 | ||||||||||||||||||||||||
Other expenseoperating |
| (1 | ) | | (1 | ) | (1 | ) | (1 | ) | (3 | ) | (4 | ) | ||||||||||||||||||
Amortization expense of purchased intangibles |
(4 | ) | (3 | ) | (3 | ) | (4 | ) | (4 | ) | (10 | ) | (12 | ) | (16 | ) | ||||||||||||||||
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Segment income (loss) |
$ | 57 | $ | 187 | $ | 8 | $ | (29 | ) | $ | (180 | ) | $ | 252 | $ | 206 | $ | 177 | ||||||||||||||
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CAY Underwriting income ex Cats |
$ | 196 | $ | 240 | $ | 230 | $ | 218 | $ | 251 | $ | 666 | $ | 715 | $ | 933 | ||||||||||||||||
Combined ratio |
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Loss and loss expense ratio |
73.7 | % | 63.0 | % | 77.7 | % | 80.4 | % | 95.1 | % | 71.5 | % | 72.2 | % | 74.2 | % | ||||||||||||||||
Policy acquisition cost ratio |
20.2 | % | 19.7 | % | 20.8 | % | 20.5 | % | 20.2 | % | 20.2 | % | 20.4 | % | 20.4 | % | ||||||||||||||||
Administrative expense ratio |
5.9 | % | 5.9 | % | 5.7 | % | 6.6 | % | 5.5 | % | 5.8 | % | 5.8 | % | 6.1 | % | ||||||||||||||||
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Combined ratio |
99.8 | % | 88.6 | % | 104.2 | % | 107.5 | % | 120.8 | % | 97.5 | % | 98.4 | % | 100.7 | % | ||||||||||||||||
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CAY combined ratio ex Cats |
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CAY loss and loss expense ratio ex Cats |
57.1 | % | 53.7 | % | 53.3 | % | 54.0 | % | 51.9 | % | 54.7 | % | 52.1 | % | 52.6 | % | ||||||||||||||||
CAY policy acquisition costs and administrative expense ratio ex Cats |
26.1 | % | 25.6 | % | 26.4 | % | 26.5 | % | 25.6 | % | 26.1 | % | 26.2 | % | 26.3 | % | ||||||||||||||||
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CAY combined ratio ex Cats |
83.2 | % | 79.3 | % | 79.7 | % | 80.5 | % | 77.5 | % | 80.8 | % | 78.3 | % | 78.9 | % | ||||||||||||||||
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Catastrophe reinstatement premiums expensedpre-tax |
$ | | $ | | $ | | $ | (19 | ) | $ | (3 | ) | $ | | $ | (3 | ) | $ | (22 | ) | ||||||||||||
Catastrophe lossespre-tax |
$ | 136 | $ | 101 | $ | 284 | $ | 278 | $ | 448 | $ | 521 | $ | 593 | $ | 871 | ||||||||||||||||
Unfavorable (favorable) prior period development (PPD)pre-tax (1) |
$ | 58 | $ | 7 | $ | (6 | ) | $ | 3 | $ | 32 | $ | 59 | $ | 66 | $ | 69 | |||||||||||||||
% Change versus prior year period |
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Net premiums written |
2.0 | % | 6.4 | % | 6.5 | % | 5.8 | % | 18.0 | % | 4.9 | % | 10.3 | % | 9.1 | % | ||||||||||||||||
Net premiums written excluding merger-related actions, one-time accounting actions, Firemans Fund non-renewal and Reinstatement premiums |
2.7 | % | 3.2 | % | 2.7 | % | 2.9 | % | ||||||||||||||||||||||||
Net premiums earned |
4.5 | % | 5.6 | % | 5.1 | % | 2.6 | % | 3.4 | % | 5.1 | % | 1.6 | % | 1.9 | % | ||||||||||||||||
Other ratios |
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Net premiums written/gross premiums written |
89 | % | 90 | % | 89 | % | 87 | % | 89 | % | 89 | % | 88 | % | 88 | % |
(1) | For Q3 2018 and YTD 2018, unfavorable prior period development is net of $1 million of unfavorable reinstatement premium adjustments. |
NA Personal | Page 14 |
Chubb Limited
Segment ResultsConsecutive Quarters
(in millions of U.S. dollars, except ratios)
(Unaudited)
North America Agricultural Insurance
3Q-18 | 2Q-18 | 1Q-18 | 4Q-17 | 3Q-17 | YTD 2018 |
YTD 2017 |
Full Year 2017 |
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Gross premiums written |
$ | 1,270 | $ | 543 | $ | 205 | $ | 276 | $ | 1,303 | $ | 2,018 | $ | 2,039 | $ | 2,315 | ||||||||||||||||
Net premiums written |
884 | 388 | 108 | 126 | 926 | 1,380 | 1,390 | 1,516 | ||||||||||||||||||||||||
Net premiums earned |
857 | 351 | 43 | 252 | 898 | 1,251 | 1,256 | 1,508 | ||||||||||||||||||||||||
Adjusted losses and loss expenses (1) |
727 | 281 | (55 | ) | 60 | 764 | 953 | 983 | 1,043 | |||||||||||||||||||||||
Policy acquisition costs |
49 | 26 | (1 | ) | 6 | 49 | 74 | 75 | 81 | |||||||||||||||||||||||
Administrative expenses |
2 | 1 | (3 | ) | (4 | ) | (1 | ) | | (4 | ) | (8 | ) | |||||||||||||||||||
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Underwriting income |
79 | 43 | 102 | 190 | 86 | 224 | 202 | 392 | ||||||||||||||||||||||||
Net investment income |
7 | 6 | 7 | 7 | 6 | 20 | 18 | 25 | ||||||||||||||||||||||||
Other expenseoperating |
| (1 | ) | | (1 | ) | | (1 | ) | (1 | ) | (2 | ) | |||||||||||||||||||
Amortization expense of purchased intangibles |
(7 | ) | (7 | ) | (7 | ) | (7 | ) | (8 | ) | (21 | ) | (22 | ) | (29 | ) | ||||||||||||||||
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Segment income |
$ | 79 | $ | 41 | $ | 102 | $ | 189 | $ | 84 | $ | 222 | $ | 197 | $ | 386 | ||||||||||||||||
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CAY Underwriting income ex Cats |
$ | 86 | $ | 45 | $ | 27 | $ | 154 | $ | 87 | $ | 158 | $ | 137 | $ | 291 | ||||||||||||||||
Combined ratio |
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Loss and loss expense ratio |
84.9 | % | 80.0 | % | NM | 23.7 | % | 85.1 | % | 76.2 | % | 78.3 | % | 69.2 | % | |||||||||||||||||
Policy acquisition cost ratio |
5.7 | % | 7.4 | % | NM | 2.4 | % | 5.4 | % | 5.9 | % | 6.0 | % | 5.4 | % | |||||||||||||||||
Administrative expense ratio |
0.1 | % | 0.5 | % | NM | -1.7 | % | -0.1 | % | 0.0 | % | -0.4 | % | -0.6 | % | |||||||||||||||||
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Combined ratio |
90.7 | % | 87.9 | % | NM | 24.4 | % | 90.4 | % | 82.1 | % | 83.9 | % | 74.0 | % | |||||||||||||||||
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CAY combined ratio ex Cats |
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CAY loss and loss expense ratio ex Cats |
84.1 | % | 79.3 | % | 68.9 | % | 36.9 | % | 84.9 | % | 81.8 | % | 83.9 | % | 76.2 | % | ||||||||||||||||
CAY policy acquisition costs and administrative expense ratio ex Cats |
5.8 | % | 7.9 | % | -1.2 | % | 3.1 | % | 5.4 | % | 6.0 | % | 5.7 | % | 5.3 | % | ||||||||||||||||
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CAY combined ratio ex Cats |
89.9 | % | 87.2 | % | 67.7 | % | 40.0 | % | 90.3 | % | 87.8 | % | 89.6 | % | 81.5 | % | ||||||||||||||||
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Catastrophe lossespre-tax |
$ | 8 | $ | 2 | $ | 1 | $ | | $ | 5 | $ | 11 | $ | 18 | $ | 18 | ||||||||||||||||
Favorable prior period development (PPD)pre-tax (2) |
$ | (1 | ) | $ | | $ | (76 | ) | $ | (36 | ) | $ | (4 | ) | $ | (77 | ) | $ | (83 | ) | $ | (119 | ) | |||||||||
% Change versus prior year period |
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Net premiums written |
-4.5 | % | -3.7 | % | 76.2 | % | 214.3 | % | 9.0 | % | -0.7 | % | 7.9 | % | 14.2 | % | ||||||||||||||||
Net premiums earned |
-4.6 | % | 2.2 | % | 214.2 | % | 72.3 | % | 9.6 | % | -0.3 | % | 7.4 | % | 14.6 | % | ||||||||||||||||
Other ratios |
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Net premiums written/gross premiums written |
70 | % | 71 | % | 53 | % | 46 | % | 71 | % | 68 | % | 68 | % | 66 | % |
(1) | Includes realized gains/losses on crop derivatives. |
(2) | For YTD 2018, favorable prior period development is net of $40 million of unfavorable net premiums earned adjustments and $4 million of favorable profit-sharing commissions. For YTD 2017, favorable prior period development is net of $61 million of unfavorable net premiums earned adjustments and $4 million of favorable profit-sharing commissions. |
NA Agriculture | Page 15 |
Chubb Limited
Segment ResultsConsecutive Quarters
(in millions of U.S. dollars, except ratios)
(Unaudited)
Overseas General Insurance
3Q-18 | 2Q-18 | 1Q-18 | 4Q-17 | 3Q-17 | YTD 2018 |
YTD 2017 |
Full Year 2017 |
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Gross premiums written (1) |
$ | 2,541 | $ | 2,743 | $ | 2,872 | $ | 2,632 | $ | 2,380 | $ | 8,156 | $ | 7,519 | $ | 10,151 | ||||||||||||||||
Net premiums written (1) |
2,081 | 2,199 | 2,384 | 2,165 | 1,966 | 6,664 | 6,185 | 8,350 | ||||||||||||||||||||||||
Net premiums earned |
2,157 | 2,161 | 2,107 | 2,113 | 2,064 | 6,425 | 6,018 | 8,131 | ||||||||||||||||||||||||
Losses and loss expenses |
1,114 | 1,071 | 1,078 | 965 | 1,281 | 3,263 | 3,316 | 4,281 | ||||||||||||||||||||||||
Policy acquisition costs |
582 | 584 | 588 | 568 | 569 | 1,754 | 1,653 | 2,221 | ||||||||||||||||||||||||
Administrative expenses |
252 | 266 | 239 | 248 | 246 | 757 | 734 | 982 | ||||||||||||||||||||||||
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Underwriting income (loss) |
209 | 240 | 202 | 332 | (32 | ) | 651 | 315 | 647 | |||||||||||||||||||||||
Net investment income |
155 | 155 | 151 | 150 | 164 | 461 | 460 | 610 | ||||||||||||||||||||||||
Other income (expense)operating |
7 | 12 | (7 | ) | (10 | ) | 10 | 12 | 14 | 4 | ||||||||||||||||||||||
Amortization expense of purchased intangibles |
(8 | ) | (11 | ) | (10 | ) | (12 | ) | (11 | ) | (29 | ) | (33 | ) | (45 | ) | ||||||||||||||||
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Segment income |
$ | 363 | $ | 396 | $ | 336 | $ | 460 | $ | 131 | $ | 1,095 | $ | 756 | $ | 1,216 | ||||||||||||||||
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CAY Underwriting income ex Cats |
$ | 217 | $ | 194 | $ | 195 | $ | 204 | $ | 195 | $ | 606 | $ | 526 | $ | 730 | ||||||||||||||||
Combined ratio |
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Loss and loss expense ratio |
51.7 | % | 49.6 | % | 51.1 | % | 45.7 | % | 62.1 | % | 50.8 | % | 55.1 | % | 52.6 | % | ||||||||||||||||
Policy acquisition cost ratio |
26.9 | % | 27.0 | % | 27.9 | % | 26.9 | % | 27.6 | % | 27.3 | % | 27.5 | % | 27.3 | % | ||||||||||||||||
Administrative expense ratio |
11.7 | % | 12.3 | % | 11.4 | % | 11.7 | % | 11.9 | % | 11.8 | % | 12.2 | % | 12.1 | % | ||||||||||||||||
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Combined ratio |
90.3 | % | 88.9 | % | 90.4 | % | 84.3 | % | 101.6 | % | 89.9 | % | 94.8 | % | 92.0 | % | ||||||||||||||||
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CAY combined ratio ex Cats |
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CAY loss and loss expense ratio ex Cats |
51.3 | % | 51.7 | % | 51.4 | % | 51.6 | % | 51.3 | % | 51.5 | % | 51.7 | % | 51.7 | % | ||||||||||||||||
CAY policy acquisition costs and administrative expense ratio ex Cats |
38.7 | % | 39.3 | % | 39.3 | % | 38.7 | % | 39.3 | % | 39.1 | % | 39.6 | % | 39.3 | % | ||||||||||||||||
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CAY combined ratio ex Cats |
90.0 | % | 91.0 | % | 90.7 | % | 90.3 | % | 90.6 | % | 90.6 | % | 91.3 | % | 91.0 | % | ||||||||||||||||
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Catastrophe reinstatement premiums (expenses) collectedpre-tax |
$ | | $ | | $ | | $ | 5 | $ | (9 | ) | $ | | $ | (9 | ) | $ | (4 | ) | |||||||||||||
Catastrophe lossespre-tax |
$ | 80 | $ | 26 | $ | 15 | $ | (55 | ) | $ | 326 | $ | 121 | $ | 386 | $ | 331 | |||||||||||||||
Favorable prior period development (PPD)pre-tax (2) |
$ | (72 | ) | $ | (72 | ) | $ | (22 | ) | $ | (68 | ) | $ | (108 | ) | $ | (166 | ) | $ | (184 | ) | $ | (252 | ) | ||||||||
% Change versus prior year period |
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Net premiums written |
5.9 | % | 9.6 | % | 7.8 | % | 2.5 | % | 1.3 | % | 7.7 | % | 2.9 | % | 2.8 | % | ||||||||||||||||
Net premiums earned |
4.5 | % | 7.1 | % | 8.8 | % | 3.1 | % | 1.4 | % | 6.8 | % | -1.1 | % | 0.0 | % | ||||||||||||||||
Net premiums written constant $ |
7.5 | % | 5.1 | % | 1.4 | % | -0.2 | % | 1.3 | % | 4.5 | % | 3.9 | % | 2.8 | % | ||||||||||||||||
Net premiums earned constant $ |
5.9 | % | 2.0 | % | 3.0 | % | 0.2 | % | 0.9 | % | 3.6 | % | -0.6 | % | -0.4 | % | ||||||||||||||||
Other ratios |
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Net premiums written/gross premiums written |
82 | % | 80 | % | 83 | % | 82 | % | 83 | % | 82 | % | 82 | % | 82 | % |
(1) | 2017 amounts (Q1: $12 million; Q2: $1 million; Q3: $3 million; Q4: $(7) million) have been revised to reflect the North America Commercial P&C Insurance segment transfer of certain multinational accounts to (from) the Overseas General Insurance segment to better align the reporting with the management of these businesses in 2018. There is no impact on a consolidated basis. |
(2) | For Q3 2018 and YTD 2018, favorable prior period development is net of $2 million of unfavorable reinstatement premium adjustments. |
Overseas General Insurance | Page 16 |
Chubb Limited
Segment Results
(in millions of U.S. dollars)
(Unaudited)
Overseas General InsuranceProduction by Region
3Q-18 | 3Q-17 | % Change 3Q-18 vs. 3Q-17 |
Constant $ 3Q-17 |
Constant $ % Change 3Q-18 vs. 3Q-17 |
YTD 2018 |
YTD 2017 |
% Change YTD-18 vs. YTD-17 |
Constant $ YTD 2017 |
Constant $ % Change YTD-18 vs. YTD-17 |
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Net premiums written |
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Europe |
$ | 727 | $ | 691 | 5.2 | % | $ | 703 | 3.4 | % | $ | 2,641 | $ | 2,447 | 7.9 | % | $ | 2,624 | 0.6 | % | ||||||||||||||||||||
Latin America |
519 | 514 | 1.0 | % | 473 | 9.7 | % | 1,597 | 1,519 | 5.1 | % | 1,474 | 8.3 | % | ||||||||||||||||||||||||||
Asia |
755 | 681 | 10.9 | % | 683 | 10.5 | % | 2,176 | 1,931 | 12.7 | % | 1,988 | 9.5 | % | ||||||||||||||||||||||||||
Other (1) (2) |
80 | 80 | 0.0 | % | 78 | 2.6 | % | 250 | 288 | -13.2 | % | 294 | -15.0 | % | ||||||||||||||||||||||||||
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Total |
$ | 2,081 | $ | 1,966 | 5.9 | % | $ | 1,937 | 7.5 | % | $ | 6,664 | $ | 6,185 | 7.7 | % | $ | 6,380 | 4.5 | % | ||||||||||||||||||||
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(1) | Q3 2017 and YTD 2017 was revised to include $3 million and $16 million, respectively, representing the transfer of certain multinational accounts from the North America Commercial P&C Insurance segment to better align the reporting with the management of these businesses in 2018. There is no impact on a consolidated basis. |
(2) | 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 ResultsConsecutive Quarters
(in millions of U.S. dollars, except ratios)
(Unaudited)
Global Reinsurance
3Q-18 | 2Q-18 | 1Q-18 | 4Q-17 | 3Q-17 | YTD 2018 |
YTD 2017 |
Full Year 2017 |
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Gross premiums written |
$ | 167 | $ | 233 | $ | 205 | $ | 104 | $ | 202 | $ | 605 | $ | 642 | $ | 746 | ||||||||||||||||
Net premiums written |
164 | 197 | 193 | 105 | 191 | 554 | 580 | 685 | ||||||||||||||||||||||||
Net premiums earned |
157 | 167 | 168 | 162 | 185 | 492 | 542 | 704 | ||||||||||||||||||||||||
Losses and loss expenses |
86 | 83 | 67 | 126 | 295 | 236 | 435 | 561 | ||||||||||||||||||||||||
Policy acquisition costs |
40 | 40 | 40 | 40 | 43 | 120 | 137 | 177 | ||||||||||||||||||||||||
Administrative expenses |
10 | 9 | 10 | 11 | 11 | 29 | 33 | 44 | ||||||||||||||||||||||||
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Underwriting income (loss) |
21 | 35 | 51 | (15 | ) | (164 | ) | 107 | (63 | ) | (78 | ) | ||||||||||||||||||||
Net investment income |
63 | 65 | 64 | 66 | 80 | 192 | 207 | 273 | ||||||||||||||||||||||||
Other income (expense)operating |
13 | 6 | 7 | (1 | ) | 3 | 26 | 2 | 1 | |||||||||||||||||||||||
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Segment income (loss) |
$ | 97 | $ | 106 | $ | 122 | $ | 50 | $ | (81 | ) | $ | 325 | $ | 146 | $ | 196 | |||||||||||||||
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CAY Underwriting income ex Cats |
$ | 27 | $ | 28 | $ | 39 | $ | 32 | $ | 26 | $ | 94 | $ | 107 | $ | 139 | ||||||||||||||||
Combined ratio |
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Loss and loss expense ratio |
55.0 | % | 49.4 | % | 40.1 | % | 78.9 | % | 158.2 | % | 48.0 | % | 80.1 | % | 79.8 | % | ||||||||||||||||
Policy acquisition cost ratio |
25.2 | % | 24.2 | % | 23.6 | % | 24.4 | % | 23.4 | % | 24.3 | % | 25.3 | % | 25.1 | % | ||||||||||||||||
Administrative expense ratio |
6.5 | % | 5.7 | % | 5.8 | % | 6.9 | % | 5.8 | % | 6.0 | % | 6.1 | % | 6.3 | % | ||||||||||||||||
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Combined ratio |
86.7 | % | 79.3 | % | 69.5 | % | 110.2 | % | 187.4 | % | 78.3 | % | 111.5 | % | 111.2 | % | ||||||||||||||||
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CAY combined ratio ex Cats |
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CAY loss and loss expense ratio ex Cats |
51.2 | % | 53.0 | % | 47.7 | % | 50.1 | % | 46.5 | % | 50.6 | % | 44.6 | % | 46.0 | % | ||||||||||||||||
CAY policy acquisition costs and administrative expense ratio ex Cats |
31.6 | % | 30.5 | % | 29.3 | % | 31.3 | % | 35.7 | % | 30.5 | % | 34.0 | % | 33.2 | % | ||||||||||||||||
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CAY combined ratio ex Cats |
82.8 | % | 83.5 | % | 77.0 | % | 81.4 | % | 82.2 | % | 81.1 | % | 78.6 | % | 79.2 | % | ||||||||||||||||
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Catastrophe reinstatement premiums collectedpre-tax |
$ | 4 | $ | | $ | | $ | | $ | 37 | $ | 4 | $ | 37 | $ | 37 | ||||||||||||||||
Catastrophe lossespre-tax |
$ | 34 | $ | 9 | $ | 2 | $ | 42 | $ | 268 | $ | 45 | $ | 271 | $ | 313 | ||||||||||||||||
Unfavorable (favorable) prior period development (PPD)pre-tax (1) |
$ | (24 | ) | $ | (16 | ) | $ | (14 | ) | $ | 5 | $ | (41 | ) | $ | (54 | ) | $ | (64 | ) | $ | (59 | ) | |||||||||
% Change versus prior year period |
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Net premiums written as reported |
-14.3 | % | 3.8 | % | -3.0 | % | -8.2 | % | 47.1 | % | -4.5 | % | 3.3 | % | 1.4 | % | ||||||||||||||||
Net premiums earned as reported |
-15.7 | % | -0.6 | % | -11.0 | % | -3.4 | % | 20.4 | % | -9.4 | % | 0.0 | % | -0.7 | % | ||||||||||||||||
Net premiums written constant $ |
-14.7 | % | 1.5 | % | -4.8 | % | -9.3 | % | 47.9 | % | -5.9 | % | 4.5 | % | 2.2 | % | ||||||||||||||||
Net premiums earned constant $ |
-16.0 | % | -3.1 | % | -12.8 | % | -5.1 | % | 20.0 | % | -10.8 | % | 1.0 | % | -0.4 | % | ||||||||||||||||
Other ratios |
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Net premiums written/gross premiums written |
98 | % | 85 | % | 94 | % | 100 | % | 95 | % | 92 | % | 91 | % | 92 | % |
(1) | For Q3 2018, favorable prior period development is net of $4 million of unfavorable net premiums earned adjustments. For YTD 2018, favorable prior period development is net of $7 million of unfavorable net premiums earned adjustments and $1 million of favorable acquisition expense adjustments. For Q3 2017, favorable prior period development is net of $3 million of unfavorable net premiums earned adjustments. For YTD 2017, favorable prior period development is net of $4 million of favorable net premiums earned adjustments. |
Global Reinsurance | Page 18 |
Chubb Limited
Segment ResultsConsecutive Quarters
(in millions of U.S. dollars)
(Unaudited)
Life Insurance
3Q-18 | 2Q-18 | 1Q-18 | 4Q-17 | 3Q-17 | YTD 2018 |
YTD 2017 |
Full Year 2017 |
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Gross premiums written |
$ | 599 | $ | 599 | $ | 592 | $ | 586 | $ | 568 | $ | 1,790 | $ | 1,675 | $ | 2,261 | ||||||||||||||||
Net premiums written |
564 | 565 | 559 | 555 | 539 | 1,688 | 1,586 | 2,141 | ||||||||||||||||||||||||
Net premiums earned |
551 | 552 | 540 | 553 | 527 | 1,643 | 1,548 | 2,101 | ||||||||||||||||||||||||
Losses and loss expenses |
195 | 184 | 205 | 183 | 181 | 584 | 556 | 739 | ||||||||||||||||||||||||
Policy benefits (1) |
127 | 150 | 151 | 176 | 169 | 428 | 500 | 676 | ||||||||||||||||||||||||
(Gains) losses from fair value changes in separate account assets (1) |
14 | 10 | (6 | ) | (27 | ) | (24 | ) | 18 | (70 | ) | (97 | ) | |||||||||||||||||||
Policy acquisition costs |
139 | 138 | 128 | 154 | 132 | 405 | 376 | 530 | ||||||||||||||||||||||||
Administrative expenses |
77 | 80 | 78 | 77 | 77 | 235 | 226 | 303 | ||||||||||||||||||||||||
Net investment income |
85 | 85 | 83 | 83 | 78 | 253 | 230 | 313 | ||||||||||||||||||||||||
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Life Insurance underwriting income (2) |
84 | 75 | 67 | 73 | 70 | 226 | 190 | 263 | ||||||||||||||||||||||||
Other income (expense)operating |
(6 | ) | 2 | (2 | ) | (3 | ) | (5 | ) | (6 | ) | (10 | ) | (13 | ) | |||||||||||||||||
Amortization expense of purchased intangibles |
| | (1 | ) | | (1 | ) | (1 | ) | (2 | ) | (2 | ) | |||||||||||||||||||
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Segment income |
$ | 78 | $ | 77 | $ | 64 | $ | 70 | $ | 64 | $ | 219 | $ | 178 | $ | 248 | ||||||||||||||||
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% Change versus prior year period |
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Net premiums written |
4.8 | % | 8.0 | % | 6.7 | % | 1.2 | % | 1.1 | % | 6.5 | % | 0.6 | % | 0.8 | % | ||||||||||||||||
Net premiums earned |
4.6 | % | 7.2 | % | 6.8 | % | 3.5 | % | 2.8 | % | 6.2 | % | 1.8 | % | 2.2 | % | ||||||||||||||||
Net premiums written constant $ |
5.1 | % | 6.5 | % | 5.0 | % | 0.3 | % | 1.1 | % | 5.5 | % | 0.3 | % | 0.3 | % | ||||||||||||||||
Net premiums earned constant $ |
4.9 | % | 5.7 | % | 5.0 | % | 2.3 | % | 2.8 | % | 5.2 | % | 1.3 | % | 1.6 | % |
(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. |
International life insurance net premiums written and deposits breakdown (excludes Combined North America and Life reinsurance businesses):
3Q-18 | 3Q-17 | % Change 3Q-18 vs. 3Q-17 |
Constant $ % Change 3Q-18 vs. 3Q-17 |
YTD-18 | YTD-17 | % Change YTD-18 vs. YTD-17 |
Constant $ % Change YTD-18 vs. YTD-17 |
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International life insurance net premiums written |
$ | 217 | $ | 203 | 6.9 | % | 7.4 | % | $ | 654 | $ | 600 | 9.0 | % | 7.2 | % | ||||||||||||||||
International life insurance deposits (3) |
392 | 422 | -7.1 | % | -7.1 | % | 1,163 | 1,048 | 10.9 | % | 8.7 | % | ||||||||||||||||||||
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Total international life insurance net premiums written and deposits |
$ | 609 | $ | 625 | -2.5 | % | -2.4 | % | $ | 1,817 | $ | 1,648 | 10.2 | % | 8.1 | % | ||||||||||||||||
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International life insurance segment income |
$ | 29 | $ | 13 | 122.1 | % | 128.7 | % | $ | 71 | $ | 35 | 101.7 | % | 107.8 | % | ||||||||||||||||
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(3) | Includes deposits collected on universal life and investment contracts. Consistent with GAAP, premiums collected on universal life and investment contracts are considered deposits and excluded from revenues. |
Life Insurance | Page 19 |
Chubb Limited
Segment ResultsConsecutive Quarters
(in millions of U.S. dollars)
(Unaudited)
Corporate
3Q-18 | 2Q-18 | 1Q-18 | 4Q-17 | 3Q-17 | YTD 2018 |
YTD 2017 |
Full Year 2017 |
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Gross premiums written |
$ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||||
Net premiums written |
| | | | | | | | ||||||||||||||||||||||||
Net premiums earned |
| | | | | | | | ||||||||||||||||||||||||
Losses and loss expenses |
13 | 48 | 11 | 140 | 89 | 72 | 145 | 285 | ||||||||||||||||||||||||
Policy acquisition costs |
| | | | | | | | ||||||||||||||||||||||||
Administrative expenses |
58 | 70 | 72 | 80 | 64 | 200 | 187 | 267 | ||||||||||||||||||||||||
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Underwriting loss |
(71 | ) | (118 | ) | (83 | ) | (220 | ) | (153 | ) | (272 | ) | (332 | ) | (552 | ) | ||||||||||||||||
Adjusted net investment income |
11 | 10 | 10 | 13 | 11 | 31 | 36 | 49 | ||||||||||||||||||||||||
Other expenseoperating |
(8 | ) | (2 | ) | (7 | ) | (61 | ) | (6 | ) | (17 | ) | (27 | ) | (88 | ) | ||||||||||||||||
Adjusted interest expense (1) |
(170 | ) | (177 | ) | (169 | ) | (168 | ) | (162 | ) | (516 | ) | (488 | ) | (656 | ) | ||||||||||||||||
Amortization expense of purchased intangibles |
(64 | ) | (64 | ) | (64 | ) | (43 | ) | (41 | ) | (192 | ) | (125 | ) | (168 | ) | ||||||||||||||||
2017 tax reform transition benefit |
| | | 450 | | | | 450 | ||||||||||||||||||||||||
Income tax (expense) benefit ex 2017 tax reform transition benefit |
(183 | ) | (218 | ) | (149 | ) | (131 | ) | 61 | (550 | ) | (353 | ) | (484 | ) | |||||||||||||||||
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Core operating loss |
(485 | ) | (569 | ) | (462 | ) | (160 | ) | (290 | ) | (1,516 | ) | (1,289 | ) | (1,449 | ) | ||||||||||||||||
Chubb integration expenses, net of tax |
(14 | ) | (10 | ) | (8 | ) | (57 | ) | (36 | ) | (32 | ) | (160 | ) | (217 | ) | ||||||||||||||||
Amortization of fair value adjustment of acquired invested assets and long-term debt, net of tax |
(42 | ) | (41 | ) | (50 | ) | (41 | ) | (50 | ) | (133 | ) | (157 | ) | (198 | ) | ||||||||||||||||
Adjusted net realized gains (losses), net of tax (2) |
165 | 92 | 43 | 142 | 76 | 300 | 350 | 492 | ||||||||||||||||||||||||
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Net loss |
$ | (376 | ) | $ | (528 | ) | $ | (477 | ) | $ | (116 | ) | $ | (300) | $ | (1,381) | $ | (1,256) | $ | (1,372) | ||||||||||||
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Unfavorable prior period development (PPD)pre-tax |
$ | 12 | $ | 45 | $ | 10 | $ | 138 | $ | 87 | $ | 67 | $ | 140 | $ | 278 |
(1) | See Non-GAAP financial measures. |
(2) | 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 | |||||||||||||||
Gross | Ceded | Net | Incurred Ratio | |||||||||||||
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 | % | ||||||||
Other (incl. foreign exch. revaluation) |
556 | 131 | 425 | |||||||||||||
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Balance at September 30, 2017 |
$ | 64,153 | $ | 13,870 | $ | 50,283 | ||||||||||
Losses and loss expenses incurred |
5,755 | 1,483 | 4,272 | |||||||||||||
Losses and loss expenses paid |
(6,419 | ) | (1,298 | ) | (5,121 | ) | 120 | % | ||||||||
Other (incl. foreign exch. revaluation) |
(310 | ) | (41 | ) | (269 | ) | ||||||||||
|
|
|
|
|
|
|||||||||||
Balance at December 31, 2017 |
$ | 63,179 | $ | 14,014 | $ | 49,165 | ||||||||||
Losses and loss expenses incurred |
5,028 | 926 | 4,102 | |||||||||||||
Losses and loss expenses paid |
(5,448 | ) | (1,206 | ) | (4,242 | ) | 103 | % | ||||||||
Other (incl. foreign exch. revaluation) |
380 | 88 | 292 | |||||||||||||
|
|
|
|
|
|
|||||||||||
Balance at March 31, 2018 |
$ | 63,139 | $ | 13,822 | $ | 49,317 | ||||||||||
Losses and loss expenses incurred |
5,458 | 971 | 4,487 | |||||||||||||
Losses and loss expenses paid |
(5,304 | ) | (931 | ) | (4,373 | ) | 97 | % | ||||||||
Other (incl. foreign exch. revaluation) |
(515 | ) | (127 | ) | (388 | ) | ||||||||||
|
|
|
|
|
|
|||||||||||
Balance at June 30, 2018 |
$ | 62,778 | $ | 13,735 | $ | 49,043 | ||||||||||
Losses and loss expenses incurred |
6,472 | 1,604 | 4,868 | |||||||||||||
Losses and loss expenses paid |
(5,771 | ) | (1,268 | ) | (4,503 | ) | 93 | % | ||||||||
Other (incl. foreign exch. revaluation) |
(450 | ) | (106 | ) | (344 | ) | ||||||||||
|
|
|
|
|
|
|||||||||||
Balance at September 30, 2018 |
$ | 63,029 | $ | 13,965 | $ | 49,064 | ||||||||||
Add net recoverable on paid losses |
| 1,123 | (1,123 | ) | ||||||||||||
|
|
|
|
|
|
|||||||||||
Balance including net recoverable on paid losses |
$ | 63,029 | $ | 15,088 | $ | 47,941 | ||||||||||
|
|
|
|
|
|
Loss Reserve Rollforward | Page 21 |
Chubb Limited
Reinsurance Recoverable Analysis
(in millions of U.S. dollars)
(Unaudited)
Net Reinsurance Recoverable by Division
September 30 2018 |
June 30 2018 |
March 31 2018 |
December 31 2017 |
|||||||||||||
Reinsurance recoverable on paid losses and loss expenses |
||||||||||||||||
Active operations |
$ | 911 | $ | 901 | $ | 972 | $ | 808 | ||||||||
Brandywine and Other Run-off |
290 | 238 | 271 | 286 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 1,201 | $ | 1,139 | $ | 1,243 | $ | 1,094 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Reinsurance recoverable on unpaid losses and loss expenses |
||||||||||||||||
Active operations |
$ | 12,989 | $ | 12,763 | $ | 12,842 | $ | 12,992 | ||||||||
Brandywine and Other Run-off |
1,214 | 1,209 | 1,217 | 1,269 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 14,203 | $ | 13,972 | $ | 14,059 | $ | 14,261 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross reinsurance recoverable |
||||||||||||||||
Active operations |
$ | 13,900 | $ | 13,664 | $ | 13,814 | $ | 13,800 | ||||||||
Brandywine and Other Run-off |
1,504 | 1,447 | 1,488 | 1,555 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 15,404 | $ | 15,111 | $ | 15,302 | $ | 15,355 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Provision for uncollectible reinsurance (1) |
||||||||||||||||
Active operations |
$ | (189 | ) | $ | (189 | ) | $ | (188 | ) | $ | (183 | ) | ||||
Brandywine and Other Run-off |
(127 | ) | (130 | ) | (132 | ) | (138 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | (316 | ) | $ | (319 | ) | $ | (320 | ) | $ | (321 | ) | ||||
|
|
|
|
|
|
|
|
|||||||||
Net reinsurance recoverable |
||||||||||||||||
Active operations |
$ | 13,711 | $ | 13,475 | $ | 13,626 | $ | 13,617 | ||||||||
Brandywine and Other Run-off |
1,377 | 1,317 | 1,356 | 1,417 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 15,088 | $ | 14,792 | $ | 14,982 | $ | 15,034 | ||||||||
|
|
|
|
|
|
|
|
(1) | The provision for uncollectible reinsurance is based on a default analysis applied to gross reinsurance, net of usable collateral of approximately $3.7 billion. |
Reinsurance Recoverable | Page 22 |
Chubb Limited
Investment Portfolio
(in millions of U.S. dollars)
(Unaudited)
September 30 2018 |
June 30 2018 |
March 31 2018 |
December 31 2017 |
|||||||||||||||||||||||||||||
Market Value |
||||||||||||||||||||||||||||||||
Fixed maturities available for sale |
$ | 77,853 | $ | 77,963 | $ | 79,111 | $ | 78,939 | ||||||||||||||||||||||||
Fixed maturities held to maturity |
13,284 | 13,665 | 14,122 | 14,474 | ||||||||||||||||||||||||||||
Short-term investments |
3,479 | 3,171 | 2,874 | 3,561 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total fixed maturities |
$ | 94,616 | $ | 94,799 | $ | 96,107 | $ | 96,974 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Asset Allocation by Market Value |
||||||||||||||||||||||||||||||||
Treasury |
$ | 4,572 | 5 | % | $ | 4,246 | 4 | % | $ | 4,277 | 4 | % | $ | 4,049 | 4 | % | ||||||||||||||||
Agency |
570 | 1 | % | 651 | 1 | % | 593 | 1 | % | 564 | 1 | % | ||||||||||||||||||||
Corporate and asset-backed |
27,373 | 29 | % | 27,150 | 29 | % | 26,564 | 28 | % | 27,215 | 28 | % | ||||||||||||||||||||
Mortgage-backed |
18,401 | 19 | % | 18,068 | 19 | % | 18,467 | 19 | % | 18,032 | 19 | % | ||||||||||||||||||||
Municipal |
17,280 | 18 | % | 17,827 | 19 | % | 19,550 | 20 | % | 20,766 | 21 | % | ||||||||||||||||||||
Non-U.S. |
22,941 | 24 | % | 23,686 | 25 | % | 23,782 | 25 | % | 22,787 | 23 | % | ||||||||||||||||||||
Short-term investments |
3,479 | 4 | % | 3,171 | 3 | % | 2,874 | 3 | % | 3,561 | 4 | % | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total fixed maturities |
$ | 94,616 | 100 | % | $ | 94,799 | 100 | % | $ | 96,107 | 100 | % | $ | 96,974 | 100 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Credit Quality by Market Value |
||||||||||||||||||||||||||||||||
AAA |
$ | 15,131 | 16 | % | $ | 14,952 | 16 | % | $ | 14,723 | 15 | % | $ | 15,512 | 16 | % | ||||||||||||||||
AA |
36,705 | 39 | % | 36,292 | 38 | % | 37,322 | 39 | % | 37,407 | 39 | % | ||||||||||||||||||||
A |
17,350 | 18 | % | 17,735 | 19 | % | 18,306 | 19 | % | 18,369 | 19 | % | ||||||||||||||||||||
BBB |
12,050 | 13 | % | 12,473 | 13 | % | 12,616 | 13 | % | 12,377 | 13 | % | ||||||||||||||||||||
BB |
7,737 | 8 | % | 7,788 | 8 | % | 7,710 | 8 | % | 7,941 | 8 | % | ||||||||||||||||||||
B |
5,421 | 6 | % | 5,356 | 6 | % | 5,235 | 6 | % | 5,135 | 5 | % | ||||||||||||||||||||
Other |
222 | 0 | % | 203 | 0 | % | 195 | 0 | % | 233 | 0 | % | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total fixed maturities |
$ | 94,616 | 100 | % | $ | 94,799 | 100 | % | $ | 96,107 | 100 | % | $ | 96,974 | 100 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Cost/Amortized Cost |
||||||||||||||||||||||||||||||||
Fixed maturities available for sale |
$ | 78,637 | $ | 78,546 | $ | 79,208 | $ | 77,835 | ||||||||||||||||||||||||
Fixed maturities held to maturity |
13,563 | 13,860 | 14,253 | 14,335 | ||||||||||||||||||||||||||||
Short-term investments |
3,479 | 3,171 | 2,874 | 3,561 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Subtotal fixed maturities |
95,679 | 95,577 | 96,335 | 95,731 | ||||||||||||||||||||||||||||
Equity securities |
843 | 933 | 948 | 737 | ||||||||||||||||||||||||||||
Other investments |
5,425 | 5,259 | 4,919 | 4,417 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total investment portfolio |
$ | 101,947 | $ | 101,769 | $ | 102,202 | $ | 100,885 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Avg. duration of fixed maturities |
3.9 years | 4.2 years | 4.3 years | 4.2 years | ||||||||||||||||||||||||||||
Avg. market yield of fixed maturities |
3.5 | % | 3.4 | % | 3.3 | % | 2.9 | % | ||||||||||||||||||||||||
Avg. credit quality |
A/Aa | A/Aa | A/Aa | A/Aa | ||||||||||||||||||||||||||||
Avg. yield on invested assets (1) |
3.5 | % | 3.5 | % | 3.4 | % | 3.5 | % |
(1) | Calculated using adjusted net investment income. |
Investments | Page 23 |
Chubb Limited
Investment Portfolio2
(in millions of U.S. dollars)
(Unaudited)
Mortgage-backed Fixed Income Portfolio | ||||||||||||||||||||||||
S&P Credit Rating | ||||||||||||||||||||||||
Mortgage-backed securities | AAA | AA | A | BBB | BB and below | Total | ||||||||||||||||||
Market Value at September 30, 2018 |
||||||||||||||||||||||||
Agency residential mortgage-backed (RMBS) |
$ | | $ | 15,065 | $ | | $ | | $ | | $ | 15,065 | ||||||||||||
Non-agency RMBS |
26 | 47 | 73 | 26 | 22 | 194 | ||||||||||||||||||
Commercial mortgage-backed |
2,804 | 240 | 98 | | | 3,142 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total mortgage-backed securities at market value |
$ | 2,830 | $ | 15,352 | $ | 171 | $ | 26 | $ | 22 | $ | 18,401 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Corporate and Asset-backed Fixed Income Portfolios
S&P Credit Rating | ||||||||||||||||||||
Investment Grade | ||||||||||||||||||||
Market Value at September 30, 2018 | AAA | AA | A | BBB | Total | |||||||||||||||
Asset-backed |
$ | 1,612 | $ | 136 | $ | 46 | $ | 29 | $ | 1,823 | ||||||||||
Banks |
1 | 31 | 1,726 | 1,346 | 3,104 | |||||||||||||||
Basic Materials |
| | 53 | 219 | 272 | |||||||||||||||
Communications |
| 162 | 220 | 1,135 | 1,517 | |||||||||||||||
Consumer, Cyclical |
| 275 | 482 | 583 | 1,340 | |||||||||||||||
Consumer, Non-Cyclical |
98 | 446 | 1,611 | 1,422 | 3,577 | |||||||||||||||
Diversified Financial Services |
7 | 41 | 545 | 202 | 795 | |||||||||||||||
Energy |
| 48 | 90 | 506 | 644 | |||||||||||||||
Industrial |
| 44 | 690 | 533 | 1,267 | |||||||||||||||
Utilities |
| 18 | 712 | 391 | 1,121 | |||||||||||||||
All Others |
159 | 310 | 940 | 778 | 2,187 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 1,877 | $ | 1,511 | $ | 7,115 | $ | 7,144 | $ | 17,647 | ||||||||||
|
|
|
|
|
|
|
|
|
|
S&P Credit Rating | ||||||||||||||||
Below Investment Grade | ||||||||||||||||
Market Value at September 30, 2018 | BB | B | CCC | Total | ||||||||||||
Asset-backed |
$ | 6 | $ | 3 | $ | 8 | $ | 17 | ||||||||
Banks |
| | | | ||||||||||||
Basic Materials |
328 | 189 | | 517 | ||||||||||||
Communications |
738 | 692 | 21 | 1,451 | ||||||||||||
Consumer, Cyclical |
1,064 | 588 | 35 | 1,687 | ||||||||||||
Consumer, Non-Cyclical |
904 | 1,076 | 53 | 2,033 | ||||||||||||
Diversified Financial Services |
181 | 162 | 5 | 348 | ||||||||||||
Energy |
642 | 316 | 7 | 965 | ||||||||||||
Industrial |
584 | 508 | 25 | 1,117 | ||||||||||||
Utilities |
224 | 21 | | 245 | ||||||||||||
All Others |
790 | 543 | 13 | 1,346 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 5,461 | $ | 4,098 | $ | 167 | $ | 9,726 | ||||||||
|
|
|
|
|
|
|
|
Investments 2 | Page 24 |
Chubb Limited
Investment Portfolio3
(in millions of U.S. dollars)
(Unaudited)
Non-U.S. Fixed Income Portfolio
September 30, 2018
Market Value by S&P Credit Rating | ||||||||||||||||||||||||
Non-U.S. Government Securities | AAA | AA | A | BBB | BB and below | Total | ||||||||||||||||||
United Kingdom |
$ | | $ | 1,166 | $ | | $ | | $ | | $ | 1,166 | ||||||||||||
Republic of Korea |
| 1,069 | | | | 1,069 | ||||||||||||||||||
Canada |
960 | | | | | 960 | ||||||||||||||||||
Federative Republic of Brazil |
| | | | 656 | 656 | ||||||||||||||||||
Province of Ontario |
| 8 | 609 | | | 617 | ||||||||||||||||||
United Mexican States |
| | 423 | 123 | | 546 | ||||||||||||||||||
Province of Quebec |
| 504 | | | | 504 | ||||||||||||||||||
Federal Republic of Germany |
462 | | | | | 462 | ||||||||||||||||||
Kingdom of Thailand |
| | 432 | | | 432 | ||||||||||||||||||
French Republic |
| 303 | | | | 303 | ||||||||||||||||||
Other Non-U.S. Government Securities |
905 | 1,014 | 845 | 555 | 857 | 4,176 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
$ | 2,327 | $ | 4,064 | $ | 2,309 | $ | 678 | $ | 1,513 | $ | 10,891 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Market Value by S&P Credit Rating | ||||||||||||||||||||||||
Non-U.S. Corporate Securities | AAA | AA | A | BBB | BB and below | Total | ||||||||||||||||||
United Kingdom |
$ | 113 | $ | 94 | $ | 665 | $ | 882 | $ | 301 | $ | 2,055 | ||||||||||||
Canada |
107 | 288 | 276 | 466 | 343 | 1,480 | ||||||||||||||||||
United States (1) |
3 | 26 | 172 | 346 | 499 | 1,046 | ||||||||||||||||||
France |
7 | 46 | 518 | 328 | 42 | 941 | ||||||||||||||||||
Australia |
113 | 207 | 357 | 134 | 10 | 821 | ||||||||||||||||||
Netherlands |
60 | 9 | 316 | 157 | 83 | 625 | ||||||||||||||||||
Germany |
113 | 38 | 139 | 256 | 23 | 569 | ||||||||||||||||||
Switzerland |
49 | 17 | 191 | 186 | 23 | 466 | ||||||||||||||||||
Japan |
| 38 | 396 | 7 | | 441 | ||||||||||||||||||
China |
| | 264 | 44 | 19 | 327 | ||||||||||||||||||
Other Non-U.S. Corporate Securities |
400 | 479 | 958 | 877 | 565 | 3,279 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
$ | 965 | $ | 1,242 | $ | 4,252 | $ | 3,683 | $ | 1,908 | $ | 12,050 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(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 Portfolio4
(in millions of U.S. dollars)
(Unaudited)
Fixed Maturity Investment Portfolio
Top 10 Global Corporate Exposures
September 30, 2018 |
Market Value | Rating | ||||||||||
1 |
Wells Fargo & Co | $ | 533 | A- | ||||||||
2 |
JP Morgan Chase & Co | 429 | A- | |||||||||
3 |
AT&T Inc | 419 | BBB | |||||||||
4 |
Bank of America Corp | 406 | A- | |||||||||
5 |
Goldman Sachs Group Inc | 358 | BBB+ | |||||||||
6 |
Anheuser-Busch InBev NV | 357 | A- | |||||||||
7 |
Verizon Communications Inc | 333 | BBB+ | |||||||||
8 |
HSBC Holdings Plc | 308 | A | |||||||||
9 |
Morgan Stanley | 302 | BBB+ | |||||||||
10 |
Citigroup Inc | 291 | 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, 2018 | ||||||||||||||||||||||||||||||||||||
Realized Gains (Losses) | Unrealized Gains (Losses) | Realized and Unrealized Gains (Losses) | ||||||||||||||||||||||||||||||||||
Gains (Losses) Pre-Tax |
Tax (Expense) Benefit |
Gains (Losses) After-Tax |
Gains (Losses) Pre-Tax |
Tax (Expense) Benefit |
Gains (Losses) After-Tax |
Gains (Losses) Pre-Tax |
Tax (Expense) Benefit |
Gains (Losses) After-Tax |
||||||||||||||||||||||||||||
Fixed income investments (1) (2) |
$ | (1 | ) | $ | (2 | ) | $ | (3 | ) | $ | (213 | ) | $ | 54 | $ | (159 | ) | $ | (214 | ) | $ | 52 | $ | (162 | ) | |||||||||||
Public equity |
48 | (9 | ) | 39 | | | | 48 | (9 | ) | 39 | |||||||||||||||||||||||||
Private equity |
152 | (8 | ) | 144 | | | | 152 | (8 | ) | 144 | |||||||||||||||||||||||||
Mark-to-market on public and private equity (3) |
(8 | ) | 6 | (2 | ) | | | | (8 | ) | 6 | (2 | ) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total investment portfolio |
191 | (13 | ) | 178 | (213 | ) | 54 | (159 | ) | (22 | ) | 41 | 19 | |||||||||||||||||||||||
Mark-to-market from variable annuity reinsurance derivative transactions, net of applicable hedges (4) |
(46 | ) | | (46 | ) | | | | (46 | ) | | (46 | ) | |||||||||||||||||||||||
Foreign exchange |
39 | (2 | ) | 37 | (482 | ) | 20 | (462 | ) | (443 | ) | 18 | (425 | ) | ||||||||||||||||||||||
Partially-owned entities (5) |
1 | | 1 | | | | 1 | | 1 | |||||||||||||||||||||||||||
Other (6) |
(6 | ) | 1 | (5 | ) | (21 | ) | 3 | (18 | ) | (27 | ) | 4 | (23 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net gains (losses) |
$ | 179 | $ | (14 | ) | $ | 165 | $ | (716 | ) | $ | 77 | $ | (639 | ) | $ | (537 | ) | $ | 63 | $ | (474 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | The net impact of rising interest rates on the Companys investment portfolio was $135 million, after-tax, comprising of unrealized losses of $159 million, partially offset by a realized gain on interest rate swaps of $24 million. Total investment portfolio gains of $178 million includes $24 million realized gains on interest rate swaps. Excluding the interest rate swaps, total investment portfolio realized gains was $154 million. |
(2) | Realized gains (losses) in the quarter include $31 million after-tax gains on fixed income derivatives. Other-than-temporary impairments for the quarter in realized gains (losses) were $11 million pre-tax for fixed maturities. |
(3) | Effective Q1 2018, the company adopted new guidance that requires the recognition of mark-to-market changes of public equities and cost-method private equities to be recognized through realized gains (losses) on the income statement. Previously these unrealized gains (losses) were recorded through other comprehensive income (loss) on the balance sheet. |
(4) | The quarter includes $100 million of losses on applicable hedges. These losses are both pre-tax and after-tax. |
(5) | 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. |
(6) | Other unrealized losses are primarily related to the companys post-retirement programs. |
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 income investments (7) |
$ | (8 | ) | $ | 5 | $ | (3 | ) | $ | 134 | $ | (39 | ) | $ | 95 | $ | 126 | $ | (34 | ) | $ | 92 | ||||||||||||||
Public equity |
4 | | 4 | 36 | (11 | ) | 25 | 40 | (11 | ) | 29 | |||||||||||||||||||||||||
Private equity |
84 | (15 | ) | 69 | (27 | ) | (1 | ) | (28 | ) | 57 | (16 | ) | 41 | ||||||||||||||||||||||
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Total investment portfolio (8) |
80 | (10 | ) | 70 | 143 | (51 | ) | 92 | 223 | (61 | ) | 162 | ||||||||||||||||||||||||
Mark-to-market from variable annuity reinsurance derivative transactions, net of applicable hedges (9) |
(3 | ) | | (3 | ) | | | | (3 | ) | | (3 | ) | |||||||||||||||||||||||
Foreign exchange |
15 | 2 | 17 | 665 | (7 | ) | 658 | 680 | (5 | ) | 675 | |||||||||||||||||||||||||
Partially-owned entities (10) |
2 | | 2 | | | | 2 | | 2 | |||||||||||||||||||||||||||
Other (11) |
(10 | ) | | (10 | ) | (63 | ) | 12 | (51 | ) | (73 | ) | 12 | (61 | ) | |||||||||||||||||||||
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Net gains (losses) |
$ | 84 | $ | (8 | ) | $ | 76 | $ | 745 | $ | (46 | ) | $ | 699 | $ | 829 | $ | (54 | ) | $ | 775 | |||||||||||||||
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(7) | The quarter includes $9 million after-tax realized losses on fixed income derivatives. |
(8) | 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. |
(9) | The quarter includes $57 million of losses on applicable hedges. These losses are both pre-tax and after-tax. |
(10) | 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. |
(11) | Other unrealized losses are primarily related to the companys post-retirement programs. |
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, 2018 | ||||||||||||||||||||||||||||||||||||
Realized Gains (Losses) | Unrealized Gains (Losses) | Realized and Unrealized Gains (Losses) | ||||||||||||||||||||||||||||||||||
Gains | Tax | Gains | Gains | Tax | Gains | Gains | Tax | Gains | ||||||||||||||||||||||||||||
(Losses) | (Expense) | (Losses) | (Losses) | (Expense) | (Losses) | (Losses) | (Expense) | (Losses) | ||||||||||||||||||||||||||||
Pre-Tax | Benefit | After-Tax | Pre-Tax | Benefit | After-Tax | Pre-Tax | Benefit | After-Tax | ||||||||||||||||||||||||||||
Fixed income investments (1) |
$ | (64 | ) | $ | 9 | $ | (55 | ) | $ | (1,921 | ) | $ | 339 | $ | (1,582 | ) | $ | (1,985 | ) | $ | 348 | $ | (1,637 | ) | ||||||||||||
Public equity |
63 | (12 | ) | 51 | | | | 63 | (12 | ) | 51 | |||||||||||||||||||||||||
Private equity |
292 | (23 | ) | 269 | | | | 292 | (23 | ) | 269 | |||||||||||||||||||||||||
Mark-to-market on public and private equity (2) |
(18 | ) | 9 | (9 | ) | | | | (18 | ) | 9 | (9 | ) | |||||||||||||||||||||||
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Total investment portfolio |
273 | (17 | ) | 256 | (1,921 | ) | 339 | (1,582 | ) | (1,648 | ) | 322 | (1,326 | ) | ||||||||||||||||||||||
Mark-to-market from variable annuity reinsurance derivative transactions, net of applicable hedges (3) |
11 | | 11 | | | | 11 | | 11 | |||||||||||||||||||||||||||
Foreign exchange |
102 | (20 | ) | 82 | (659 | ) | 5 | (654 | ) | (557 | ) | (15 | ) | (572 | ) | |||||||||||||||||||||
Partially-owned entities (4) |
| | | | | | | | | |||||||||||||||||||||||||||
Other (5) |
(61 | ) | 12 | (49 | ) | (61 | ) | 12 | (49 | ) | (122 | ) | 24 | (98 | ) | |||||||||||||||||||||
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Net gains (losses) |
$ | 325 | $ | (25 | ) | $ | 300 | $ | (2,641 | ) | $ | 356 | $ | (2,285 | ) | $ | (2,316 | ) | $ | 331 | $ | (1,985 | ) | |||||||||||||
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(1) | Year to date includes $68 pre-tax million after-tax realized gains on fixed income derivatives. Year to date other-than-temporary impairments in realized gains (losses) were $16 pre-tax million for fixed maturities. |
(2) | Effective Q1 2018, the company adopted new guidance that requires the recognition of mark-to-market changes of public equities and cost-method private equities to be recognized through realized gains (losses) on the income statement. Previously these unrealized gains (losses) were recorded through other comprehensive income (loss) on the balance sheet. |
(3) | Year to date includes $122 million of losses on applicable hedges. These losses are both pre-tax and after-tax. |
(4) | Partially-owned entities are investments where we hold more than an insignificant percentage of the investees shares. Refer to the Non-GAAP financial measures section for additional details. |
(5) | Other realized losses primarily include $36 million related to the early redemption of the $1.0 billion junior subordinated capital securities in April 2018 and $22 million related to lease impairments. Other unrealized losses are primarily related to the companys post-retirement programs. |
Nine months ended September 30, 2017 | ||||||||||||||||||||||||||||||||||||
Realized Gains (Losses) | Unrealized Gains (Losses) | Realized and Unrealized Gains (Losses) | ||||||||||||||||||||||||||||||||||
Gains | Tax | Gains | Gains | Tax | Gains | Gains | Tax | Gains | ||||||||||||||||||||||||||||
(Losses) | (Expense) | (Losses) | (Losses) | (Expense) | (Losses) | (Losses) | (Expense) | (Losses) | ||||||||||||||||||||||||||||
Pre-Tax | Benefit | After-Tax | Pre-Tax | Benefit | After-Tax | Pre-Tax | Benefit | After-Tax | ||||||||||||||||||||||||||||
Fixed income investments (6) |
$ | (7 | ) | $ | 11 | $ | 4 | $ | 813 | $ | (275 | ) | $ | 538 | $ | 806 | $ | (264 | ) | $ | 542 | |||||||||||||||
Public equity |
10 | (1 | ) | 9 | 79 | (25 | ) | 54 | 89 | (26 | ) | 63 | ||||||||||||||||||||||||
Private equity |
279 | (42 | ) | 237 | | (7 | ) | (7 | ) | 279 | (49 | ) | 230 | |||||||||||||||||||||||
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Total investment portfolio (7) |
282 | (32 | ) | 250 | 892 | (307 | ) | 585 | 1,174 | (339 | ) | 835 | ||||||||||||||||||||||||
Mark-to-market from variable annuity reinsurance derivative transactions, net of applicable hedges (8) |
96 | | 96 | | | | 96 | | 96 | |||||||||||||||||||||||||||
Foreign exchange |
10 | 5 | 15 | 901 | (14 | ) | 887 | 911 | (9 | ) | 902 | |||||||||||||||||||||||||
Partially-owned entities (9) |
(6 | ) | 2 | (4 | ) | | | | (6 | ) | 2 | (4 | ) | |||||||||||||||||||||||
Other (10) |
(7 | ) | | (7 | ) | (118 | ) | 29 | (89 | ) | (125 | ) | 29 | (96 | ) | |||||||||||||||||||||
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Net gains (losses) |
$ | 375 | $ | (25 | ) | $ | 350 | $ | 1,675 | $ | (292 | ) | $ | 1,383 | $ | 2,050 | $ | (317 | ) | $ | 1,733 | |||||||||||||||
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(6) | Year to date includes $11 million after-tax realized losses on fixed income derivatives. |
(7) | 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. |
(8) | Year to date includes $169 million of losses on applicable hedges. These losses are both pre-tax and after-tax. |
(9) | 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. |
(10) | Other unrealized losses are primarily related to the companys post-retirement programs. |
Net Gains (Losses) 2 | Page 28 |
Chubb Limited
Debt and Capital
(in millions of U.S. dollars, except ratios)
(Unaudited)
September 30 2018 |
June 30 2018 |
March 31 2018 |
December 31 2017 |
December 31 2016 |
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Financial Debt: |
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Total short-term debt (1) |
$ | 500 | $ | 600 | $ | 1,669 | $ | 1,013 | $ | 500 | ||||||||||
Total long-term debt |
12,149 | 12,184 | 12,786 | 11,556 | 12,610 | |||||||||||||||
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Total financial debt |
$ | 12,649 | $ | 12,784 | $ | 14,455 | $ | 12,569 | $ | 13,110 | ||||||||||
Hybrid debt: |
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Total trust preferred securities |
308 | 308 | 308 | 308 | 308 | |||||||||||||||
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Total |
$ | 12,957 | $ | 13,092 | $ | 14,763 | $ | 12,877 | $ | 13,418 | ||||||||||
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Capitalization: |
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Shareholders equity |
$ | 50,934 | $ | 50,971 | $ | 51,287 | $ | 51,172 | $ | 48,275 | ||||||||||
Hybrid debt |
308 | 308 | 308 | 308 | 308 | |||||||||||||||
Financial debt |
12,649 | 12,784 | 14,455 | 12,569 | 13,110 | |||||||||||||||
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Total capitalization |
$ | 63,891 | $ | 64,063 | $ | 66,050 | $ | 64,049 | $ | 61,693 | ||||||||||
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Leverage ratios (based on total capital): |
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Hybrid debt |
0.5 | % | 0.5 | % | 0.5 | % | 0.5 | % | 0.5 | % | ||||||||||
Financial debt |
19.8 | % | 20.0 | % | 21.9 | % | 19.6 | % | 21.3 | % | ||||||||||
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Total hybrid & financial debt |
20.3 | % | 20.5 | % | 22.4 | % | 20.1 | % | 21.8 | % |
Note: As of September 30, 2018, there was $0.4 billion usage of credit facilities on a total commitment of $1.0 billion.
(1) | During August 2018, the $100 million 6.6% senior notes matured and were fully paid. |
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 | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Numerator |
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Core operating income (loss) to common shares |
$ | 1,122 | $ | (60 | ) | $ | 3,472 | $ | 2,295 | |||||||
Amortization of fair value adjustment of acquired invested assets and long-term debt, pre-tax (1) |
(54 | ) | (68 | ) | (165 | ) | (219 | ) | ||||||||
Tax benefit on amortization adjustment |
12 | 18 | 32 | 62 | ||||||||||||
Chubb integration expenses, pre-tax |
(16 | ) | (50 | ) | (39 | ) | (233 | ) | ||||||||
Tax benefit on Chubb integration expenses |
2 | 14 | 7 | 73 | ||||||||||||
Adjusted net realized gains (losses), pre-tax |
179 | 84 | 325 | 375 | ||||||||||||
Tax expense on adjusted net realized gains (losses) |
(14 | ) | (8 | ) | (25 | ) | (25 | ) | ||||||||
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Net income (loss) |
$ | 1,231 | $ | (70 | ) | $ | 3,607 | $ | 2,328 | |||||||
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Rollforward of Common Shares Outstanding |
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Sharesbeginning of period |
463,502,164 | 465,375,141 | 463,833,179 | 465,968,716 | ||||||||||||
Repurchase of shares |
(2,781,307 | ) | (1,615,383 | ) | (5,225,162 | ) | (5,033,013 | ) | ||||||||
Shares issued, excluding option exercises |
(13,598 | ) | 148,087 | 1,582,169 | 1,939,627 | |||||||||||
Issued for option exercises |
393,531 | 250,674 | 910,604 | 1,283,189 | ||||||||||||
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Sharesend of period |
461,100,790 | 464,158,519 | 461,100,790 | 464,158,519 | ||||||||||||
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Denominator |
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Weighted average shares outstanding (2) |
462,981,973 | 466,370,784 | 464,644,013 | 467,658,334 | ||||||||||||
Effect of other dilutive securities (3) |
3,034,525 | | 3,360,511 | 3,961,572 | ||||||||||||
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Adj. wtd. avg. shares outstanding and assumed conversions |
466,016,498 | 466,370,784 | 468,004,524 | 471,619,906 | ||||||||||||
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Basic earnings per share |
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Core operating income (loss) |
$ | 2.42 | $ | (0.13 | ) | $ | 7.47 | $ | 4.91 | |||||||
Amortization of fair value adjustment of acquired invested assets and long-term debt, net of tax (1) |
(0.09 | ) | (0.11 | ) | (0.29 | ) | (0.34 | ) | ||||||||
Chubb integration expenses, net of tax |
(0.03 | ) | (0.08 | ) | (0.07 | ) | (0.34 | ) | ||||||||
Adjusted net realized gains (losses), net of tax |
0.36 | 0.17 | 0.65 | 0.75 | ||||||||||||
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Net income (loss) |
$ | 2.66 | $ | (0.15 | ) | $ | 7.76 | $ | 4.98 | |||||||
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Diluted earnings per share |
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Core operating income (loss) (3) |
$ | 2.41 | $ | (0.13 | ) | $ | 7.42 | $ | 4.87 | |||||||
Amortization of fair value adjustment of acquired invested assets and long-term debt, net of tax (1) |
(0.09 | ) | (0.11 | ) | (0.29 | ) | (0.33 | ) | ||||||||
Chubb integration expenses, net of tax |
(0.03 | ) | (0.08 | ) | (0.07 | ) | (0.34 | ) | ||||||||
Adjusted net realized gains (losses), net of tax |
0.35 | 0.17 | 0.65 | 0.74 | ||||||||||||
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Net income (loss) (3) |
$ | 2.64 | $ | (0.15 | ) | $ | 7.71 | $ | 4.94 | |||||||
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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 core operating loss and net loss per share excludes the effect of dilutive securities of 3,820,673 shares. In periods where core 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)
Reconciliation of Book Value per Common Share
September 30 | June 30 | March 31 | December 31 | September 30 | ||||||||||||||||
2018 | 2018 | 2018 | 2017 | 2017 | ||||||||||||||||
Shareholders equity |
$ | 50,934 | $ | 50,971 | $ | 51,287 | $ | 51,172 | $ | 50,471 | ||||||||||
Less: goodwill and other intangible assets, net of tax |
20,121 | 20,380 | 20,706 | 20,621 | 20,274 | |||||||||||||||
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Numerator for tangible book value per share |
$ | 30,813 | $ | 30,591 | $ | 30,581 | $ | 30,551 | $ | 30,197 | ||||||||||
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Book value% change over prior quarter |
-0.1 | % | -0.6 | % | 0.2 | % | 1.4 | % | 0.2 | % | ||||||||||
Tangible book value% change over prior quarter |
0.7 | % | 0.0 | % | 0.1 | % | 1.2 | % | -0.5 | % | ||||||||||
Denominator |
461,100,790 | 463,502,164 | 465,831,486 | 463,833,179 | 464,158,519 | |||||||||||||||
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Book value per common share |
$ | 110.46 | $ | 109.97 | $ | 110.10 | $ | 110.32 | $ | 108.74 | ||||||||||
Tangible book value per common share |
$ | 66.83 | $ | 66.00 | $ | 65.65 | $ | 65.87 | $ | 65.06 | ||||||||||
Reconciliation of Book Value |
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Shareholders equity, beginning of quarter |
$ | 50,971 | $ | 51,287 | $ | 51,172 | $ | 50,471 | $ | 50,349 | ||||||||||
Core operating income (loss) |
1,122 | 1,253 | 1,097 | 1,489 | (60 | ) | ||||||||||||||
Amortization of fair value adjustment of acquired invested assets and long-term debt, net of tax (1) |
(42 | ) | (41 | ) | (50 | ) | (41 | ) | (50 | ) | ||||||||||
Chubb integration expenses, net of tax |
(14 | ) | (10 | ) | (8 | ) | (57 | ) | (36 | ) | ||||||||||
Adjusted net realized gains (losses), net of tax (2) |
165 | 92 | 43 | 142 | 76 | |||||||||||||||
Net unrealized gains (losses) on the investment portfolio |
(159 | ) | (435 | ) | (988 | ) | (193 | ) | 92 | |||||||||||
Repurchase of shares |
(379 | ) | (324 | ) | | (123 | ) | (232 | ) | |||||||||||
Dividend declared on common shares |
(337 | ) | (339 | ) | (332 | ) | (330 | ) | (331 | ) | ||||||||||
Cumulative translation |
(462 | ) | (570 | ) | 378 | (411 | ) | 658 | ||||||||||||
Postretirement benefit liability |
(18 | ) | (13 | ) | (18 | ) | 78 | (51 | ) | |||||||||||
Other (3) |
87 | 71 | (7 | ) | 147 | 56 | ||||||||||||||
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$ | 50,934 | $ | 50,971 | $ | 51,287 | $ | 51,172 | $ | 50,471 | |||||||||||
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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, offset by the value of any share cancellations for restricted stock vesting taxes. |
Reconciliation Book Value | Page 31 |
Chubb Limited
Non-GAAP Financial Measures
(Unaudited)
Regulation GNon-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 core 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 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.
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.
In presenting our segment income (loss) 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 administrative expenses from net premiums earned. We use underwriting results and adjusted 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 administrative expenses in the ratio numerator. A reconciliation of combined ratio to P&C combined ratio is provided on pages 35-38.
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 losses on the 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.
CAY P&C combined ratio excluding the impact of catastrophe losses is a non-GAAP financial measure. The combined ratio numerator includes adjusted losses and loss expenses, policy acquisition costs, and administrative expenses. The denominator 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 premiums earned 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 combined ratio with expected level of catastrophe losses excludes the impact of catastrophe losses above or below managements view of typical catastrophe losses for that period. The adjustment for normalized catastrophe activity reduces the unusually large impact of catastrophe activity which is not indicative of our underlying performance.
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 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 adjusted operating results (including corporate) and exclude the adjusted 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 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.
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.
Core 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 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 adjusted 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 expenses due to the size and complexity of this acquisition. These integration expenses are distortive to our results and are not indicative of our underlying profitability. We believe that excluding these integration 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 (loss), as well.
Core operating income excluding catastrophe losses excludes the impact of catastrophe losses due to the significant size and number of these events 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. Core operating income with expected level of catastrophe losses is a non-GAAP financial measure which excludes catastrophe losses above or below managements view of typical catastrophe losses for that period. The adjustment for normalized catastrophe activity reduces the unusually large impact of catastrophe activity which is not indicative of our underlying performance. Current accident year core operating income excluding catastrophe losses is core operating 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 year underwriting performance. Core operating income, Core operating income excluding catastrophe losses, Core operating income with expected level of catastrophe losses, and Current accident year core operating income excluding catastrophe losses should not be viewed as a substitute for net income determined in accordance with GAAP. References to core operating income measures mean net of tax, whether or not noted.
Core operating effective tax rate is a non-GAAP financial measure. The numerator excludes tax on adjusted net realized gains (losses), tax on Chubb integration 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 is core operating income (loss), before tax. Core operating effective tax rate should not be viewed as a substitute for effective tax rate determined in accordance with GAAP.
Book value per common share, net of tax is shareholders equity divided by the shares outstanding. Tangible book value per common share, net of tax 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. 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. Adjusted book value per common share, net of tax, excludes unrealized investment gains (losses). Adjusted tangible book value per common share, net of tax, excludes goodwill and other intangible assets, net of tax, as well as unrealized investment gains (losses). We exclude unrealized investment gains (losses) because the amount of these gains (losses) is heavily influenced by changes in market conditions, including interest rate changes. We believe these measures are meaningful to understanding growth in book and tangible book value by highlighting the underlying profitability relative to shareholders equity excluding the effect of unrealized gains and losses on our investments.
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.
Net premiums written excluding merger-related actions 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 actions, including exiting certain types of business that do not meet our underwriting standards or adhere to our risk diversification strategy. 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 Measures2
(in millions of U.S. dollars, except ratios)
(Unaudited)
Regulation GNon-GAAP Financial Measures (continued)
Core operating ROE
Core operating return on equity (ROE) or ROE calculated using core operating income (loss): The ROE numerator includes income adjusted to exclude after-tax adjusted net realized gains (losses), Chubb integration 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. Core 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.
YTD | YTD | Full Year | ||||||||||||||||||||||||||||||
3Q-18 | 3Q-17 | 2018 | 2017 | 2017 | ||||||||||||||||||||||||||||
Net income (loss) |
$ | 1,231 | $ | (70 | ) | $ | 3,607 | $ | 2,328 | $ | 3,861 | |||||||||||||||||||||
Core operating income (loss) |
$ | 1,122 | $ | (60 | ) | $ | 3,472 | $ | 2,295 | $ | 3,784 | |||||||||||||||||||||
Equitybeginning of period, as reported |
$ | 50,971 | $ | 50,349 | $ | 51,172 | $ | 48,275 | $ | 48,275 | ||||||||||||||||||||||
Less: unrealized gains (losses) on investments, net of deferred tax (1) |
(390 | ) | 1,551 | 1,033 | 1,058 | 1,058 | ||||||||||||||||||||||||||
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Equitybeginning of period, as adjusted |
$ | 51,361 | $ | 48,798 | $ | 50,139 | $ | 47,217 | $ | 47,217 | ||||||||||||||||||||||
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Equityend of period, as reported |
$ | 50,934 | $ | 50,471 | $ | 50,934 | $ | 50,471 | $ | 51,172 | ||||||||||||||||||||||
Less: unrealized gains (losses) on investments, net of deferred tax |
(549 | ) | 1,643 | (549 | ) | 1,643 | 1,450 | |||||||||||||||||||||||||
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Equityend of period, as adjusted |
$ | 51,483 | $ | 48,828 | $ | 51,483 | $ | 48,828 | $ | 49,722 | ||||||||||||||||||||||
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Weighted average equity, as reported |
$ | 50,953 | $ | 50,410 | $ | 51,053 | $ | 49,373 | $ | 49,724 | ||||||||||||||||||||||
Weighted average equity, as adjusted |
$ | 51,422 | $ | 48,813 | $ | 50,811 | $ | 48,023 | $ | 48,470 | ||||||||||||||||||||||
ROE |
9.7 | % | -0.6 | % | 9.4 | % | 6.3 | % | 7.8 | % | ||||||||||||||||||||||
Core operating ROE |
8.7 | % | -0.5 | % | 9.1 | % | 6.4 | % | 7.8 | % |
(1) | During Q1 2018, the company adopted new guidance that requires the reclassification of $417 million of unrealized appreciation to beginning retained earnings related to public equities and cost-method private equities. |
Core operating effective tax rate
The following table presents the reconciliation of effective tax rate to the core operating effective tax rate:
YTD | YTD | Full Year | ||||||||||||||||||||||||||||||
3Q-18 | 2Q-18 | 1Q-18 | 4Q-17 | 3Q-17 | 2018 | 2017 | 2017 | |||||||||||||||||||||||||
Tax expense (benefit), as reported |
$ | 183 | $ | 218 | $ | 135 | $ | (382 | ) | $ | (85 | ) | $ | 536 | $ | 243 | $ | (139 | ) | |||||||||||||
Less: tax benefit on amortization of fair value of acquired invested assets and debt (1) |
(12 | ) | (11 | ) | (9 | ) | (23 | ) | (18 | ) | (32 | ) | (62 | ) | (85 | ) | ||||||||||||||||
Less: tax benefit on Chubb integration expenses |
(2 | ) | (3 | ) | (2 | ) | (20 | ) | (14 | ) | (7 | ) | (73 | ) | (93 | ) | ||||||||||||||||
Less: tax expense (benefit) on adjusted net realized gains (losses) |
14 | 14 | (3 | ) | (20 | ) | 8 | 25 | 25 | 5 | ||||||||||||||||||||||
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Tax expense (benefit), adjusted |
$ | 183 | $ | 218 | $ | 149 | $ | (319 | ) | $ | (61 | ) | $ | 550 | $ | 353 | $ | 34 | ||||||||||||||
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Income (loss) before tax, as reported |
$ | 1,414 | $ | 1,512 | $ | 1,217 | $ | 1,151 | $ | (155 | ) | $ | 4,143 | $ | 2,571 | $ | 3,722 | |||||||||||||||
Less: amortization of fair value of acquired invested assets and debt (1) |
(54 | ) | (52 | ) | (59 | ) | (64 | ) | (68 | ) | (165 | ) | (219 | ) | (283 | ) | ||||||||||||||||
Less: Chubb integration expenses |
(16 | ) | (13 | ) | (10 | ) | (77 | ) | (50 | ) | (39 | ) | (233 | ) | (310 | ) | ||||||||||||||||
Less: adjusted realized gains (losses) |
27 | 10 | (4 | ) | | (5 | ) | 33 | 91 | 91 | ||||||||||||||||||||||
Less: realized gains (losses) related to unconsolidated entities |
152 | 96 | 44 | 122 | 89 | 292 | 284 | 406 | ||||||||||||||||||||||||
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Core operating income (loss) before tax |
$ | 1,305 | $ | 1,471 | $ | 1,246 | $ | 1,170 | $ | (121 | ) | $ | 4,022 | $ | 2,648 | $ | 3,818 | |||||||||||||||
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Effective tax rate |
12.9 | % | 14.4 | % | 11.1 | % | -33.1 | % | 54.7 | % | 12.9 | % | 9.4 | % | -3.7 | % | ||||||||||||||||
Adjustment for tax impact of amortization of fair value of acquired invested assets and debt (1) |
0.4 | % | 0.2 | % | 0.2 | % | 3.7 | % | 8.6 | % | 0.2 | % | 1.4 | % | 2.3 | % | ||||||||||||||||
Adjustment for tax impact of Chubb integration expenses |
0.0 | % | 0.1 | % | 0.1 | % | 3.8 | % | 6.6 | % | 0.0 | % | 1.7 | % | 2.6 | % | ||||||||||||||||
Adjustment for tax impact of adjusted net realized gains (losses) |
0.8 | % | 0.1 | % | 0.6 | % | -1.6 | % | -19.0 | % | 0.6 | % | 0.8 | % | -0.3 | % | ||||||||||||||||
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Core operating effective tax rate |
14.1 | % | 14.8 | % | 12.0 | % | -27.2 | % | 50.9 | % | 13.7 | % | 13.3 | % | 0.9 | % | ||||||||||||||||
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(1) | Related to the acquisition of The Chubb Corporation. |
Core operating income (loss)
The following table presents the reconciliation of Net income (loss) to Core operating income (loss):
YTD | YTD | Full Year | ||||||||||||||||||||||||||||||
3Q-18 | 2Q-18 | 1Q-18 | 4Q-17 | 3Q-17 | 2018 | 2017 | 2017 | |||||||||||||||||||||||||
Net income (loss), as reported |
$ | 1,231 | $ | 1,294 | $ | 1,082 | $ | 1,533 | $ | (70 | ) | $ | 3,607 | $ | 2,328 | $ | 3,861 | |||||||||||||||
Amortization of fair value adjustment of acquired invested assets and long-term debt, pre-tax (1) |
(54 | ) | (52 | ) | (59 | ) | (64 | ) | (68 | ) | (165 | ) | (219 | ) | (283 | ) | ||||||||||||||||
Tax benefit on amortization of fair value of acquired invested assets and debt |
12 | 11 | 9 | 23 | 18 | 32 | 62 | 85 | ||||||||||||||||||||||||
Chubb integration expenses, pre-tax |
(16 | ) | (13 | ) | (10 | ) | (77 | ) | (50 | ) | (39 | ) | (233 | ) | (310 | ) | ||||||||||||||||
Tax benefit on Chubb integration expenses |
2 | 3 | 2 | 20 | 14 | 7 | 73 | 93 | ||||||||||||||||||||||||
Adjusted net realized gains (losses) |
27 | 10 | (4 | ) | | (5 | ) | 33 | 91 | 91 | ||||||||||||||||||||||
Net realized gains (losses) related to unconsolidated entities (2) |
152 | 96 | 44 | 122 | 89 | 292 | 284 | 406 | ||||||||||||||||||||||||
Tax benefit (expense) on adjusted net realized gains (losses) |
(14 | ) | (14 | ) | 3 | 20 | (8 | ) | (25 | ) | (25 | ) | (5 | ) | ||||||||||||||||||
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Core operating income (loss) |
$ | 1,122 | $ | 1,253 | $ | 1,097 | $ | 1,489 | $ | (60 | ) | $ | 3,472 | $ | 2,295 | $ | 3,784 | |||||||||||||||
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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). |
Reconciliation Non-GAAP 2 | Page 33 |
Chubb Limited
Non-GAAP Financial Measures3
(in millions of U.S. dollars, except share, per share data, and ratios)
(Unaudited)
Regulation GNon-GAAP Financial Measures (continued)
Core operating income measures
% Change | % Change | |||||||||||||||||||||||||||
3Q-18 vs. | YTD | YTD | YTD-18 vs | Full Year | ||||||||||||||||||||||||
3Q-18 | 3Q-17 | 3Q-17 | 2018 | 2017 | YTD-17 | 2017 | ||||||||||||||||||||||
Core operating income (loss) |
$ | 1,122 | $ | (60 | ) | $ | 3,472 | $ | 2,295 | $ | 3,784 | |||||||||||||||||
Less: Catastrophe losses, after-tax |
(372 | ) | (1,525 | ) | (848 | ) | (1,841 | ) | (2,171 | ) | ||||||||||||||||||
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Core operating income ex Cats |
$ | 1,494 | $ | 1,465 | 1.9 | % | $ | 4,320 | $ | 4,136 | 4.4 | % | $ | 5,955 | ||||||||||||||
Less: Prior period development, after-tax |
180 | 206 | 504 | 505 | 634 | |||||||||||||||||||||||
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Core operating income ex Cats and PPD |
$ | 1,314 | $ | 1,259 | $ | 3,816 | $ | 3,631 | $ | 5,321 | ||||||||||||||||||
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Core operating income (loss) |
$ | 1,122 | $ | (60 | ) | $ | 3,472 | $ | 2,295 | $ | 3,784 | |||||||||||||||||
Add: Actual Cats above expected levels, after-tax |
90 | 1,263 | 215 | 1,258 | 1,455 | |||||||||||||||||||||||
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Core operating income w/ expected level of Cats |
$ | 1,212 | $ | 1,203 | 0.7 | % | $ | 3,687 | $ | 3,553 | 3.8 | % | $ | 5,239 | ||||||||||||||
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Diluted earnings per share |
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Core operating income ex Cats |
$ | 3.21 | $ | 3.12 | 2.9 | % | $ | 9.23 | $ | 8.77 | 5.2 | % | $ | 12.64 | ||||||||||||||
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Core operating income ex Cats and PPD |
$ | 2.82 | $ | 2.68 | 5.2 | % | $ | 8.15 | $ | 7.70 | 5.8 | % | $ | 11.29 | ||||||||||||||
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Core operating income w/ expected level of Cats |
$ | 2.60 | $ | 2.56 | 1.6 | % | $ | 7.88 | $ | 7.53 | 4.6 | % | $ | 11.12 | ||||||||||||||
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Core operating ROE with expected level of Cats
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YTD | YTD | Full Year | ||||||||||||||||||
3Q-18 | 3Q-17 | 2018 | 2017 | 2017 | ||||||||||||||||
Equity - beginning of period, as reported |
$ | 50,971 | $ | 50,349 | $ | 51,172 | $ | 48,275 | $ | 48,275 | ||||||||||
Less: unrealized gains (losses) on investments, net of deferred tax |
(390 | ) | 1,551 | 1,033 | 1,058 | 1,058 | ||||||||||||||
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Equity - beginning of period, as adjusted |
$ | 51,361 | $ | 48,798 | $ | 50,139 | $ | 47,217 | $ | 47,217 | ||||||||||
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Equity - end of period, as reported |
$ | 50,934 | $ | 50,471 | $ | 50,934 | $ | 50,471 | $ | 51,172 | ||||||||||
Less: unrealized gains (losses) on investments, net of deferred tax |
(549 | ) | 1,643 | (549 | ) | 1,643 | 1,450 | |||||||||||||
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Equity - end of period, as adjusted |
$ | 51,483 | $ | 48,828 | $ | 51,483 | $ | 48,828 | $ | 49,722 | ||||||||||
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Add: Actual Cats above expected levels, after-tax |
90 | 1,263 | 215 | 1,258 | 1,455 | |||||||||||||||
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Equity - end of period, as adjusted, w/ expected level of Cats |
$ | 51,573 | $ | 50,091 | $ | 51,698 | $ | 50,086 | $ | 51,177 | ||||||||||
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Weighted average equity, as reported |
$ | 50,953 | $ | 50,410 | $ | 51,053 | $ | 49,373 | $ | 49,724 | ||||||||||
Weighted average equity, as adjusted |
$ | 51,422 | $ | 48,813 | $ | 50,811 | $ | 48,023 | $ | 48,470 | ||||||||||
Weighted average equity, as adjusted, w/ expected level of Cats |
$ | 51,467 | $ | 49,445 | $ | 50,919 | $ | 48,652 | $ | 49,197 | ||||||||||
ROE |
9.7 | % | -0.6 | % | 9.4 | % | 6.3 | % | 7.8 | % | ||||||||||
Core operating ROE |
8.7 | % | -0.5 | % | 9.1 | % | 6.4 | % | 7.8 | % | ||||||||||
Core operating ROE, w/ expected level of Cats |
9.4 | % | 9.7 | % | 9.7 | % | 9.7 | % | 10.6 | % |
Reconciliation of Book Value and Tangible Book Value per Share, excluding Unrealized Gains (Losses) on Investments
% Change | % Change | |||||||||||||||||||||||
September 30 | June 30 | March 31 | January 1 | QTD | YTD | |||||||||||||||||||
2018 | 2018 | 2018 | 2018 | 2018 | 2018 | |||||||||||||||||||
Adjusted book value |
$ | 51,483 | $ | 51,361 | $ | 51,242 | $ | 50,139 | ||||||||||||||||
Less: goodwill and other intangible assets, net of tax |
20,121 | 20,380 | 20,706 | 20,621 | ||||||||||||||||||||
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Adjusted tangible book value |
$ | 31,362 | $ | 30,981 | $ | 30,536 | $ | 29,518 | ||||||||||||||||
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Denominator |
461,100,790 | 463,502,164 | 465,831,486 | 463,833,179 | ||||||||||||||||||||
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Adjusted book value per share |
$ | 111.65 | $ | 110.81 | $ | 110.00 | $ | 108.10 | 0.8 | % | 3.3 | % | ||||||||||||
Adjusted tangible book value per share |
$ | 68.02 | $ | 66.84 | $ | 65.55 | $ | 63.64 | 1.8 | % | 6.9 | % |
P&C combined ratio with expected level of Cats
YTD | YTD | Full Year | ||||||||||||||||||
3Q-18 | 3Q-17 | 2018 | 2017 | 2017 | ||||||||||||||||
P&C combined ratio |
90.9 | % | 110.8 | % | 89.8 | % | 96.0 | % | 94.7 | % | ||||||||||
Less: Catastrophe losses |
6.1 | % | 26.0 | % | 5.0 | % | 11.3 | % | 10.2 | % | ||||||||||
Less: Prior period development |
-3.4 | % | -3.7 | % | -3.2 | % | -3.3 | % | -3.1 | % | ||||||||||
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P&C CAY combined ratio excluding Cats |
88.2 | % | 88.5 | % | 88.0 | % | 88.0 | % | 87.6 | % | ||||||||||
Add: Expected level of Cats |
4.6 | % | 4.5 | % | 3.6 | % | 3.7 | % | 3.4 | % | ||||||||||
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P&C CAY combined ratio w/ expected level of Cats |
92.8 | % | 93.0 | % | 91.6 | % | 91.7 | % | 91.0 | % | ||||||||||
Add: Prior period development |
-3.4 | % | -3.7 | % | -3.2 | % | -3.3 | % | -3.1 | % | ||||||||||
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P&C combined ratio w/ expected level of Cats |
89.4 | % | 89.3 | % | 88.4 | % | 88.4 | % | 87.9 | % | ||||||||||
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Reconciliation Non-GAAP 3 | Page 34 |
Chubb Limited
Non-GAAP Financial Measures4
(in millions of U.S. dollars, except ratios)
(Unaudited)
Regulation GNon-GAAP Financial Measures (continued)
P&C combined ratio
The P&C combined ratio includes the impact of realized gains and losses on crop derivatives. These derivatives were purchased to provide economic benefit, in a manner similar to reinsurance protection, in the event that a significant decline in commodity pricing will impact underwriting results. We view gains and losses on these derivatives as part of the results of our underwriting operations.
The following tables present the calculation of combined ratio, as reported, for each segment to P&C combined ratio, adjusted for catastrophe losses (Cats) and PPD.
Q3 2018 |
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 |
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Numerator |
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Losses and loss expenses |
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Losses and loss expenses |
$ | 1,881 | $ | 860 | $ | 719 | $ | 1,114 | $ | 86 | $ | 13 | $ | 4,673 | ||||||||||||||||||
Realized (gains) losses on crop derivatives |
| | 8 | | | | 8 | |||||||||||||||||||||||||
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Adjusted losses and loss expenses |
A | $ | 1,881 | $ | 860 | $ | 727 | $ | 1,114 | $ | 86 | $ | 13 | $ | 4,681 | |||||||||||||||||
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Catastrophe losses |
(196 | ) | (136 | ) | (8 | ) | (80 | ) | (34 | ) | | (454 | ) | |||||||||||||||||||
PPD and related adjustments |
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PPD, net of related adjustmentsfavorable (unfavorable) |
216 | (58 | ) | 1 | 72 | 24 | (12 | ) | 243 | |||||||||||||||||||||||
Net premiums earned adjustments on PPDunfavorable (favorable) |
|
40 | | | | 4 | | 44 | ||||||||||||||||||||||||
Expense adjustmentsunfavorable (favorable) |
1 | | | | | | 1 | |||||||||||||||||||||||||
PPD reinstatement premiumsunfavorable (favorable) |
1 | 1 | | 2 | | | 4 | |||||||||||||||||||||||||
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PPDgross of related adjustmentsfavorable (unfavorable) |
258 | (57 | ) | 1 | 74 | 28 | (12 | ) | 292 | |||||||||||||||||||||||
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CAY loss and loss expense ex Cats |
B | $ | 1,943 | $ | 667 | $ | 720 | $ | 1,108 | $ | 80 | $ | 1 | $ | 4,519 | |||||||||||||||||
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Policy acquisition costs and administrative expenses |
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Policy acquisition costs and administrative expenses |
C | $ | 709 | $ | 305 | $ | 51 | $ | 834 | $ | 50 | $ | 58 | $ | 2,007 | |||||||||||||||||
Expense adjustmentsfavorable (unfavorable) |
(1 | ) | | | | | | (1 | ) | |||||||||||||||||||||||
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Policy acquisition costs and administrative expenses, adjusted |
D | $ | 708 | $ | 305 | $ | 51 | $ | 834 | $ | 50 | $ | 58 | $ | 2,006 | |||||||||||||||||
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Denominator |
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Net premiums earned |
E | $ | 3,019 | $ | 1,167 | $ | 857 | $ | 2,157 | $ | 157 | $ | 7,357 | |||||||||||||||||||
Reinstatement premiums (collected) expensed on catastrophe losses |
| | | | (4 | ) | (4 | ) | ||||||||||||||||||||||||
Net premiums earned adjustments on PPDunfavorable (favorable) |
40 | | | | 4 | 44 | ||||||||||||||||||||||||||
PPD reinstatement premiumsunfavorable (favorable) |
1 | 1 | | 2 | | 4 | ||||||||||||||||||||||||||
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Net premiums earned excluding adjustments |
F | $ | 3,060 | $ | 1,168 | $ | 857 | $ | 2,159 | $ | 157 | $ | 7,401 | |||||||||||||||||||
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P&C combined ratio |
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Losses and loss expense ratio |
A/E | 62.3 | % | 73.7 | % | 84.9 | % | 51.7 | % | 55.0 | % | 63.6 | % | |||||||||||||||||||
Policy acquisition costs and administrative expense ratio |
C/E | 23.5 | % | 26.1 | % | 5.8 | % | 38.6 | % | 31.7 | % | 27.3 | % | |||||||||||||||||||
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P&C combined ratio |
85.8 | % | 99.8 | % | 90.7 | % | 90.3 | % | 86.7 | % | 90.9 | % | ||||||||||||||||||||
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CAY P&C combined ratio ex Cats |
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Loss and loss expense ratio, adjusted |
B/F | 63.5 | % | 57.1 | % | 84.1 | % | 51.3 | % | 51.2 | % | 61.1 | % | |||||||||||||||||||
Policy acquisition costs and administrative expense ratio, adjusted |
D/F | 23.2 | % | 26.1 | % | 5.8 | % | 38.7 | % | 31.6 | % | 27.1 | % | |||||||||||||||||||
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CAY P&C combined ratio ex Cats |
86.7 | % | 83.2 | % | 89.9 | % | 90.0 | % | 82.8 | % | 88.2 | % | ||||||||||||||||||||
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Combined ratio |
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Combined ratio |
90.8 | % | ||||||||||||||||||||||||||||||
Add: impact of gains and losses on crop derivatives |
0.1 | % | ||||||||||||||||||||||||||||||
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P&C combined ratio |
90.9 | % | ||||||||||||||||||||||||||||||
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Note: The ratios above are calculated using whole U.S. dollars. Accordingly, calculations using rounded amounts may differ. Letters A, B, C, D, E, and F included in the table are references for calculating the ratios above.
Reconciliation Non-GAAP 4 | Page 35 |
Chubb Limited
Non-GAAP Financial Measures5
(in millions of U.S. dollars, except ratios)
(Unaudited)
Regulation GNon-GAAP Financial Measures (continued)
P&C combined ratio (continued)
YTD 2018 |
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 |
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Numerator |
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Losses and loss expenses |
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Losses and loss expenses |
$ | 5,873 | $ | 2,474 | $ | 955 | $ | 3,263 | $ | 236 | $ | 72 | $ | 12,873 | ||||||||||||||||||
Realized (gains) losses on crop derivatives |
| | (2 | ) | | | | (2 | ) | |||||||||||||||||||||||
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Adjusted losses and loss expenses |
A | $ | 5,873 | $ | 2,474 | $ | 953 | $ | 3,263 | $ | 236 | $ | 72 | $ | 12,871 | |||||||||||||||||
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Catastrophe losses |
(347 | ) | (521 | ) | (11 | ) | (121 | ) | (45 | ) | | (1,045 | ) | |||||||||||||||||||
PPD and related adjustments |
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PPD, net of related adjustmentsfavorable (unfavorable) |
472 | (59 | ) | 77 | 166 | 54 | (67 | ) | 643 | |||||||||||||||||||||||
Net premiums earned adjustments on PPDunfavorable (favorable) |
29 | | 40 | | 7 | | 76 | |||||||||||||||||||||||||
Expense adjustmentsunfavorable (favorable) |
7 | | (4 | ) | | (1 | ) | | 2 | |||||||||||||||||||||||
PPD reinstatement premiumsunfavorable (favorable) |
5 | 1 | | 2 | | | 8 | |||||||||||||||||||||||||
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PPDgross of related adjustmentsfavorable (unfavorable) |
513 | (58 | ) | 113 | 168 | 60 | (67 | ) | 729 | |||||||||||||||||||||||
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CAY loss and loss expense ex Cats |
B | $ | 6,039 | $ | 1,895 | $ | 1,055 | $ | 3,310 | $ | 251 | $ | 5 | $ | 12,555 | |||||||||||||||||
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Policy acquisition costs and administrative expenses |
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Policy acquisition costs and administrative expenses |
C | $ | 2,113 | $ | 903 | $ | 74 | $ | 2,511 | $ | 149 | $ | 200 | $ | 5,950 | |||||||||||||||||
Expense adjustmentsfavorable (unfavorable) |
(7 | ) | | 4 | | 1 | | (2 | ) | |||||||||||||||||||||||
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Policy acquisition costs and administrative expenses, adjusted |
D | $ | 2,106 | $ | 903 | $ | 78 | $ | 2,511 | $ | 150 | $ | 200 | $ | 5,948 | |||||||||||||||||
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Denominator |
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Net premiums earned |
E | $ | 9,325 | $ | 3,463 | $ | 1,251 | $ | 6,425 | $ | 492 | $ | 20,956 | |||||||||||||||||||
Reinstatement premiums (collected) expensed on catastrophe losses |
| | | | (4 | ) | (4 | ) | ||||||||||||||||||||||||
Net premiums earned adjustments on PPDunfavorable (favorable) |
29 | | 40 | | 7 | 76 | ||||||||||||||||||||||||||
PPD reinstatement premiumsunfavorable (favorable) |
5 | 1 | | 2 | | 8 | ||||||||||||||||||||||||||
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Net premiums earned excluding adjustments |
F | $ | 9,359 | $ | 3,464 | $ | 1,291 | $ | 6,427 | $ | 495 | $ | 21,036 | |||||||||||||||||||
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P&C combined ratio |
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Losses and loss expense ratio |
A/E | 63.0 | % | 71.5 | % | 76.2 | % | 50.8 | % | 48.0 | % | 61.4 | % | |||||||||||||||||||
Policy acquisition costs and administrative expense ratio |
C/E | 22.6 | % | 26.0 | % | 5.9 | % | 39.1 | % | 30.3 | % | 28.4 | % | |||||||||||||||||||
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P&C combined ratio |
85.6 | % | 97.5 | % | 82.1 | % | 89.9 | % | 78.3 | % | 89.8 | % | ||||||||||||||||||||
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CAY P&C combined ratio ex Cats |
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Loss and loss expense ratio, adjusted |
B/F | 64.5 | % | 54.7 | % | 81.8 | % | 51.5 | % | 50.6 | % | 59.7 | % | |||||||||||||||||||
Policy acquisition costs and administrative expense ratio, adjusted |
D/F | 22.5 | % | 26.1 | % | 6.0 | % | 39.1 | % | 30.5 | % | 28.3 | % | |||||||||||||||||||
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CAY P&C combined ratio ex Cats |
87.0 | % | 80.8 | % | 87.8 | % | 90.6 | % | 81.1 | % | 88.0 | % | ||||||||||||||||||||
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Combined ratio |
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Combined ratio |
89.8 | % | ||||||||||||||||||||||||||||||
Add: impact of gains and losses on crop derivatives |
0.0 | % | ||||||||||||||||||||||||||||||
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P&C combined ratio |
89.8 | % | ||||||||||||||||||||||||||||||
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Note: The ratios above are calculated using whole U.S. dollars. Accordingly, calculations using rounded amounts may differ. Letters A, B, C, D, E, and F included in the table are references for calculating the ratios above.
Reconciliation Non-GAAP 5 | Page 36 |
Chubb Limited
Non-GAAP Financial Measures6
(in millions of U.S. dollars, except ratios)
(Unaudited)
Regulation GNon-GAAP Financial Measures (continued)
P&C combined ratio (continued)
Q3 2017 |
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 |
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Numerator |
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Losses and loss expenses |
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Losses and loss expenses |
$ | 2,580 | $ | 1,062 | $ | 759 | $ | 1,281 | $ | 295 | $ | 89 | $ | 6,066 | ||||||||||||||||||
Realized (gains) losses on crop derivatives |
| | 5 | | | | 5 | |||||||||||||||||||||||||
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Adjusted losses and loss expenses |
A | $ | 2,580 | $ | 1,062 | $ | 764 | $ | 1,281 | $ | 295 | $ | 89 | $ | 6,071 | |||||||||||||||||
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Catastrophe losses |
(868 | ) | (448 | ) | (5 | ) | (326 | ) | (268 | ) | | (1,915 | ) | |||||||||||||||||||
PPD and related adjustments |
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PPD, net of related adjustmentsfavorable (unfavorable) |
236 | (32 | ) | 4 | 108 | 41 | (87 | ) | 270 | |||||||||||||||||||||||
Net premiums earned adjustments on PPDunfavorable (favorable) |
39 | | | | 3 | | 42 | |||||||||||||||||||||||||
Expense adjustmentsunfavorable (favorable) |
6 | | | | | | 6 | |||||||||||||||||||||||||
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PPDgross of related adjustmentsfavorable (unfavorable) |
281 | (32 | ) | 4 | 108 | 44 | (87 | ) | 318 | |||||||||||||||||||||||
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CAY loss and loss expense ex Cats |
B | $ | 1,993 | $ | 582 | $ | 763 | $ | 1,063 | $ | 71 | $ | 2 | $ | 4,474 | |||||||||||||||||
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Policy acquisition costs and administrative expenses |
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Policy acquisition costs and administrative expenses |
C | $ | 725 | $ | 287 | $ | 48 | $ | 815 | $ | 54 | $ | 64 | $ | 1,993 | |||||||||||||||||
Expense adjustmentsfavorable (unfavorable) |
(6 | ) | | | | | | (6 | ) | |||||||||||||||||||||||
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Policy acquisition costs and administrative expenses, adjusted |
D | $ | 719 | $ | 287 | $ | 48 | $ | 815 | $ | 54 | $ | 64 | $ | 1,987 | |||||||||||||||||
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Denominator |
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Net premiums earned |
E | $ | 3,016 | $ | 1,117 | $ | 898 | $ | 2,064 | $ | 185 | $ | 7,280 | |||||||||||||||||||
Reinstatement premiums (collected) expensed on catastrophe losses |
3 | 3 | | 9 | (37 | ) | (22 | ) | ||||||||||||||||||||||||
Net premiums earned adjustments on PPDunfavorable (favorable) |
39 | | | | 3 | 42 | ||||||||||||||||||||||||||
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Net premiums earned excluding adjustments |
F | $ | 3,058 | $ | 1,120 | $ | 898 | $ | 2,073 | $ | 151 | $ | 7,300 | |||||||||||||||||||
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P&C combined ratio |
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Losses and loss expense ratio |
A/E | 85.5 | % | 95.1 | % | 85.1 | % | 62.1 | % | 158.2 | % | 83.4 | % | |||||||||||||||||||
Policy acquisition costs and administrative expense ratio |
C/E | 24.1 | % | 25.7 | % | 5.3 | % | 39.5 | % | 29.2 | % | 27.4 | % | |||||||||||||||||||
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P&C combined ratio |
109.6 | % | 120.8 | % | 90.4 | % | 101.6 | % | 187.4 | % | 110.8 | % | ||||||||||||||||||||
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CAY P&C combined ratio ex Cats |
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Loss and loss expense ratio, adjusted |
B/F | 65.2 | % | 51.9 | % | 84.9 | % | 51.3 | % | 46.5 | % | 61.3 | % | |||||||||||||||||||
Policy acquisition costs and administrative expense ratio, adjusted |
D/F | 23.5 | % | 25.6 | % | 5.4 | % | 39.3 | % | 35.7 | % | 27.2 | % | |||||||||||||||||||
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CAY P&C combined ratio ex Cats |
88.7 | % | 77.5 | % | 90.3 | % | 90.6 | % | 82.2 | % | 88.5 | % | ||||||||||||||||||||
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Combined ratio |
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Combined ratio |
110.7 | % | ||||||||||||||||||||||||||||||
Add: impact of gains and losses on crop derivatives |
0.1 | % | ||||||||||||||||||||||||||||||
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P&C combined ratio |
110.8 | % | ||||||||||||||||||||||||||||||
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Note: The ratios above are calculated using whole U.S. dollars. Accordingly, calculations using rounded amounts may differ. Letters A, B, C, D, E, and F included in the table are references for calculating the ratios above.
Reconciliation Non-GAAP 6 | Page 37 |
Chubb Limited
Non-GAAP Financial Measures7
(in millions of U.S. dollars, except ratios)
(Unaudited)
Regulation GNon-GAAP Financial Measures (continued)
P&C combined ratio (continued)
YTD 2017 |
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 |
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Numerator |
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Losses and loss expenses |
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Losses and loss expenses |
$ | 6,376 | $ | 2,378 | $ | 976 | $ | 3,316 | $ | 435 | $ | 145 | $ | 13,626 | ||||||||||||||||||
Realized (gains) losses on crop derivatives |
| | 7 | | | | 7 | |||||||||||||||||||||||||
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Adjusted losses and loss expenses |
A | $ | 6,376 | $ | 2,378 | $ | 983 | $ | 3,316 | $ | 435 | $ | 145 | $ | 13,633 | |||||||||||||||||
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Catastrophe losses |
(1,053 | ) | (593 | ) | (18 | ) | (386 | ) | (271 | ) | | (2,321 | ) | |||||||||||||||||||
PPD and related adjustments |
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PPD, net of related adjustmentsfavorable (unfavorable) |
546 | (66 | ) | 83 | 184 | 64 | (140 | ) | 671 | |||||||||||||||||||||||
Net premiums earned adjustments on PPDunfavorable (favorable) |
42 | | 61 | | (4 | ) | | 99 | ||||||||||||||||||||||||
Expense adjustmentsunfavorable (favorable) |
6 | | (4 | ) | | | | 2 | ||||||||||||||||||||||||
PPD reinstatement premiumsunfavorable (favorable) |
9 | | | | | | 9 | |||||||||||||||||||||||||
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PPDgross of related adjustmentsfavorable (unfavorable) |
603 | (66 | ) | 140 | 184 | 60 | (140 | ) | 781 | |||||||||||||||||||||||
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CAY loss and loss expense ex Cats |
B | $ | 5,926 | $ | 1,719 | $ | 1,105 | $ | 3,114 | $ | 224 | $ | 5 | $ | 12,093 | |||||||||||||||||
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Policy acquisition costs and administrative expenses |
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Policy acquisition costs and administrative expenses |
C | $ | 2,148 | $ | 865 | $ | 71 | $ | 2,387 | $ | 170 | $ | 187 | $ | 5,828 | |||||||||||||||||
Expense adjustmentsfavorable (unfavorable) |
(6 | ) | | 4 | | | | (2 | ) | |||||||||||||||||||||||
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Policy acquisition costs and administrative expenses, adjusted |
D | $ | 2,142 | $ | 865 | $ | 75 | $ | 2,387 | $ | 170 | $ | 187 | $ | 5,826 | |||||||||||||||||
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Denominator |
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Net premiums earned |
E | $ | 9,156 | $ | 3,296 | $ | 1,256 | $ | 6,018 | $ | 542 | $ | 20,268 | |||||||||||||||||||
Reinstatement premiums (collected) expensed on catastrophe losses |
3 | 3 | | 9 | (37 | ) | (22 | ) | ||||||||||||||||||||||||
Net premiums earned adjustments on PPDunfavorable (favorable) |
42 | | 61 | | (4 | ) | 99 | |||||||||||||||||||||||||
PPD reinstatement premiumsunfavorable (favorable) |
9 | | | | | 9 | ||||||||||||||||||||||||||
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Net premiums earned excluding adjustments |
F | $ | 9,210 | $ | 3,299 | $ | 1,317 | $ | 6,027 | $ | 501 | $ | 20,354 | |||||||||||||||||||
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P&C combined ratio |
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Losses and loss expense ratio |
A/E | 69.6 | % | 72.2 | % | 78.3 | % | 55.1 | % | 80.1 | % | 67.3 | % | |||||||||||||||||||
Policy acquisition costs and administrative expense ratio |
C/E | 23.5 | % | 26.2 | % | 5.6 | % | 39.7 | % | 31.4 | % | 28.7 | % | |||||||||||||||||||
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P&C combined ratio |
93.1 | % | 98.4 | % | 83.9 | % | 94.8 | % | 111.5 | % | 96.0 | % | ||||||||||||||||||||
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CAY P&C combined ratio ex Cats |
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Loss and loss expense ratio, adjusted |
B/F | 64.3 | % | 52.1 | % | 83.9 | % | 51.7 | % | 44.6 | % | 59.4 | % | |||||||||||||||||||
Policy acquisition costs and administrative expense ratio, adjusted |
D/F | 23.3 | % | 26.2 | % | 5.7 | % | 39.6 | % | 34.0 | % | 28.6 | % | |||||||||||||||||||
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CAY P&C combined ratio ex Cats |
87.6 | % | 78.3 | % | 89.6 | % | 91.3 | % | 78.6 | % | 88.0 | % | ||||||||||||||||||||
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Combined ratio |
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Combined ratio |
96.0 | % | ||||||||||||||||||||||||||||||
Add: impact of gains and losses on crop derivatives |
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P&C combined ratio |
96.0 | % | ||||||||||||||||||||||||||||||
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Note: The ratios above are calculated using whole U.S. dollars. Accordingly, calculations using rounded amounts may differ. Letters A, B, C, D, E, and F included in the table are references for calculating the ratios above.
Reconciliation Non-GAAP 7 | Page 38 |
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 the life business and including realized gains and losses on crop derivatives.
Core 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 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 expenses before tax.
Tangible book value per common share: Shareholders' equity less goodwill and other intangible assets, net of tax, divided by the shares outstanding.
Average market yield of fixed maturities: Weighted average yield to maturity of our fixed income portfolio based on the market prices of the holdings as of that date.
Average yield on invested assets: 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.
Chubb integration expenses: Chubb integration expenses comprise legal and professional fees and all other costs directly related to the integration activities of the Chubb Corp acquisition. 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.
Catastrophe losses (Cats): We generally define catastrophe loss events consistent with the definition of the Property Claims Service (PCS) for events in the U.S. and Canada. PCS defines a catastrophe as an event that causes damage of $25 million or more in insured property losses and affects a significant number of insureds. For events outside of the U.S. and Canada, we generally use a similar definition. Catastrophe loss events are events that occurred in the current calendar year only. Changes in catastrophe loss estimates in the current calendar year that relate to loss events that occurred in previous calendar years are considered prior period development.
Prior period development (PPD) arises from changes to loss estimates recognized in the current year that relate to loss events that occurred in previous calendar years and excludes the effect of losses from the development of earned premium from previous accident years.
Reinstatement premiums are additional premiums paid on certain reinsurance agreements in order to reinstate coverage that had been exhausted by loss occurrences. The reinstatement premium amount is typically a pro rata portion of the original ceded premium paid based on how much of the reinsurance limit had been exhausted.
Net premiums earned adjustments within prior period development are adjustments to the initial premium earned on retrospectively rated policies based on actual claim experience that develops after the policy period ends. The premium adjustments correlate to the prior period loss development on these same policies and are fully earned in the period the adjustments are recorded.
Prior period expense adjustments typically relate to either profit commission reserves or policyholder dividend reserves based on actual claim experience that develops after the policy period ends. The expense adjustments correlate to the prior period loss development on these same policies.
NM: Not meaningful.
Glossary | Page 39 |