Chubb Limited
Annual Report
2023
A Record-Breaking Year
Contents
Financial Summary
Chairman and CEO
Letter to Shareholders
Review of Operations
Sustainability at Chubb
Chubb Group Corporate Officers
and Other Executives
1
2
22
43
44
Chubb Limited Board of Directors 46
Shareholder Information
Non–GAAP Financial Measures
47
48
Form 10–K
Swiss Statutory Financial Statements
Swiss Statutory Compensation Report
Core Operating Income
$9.34B
A record and up 45.2%
P&C Combined Ratio
86.5%
A record
Adjusted Net Investment Income
$5.34B
A record and up 32.8%
Core Operating EPS
$22.54
A record and up 48.5%
Consolidated Net Premiums Written
13.5%
Increase
All metrics are for the year 2023
Percentage
Change
Constant
Dollars
10.7%
13.5%
13.1%
Financial Summary
In millions of U.S. dollars
In millions of U.S. dollars
except per share data and ratios
except per share data and ratios
Year Ended
Dec. 31, 2023
As Adjusted
Year Ended
Dec. 31, 2022
Percentage
Change
Gross premiums written
$57,526
$51,978
Net premiums written
47,361
41,720
Net premiums earned
45,712
40,360
P&C combined ratio
86.5%
87.6%
P&C current accident year combined ratio
excluding catastrophe losses
83.9%
84.2%
Chubb net income
Core operating income
Diluted earnings per share – Chubb net income
Diluted earnings per share – core operating income
Total investments
Total assets
9,028
9,337
21.80
22.54
5,246
6,429
12.39
15.18
136,735
113,551
230,682
199,017
Chubb shareholders’ equity
59,507
50,519
Book value per share
146.83
121.85
Book value per share excluding AOCI
163.64
146.42
Tangible book value per share
87.98
Tangible book value per share excluding tangible AOCI
102.78
Return on equity
Core operating return on tangible equity
Core operating return on equity
16.4%
24.2%
15.4%
72.51
94.90
9.6%
17.0%
11.1%
10.7%
13.5%
13.3%
NM
NM
72.1%
45.2%
75.9%
48.5%
20.4%
15.9%
17.8%
20.5%
11.8%
21.3%
8.3%
NM
NM
NM
This document contains non-GAAP financial measures. Refer to
This document contains non-GAAP financial measures. Refer to
pages 48-51 for reconciliations to the most directly comparable
pages 48-51 for reconciliations to the most directly comparable
GAAP measures.
GAAP measures.
NM—not meaningful
NM—not meaningful
1
Evan G. Greenberg
Chairman and Chief Executive Officer
Chubb Group
2
To My Fellow Shareholders
Chubb produced another year of record financial results
in 2023. All divisions of the company contributed to our
growth in operating income, which topped $9.3 billion, up
45%, with operating income per share up 49%. Operating
income was double the amount from pre-COVID 2019.
Three sources contributed to this growth – property and
casualty (P&C) underwriting income, investment income
and life insurance income – and each delivered new highs
in operating performance.
We benefited one time from Bermuda’s new income tax
law, which added about 12% to earnings. Without this,
core operating income was $8.2 billion, up 28%, and
again a record.
We had another year of double-digit consolidated
premium revenue growth, which reached $57.5 billion,
up nearly 40% from three years ago. We continued to
capitalize on favorable commercial P&C underwriting
conditions around the world while growth accelerated
in our global consumer businesses, supported by global
non-life accident and health (A&H) insurance, North
America high-net-worth personal lines, and our Asia life
insurance business, which is also mostly supplemental
A&H and risk products.
At our core, we are an underwriting company,
dedicated to the art and science of taking risk. We have
outperformed the industry in the craft of risk-taking for
20 years, and last year was no exception. We once again
achieved industry-leading underwriting profitability
with $5.5 billion in underwriting income and a record
combined ratio of 86.5%, which is a real trick given our
size and global breadth and speaks to our management,
culture, and underwriting governance processes.
On the invested asset side, we are predominantly
fixed-income investors, and we capitalized on our
strong liquidity, higher rates and widening spreads
while maintaining an average “A” rating. Adjusted net
investment income grew 33% to $5.3 billion.
We advanced a number of our longer-term strategies
that position us for future revenue and earnings growth,
including attaining after 20 years of effort a significant
majority stake in Huatai Group in China, a holding
company with life, non-life and asset management
subsidiaries. Over the longer term, Huatai should
contribute meaningfully to revenue and earnings growth
in both our life and non-life operations.
We are continuing to invest in our competitive profile
to ensure future value creation. As I look forward,
I am confident in our ability to continue growing
operating earnings and earnings per share at a superior
rate through the combination of P&C revenue and
underwriting income, investment income and life income.
An organization built for purpose and value creation
Let me begin as usual by giving you, our owners, a view
of who and what the company you are invested in is all
about. The characteristics and features come together
to create what I believe is a company synonymous with
quality, an ambitious and enduring organization built for
purpose and value creation.
Chubb is one of the largest insurers in the world as
measured by our market capitalization of more than
$100 billion as of this writing. Since 2013, we have
tripled our market cap, reflecting our scale and income-
generating power. When I became CEO, our market cap
was about $12 billion. We have grown market cap since
by more than 11% per year. We achieved this not simply
by getting larger, but, more importantly, by delivering
value to shareholders. Our total return to shareholders
over the same period, measured on a per-share basis and
including dividends, grew similarly at 11.4% per year,
outpacing the S&P 500 at 9.9% and the S&P 500 P&C
Index at 10.2%.
3
Chubb Market Capitalization
March 1, 2004 to March 1, 2024
in billions of dollars
$120
$100
$80
$60
$40
$20
$0
Total Return to Shareholders: 11.4% per year
Market Cap Compound Annual Growth Rate: 11.1%
$102
$12
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We are global and well diversified with a deep local
presence in 54 countries and territories, a true insurance
multinational – one of only a few in the world – and
we see a lot of room to grow over time. We are well
integrated with a thoughtfully constructed portfolio
of top-performing, multibillion-dollar businesses with
substantial scale and potential for growth. Many are clear
market leaders. While we are the largest commercial
P&C insurer in America, 60% of our total company
premium revenue originates outside our North America
commercial division. About 30% of our global commercial
P&C business and almost 50% of our global consumer
P&C business is outside the U.S., and both have been
growing quickly.
We have a well-balanced mix of business by customer
and product. About 62% of our revenue and earnings
globally comes from insuring businesses, where we serve
the smallest to the largest companies with more than 200
different property and casualty-related products, and
38% comes from insuring individuals. We insure people’s
lives and their health as well as the things they own –
everything from autos to homes and their contents to the
gadgets they own. Our business insuring high-net-worth
individuals in the U.S. is core to our brand recognition
for quality.
By design, we market through an extensive range of
distribution channels to reach the target buyer most
effectively. In addition to being a vital partner of the
largest global brokers, our distribution network spans
50,000 brokers and independent agents, hundreds
of thousands of exclusive life and health agents, and
hundreds of direct-to-consumer partnerships that give
us access to hundreds of millions of existing and potential
customers through digital, phone and face-to-face sales.
We are, in fact, the largest direct marketer of insurance
in Asia, and one of the largest in the world, through both
digital and telemarketing channels.
Culturally, we are builders with a clear vision. Over the
past 20 years, we have grown organically first and then
added complementary acquisitions that advanced our
strategy further. Few companies in any industry have
our record of successfully acquiring and integrating
businesses while at the same time building organically.
We are hungry, results-focused and maniacally
execution-oriented, with a relatively flat management
structure that enables rapid decision-making and
oversight, combined with a rigorous governance
process to ensure discipline and consistency. We have
consistently focused on talent management, patiently
grooming over many years a deep, multi-generational
leadership bench that is of our culture and brings decades
of experience to bear, ensuring continuity of standards
and knowledge for a long time to come.
The result is an enviable long-term track record of
financial outperformance, including growth in earnings,
tangible book value and book value, underpinned by
distinguished underwriting and investment results.
Another year of underwriting outperformance
Last year was another above-average year in the U.S. and
around the globe in terms of natural catastrophes (CATs)
and one of the costliest on record for the insurance
industry. Global insured losses from CATs exceeded
$100 billion for the fourth consecutive year, above the
10-year average. The absence of a single, major insured
CAT event globally was striking. A frequency of severe
convective storms, e.g., tornadoes and thunderstorms,
accounted for $60 billion of industry losses – an all-
time high.
Exacerbated by climate change and urbanization, the
industry and society face a growing frequency of costly
CATs from a variety of perils. For Chubb, our total pre-tax
CAT losses in 2023 were $1.8 billion, which, ironically,
4
I am confident in our ability to continue growing operating
earnings and earnings per share at a superior rate through
the combination of P&C revenue and underwriting income,
investment income and life income.”
was below our expected losses – a mathematically
derived number that by definition is always wrong and
simply represents an expected average over time. In
truth, it was the other side of volatility, and we were
simply lucky.
Chubb’s underwriting performance last year was
exceptional. As you can see from the nearby chart, our
underwriting margin surpassed the average of our peers
by almost 10 percentage points; over the past 10 and
20 years, the outperformance has been about eight and
seven points, respectively. As a secondary measure of
underlying health, our current accident year combined
ratio excluding catastrophe losses, which strips out the
volatility of CATs and claim reserve movement, was
83.9% – a record low. As we and other insurers become
more CAT-levered by writing more property insurance
business, of course, this ratio drops. You well know my
view: The best measure for investors is the published
calendar year combined ratio, which includes CATs and
reserve movement. Volatility of margin and income is a
feature of a company in the risk business.
The most important part of our balance sheet is our
loss reserves, which back our liabilities and stand at
$80 billion. We have always managed our reserves
conservatively. In terms of loss development, we
recognize bad news early and are slow to recognize
favorable development. As I have said for years in this
letter, insuring casualty is not for optimists. Our current
reserve adequacy is as strong as I can remember.
Favorable conditions for both commercial and
consumer lines, but beware of risk
For the year, commercial P&C underwriting conditions
were broadly favorable around the globe and prices, in
aggregate, increased at a faster pace than loss costs. My
colleagues who lead our $39.7 billion global commercial
P&C business – of which, again, two-thirds originates in
the U.S. and one-third is international – did a great job
capitalizing on these favorable conditions and produced
net premium growth of 8.6%. Since 2019, we’ve grown
our commercial P&C insurance business by about 50%.
Loss-cost inflation is a reality, both property-related
and especially liability-related, and remains elevated,
particularly in the U.S., due to a combination of societal
attitudes toward business and a money-making litigation
industry that is becoming more global. Lawyers seeking
plaintiffs under the guise of Robin Hood righting a wrong
have increased their advertising on billboards and the
airwaves: About 800,000 television ads for litigation ran
last year. The frequency of severity of liability losses, i.e.,
large liability awards, continues to increase, especially
around anything with wheels. Think commercial fleets,
transportation and logistics. Casualty loss-cost inflation
also comes from other powerful sources that create new
exposures, such as advancements in technology and
science or new laws. Lately, we have forever chemicals,
responsibility for climate change and climate disclosures,
and cyber-related privacy exposures, to name a few.
Of course, there is plenty of appropriate litigation
brought to truly address a wrong, but then there is
excessive litigation, which is a tax on the economy,
business and innovation. In total, litigation costs are
estimated at about 2.1% of GDP – a major tax on society
and innovation. Ultimately, the business community
needs to band together, pool resources and take the
lead in driving reforms if we are to bring costs down.
The insurance industry is hardly the right constituent to
lead the change: As an industry, we don’t garner much
5
At times, shedding revenue when we can’t make a profit is a
strength and, in fact, leads to improved profit margins and
income growth for Chubb. In this business, choosing to shrink
at the right moments is a strength.”
sympathy. However, we are actively seeking out and
supporting efforts to address reforms at a state and local
level, advocating for changes such as those around joint
and several liability laws or mandatory disclosure of who
is funding a lawsuit so juries and judges can see the true
motivations for many suits and requests for award.
In the meantime, we will underwrite casualty with the
legal environment as we know it. That means at times
shedding revenue when we can’t make a profit, which is
a strength and, in fact, leads to improved profit margins
and income growth for Chubb – the opposite of how
some uninformed sell-side analysts at times simplistically
perceive our business. In this business, choosing to shrink
at the right moments is a strength.
Growth in our $19.4 billion global consumer lines
operations accelerated in 2023, with strong results in
both our consumer P&C and life insurance businesses. In
the U.S., the results were driven primarily by our high-
net-worth personal lines business, which experienced the
best growth in recent memory, and in Asia from growth
in our A&H division. Total company consumer premiums
increased 24%.
Record financial performance in ’23
Again, our financial results were simply outstanding with
numerous records achieved:
• Core operating income was $22.54 per share, up 49%
compared with 2022 – and without the one-time tax
benefit I mentioned earlier, it was $19.80 per share,
up 30%. Either way, our operating earnings and per
share were a record result. As you know, our preferred
means of growing earnings per share is by investing in
and growing the company and not shrinking our way to
greatness through excessive capital management.
• Total consolidated net premiums written, which are
the premiums we retain on our balance sheet, were
$47.4 billion, up 13.5%. P&C net premiums grew 9.9%
to $41.9 billion, while Life Insurance premiums and
deposits grew more than 30% to $7.1 billion.
• P&C underwriting income of $5.5 billion was up 20%,
driven by growth in revenue and margin.
• We have been slowly building our Life Insurance
business for more than 15 years, and life income for the
first time exceeded $1 billion, up 59%.
• We invested a record amount of cash and even
accelerated portfolio turnover to raise more money to
take advantage of higher interest rates and widening
spreads, and we began to extend duration. Investment
income increased to a record $5.3 billion, up 33% over
prior year, and will continue to grow without a change
to our portfolio risk profile.
Insurance is a balance sheet business, so we measure
wealth creation by growth in tangible book value and
book value. I firmly believe long-term tangible book
value growth is the best measure of economic value
creation for a few reasons. Tangible equity is our most
constraining factor when it comes to growth, and we
cannot pay claims out of goodwill. For the year, book
and tangible book value per share increased 20.5% and
21.3%, respectively.
Our core operating return on equity (ROE) and core
operating return on tangible equity (ROTE) last year were
15.4% and 24.2%, respectively. Without the one-time tax
benefit, our core operating ROE and core operating ROTE
were 13.6% and 21.6%, respectively. All of these are well
in excess of our cost of equity capital, which is around
8.5%, so we are creating a lot of value for shareholders.
6
P&C Combined Ratio
Versus Peers
The company’s underwriting results
have outperformed the average of
its peers over the last 20 years.
105%
100%
95%
90%
85%
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1 Includes AIG, ALL, CNA, HIG, TRV.
Source: SNL and company disclosures
Averages:
Peers1
Chubb
1 year
96.1%
86.5%
3 year
96.1%
87.7%
5 year
96.3%
90.0%
10 year
15 year
20 year
97.5%
89.9%
98.2%
90.3%
97.5%
90.8%
For an ambitious and acquisitive company such as Chubb,
ROE and ROTE are distorted by purchase accounting
requirements, which employ accounting theory that,
frankly, distorts the true economic returns derived from
an acquisition. In Chubb’s case, these distortions scrub
about 50 basis points on average from our ROE and about
75 basis points from our ROTE. Let me provide a simple,
common-sense example of what I mean by distortion,
which arises from the treatment of intangible assets –
including what’s called VOBA, which stands for value of
business acquired – when one buys a life business.
Typically, an in-force insurance portfolio that we are
acquiring produces substantial future earnings, a key
rationale for the transaction. Purchase accounting
requires the acquirer to record the entire present value
of those earnings as an asset and amortize it over time.
A profitable book of business like our recent Cigna
acquisition leads to a higher asset value and, ironically,
results in a higher amortization charge, making the
acquired business look less profitable than it was when
owned by those we bought it from. Those intangibles
depress our ROE.
Another example: We are forced when we purchase a
commercial P&C company to ascribe a portion of the
purchase price to the brokerage relationships that were
the source of the business and amortize that over a
defined period as if it’s an asset with a diminishing value.
Pure theoretical nonsense. A better measure of ROE and
ROTE recognizes and transparently adjusts for these
distortions.
We expect to continue generating an ROE in the range of
13%+ and a tangible ROE of 20%+ on a published basis,
and then add 50 and 75 basis points to whatever we
publish for a better economic view.
Why our excess capital deserves to be valued at a
premium to book value
We have told you for many years that our policy is to
hold excess capital for both risk and opportunity, and
that has served you well. That excess capital has created,
on average, a drag on ROE of 1-2 percentage points
depending on the period and how much we are holding.
We would rather have some modest dilution to our ROE
from holding excess capital and improve our accretion
when used for an acquisition. We are constantly
evaluating opportunities to deploy this cash, but we are
patient and disciplined. An acquisition must meet our
standard of return and must advance the strategy
we are already pursuing organically. We have spent
$47 billion on M&A over the past 15 years. The internal
rate of return (IRR) on our cash from M&A has been 16%
– almost double our cost of capital. Therefore, it stands to
reason that if you think we are good stewards of capital,
then our excess capital should be valued at a premium to
book value.
In our company, independent of annual budgets, we
prepare a rolling five-year plan. I introduced the process
almost 20 years ago. Looking back, it’s stunning how close
our actual results have been over the years relative to
what we imagined in the five-year plans – some up, some
down, but over time pretty close. I must admit, though,
that the path to how we got there was sometimes wildly
different than what we had imagined. This leads me to
the simple notion of intrinsic value of the company. We
have a pretty good sense of ours. Our intrinsic value is
substantially higher than our current share price, and the
beauty: That’s intrinsic value at a moment in time. If we
are doing our job, it is continuing to increase over time.
Chubb remains a bargain hiding in plain sight.
7
Next to our people, the balance sheet is our most
important asset. We have $74 billion in total capital –
double what we had 10 years ago and nearly seven times
our $11 billion total of 20 years ago – and our equity
capital was $60 billion at December 31. Our company is
rated AA by S&P and A++ by AM Best.
Capitalizing on a broad set of growth opportunities
In previous years’ letters, I described in detail every
major division of the company. This year, I’ll give you
more of a summary by region, including key strategies
and the growth outlook going forward. (If you want
the description of each division, please revisit last
year’s letter.)
Chubb has approximately 40,000 employees and more
than 1,100 offices in the U.S., Europe, Asia, Latin America
and other parts of the world. We operate our insurance
business under two principal P&C divisions – North
America Insurance and Overseas General Insurance
– and a Life Insurance division, which is basically
Asia and North America. Given our breadth of local
market presence and capability, we are well positioned
to continue capitalizing on a broad set of growth
opportunities globally.
North America Insurance comprises our commercial and
consumer P&C divisions in the United States, Canada
and Bermuda, which together write $35.0 billion in gross
premiums annually. Chubb is the largest commercial P&C
insurer in the U.S., and we serve all sizes of companies.
We are the #1 insurer for large corporations, #2 for
middle market companies, a top excess and surplus lines
(E&S) writer, and the largest crop insurer in America.
On the consumer side, we are the #1 writer of personal
lines coverage for high-net-worth individuals and
families. Capitalizing on favorable market conditions for
underwriting and a resilient U.S. economy, North America
Insurance had an excellent year in 2023. Net premiums
grew 8.4%, with commercial lines up 7.8% and personal
lines up 10.6%.
Our international P&C business, Overseas General
Insurance, wrote $15.7 billion in gross premiums last
year with major commercial and consumer operations.
We have 500 branch offices in 51 countries spread across
Europe, Asia and Latin America. We insure more than
12,000 multinational and large domestic companies
around the world, and a third of our mid-market and
small commercial business is outside the U.S. Our local
presence gives us the ability and opportunity to compete
for business in the local marketplace. It provides us
with local insight and data, and it allows us to reach and
service customers. The deeper we get in each market –
it’s iterative and takes time – the more the opportunity
grows. Our international commercial business represents
a major growth opportunity for us.
On the consumer side, we are one of the largest
supplemental A&H writers in the world – a $7.5 billion
business for Chubb written through both our non-life and
life companies – and we have a meaningful international
personal lines business underwriting everything from
autos to homes to cell phones. Last year, international
P&C net premiums written grew 13.7%, with commercial
lines up 11.2% and consumer lines up 17.8%, led by Asia.
Looking ahead, commercial P&C underwriting conditions
remain broadly favorable around the globe, and pricing
continues to exceed or keep pace with loss costs in
most of our major product areas. I am confident we will
continue to capitalize and produce strong above-trend
annual premium growth.
Property insurance has been a growth opportunity for
us given favorable risk-reward underwriting conditions
globally. With the growing impact of climate change,
8
Our intrinsic value is substantially higher than our current
share price, and the beauty: That’s intrinsic value at a moment
in time. If we are doing our job, it is continuing to increase over
time. Chubb remains a bargain hiding in plain sight.”
its related costs and volatility; reinsurers charging
appropriately for risk and, in large part, passing all but
the CAT tail risk back to primary companies; and the cost
of money no longer zero, thus keeping alternative capital
honest, favorable property insurance underwriting
conditions in most areas of the world should endure.
After all, inadequacy in property pricing shows up quickly.
Our company has become more property- and CAT
exposure-levered. Property business is the best-priced
business in the world right now, and as long as we are
paid adequately, we have the balance sheet to take
greater concentration and volatility in earnings from
property.
In commercial lines, casualty conditions overall have
been favorable, but it is an underwriter’s market, and
we are more selective depending on the type of casualty
client, class and territory. We have the data and years
of experience to distinguish those areas where pricing
and terms are attractive and where they are not. As
important, the environment for casualty is dynamic and
constantly evolving. To be successful requires proactive
management that is quick to recognize changes, adapt
pricing and terms for the future, and adjust held reserves
for the past if necessary.
We are one of the largest, if not the largest, underwriters
of financial lines coverage in the world, including
directors and officers (D&O) – public and private, errors
and omissions (E&O) for a variety of professional risks,
employment practices liability insurance (EPLI), and
cyber. We are a global leader in this business with years
of experience and lots of data, and we see opportunities
for growth globally. The big exceptions: important areas
of D&O and EPLI that are simply underpriced. Frequency
of securities class actions is rising at both the federal and
state levels, and severity is increasing. EPLI awards are
growing in size. As usual, the naive or ignorant capital
and underwriters chasing this business at inadequate
terms will get burned, and then pricing and terms will
correct. At that time, clients and brokers will complain
about inflated D&O prices, but they are happy to take
advantage of soft pricing while it lasts. The same is true
for certain underpriced areas of cyber.
New cybersecurity rules: an overreach
Cyber insurance is a dynamic and emerging risk and,
therefore, an opportunity, and Chubb is one of the
largest writers of this business. As polls show, cyber
incidents rank as a top risk for businesses globally and
for companies of all sizes. Cyber threats are growing
as nation-state attackers and common criminals alike
intensify strikes to steal information, hold companies
for ransom and disrupt commerce. Our response to
increasingly sophisticated cyber threats across the
globe is a combination of improved threat detection
and risk mitigation services, incident response services,
and underwriting tools that allow us to discern sound
cybersecurity standards and resiliency on the part
of organizations seeking coverage. But while our
capabilities improve, artificial intelligence is now creating
an arms race between bad actors and the cybersecurity
industry. Threats are growing, and the environment is
becoming more complex.
Last year, the U.S. Securities and Exchange Commission
(SEC) adopted new rules that require companies to
disclose material cybersecurity breaches within four
days. This is a bad idea. It compromises a company’s
ability to manage a delicate event by unnecessarily
increasing pressure through forced disclosure that
impacts its share price while the event is still in progress.
It puts unnecessary pressure on companies to settle
9
In North America, our Chubb Personal Risk Services business,
the clear market leader and gold-standard franchise in
high-net-worth personal lines, produced its best growth
in 20 years.”
with attackers and, while the company is remedying the
breach, the disclosure gives a potential roadmap to other
bad actors to exploit similar software vulnerabilities in
other companies. It essentially takes one problem and
creates two, putting directors and officers in a difficult
position as they try to balance SEC compliance against
additional harm to their company from premature
disclosure of a serious cybersecurity incident. Unwise.
Going a step further, the SEC recently expanded its
enforcement powers by claiming a company failed to
maintain its internal accounting controls as a result of a
cybersecurity incident. While it is unclear whether the
SEC’s unprecedented move will survive a legal challenge,
the expansive new rules and enforcement claim, in
my judgment, are an overreach, reflecting both a poor
understanding of cybersecurity and an intrusion on
the cybersecurity responsibilities of other government
agencies.
Rain and Hail: a terrific company run by great people
Returning to our North America business results, last
year was another below-average year for our multi-peril
crop insurance business, where Chubb is the #1 writer
in America through our Rain and Hail affiliate, a terrific
company run by great people providing a valuable service
to American farmers. Growing conditions for crops
were challenging last year, but we still produced a 95.4%
combined ratio and earned $146 million in underwriting
profit, so not bad.
Crop insurance is a CAT-like business, by its nature
vulnerable to weather volatility, but with very good
risk-reward dynamics. Crop insurance has been a great
business for Chubb. Since fully acquiring Rain and Hail
in 2010 for $1.1 billion, we’ve earned almost $2 billion in
operating profit with an IRR of 26%.
Chubb Personal Risk Services: the gold standard
In North America, our $6.7 billion Chubb Personal Risk
Services (PRS) business – the clear market leader and
gold-standard franchise in high-net-worth personal lines
with more than 60% market share among high-net-worth
writers – produced its best growth in 20 years. I couldn’t
be prouder of our team of professionals who work every
day to support our clients.
To provide needed coverage at appropriate terms, we
are writing more homeowners business through our E&S
entities on what’s called a non-admitted basis in states
where regulation doesn’t allow us to tailor coverage or
charge the right price for clients who are exposed in a
more outsized way to catastrophes. Remember, affluent
people want to live in beautiful places in sight of nature
that are often more exposed to catastrophes. Where
state regulators won’t allow us to tailor coverage in line
with exposure and price it adequately, we’ll use our E&S
capabilities. But frankly, I wish there was more flexibility
within certain states’ regulation so that we could serve
this customer base on an admitted basis to give them
what they need and want to buy, rather than be forced
to E&S.
While other insurers compete on price, Chubb PRS offers
an extensive array of services backed by a renowned
reputation for quality. Frankly, the business is a historic
wellhead of our company’s brand reputation and gives
the Chubb name a halo. Teams of Chubb engineers
provide advice and services to help clients be more
resilient against the threats of climate change. Home
evaluation services utilize innovative technology, such
as water leak detection systems, to prevent losses. We
are reaching new clients and new demographics through
digital distribution efforts, such as embedding insurance
with luxury e-commerce retailers to offer protection for
jewelry, collections and other valuables – all through a
digitally enabled purchase experience.
10
Premium Growth
by Geography
Percentage change in P&C net premiums
written, 2023 versus 2022
Commercial businesses
Consumer businesses
Overall growth
*Total P&C includes Global Re,
Combined International, Japan and
other international operations, which
are excluded from the regions.
North America
Asia Pacific
Latin America
Europe
Total P&C*
35.4%
24.7%
16.0%
17.4%
14.8%
11.2%
10.6%
7.8%
8.4%
10.4%
6.1%
9.4%
8.6%
13.8%
9.9%
A trusted brand-name insurer of large domestic and
multinational European corporations
Europe is Chubb’s second-largest commercial P&C
market after North America and the company’s third-
largest region overall, with annual gross premiums of
$7.5 billion. With more than 60 offices in 27 countries
– from the U.K. across the entire European continent
to parts of the Middle East – we have a rich history in
Europe. Our presence in the U.K., for instance, dates back
more than 100 years.
We serve businesses in Europe of all types and sizes
through a substantial network of retail offices, while
our Global Markets E&S division operates in the London
wholesale market and Lloyd’s. Chubb is a major and
trusted brand-name insurer of large domestic and
multinational European corporations. We write 75% of
the FTSE 100 and all 40 companies in the CAC 40.
For consumers in Europe, Chubb is a leader in employer-
paid group personal and travel accident insurance for
employees, and we are the leading cell phone insurer for
the customers of mobile network operators. In the U.K.,
we have a market-leading position in the high-net-worth
personal lines segment as well. Europe had another
excellent year in 2023 with net premium growth of 9.4%.
In Latin America, we have major operations in nine
countries, with Mexico, Chile, Brazil and Ecuador being
among our largest. We insure consumers through A&H,
personal lines and life, and we are a major commercial
P&C insurer for businesses, in sum producing $3.3 billion
in gross premiums annually. Mexico is our largest country
in the region, where we are a top-five commercial P&C
and surety insurer. As one of the largest auto insurers in
the nation, we have policies on about 2 million vehicles.
The combination of digital distribution and traditional
direct marketing through a roster of distinguished
partners is one of the primary drivers of growth for
Chubb in the region. We are the preferred insurance
partner for Nubank, the #1 digital bank in Latin America,
and Banco de Chile and Citibanamex, the second-largest
banks in those countries. Net premiums in the region
grew nearly 15% last year.
A unique, integrated proposition in Asia
Asia and the United States are the two most dynamic
regions in the world for future economic and insurance
market growth. The two regions represent about 77%
of our business but 69% of the world insurance market.
Looking forward, they are expected to grow 40% faster
than the rest of the world and are likely the regions with
our greatest long-term growth potential.
During the summer of last year, I moved my office to Asia
for six weeks to spend more time meeting more people
and to gain broader and deeper insight into trends and
what’s driving the region. In total, I spent about nine
weeks there over the year. While I have traveled in the
region about two to four times a year for 40 years, trips
of just one to two weeks simply limited my bandwidth
to explore.
There is a lot more happening in Asia than just China and,
though very important, what’s occurring between China
and the rest of the region. What’s going on within and
between ASEAN and North and South Asia is incredibly
dynamic – it’s an example of growing regionalism. There
is immense trade in goods, capital flows, innovation and
travel by people between and among countries across
the region. India, Japan and Korea are powerhouses
– investing, building and spreading their influence
throughout Asia, particularly ASEAN. It’s about the tech
development that’s taking place, and the next generation
of leaders and entrepreneurs who are emerging. And
we’re well positioned to capitalize.
11
Geographic Sources
of Premium
2023 net premiums written and deposits
Latin America 6%
Europe 12%
Asia 20%
Bermuda/Canada 5%
United States 57%
With $10.7 billion in gross premiums and deposits, and
operations in 15 countries in which we have built a deep
local presence over many years, our Asia region is now
20% of our company. More than 75% of the business is
consumer-focused – A&H, personal lines and life – and
about 25% is commercial P&C. In 2023, Japan aside, Asia
generated P&C net premium growth of 25%, with strong
contributions from both consumer and commercial lines,
while life premiums in the region grew more than 80%.
There is no better place to showcase our international
consumer business than Asia – a collection of individual
markets large and small with more than 2 billion
people. We have the ability to bundle and cross-sell
coverage across our consumer P&C and life product
lines. Our direct marketing operation has more than
7,000 telemarketers, massive consumer databases,
and powerful digital technology in the hands of a team
with considerable marketing and sales know-how. We
have distribution partnerships with some of the most
successful digital companies in the world, giving us access
to hundreds of millions of customers. To that point, we
expect consumer premium revenue through our 100%
digital channels to exceed $1 billion in 2024, more than
40% of which will originate in Asia.
Our commercial business in Asia is equally robust
and benefited last year from continued favorable
underwriting conditions in several major markets,
including Hong Kong, Singapore and Australia, which
alone produced about $1.2 billion in gross premiums.
The dynamism I mentioned means a growing small and
medium-sized (SME) and large business community
across the region with growing needs for insurance. To
reach and serve that base, you must be local in many
markets – and we are there. Let me bring it to life with a
few examples.
Korea is Chubb’s second-largest country after the U.S.
with $3 billion in gross premiums. Our Korean leadership
team is a powerhouse with an operation that combines
life and non-life capabilities to predominantly focus on
the consumer through direct response marketing and a
network of thousands of agents and brokers. LINA, which
stands for Life Insurance Company of North America, is
our life company in Korea and is a well-regarded brand
that dates back nearly four decades.
In Thailand, where we have both non-life and life
companies, we have bancassurance partnerships with
major Thai financial institutions such as Krungthai Bank,
or KTB, one of the largest banks in that country with
40 million customers. We are transitioning sales through
branches and traditional telemarketing to digitally
embedded products. We bring Chubb’s considerable
commercial P&C capacity and service solutions to
Thailand’s large, middle and small business marketplace
through a network of 16 branches, and we write 37 of
the Stock Exchange of Thailand’s (SET) top 50 companies,
including nine of the top 10.
In the dynamic and fast-growing consumer market of
Vietnam, where we have life and non-life companies, our
agency and brokerage distribution is complemented by
partnerships with payments, banking, e-commerce, ride-
share and travel platforms that give millions of emerging
middle-class consumers access to Chubb’s products
through digital channels.
Huatai in China: a rare, long-term opportunity
In China, we now own Huatai Group, which has three
major subsidiaries – a property and casualty company, a
life company, and an asset management company with
more than $120 billion of funds under management.
Chubb is the only foreign financial institution to majority
own a Chinese financial services holding company. It took
us 20 years to get government permission, and we have
invested about $4 billion over the years to acquire the
12
With $10.7 billion in gross premiums and deposits, and
operations in 15 countries in which we have built a deep
local presence over many years, our Asia region is now
20% of our company.”
shares. Based upon any classic financial return model
we overpaid. However, in this case, we purchased an
opportunity – a long-term one. The licenses, provincial
presence and branches throughout the country provide
a rare opportunity to build something meaningful in the
second-largest economy in the world, and one that is not
going away. That’s the bet.
Today, Huatai has 600 branch offices and thousands of
employees spread among nearly all the provinces. We
insure average citizens for life, health and auto insurance,
and from small private businesses to large state-owned
enterprises for all kinds of commercial insurance.
Our asset management company is one of the largest
in the country, offering both retail and institutional
mutual funds and boasting top-quartile fixed-income
performance.
We compete in China with our model of doing business,
and we are an example of a market-oriented meritocracy.
Our innovation, skill in risk-taking and distribution,
building and managing insurance companies, and
dynamic nature are our advantages. The valuable savings
and protection we provide for Chinese citizens is an
example in China of a private sector solution versus
relying on the state for protection.
Our business in China, Hong Kong and the Greater Bay
Area – a $2 trillion GDP market – is relatively small for us
today but has the potential to be sizable. Given the size
of the Chinese economy and the vastness of the business
community, the country’s aging population, the growing
middle class and the limited government safety net,
the long-term opportunity is attractive. While there is
much risk and no guarantee of success, ultimately, I
have confidence in the culture and in the hardworking
nature and capitalist spirit of the Chinese people. We
are patient.
Chubb Life: predominantly A&H and risk products
in life clothing
Our Life Insurance division includes an Asia-based
international life insurance company, Chubb Life, which
produces about 85% of the division’s life premium
and deposits of $7.3 billion, and a growing worksite
benefits business in North America under the Combined
Insurance brand. Chubb Life operates in nine countries
in North and Southeast Asia with a focus on protection
and A&H-type health insurance products supplemented
with savings-oriented plans. This product mix is the right
kind of life business for us – predominantly A&H and risk
products in life clothing combined with savings products
that have minimum-to-no guarantees. Last year, net
premiums were up 74%.
Our life business is leaning heavily into three macro
trends in the Asia region: 1) Consumers have relatively
little life and health insurance protection; 2) Wealth
is being created at an unprecedented level. In Korea
and Greater China, customers are aging, and it’s about
legacy planning and quality of life in retirement. In
Southeast Asia, customers are much younger, and it’s
about protecting family and lifestyle, affording quality
education, and access to international health care; and
3) Consumers are tech-savvy. Beyond coverage, they
want access to digitally curated health services and
personalized well-being reminders and rewards.
On the other side of the world, we have worked quietly
over the last few years to convert Combined Insurance
in North America to a worksite benefits business that
offers supplemental A&H and life voluntary benefits
plans. A team of 3,500 independent agents focuses
on small businesses, while Chubb Workplace Benefits
caters to mid- and large-size employers through brokers
and consultants. This unit’s growth, both revenue and
earnings, should emerge in a more meaningful way over
the next year or two, and I will talk more about it then.
13
Investing in and protecting infrastructure investments is a
large opportunity for those insurers with a global presence,
large balance sheet and expertise. Chubb is ideally positioned.”
Reimagining how an insurance company should
operate in a digital age
Over the last three to four years, we have been investing
in our company’s digital transformation and our digitally
native business unit – two separate efforts that are
coordinated and will converge over time. We are
making steady progress in our plan to transform our
traditional flow businesses, which represent 70% of
our company, into digital enterprises over the next few
years, with the balance of our business becoming digitally
enabled. These businesses are reorganized around
multidisciplinary teams, bringing together underwriters
or claims professionals with engineers, data analysts
and managers who share common objectives and tasks.
It breaks down silos. Transformation means reimagining
how an insurance company should operate in a digital
age, including how we employ and use data – our own and
external – to drive analytics, AI literacy, straight-through
processing, the customer experience, and underwriting
and marketing insights. It’s about cycle times of change
– speed and insight. Importantly, we expect and measure
outcomes.
Our de novo digital business unit is expanding quickly in
terms of revenue, products and capabilities with leading
digitally native platforms and financial institutions,
particularly in Asia and Latin America. This business
has 25 million digital policies in force now and access to
more than 375 million customers. Last year, we produced
about $760 million in gross premiums through digital
platforms and next year expect to top $1.1 billion with
more than $70 million in underwriting income.
The emergence of AI and the power of large
language models
In the transformational potential of artificial intelligence,
the emergence of large language models (LLMs) in
2023 may prove a seminal moment. In my judgment, AI
is not an instant game-changer in our industry or most
industries, but rather its impact will continue to unfold
over time and will be immensely powerful. It is one of
those technologies, like the steam engine, that emerge
and usher in a historic period of change. The implications
for both good and bad, which we as societies are coming
to understand, are enormous. AI brings exciting promise
for science and medicine, education and learning,
services, engineering, manufacturing, agriculture, finance
– you name it.
On the other hand, AI is a weapon that potentially
threatens our notion of free will, which is at the core
of democracy. We are already beginning to see what
it means for military capabilities and cybercrime, and
it’s frightening. How do we govern AI, and what do we
regulate? Who should do so, and how do we equip them?
Is it even possible?
For Chubb and insurance, the power of LLMs will be
profound. Algorithmic AI has been in use at Chubb for
about six years in areas such as underwriting, claims
and marketing. Using “ChubbGPT,” a secure version
of ChatGPT within our firewall, employees perform
research, write code and summarize reports. AI
presents an extraordinary opportunity for us to unlock
and maximize our rich trove of data to accelerate
innovation, expand capabilities and bolster competitive
differentiation. By exploiting our data as a strategic
asset across multiple lines of business, geographies and
products, we are advancing our ability to materially
outperform through improved risk selection, pricing,
portfolio management and operational efficiency.
As we continue to invest in AI capability, we will
progressively unlock more complex, unstructured data
to provide deep insights for decision-makers across
the company. We are optimistic about the business
14
value these AI solutions will bring to Chubb, but we are
realistic. We recognize that adoption will be iterative and
take time to reap rewards, especially when considering
not only the evolution of the technology itself but also
the breadth of our business and geographies, the intrinsic
complexity of insurance, as well as emerging regulations.
Responsibly insuring the transition to a net-zero
economy
Protecting our insureds includes supporting their
resilience against the threat of a changing climate. We
also seek to help society make an orderly transition
to a net-zero economy in a responsible way that does
not sacrifice our energy security needs. We are taking
tangible actions in three distinct areas.
Chubb Climate+, our climate-focused business division,
brings together extensive technical capabilities in
underwriting and risk engineering to support businesses
engaged in developing or employing new technologies
and processes to reduce dependence on carbon. Climate
tech insurance solutions address carbon capture,
hydrogen, EV charging stations and industrial battery
storage systems that allow clean energy producers,
such as wind and solar, to store energy for efficient
distribution.
For instance, in the U.K., Chubb Climate+ Renewables
supports the growth of alternative and renewable energy
projects, principally onshore wind and ground-mounted
photovoltaic solar. In addition, Chubb has a leadership
role in a new Lloyd’s of London consortium that provides
insurance coverage for risks associated with the transit
and storage of lithium batteries in the marine cargo
market.
Through our underwriting actions, we support and
encourage businesses to adopt best practices to help
them achieve their sustainability goals. Our climate-
and sustainability-based underwriting criteria for oil
and gas extraction projects require clients to limit
their emissions, or we won’t underwrite the risk. We
are particularly focused on the capture or reduction
of methane, a byproduct of oil and gas production that
can be managed through controls and technologies.
The digital Chubb Methane Resource Hub offers clients
information and insights for measuring and mitigating
methane emissions. We also limit the underwriting of oil
and gas extraction in globally recognized conservation
areas.
Through our risk engineering services, we help
individuals, businesses and communities be more
resilient to the effects of climate change. This includes
conducting property resiliency assessments to help
companies forecast their climate risks. Our political
risk insurance division has helped finance remarkable
conservation projects in places like Ecuador and Belize
that support sustainable economic development and
community resilience while providing debt relief.
One last thought on climate and digital: The convergence
of two powerful trends – the world’s transition to cleaner
energy and the inexorable digitization of everything
– is driving a massive societal need for infrastructure
investment. Think energy generation and transmission,
data storage and resiliency-related construction to
protect against the effects of climate change. The need is
enormous – in the trillions of dollars – and governments
don’t have the money. For the private sector, this mega-
trend represents a growing asset class for investors,
which, in turn, is creating the need for insurance to
cover both the construction and operating-related risks
of infrastructure. Investing in and protecting those
investments is a large opportunity for those insurers
with a global presence, large balance sheet and expertise.
Chubb is ideally positioned.
15
Premium Distribution
by Product
2023 net premiums written and deposits
Global Reinsurance 2%
Agriculture 7%
Global A&H and Life 21%
Personal Lines 17%
America’s financial solvency: an existential risk
For perspective, looking back, government policies
following the economic recession in 2008 supported
an extended period of expansive monetary and fiscal
stimulus. Persistent and enormous federal deficits
caused the U.S. ratio of debt to GDP to nearly double.
Meanwhile, negative “real” interest rates distorted asset
prices and encouraged excessive risk-taking and use
of leverage, inflating consumer and corporate balance
sheets. Then, the government’s response to COVID
exacerbated these conditions by injecting massive fiscal
stimulus of almost $6 trillion into the economy. As a
result, the broad money supply rose to nearly 120% of
real GDP versus its long-term average of approximately
80%, leading to a predictable surge in inflation, deeply
aggravated by mostly short-term supply chain problems.
To counter this inflationary spiral, the Federal Reserve
has raised short-term rates and reduced its balance
sheet by nearly $1.5 trillion. However, liquidity remains
abundant, and the Fed’s security holdings remain at
$7 trillion, or nearly twice the size of pre-COVID levels.
Our economy is strong and resilient across a wide range
of measures: Unemployment is low, and the outlook for
’24 is favorable.
The medium-term outlook for inflation remains
uncertain. The wealth effect linked to liquidity and
financial market valuations supports the uncertainty.
While inflation in the goods sector has slowed, helping to
reduce overall inflation, tight labor markets and a robust
service sector continue to support elevated wage and
price gains. The declining support for globalization, a
reordering of supply chains, the transition to renewable
energy, aging demographics, latent excess liquidity and
expansive fiscal policies all pose challenges to inflation.
Large Corporate
Commercial P&C 18%
Middle Market/
Small Commercial
P&C 23%
Wholesale Specialty
Commercial P&C 12%
One of the greatest risks, in fact, an existential risk to
the health of America, is lying in plain sight: our financial
solvency. Despite solid economic fundamentals and near-
record full employment, the U.S. ran a 2023 fiscal deficit
of $1.7 trillion, or 6.3% of GDP. Total U.S. debt is now
more than $34 trillion, or approximately 123% of GDP,
and interest expense stands at 16% of revenue, similar to
the capital structure of a BBB corporation. In fact, federal
net interest costs are forecasted to exceed defense
payments in 2024 for the first time in six decades.
In addition, entitlement spending is crowding out
important funding for key discretionary sectors such
as defense and infrastructure, and the Congressional
Budget Office now projects all federal revenue will be
consumed by entitlement payments and interest on the
debt by 2030. With 50% of U.S. debt maturing within
three years, declining Federal Reserve Treasury holdings,
slack foreign demand and the intransigent nature of our
divided political environment, the U.S. credit rating risks
further downgrades. The prospect of a “crowding out”
in financial markets, higher U.S. yields, inflation and a
weakened U.S. dollar are real and growing risks without
decisive action on the part of our government.
America’s central role in preserving security around
the globe
The current geopolitical environment is defined by
power distributed to more countries operating contrary
to America’s interests. Russia, Iran and China each are
seeking to revise the regional order in their respective
regions and globally. At the same time, Iran is at the
nuclear threshold, and North Korea is expanding its
nuclear inventory. These developments are generating
increased tail risks.
European countries lack capacity to tip the military
balance in Ukraine’s favor. They are unable to defend
themselves against Russian aggression without American
16
There is a declining consensus inside our country for playing
a leadership role. Our leaders are not making a strong case
for our involvement abroad as a requirement for security and
prosperity at home.”
security support. American-led efforts to support
Ukraine’s defense have produced outsized returns on
investment. Failure to sustain support for Ukraine’s
defense would undermine the credibility of American
resolve to stand down Russian aggression and raise
the risk of emboldening Russia to expand its ambitions
in ways that implicate NATO security commitments
and threaten Europe. It would undermine America’s
credibility with allies around the world and embolden our
adversaries.
In the Middle East, Israel feels existentially vulnerable,
and the Palestinians need a homeland and a future. Even
though, on balance, none of the major actors sees benefit
from an escalation of tensions, the regional dynamic
is fragile. There is no path out of the current morass
without active American leadership.
China, meanwhile, is demonstrating diminished patience
with the status quo. Beijing is generating greater military
friction in pursuit of its territorial claims in the Taiwan
Strait, the South China Sea and along the border with
India. China is investing in its “no-limits” partnership with
Russia. America’s active alliance-building and military
deterrence are essential to preserving regional peace
and stability.
The United States and China are the two most powerful
countries and account for more than one-third of global
GDP. Even so, each’s ability to influence outcomes
outside its borders is less than was the case during
America’s unipolar moment from the end of the Cold War
through the early part of this century.
China is viewed both as important and as a source of
anxiety for many countries around the world. China is
a revisionist and revanchist power that is pursuing a
large-scale expansion in military capabilities. Its foreign
policy is driven both by its historical aggrievement and
an ambition to reshape the international system to suit
its benefit. Beijing is protectionist and predatory in its
economic practices. China is the largest trading partner
for most countries in Asia and around the world. No
country can do without China as a source of economic
growth.
America plays a central role in preserving security in
Europe, the Middle East and Asia. The U.S. is viewed as
both indispensable but also unreliable. Our economy
is the strongest in the world, our ability to innovate is
unmatched, and our military remains the most powerful
and capable in the world. At the same time, our political
system produces unpredictable outcomes.
In the face of China’s assertiveness and America’s
unreliability, countries around the world are hedging.
Countries are avoiding aligning with either America or
China across all domains.
There is a declining consensus inside our country for
playing a leadership role. Our leaders are not making a
strong case for our involvement abroad as a requirement
for security and prosperity at home. The current
direction of travel is toward increased nationalism and
economic protectionism. This is not a direction that
inspires confidence abroad or supports prosperity and
innovation at home. It contributes to global instability
and increases our vulnerability.
Restoring America’s traditional leadership role in
global trade
Our economy is the envy of the world. Our country is a
beacon: We are the land of opportunity, and we protect
the sanctity of the individual. Our democratic values
inspire. Our economy is market-oriented and supports
a thriving private sector. We have a transparent legal
system and strong institutions to administer justice.
17
It’s all the more important to recognize that coexistence
remains an inescapable requirement for both the
United States and China. Neither country can subdue the
other or force the other to abandon its ambitions.”
U.S. companies lead the world in technological
innovation. Our country is a magnet for capital,
technology, and the best and brightest from around
the world.
None of this is guaranteed, and we confront fundamental
challenges that threaten our future prosperity. At the
global level, our leaders project disunity in putting forth
a foreign policy and national security strategy that
integrates economic and military capability with the
promotion of American values.
At the national level, our leaders are deeply divided and
tribal in their politics. They are more focused on political
survival and partisan advantage than addressing our
deep societal challenges. This inability to address obvious
problems is a source of frustration for most Americans.
For example, our leaders have proven shamefully inept
at protecting the country’s borders and reforming
immigration policies. Our country’s mounting national
deficit is an existential problem right in front of our faces.
Burdensome regulation and outsized bureaucracy inhibit
our progress in important areas. It takes too long and
costs too much to build infrastructure in our country.
Energy and transportation infrastructure are pillars of
a modern economy and enablers of innovation. Chronic
delays and exorbitant costs impact our growth.
Our country lacks a critical ability to produce ships,
planes, missiles and munitions at the speed and scale
needed to meet our own national security requirements
and those of our security partners. It is undermining
America’s value proposition for countries to align more
closely with us. Rebuilding our defense industrial base in
concert with our allies is an urgent priority.
While a view currently out of fashion, as part of our
economic well-being and our national security and
foreign policy, we should restore our traditional
leadership role in global trade. After all, 95% of the
world’s consumers live outside our borders.
Our country is strongest when other countries
are invested in our security and economic growth
agenda, and we in theirs. We are not giving adequate
consideration to our allies’ requirements. Free trade
agreements that include market access provisions are
necessary to promote our vision of trade and unlock
opportunities for our companies and workers. Deeper
economic integration binds our fortunes more closely
with those of our partners.
The prevailing narrative inside the United States today
is that free trade destroys American jobs. I reject
that narrative. America’s unrivaled global power in
the post-World War II era was underwritten by our
vision of market-oriented, rules-based fair trade.
Reinvigorating America’s international trade leadership
would strengthen America’s presence and staying power
globally. It would support economic growth at home. And
it would undercut Beijing’s preferred – and increasingly
tarnished – narrative that countries must stand with
China to prosper in the 21st century. A fair market-
oriented trade system means we don’t allow countries
to game the trading system. The notion of reciprocity in
trade and market access, and the rules we each adopt, are
fundamental.
Supply chains are no longer linear transmission
mechanisms from suppliers of raw materials to producers
to consumers. Supply chains now encompass a global
web of companies and countries at a density, scope and
complexity never seen in human history. It would be
unwise and infeasible to attempt to unwind global supply
chains.
However, we should diversify supply chains for critical
resources to ensure supply. Although likely inflationary,
diversification represents sound risk management
against a range of potential shocks. These efforts need
to be undertaken with thoughtfulness and precision,
and not blunt-force moves guided by nationalism and
protectionism.
18
No country is in a stronger position in the world today
than America. Many of our greatest challenges are
within our own scope to address. With wise, focused and
determined leadership, our country can compete with
any country in the world.
The U.S. and China: Coexistence remains an
inescapable requirement
In recent years, the U.S.-China relationship has grown
increasingly rivalrous. Both countries see the other as
a growing threat. Each has become more protectionist,
more tolerant of friction, and more focused on military
power in dealing with the other. Both countries are
directionally moving to become more independent of the
other.
China is continuing to grow more authoritarian at
home and aggressive abroad. The Chinese leadership
is unrelenting at home in their approach to imposing
centralized control. China’s foreign policy has become
more assertive, intolerant of criticism and forceful in
responding to challenges to its interests. China’s leaders
hold a different view of their behavior, believing they
are responding to U.S.-led Western pressure to stifle
China’s rise. Nevertheless, we view China as increasingly
presenting a threat to our interests and values, as well as
those of our allies and partners.
Given these trends, it’s all the more important to
recognize that coexistence remains an inescapable
requirement for both the United States and China.
Neither country can subdue the other or force the other
to abandon its ambitions. Acknowledging the mutual
need for coexistence is a wise recognition of reality lest
we have war. Coexistence requires active engagement
to establish the terms by which both sides relate to
each other. Engagement is not a form of surrender,
and it does not mean either side needs to admire the
other. Engagement is how relationships are built and
knowledge is shared. It is how leaders in both countries
acquire an understanding of each other and how trust
is developed at a personal level. These relationships are
a key ingredient for leaders to be able to craft a better
framework for the relationship going forward.
Our country will best manage its competition with China
if we show firmness in protecting our interests and
supporting our alliances while showing patience and
confidence in our long-term competitive advantages.
In my judgment, China is making domestic and foreign
policy decisions that are undermining its national
competitiveness and interests. It would be wise for
Washington, while defending our interests, to leave
China room either to double down on its mistakes or
adjust.
Chubb: our launching pad into the future
I want to thank my fellow employees and our senior
management team for their outstanding contributions
last year. You never cease to amaze me. Your technical
proficiency, drive and creativity are matched only by your
dedication to our clients and business partners. You are
the brand. I also want to thank our thoughtful, active and
supportive Board of Directors. I appreciate your wise
counsel and commitment to our mission.
Our best days are in front of us. The company we have
built is our launching pad into the future as we capitalize
over time on an enormous number of opportunities
we could only dream about a decade or two ago.
Acknowledging that ours is a long-term business, we are
patient in strategy. Exceeding our ambitious objectives,
we are impatient in execution.
On behalf of the entire organization, thank you for your
investment and trust in us.
Sincerely,
Evan G. Greenberg
Chairman and Chief Executive Officer
19
A World Leader in Insurance
A local presence in 54 countries and territories around the world
Chubb has operations in the countries and territories listed here
and can help clients manage their risks anywhere in the world.
Argentina
Australia
Austria
Belgium
Bermuda
Brazil
Canada
Chile
China
Colombia
Czech
Republic
Denmark
Ecuador
Egypt
Finland
France
Germany
Gibraltar
Japan
Korea
Pakistan
Panama
Macau SAR
Peru
Hong Kong SAR
Malaysia
Philippines
Hungary
Mexico
Indonesia
Myanmar
Poland
Portugal
Saudi Arabia
Singapore
South Africa
Spain
Sweden
Switzerland
Ireland
Italy
Netherlands
Puerto Rico
Taiwan
New Zealand
Russia
Thailand
Norway
Tunisia
Turkey
United Arab
Emirates
United
Kingdom
United States
Vietnam
20
Chubb Senior Operating Leaders
Chubb’s senior operating leadership includes the company’s President
and Chief Operating Officer and the presidents of the North America,
Overseas General and Chubb Life insurance operations.
Bryce Johns
Juan Luis Ortega
John Keogh
John Lupica
Senior Vice President,
Chubb Group;
President,
Chubb Life
Executive Vice President,
Chubb Group;
President,
Overseas General Insurance
President and
Chief Operating Officer,
Chubb Group
Vice Chairman,
Chubb Group;
President,
North America Insurance
21
Premium distribution
by product
Agriculture 13%
Personal
Lines 19%
Specialty 11%
Retail
Commercial 57%
FY 2023 gross premiums written
9,000+ agent
and broker
locations served
9 regions and 40
branches across
U.S. & Canada
144 offices
U.S., Canada and Bermuda
22
North America Insurance
Key Financial Results
Dollars in millions
Total North America P&C Insurance
2023
Gross premiums written
Net premiums written
Combined ratio
Segment income
$34,955
$28,303
84.9%
$7,487
North America Commercial P&C Insurance
2023
Gross premiums written
Net premiums written
Combined ratio
Segment income
$23,810
$19,237
81.6%
$6,390
North America Personal P&C Insurance
2023
Gross premiums written
Net premiums written
Combined ratio
Segment income
$6,739
$5,878
89.7%
$914
North America Agricultural Insurance
2023
Gross premiums written
Net premiums written
Combined ratio
Segment income
$4,406
$3,188
95.4%
$183
Chubb’s insurance businesses in North America serve
clients ranging from the largest multinationals, middle
market companies, and small businesses to successful
individuals and families, and the agriculture community.
“2023 was a terrific year for Chubb’s North America
businesses,” said John Lupica, Vice Chairman, Chubb
Group and President, North America Insurance. “We
generated strong premium revenue growth in our
commercial property and casualty (P&C) and personal
lines businesses, and posted record underwriting results.
Our ongoing success is the result of thoughtful planning
and strategic investment across our organization in our
people and innovative insurance solutions. We always
stayed focused on delivering the quality, value and
consistency of Chubb to our clients and distribution
partners.”
“In 2023, Chubb continued to be an important partner
in a volatile risk environment that included inflation,
a litigation market that continued to deteriorate, and
losses from natural catastrophes and secondary perils,”
said John Keogh, President and Chief Operating Officer
of Chubb Group. “In a challenging insurance market for
buyers, we were able to find solutions to protect our
clients and their assets. For example, our consistent
underwriting discipline allowed us to take on more
exposure in property lines in North America.”
During the year, Chubb continued to distinguish itself
through the quality of its claims service. Through the
demonstration of technical excellence and superior
service, the North America Claims team earned an
excellent rating in customer experience. Chubb also
implemented new technology to deliver new solutions
for customers, enhance efficiency and make it easier
for clients and partners to interact with Chubb. “Our
execution against strategic deliverables in 2023 led to
significant progress in our journey to reimagine how we
service and adjudicate claims,” said Lupica. “It’s about
evolving how we work and always keeping our brand at
the center of all we do.”
23
Chubb’s North America
Insurance Business Units
Major Accounts
Commercial P&C insurance products for the large corporate
market sold by retail brokers
Commercial Insurance
Commercial P&C insurance products for middle market and
small businesses sold by independent agents and retail brokers
Personal Risk Services
Personal lines coverage, including home, auto, valuables,
umbrella and recreational marine insurance, for successful
individuals and families sold by independent agents and brokers
Westchester
Commercial P&C excess and surplus lines sold through
wholesale brokers
Chubb Bermuda
Excess liability, financial lines, property and political risk
coverages sold by large international brokers
Agriculture
Crop insurance from Rain and Hail and farm and other P&C
coverages sold by agents and brokers
Total net premiums written for the company’s North
America P&C insurance businesses were $28.3 billion, up
8.4% from 2022. Underwriting income was $4.1 billion,
leading to a combined ratio of 84.9%.
North America Commercial P&C Insurance
Chubb is the largest commercial lines insurer in the
United States, offering a full range of traditional and
specialty products for businesses of all sizes. Net
premiums written for North America Commercial P&C
Insurance were up 7.5% to a record $19.2 billion, with
P&C lines up 9.9% and financial lines down 1.7%. The
combined ratio for the segment was 81.6%. Underwriting
income was $3.4 billion, and segment income was
$6.4 billion.
Major Accounts, Chubb’s P&C business unit that serves
large corporations, is recognized for the breadth and
depth of its product and service offerings, technical
underwriting expertise, superior customer service, and
global web-based application built to service complex,
bespoke insurance programs in many countries around
the world. It’s a high-touch business where Chubb,
with its strong client- and broker-centric culture, has
developed long-term, enduring relationships. One
indicator of the range of Chubb’s business: About 98%
of the Fortune 1000 companies have at least one policy
with Chubb. Another area that has seen growth is Chubb
Alternative Risk Solutions, which caters to customers’
ever-changing risk profiles by developing tailored
insurance solutions to address unique and complex
situations, including loss portfolio transfers, deductible
buybacks and multi-year structured products.
In 2023, the Major Accounts division generated
$1.5 billion of new business, with double-digit growth
in targeted high-margin products.
Major Accounts’ annual Client Advisory Board Meetings
continued to serve as a forum for Chubb to hear
important feedback from clients and share the company’s
perspective on top issues. Themes from 2023 included
tort reform initiatives, climate change, the regulatory
environment, cyber risks and risk management training
programs.
24
2023 was a terrific year for Chubb’s
North America businesses. ... We always
stayed focused on delivering the quality,
value and consistency of Chubb to our
clients and distribution partners.”
— John Lupica
Westchester, Chubb’s excess and surplus (E&S)
company that specializes in hard-to-place casualty,
property and specialty lines for middle market and small
businesses, produced record new business for the second
consecutive year in 2023, which contributed to its fifth
consecutive year of strong growth in net premiums
written. Additionally, Westchester was able to expand
its writings in a favorable market for the vast majority
of its products within the three divisions of brokerage,
programs and digital, where more efficient processing
and new digital products were deployed with the
company’s technology investments.
Chubb Bermuda, which provides high excess casualty
and property capacity, as well as financial lines and
political risk products, posted its fifth consecutive year of
double-digit growth in net premiums written. It operates
with a high severity/low frequency business model and
offers broad coverage and sizable capacity to clients
and brokers around the world. Chubb Bermuda proved
its value in the market with its record revenue in 2023.
Retention rates also remained high as Chubb Bermuda
continued to leverage its deep client relationships, many
of which have been in place since the company was
founded in 1985.
“As a leader in high excess capacity, Chubb Bermuda gives
us an outstanding ability to round out global programs
for our large clients,” said Lupica. “The business also
continues to demonstrate its agility by moving quickly,
with strategic discipline, to seize market opportunities
that support clients with stable large-block capacity as
well as more specialized solutions like punitive damages
wraps.”
Together, Major Accounts and Specialty insurance in
North America produced $11.7 billion in net premiums
written in 2023.
Commercial Insurance is Chubb’s division that provides
P&C coverage to medium- and small-sized companies
with revenues up to about $1 billion. In 2023, net
premiums written in the division grew 6.7% to
$7.6 billion, and underwriting income was strong.
Growth was driven by the performance of the core
property and casualty lines, as well as cross-selling of
specialty coverages, including financial lines, cyber,
product recall, environmental, multinational and accident
and health.
In the middle market segment, Chubb’s core package
product is complemented by one of the industry’s largest
offerings of standard and specialty coverages. In 2023,
Chubb launched a refresh of The ForeFront Portfolio®,
a suite of management liability offerings that addresses
a range of risks for private, not-for-profit and healthcare
organizations. Clients utilizing The ForeFront Portfolio
can mix and match management liability coverages to
meet their financial lines-related insurance product
needs.
In 2023, Chubb continued to expand its business with
companies in the lower middle market segment, which
represents a significant growth opportunity for the
organization. Chubb launched its Benchmarq® product,
a package insurance solution, to address this expansive
market opportunity.
“As lower middle market customers’ businesses grow,
so do their exposures and insurance coverage needs,”
Lupica said. “Chubb decided to implement a different
approach with our Benchmarq package by offering
customers scalable coverage complemented by efficient
underwriting decisions and quicker delivery of quotes
and policies for when their businesses expand and
evolve.”
In the small business segment, Chubb is making inroads
using digital technology to deliver an industry-leading
customer experience and enhance risk selection through
the application of data and analytics. In 2023, Chubb
continued its commitment to leading with premier
digital tools that automate processes end-to-end in
addition to continuously improving data and fact-based
underwriting.
With our focus on delivering this segment in a digital
way, customers saw greater efficiencies when leveraging
Chubb technologies. Chubb continues to invest in
25
In a challenging insurance market for
buyers, we were able to find solutions to
protect our clients and their assets.”
— John Keogh
solutions that make it easier for distribution partners
to work with us across commercial P&C businesses.
One example: For agents and brokers serving small and
lower middle market businesses, the Chubb Marketplace
platform streamlines quoting, issuing and servicing on the glass.
In addition to the investments made in technology, Chubb
increased distribution of products and services through
multiple channels, including brokerage, agency, programs,
digital and direct via an owned agency. In 2023, progress
continued through the expansion of Chubb’s agency
footprint, establishing relationships with more than
1,100 independent agents who serve both commercial
and consumer customers.
Chubb’s industry practices represented another key
component of the company’s go-to-market distribution
strategy. Industry practices are handled by teams of
experienced underwriting, claims and risk engineering
professionals who understand the exposures of their
specific industry. By cultivating talent with deep
expertise in coverage solutions for specific industries, the
industry practice model ensures that Chubb addresses
the needs of clients as thoroughly as possible.
2023 also saw the launch of Chubb Climate+, a global
climate business unit that provides a full spectrum of
insurance products and services to businesses developing
or employing new technologies and processes that offset
carbon dependence. In North America, Chubb Climate+
serves national and multinational corporations, middle
market and small businesses.
Further investment was demonstrated with the launch
of the North America Natural Resources Property
Practice, which provides Chubb underwriting expertise
and expands our property coverage capabilities to large
commercial energy accounts.
To further enhance our risk mitigation services, we
integrated Chubb Risk Engineering Services and Chubb
Global Risk Advisors into a single group to support clients
in managing and mitigating risk in the areas of property,
equipment breakdown, environmental, health, safety and
sustainability compliance. Chubb Risk Consulting offers
26
clients a tailored approach to risk management with a
combination of technical field engineering expertise and
expanded fee-for-service offerings.
North America Personal P&C Insurance
Chubb is the leading provider of personal lines insurance
for successful individuals and families in the U.S. and
Canada. Chubb Personal Risk Services (PRS) is known
for its broad product offering, superior claims and risk
consulting services, and access to Chubb’s extensive
branch network in the U.S. and Canada. Chubb clients
also benefit from the company’s global presence, which
offers protection for their assets around the world.
Net premiums written for the North America Personal
P&C Insurance segment were $5.9 billion, up 10.6% from
prior year. The combined ratio was 89.7%. Underwriting
income was $568 million, and segment income was
$914 million.
“Chubb PRS had another strong year, producing double-
digit growth in premiums,” said Lupica. “We also achieved
record new business, as the flight to quality continues to
draw new clients to PRS for its outstanding claims service
and customer experience.”
In 2023, Chubb risk consultants conducted 38,000 risk
consulting visits. Chubb PRS launched a Risk Solutions
team that offers clients concierge services to support the
adoption of “predict and prevent” technologies to help
avoid losses from happening in the first place. Chubb
continues to provide clients with access to the most
advanced services in the industry. This team also advises
clients about technologies such as water shut-off devices,
heat sensors, and alarms, and even implements best
practices during construction of new homes.
As clients expanded their collections of art, jewelry and
other collectibles, Chubb continued to deliver innovative
services to protect those assets from loss. Chubb’s
in-house team of Fine Art & Collections Specialists
consulted with clients throughout North America on
risks starting at the point of an item’s acquisition through
the time of divestiture. As the largest insurer of private
collections in North America, Chubb’s commitment to the
art community and emerging artists remains a priority.
North American Business Unit Leaders
Benjamin Rockwell
Scott Arnold
Judy Gonsalves
Scott Meyer
Vice President,
Chubb Group;
Division President,
North America
Middle Market
Vice President,
Chubb Group;
Chairman,
Chubb Agriculture
and Rain and Hail
Vice President,
Chubb Group;
Division President,
Chubb Bermuda
Senior Vice President,
Chubb Group;
Division President,
Westchester
27
North American Business Unit Leaders
Matthew Merna
Ana Robic
Christopher A. Maleno
Senior Vice President,
Chubb Group;
Division President,
North America
Major Accounts
Vice President,
Chubb Group;
Division President,
North America
Personal Risk
Services
Senior Vice President,
Chubb Group;
Division President,
North America
Field Operations
28
Our people create our vibrant culture,
cultivate our strong relationships with
clients and distribution partners, and deliver
the full value of Chubb to the market.”
— John Lupica
This commitment is demonstrated in the continued
support of a new generation of artists through the Chubb
Fellowship program at the New York Academy of Art,
sponsorship of Young Collectors at The Winter Show and
ongoing partnership with Art Basel Miami Beach.
Digitally advanced, frictionless and personalized
interactions are believed to be fundamental
necessities for both clients and agents, as well as key
Chubb differentiators. With 1.5 million digital client
engagements through Chubb’s portal and mobile app,
we modernized how quickly clients can access important
insurance documents and easily make changes to their
insurance programs. From a distribution perspective,
agents view Chubb as the most digitally advanced
platform to quote and bind coverage on the glass. Chubb
PRS continues to see high adoption of its agency partner
digital platforms with more than 3.5 million transactions
processed on these platforms in 2023.
North America Agricultural Insurance
Chubb’s Rain and Hail subsidiary is the leading
crop insurer in North America. The business serves
approximately 120,000 farmers, insuring approximately
120 different crops on 97 million acres – a 9 million acre
increase over 2022. Chubb’s North America agriculture
segment includes Chubb Agribusiness, which is focused
on P&C offerings that provide commercial insurance
coverages for manufacturers, processors and distributors
in the agriculture sector. Chubb also offers property
insurance for farms and ranches, including hobby farms,
complex corporate farms and equine services.
Crop insurance is a public-private partnership that
operates with a proven model. The federal government
sets the rate, terms and conditions. Market participants
like Chubb compete based on service, technology, risk
selection and claims handling. It’s a playing field where
Rain and Hail brings strengths, including experienced
underwriters, a significant branch network and strong
agency relationships. Chubb also has a tremendous
amount of underwriting data, which offers a competitive
advantage through leveraging 130 gigabytes of data
to build models, drawing on approximately 1.6 million
unique risks going back decades.
In 2023, Chubb was rated the #1 insurer in technology by
major agriculture clients for the eighth consecutive year.
“Agriculture plays a key diversification role in North
America and fits perfectly into our risk profile,” noted
Lupica. “Even in periods of stressed growing conditions
and volatility around prices, Rain and Hail has delivered
combined ratios averaging in the low 90s. This is mainly
due to our geographic spread, best-in-class models and
the exceptional talent that fills our regional offices.”
Continued Investment
Chubb’s North America operation made investments in
various other areas throughout 2023.
Chubb’s ability to serve customers and partners with
excellence also requires investing in our people. In 2023,
Chubb welcomed more than 1,600 new colleagues in
North America. Throughout the year, 85% of employees
in North America completed more than 1,300 learning
and development programs. Chubb’s commitment to
professional development is also reflected in another
number: Nearly 2,500 employees were promoted during
the year.
Chubb continues to invest in talent and attract a diverse
slate of early career professionals and experienced hires.
In fact, Chubb’s Early Career development program in
North America welcomed more than 300 new hires.
Over the past five years, Chubb has retained nearly
three quarters of those individuals. Investing in the next
generation of talent remains a key organizational priority
to ensure we thrive and evolve with the times.
“Chubb’s outstanding 2023 results are testimony to
the tremendous talent and commitment of our people,”
concluded Lupica. “They create our vibrant culture,
cultivate our strong relationships with clients and
distribution partners, and deliver the full value of Chubb
to the market.”
29
Corporate and Global Functional Leaders
Joseph Wayland
Sean Ringsted
Frances D. O’Brien
Michael W. Smith
Executive Vice President,
Chubb Group;
General Counsel
Executive Vice President,
Chubb Group;
Chief Digital Business
Officer
Executive Vice President,
Chubb Group;
Chief Risk Officer
Senior Vice President,
Chubb Group;
Global Claims Officer
30
Jo Ann Rabitz
Peter Enns
Timothy Boroughs
Julie Dillman
Rainer Kirchgaessner
Senior Vice President,
Chubb Group;
Global Human Resources
Officer
Executive Vice President,
Chubb Group;
Chief Financial Officer
Executive Vice President,
Chubb Group;
Chief Investment Officer
Executive Vice President,
Chubb Group;
Senior Executive,
Operations and
Technology; and Digital
Transformation Officer
Executive Vice President,
Chubb Group;
Global Corporate
Development Officer
31
51 countries and
territories outside
North America
500+ offices
Premium distribution
by product
Personal
Lines 17%
A&H 17%
P&C 66%
FY 2023 gross premiums written
Distribution:
• 25,000 independent
agents and brokers
• 150+ partnerships
and affinity groups
• Bancassurance
• Direct marketing
32
Overseas General Insurance
Key Financial Results
Dollars in millions
Overseas General Insurance
2023
Gross premiums written
Net premiums written
Combined ratio
Segment income
$15,666
$12,575
85.3%
$2,649
Chubb’s international general insurance operation
comprises two main businesses: one with a retail
presence in four regions of the world and the other an
excess and surplus (E&S) lines operation in the London
wholesale market.
“This was a record year for our international general
insurance business,” said Juan Luis Ortega, Executive
Vice President, Chubb Group and President, Overseas
General Insurance. “Our excellent performance and
progress spanned the regions where we operate and the
markets we serve, both commercial and consumer. The
operating environment was broadly favorable, and we
seized the opportunities before us. At the same time,
we continued to deepen and expand our network of
digital distribution partners; invest in data, analytics and
technology platforms; and effectively attract and develop
talent. Our consistency in underwriting and claims
service – attributes that matter to clients, distribution
partners and investors – were on full display. Our people,
from underwriting, claims and risk engineering teams to
technology and other functions, delivered.”
“A key Chubb strength is our local operations globally.
Year over year, we have built and further extended our
capabilities, from products and distribution to digital
technology,” said Keogh. “We can serve – we are
serving – millions of customers that were out of reach a
decade ago, from consumers to middle market and small
businesses. We have scale and momentum and are well
balanced between commercial and consumer lines.”
Overall, Overseas General Insurance generated net
premiums written of $12.6 billion in 2023, up 13.7%.
Commercial P&C businesses grew 11.2% while consumer
businesses increased 17.8%. The combined ratio for the
year was 85.3%. Segment income was $2.6 billion.
The Europe, Middle East and Africa region produced
$5.7 billion of net premiums written in 2023, up 9.4%
from prior year. In Asia Pacific, net premiums written
were $3.6 billion. The Latin America region generated
net premiums written of $2.7 billion, up 14.8% from
2022. In the Far East region, which encompasses Japan,
net premiums written of $451 million were down 1.7%
from prior year and up 5.9% in constant dollars.
Looking at results over a three-year period highlights
Chubb’s continued momentum. Since 2020, net
premiums written in commercial lines increased 40.8%.
That represents a three-year compound annual growth
rate of 12.1%. Over the same period, premiums in
Overseas General’s consumer lines have grown 26.3%.
Major Accounts, Chubb’s P&C business unit that serves
large corporations, helped to drive the strong growth in
commercial P&C. We offer capabilities, including a global
network, best-in-class service, underwriting expertise,
an extensive product offering, and a broker- and client-
centric culture, that few, if any, competitors can match.
Growth was particularly strong in the U.K., continental
Europe and Australia.
Today, Chubb does business with 83% of Fortune’s Global
500, writes coverage for 75% of the FTSE 100 in the U.K.,
and insures all of the CAC 40 in France and 26 of the 40
companies that comprise the DAX index in Germany.
Globally, we are also the largest trading partner of the
four largest brokers in the world.
33
Chubb’s Overseas General
Insurance Business Units
“Clients prefer Chubb’s consistency, and we have built
relationships that enable us to serve more than 12,000
multinationals and large domestic companies around the
world,” said Ortega.
We continue to invest in the technology required to
administer large, complex programs for large domestic
and multinational clients and their brokers. The company
has expanded its Global Client Executive program,
through which experienced leaders provide clients and
their brokers with a single point of contact from which
to access all of Chubb. They ensure high quality, custom-
crafted service across a client’s program, and provide
senior-level accountability across all product lines
and services.
In 2023, Chubb further expanded the reach and
capabilities of its commercial P&C business serving
middle market and small businesses, which together
comprise a large percentage of gross premiums written
for Overseas General Insurance.
Chubb’s ability to serve middle market companies
globally is also strengthened by its industry practices,
which bring together specialized underwriting, claims
and risk engineering professionals who have a deep
understanding of the risks in particular industries.
Across our international operations, industry practices
include construction, technology and life sciences.
The newest industry practice, launched in early 2023,
is Chubb Climate+, which provides a full spectrum of
insurance products and services to businesses engaged in
developing or employing new technologies and processes
that support the transition to a low-carbon economy. It
also provides risk management and resiliency services to
help those managing the impact of climate change.
International
Commercial P&C, A&H, and traditional and specialty personal
lines sold by retail brokers, agents and other channels in
four regions:
Europe
Operations in 27 countries, including seven in the Middle East
and Africa, comprising P&C commercial lines and consumer
lines, including A&H and specialty personal lines
Asia Pacific
Operations in 14 countries and territories serving commercial
customers and consumers with P&C, A&H and personal lines
Latin America
Operations in nine countries serving commercial customers
with P&C products and consumers through A&H and
personal lines
Far East
Operations in Japan serving commercial customers with P&C
products and consumers through A&H and personal lines
Chubb Global Markets
Commercial P&C excess and surplus lines sold by wholesale
brokers in the London market and through Lloyd’s
34
This was a record year for our international
general insurance business. Our excellent
performance and progress spanned the
regions where we operate and the markets
we serve, both commercial and consumer.”
— Juan Luis Ortega
One innovative solution launched during the year was
Chubb Climate+ Renewables, a packaged insurance
solution in the U.K. that will support the growth of
alternative and renewable energy projects, principally
onshore wind and ground-mounted photovoltaic solar.
The product is designed for small to medium renewables
projects and will be rolled out in other countries. In
2023, Chubb also announced it will lead a new Lloyd’s of
London consortium designed to address a lack of capacity
in the marine cargo market for providing lithium battery
transit and stock insurance. The consortium, led by
Chubb Global Markets and supported by 11 other
Lloyd’s syndicates, will draw on the capabilities of
Chubb Climate+.
Our investments in technology are creating new
opportunities to service the vast market for small and
medium businesses, which drive growth and employment
in economies around the world. Chubb has built a fully
digital end-to-end insurance platform for these smaller
commercial enterprises, distributed by agents and
brokers that have longstanding trading relationships
with us. The division offers stand-alone and packaged
P&C products that are transacted on market-facing
platforms operated by Chubb and third parties.
“We expect the small commercial segment to continue
playing a major part in our growth story beyond any
market cycle,” said Ortega. “In Australia, for example,
we have built a fast-growing business through a digital
transformation that embraces agile ways of working.
Our platform and the analytics behind it allow for agents
and brokers to quote, bind, issue and renew policies with
no human intervention.”
Chubb Global Markets, our London market wholesale
business that provides global access to experienced
specialist underwriters in aviation, energy, financial
lines, marine, political risk and credit, and property,
had another year of strong growth. Chubb Global
Markets stands as another example of the company’s
underwriting discipline through all market cycles – and
its ability to seize opportunities. Since 2017, the business
more than doubled, benefiting from market conditions
that continue to remain favorable in most classes. Since
2020 alone, the business grew 57%. “We see plenty of
opportunity ahead for our wholesale business,” said Ortega.
Clients and distribution partners are positioned to
benefit from Chubb’s initiatives to further enhance its
underwriting capabilities and services. For example, the
Continental Europe Underwriting and Service Centre
in Madrid is a state-of-the-art facility with nearly 250
employees from 33 countries who collectively speak
13 languages.
For our international non-life consumer businesses,
2023 was another year of growth. Net premiums written
in the international accident and health (A&H) business
were up 14.4%. In addition to being a global leader in
A&H coverages, including employer-paid group personal
and travel accident insurance, our international personal
lines businesses encompass cell phone insurance for
mobile network operators in the U.K., Asia and Europe,
home and contents coverages in Latin America and Asia,
and a growing business serving the needs of high-net-
worth consumers and families in select markets, including
the U.K., where we are the leader, as well as Australia.
“An important part of our consumer story is our rapidly
growing digital distribution,” said Ortega. “We are
focused on long-term strategic distribution with market-
leading financial institutions, fintechs, e-commerce
companies, and social and gig economy platforms.”
Today, Chubb has digital partnerships with more than
200 companies, primarily in Asia and Latin America.
Our award-winning tech integration platform, Chubb
Studio®, provides partner companies with digital access
to an extensive range of consumer and small business
35
A key Chubb strength is our local
operations globally. Year over year, we have
built and further extended our capabilities,
from products and distribution to
digital technology.”
— John Keogh
insurance products, customer services and claims. By
embedding in partner company ecosystems using API
technology, we are able to provide contextual insurance
offerings to their customers seamlessly. With Chubb
Studio, partners can gain an ancillary income stream
and help to narrow the protection gap for their own
customers. Today, the platform is live in more than
30 countries, has 25 million digital policies in force and
digital access to more than 375 million people who are
potential customers.
New digital partnerships in 2023 include an exclusive
15-year distribution agreement with Hang Seng
Bank Limited. Chubb will provide Hang Seng banking
customers in Hong Kong with a comprehensive range of
personal and commercial general insurance products and
solutions. We also forged a partnership with Krungthai
Bank, a major Thai financial institution.
Chubb’s distribution for consumer insurance also
encompasses 25,000 independent agents and brokers
and more than 4,000 telemarketers. The company is the
largest telemarketer in Korea and Thailand, and ranks
second in Taiwan and Indonesia.
“Our markets in Asia, with more than 2 billion people,
demonstrate the breadth and potential of our consumer
business,” said Ortega. “What makes this such an
exciting opportunity is our ability to bundle and cross-
sell products across life, A&H and personal lines. Our
integrated capability, which can be accessed through
Chubb Studio, is simply unmatched in the region.”
Our Asia presence was enhanced in 2023 when we
acquired majority ownership in Huatai Group, the
holding company for Huatai Property & Casualty
Insurance Company, Huatai Life Insurance Company,
and Huatai Asset Management Company. Huatai’s
insurance operation has 600 branch offices, 17,000
agents and approximately 19 million customers in China.
36
To pursue opportunity and navigate challenges, we
continue to invest in our people. One of the principal
ways the company develops talent is by promoting intra-
and inter-regional mobility that exposes employees to
different markets and cultures. In the past two years
alone, nearly 230 colleagues were promoted to a job
in another country, including some who transferred
to a role in a different region. In addition, more than
1,500 colleagues each year are promoted into a new
job or granted expanded responsibilities. These career
progression opportunities recognize the performance
of colleagues and create an environment for continuous
learning. Among those learning opportunities is
Centurion, a professional development program. The
curriculum, which draws on both internal and external
experts, explores real-life scenarios to help prepare the
next generation of leaders for what it means to run a
business for Chubb.
“Our ability to have a consistent and reliable presence in
the market, maintain relationships with brokers, develop
and introduce products and services that meet the
protection needs of clients, and deliver excellent claims
service reflects our culture and our people,” said Keogh.
“Culture and talent are what distinguishes Chubb and
drives our success.”
“We have so much capability, from our large commercial,
middle market and small businesses, to our industry
practices and Chubb Climate+. We also see opportunity
for growth in our consumer business, particularly across
Asia and Latin America,” Ortega concluded. “Our teams
around the world go to market backed by extensive
capabilities and resources. At the same time, they are
focused on executing thoughtful strategies that have
served us well over time.”
Overseas General Regional Leaders
Paul McNamee
David Furby
Edward Kopp
Marcos Gunn
Senior Vice President,
Chubb Group;
Regional President,
Asia Pacific
Senior Vice President,
Chubb Group;
Regional President,
Europe, Middle East
& Africa;
Division President,
Chubb Global Markets
Regional President,
Far East
Senior Vice President,
Chubb Group;
Regional President,
Latin America
37
Overseas General and Global Reinsurance
Business Unit Leaders
Mark Homan
John Thompson
Daniela Hernandez
James E. Wixtead
Division President,
International Property
and Casualty
Vice President,
Chubb Group;
Division President,
International Personal
Lines
Division President,
International Accident
& Health
Senior Vice President,
Chubb Group;
President,
Chubb Tempest Re Group
38
Life Insurance
Key Financial Results
Dollars in millions
Life Insurance
2023
Gross premiums written
Net premiums written
Segment income
Total international life insurance net
premiums written and deposits
International life insurance
segment income
$5,754
$5,465
$1,049
$6,074
$835
Chubb’s Life Insurance segment comprises two
businesses. Chubb Life is an international life insurer,
focused on Asia and with a presence in Latin America.
The business provides health, life and savings-oriented
insurance products to individuals and groups, and works
with Overseas General Insurance to bring integrated
life and general insurance to consumers and small
businesses. Combined Insurance provides personal
accident and supplemental health insurance coverages to
consumers in North America.
For the year, the Life Insurance segment generated net
premiums written of $5.5 billion, up 51.5%. Segment
income was $1.0 billion, up 58.8%.
Chubb Life
Chubb Life serves the needs of consumers through a
variety of distribution channels, including captive agents;
direct marketing capabilities, both telemarketing and
digital; and targeted partnerships with independent
financial advisors, consumer finance companies, banks
and retailers. Chubb Life has operations in nine Asia
Pacific markets: Korea (operating as LINA), mainland
China, Hong Kong SAR and Taiwan in North Asia;
Vietnam, Thailand, Indonesia and Myanmar in Southeast
Asia; and New Zealand. It is also present in nine markets
across Latin America, including Brazil, Chile, Ecuador
and Mexico.
“For Chubb Life, 2023 was a year of integration and
building a foundation for accelerated growth,” said
Bryce Johns, Senior Vice President, Chubb Group and
President, Chubb Life. “We completed the integration
of the life insurance and A&H businesses of Cigna we
acquired in 2022, and gained majority ownership of
Huatai Group, which we financially consolidated in
the third quarter. We reinvigorated and expanded our
product offerings and agent development programs,
launched a pioneering integrated distribution platform
in Korea (LINA One), forged meaningful new distribution
partnerships, and further strengthened our talent bench.”
Looking at the business over a four-year period highlights
the scale of its transformation. In 2023, international
life insurance net premiums written were $4.5 billion,
more than 4.5 times greater than in 2019. Over the same
period, segment income increased to $835 million from
$152 million.
Chubb Life is well positioned to benefit from favorable
long-term economic and demographic trends across
Asia. The protection gap in the region is estimated to be
$85 trillion, which translates to an untapped market of
approximately $300 billion in insurance premiums.
Per capita growth in gross domestic product over the
next five years is expected to be around 30%. At the same
time, wealth is being created at an unprecedented level.
Aging populations, including in Korea and Greater China,
are creating growing demand for wealth preservation,
legacy planning and ensuring quality of life in retirement.
The rapid evolution and increasing integration of the
Greater Bay Area – a megalopolis comprising nine cities
and two special administrative regions in Southern China
with $2 trillion in gross domestic product – provide
growth engines for both Huatai Life and Chubb Life
39
In Asia, Chubb is uniquely positioned to
bring integrated life and general insurance
products and experiences to consumers
and small businesses, across the full
spectrum of distribution channels.”
— Bryce Johns
Hong Kong. In addition, Hong Kong is a key hub in the
Greater Bay Area for customers looking to access wealth
products denominated in U.S. dollars.
In the younger, large-population markets of Southeast
Asia, there are increasing opportunities for insurance
products focused on protecting family and lifestyles,
affording quality education and providing access to
international health care.
“In our life insurance business, we’re in the markets
that matter in Asia,” said Johns, noting that the region
accounts for more than 90% of Chubb Life’s total
premiums and deposits. “Chubb is also uniquely
positioned in these markets to bring integrated life
and general insurance products and experiences to
consumers and small businesses, across the full spectrum
of distribution channels.”
Korea is the largest market for Chubb Life, and the
second-largest market for the company outside of North
America. Operating under the LINA brand, our life and
non-life businesses have nearly 4 million customers.
In Greater China, we have a unique footprint that spans
mainland China, Hong Kong SAR and Taiwan, and over
1.4 million customers. In mainland China, Huatai Life has
a nationwide presence and Huatai’s asset management
business is one of the largest institutional managers.
Chubb Life Taiwan is the leading direct marketer, with
55% market share, and the second-largest player in the
broker channel.
In Southeast Asia, the business has a total of 4
million customers. In New Zealand, Chubb Life is
a leading industry player, with a top-two position
among independent financial advisors and exclusive
40
partnerships with the largest banking and healthcare
groups in the market.
Together, Chubb Life (including LINA and Huatai Life)
has nearly 530 offices, more than 6,000 employees, more
than 63,000 captive agents, 5,000 telemarketers and
over 60 distribution partnerships.
“We have invested and scaled significantly over the last
18 months, focusing on building and strengthening our
leadership team to ensure we execute against our target
and land the tremendous opportunity ahead,” said Johns.
“We are well positioned to bring the best of Chubb to our
customers and distributors across all our markets.”
Combined Insurance
Combined Insurance (Combined) is a leading provider
of supplemental health, accident, disability and life
insurance products across the U.S. and Canada. In 2023,
the business continued its transformation to provide
voluntary worksite benefits to businesses of all sizes
through insurance agents and brokers. Today, Combined-
branded businesses in the U.S. and Canada focus on
providing benefits to small businesses and individuals
through independent agents and brokers. Our Chubb
Workplace Benefits division caters to mid- and large-
market employers with distribution solely through
brokers and benefits consultants.
“Product development work is underway throughout
the company, with initiatives that will position us to
grow and better serve our customers and clients across
North America,” said Williams. Examples include new
critical illness, group hospital indemnity, cancer and life
products slated for launch in 2024, among other portfolio
enhancements for worksite customers.
New sales technology is enhancing efficiency and
enabling agents to optimize their time in the field and
ease important customer tasks. During the year, new
contact center customer relationship management and
service platforms were introduced, new online customer
administration platforms released, and a new policy
administration system continues to roll out, adding speed
and agility to further product introductions along with
improved customer administration and service.
“Combined Insurance is well positioned to continue our
progress building a voluntary worksite benefits offering
that serves businesses of all sizes,” said Williams. “Our
strategy is clear, and we’re making investments in people,
training, technology and products. Looking ahead, we’re
very excited about the initiatives already in motion.”
“In 2023, we made substantial progress advancing our
worksite business while generating strong growth in
premiums and underwriting income,” said Rich Williams,
President of Combined Insurance. “We added more
than 2,500 independent agents to our U.S. distribution
organization, launched new one-of-a-kind products and
solutions, and enhanced our technology.”
As healthcare inflation is on the rise again, employers
continue to balance increasing medical cost and risk with
high-value employee benefits. Individuals and families
are also seeking ways to offset out-of-pocket expenses
left by their primary health plan and increase insurance
coverage when they experience an unexpected medical
event. The plans offered by Combined and Chubb
Workplace Benefits pay benefits directly to the insured
that fill gaps left by major medical coverage, along with
newer programs that provide advanced health benefits
and risk management for employers and their workforce.
More employers today look to voluntary benefits as a
means to expand their total benefits portfolio. In addition
to expansion, the ability to offer unique and creative
solutions is of growing importance in the war for talent.
To meet the needs of customers, agents and partners,
Combined continued to invest in its people, distribution,
service infrastructure, products and technology.
The business broadened its distribution through
independent agents and brokers, transforming from
the captive agency channel that had previously been
its primary avenue for selling products to individuals
and families. The total North America producer count
for Combined grew to more than 4,400 agents, and is
targeted for further growth in the year ahead.
41
Global Reinsurance
Key Financial Results
Dollars in millions
Global Reinsurance
2023
Gross premiums written
Net premiums written
Combined ratio
Segment income
$1,151
$1,018
75.5%
$445
Chubb’s reinsurance business, which operates under
the Chubb Tempest Re brand, offers a broad range of
products to a diverse group of primary property and
casualty insurers worldwide. Doing business globally
with offices in Bermuda, Stamford, London, Montreal and
Zurich, the business has deep underwriting, actuarial and
claims expertise.
As a subsidiary of Chubb, Tempest Re benefits from the
company’s global reach, financial strength and deep
insights into insurance markets across geographies
and lines of business. Chubb’s geographic and product
diversity also gives the company optionality in terms of
where it can deploy capacity to achieve adequate risk-
adjusted returns.
“In 2023, the trading environment for reinsurers was
increasingly favorable. We wrote more business and
expanded our base of clients,” said James Wixtead, Senior
Vice President, Chubb Group and President, Chubb
Tempest Re Group. “Our financial results, including
premium revenue growth and underwriting profitability,
were excellent. We posted our best combined ratio
in nearly a decade, which also stands among the best in
the industry.”
Net premiums written for Chubb’s Global Reinsurance
segment were $1.0 billion, up 8.0% from prior year. The
combined ratio was 75.5%, and segment income was
$445 million, up 73.8%. Pre-tax catastrophe losses were
$7 million versus $216 million prior year.
Since 2019, when the reinsurance market first began
to firm, net premiums written for the segment have
increased 57%.
“We have a consistent and stable view of risk. Even as the
market jumps around, we strive to maintain underwriting
discipline throughout the cycle,” said Wixtead. “Our view
of risk, along with Chubb’s financial strength and the
stability of our management, have made Tempest Re a
preferred trading partner for many of our clients.”
The elevated level of natural catastrophes continued in
2023: It was the fourth consecutive year of global insured
losses exceeding $100 billion. During the year, Tempest
Re continued to take action to mitigate the volatility in its
portfolio. “Tempest was able to grow the portfolio while
shrinking property exposures and benefiting from firming
prices, terms and conditions,” said Wixtead.
The business is navigating the market with a seasoned
leadership team and a deep bench of talent. In 2023,
there was just one retirement. “Our team is experienced
and consistent. They know where and how we can add
value for our clients and broker partners.”
Looking ahead to 2024, Chubb Tempest Re remains
focused on maintaining discipline and looking for
business that delivers a reasonable, risk-adjusted return.
“We continue to see opportunity in the market, and
Chubb Tempest Re is well positioned for growth,”
said Wixtead.
42
42
Sustainability at Chubb
Our Mission
Good corporate citizenship lies at our core – how we
practice our craft of insurance, how we work together to
serve our customers, how we treat each other, and how
we help to make a better world.
We accomplish our mission by providing the security
from risk that allows people and businesses to grow and
prosper. Our mission is realized by sustaining a culture
that values and rewards excellence, integrity, inclusion
and opportunity; by working to protect our planet and
assisting less fortunate individuals and communities in
achieving and sustaining productive and healthy lives;
and by promoting the rule of law.
Within this larger framework of corporate citizenship,
Chubb’s commitment to sustainability is demonstrated
through our leading work in developing approaches to
insuring the transition to the net-zero economy, our
operational sustainability practices, and our policies and
standards that promote an inclusive global workplace
and strive to maintain the highest ethical standards in
all that we do. Our commitment to sustainability comes
from the very top of the company and is embedded in
our governance.
As part of our sustainability program, we continuously
evaluate evolving regulatory and voluntary approaches
to sustainability disclosure and evaluate their suitability
for our strategic purposes, including meeting the
informational needs of our various stakeholders.
Chubb Limited 2023 Sustainability Report
Chubb has long been committed to communicating
important information about environmental and
sustainability initiatives to a range of stakeholders: our
clients, shareholders, employees, business partners,
the communities where we operate, and others who
have a general interest in our company, our industry,
and environmental and sustainability initiatives. These
communications include an annual report prepared in
accordance with the Task Force on Climate-Related
Financial Disclosures reporting framework (TCFD
Report), a UN Global Compact Communication on
Progress, a Global Prohibition on Modern Slavery
Statement, and a variety of other public reports and
disclosures on sustainability, which are available at
https://about.chubb.com/citizenship.html.
Beginning this year, Chubb has produced its first
combined report covering multiple sustainability
topics. Our 2023 Sustainability Report is available at
https://investors.chubb.com/financials/annual-reports/
default.aspx.
The Sustainability Report addresses the following topics:
• Our approach to sustainability
• Governance of sustainability risks
• Environmental matters and climate change
• Chubb’s workforce
• Business conduct and human rights
43
Officers and Executives
Chubb Group
Corporate Officers
Evan G. Greenberg*
Chairman and Chief Executive
Officer, Chubb Group
John Keogh*
President and Chief Operating
Officer, Chubb Group
John Lupica**
Vice Chairman, Chubb Group;
President,
North America Insurance
Juan Luis Ortega**
Executive Vice President,
Chubb Group;
President,
Overseas General Insurance
Timothy Boroughs**
Executive Vice President,
Chubb Group;
Chief Investment Officer
Julie Dillman
Executive Vice President,
Chubb Group;
Senior Executive, Operations
and Technology; and
Digital Transformation Officer
Peter Enns*
Executive Vice President,
Chubb Group;
Chief Financial Officer
Rainer Kirchgaessner
Executive Vice President,
Chubb Group;
Global Corporate
Development Officer
Frances D. O’Brien**
Executive Vice President,
Chubb Group;
Chief Risk Officer
Sean Ringsted
Executive Vice President,
Chubb Group;
Chief Digital Business Officer
Joseph Wayland*
Executive Vice President,
Chubb Group;
General Counsel
David Furby
Senior Vice President,
Chubb Group;
Regional President, Europe,
Middle East and Africa;
Division President,
Chubb Global Markets
Marcos Gunn
Senior Vice President,
Chubb Group;
Regional President,
Latin America
Bryce Johns**
Senior Vice President,
Chubb Group;
President, Chubb Life
Cheryl Krauss
Senior Vice President,
Chubb Group;
Chief Communications Officer
Christopher A. Maleno
Senior Vice President,
Chubb Group;
Division President,
North America Field Operations
Paul McNamee
Senior Vice President,
Chubb Group;
Regional President,
Asia Pacific
Michael W. Smith
Senior Vice President,
Chubb Group;
Global Claims Officer
Derek Talbott
Senior Vice President,
Chubb Group;
Division President,
North America Property
and Specialty Lines
Matthew Merna
Senior Vice President,
Chubb Group;
Division President,
North America Major Accounts
James E. Wixtead
Senior Vice President,
Chubb Group;
President,
Chubb Tempest Re Group
Scott Arnold
Vice President,
Chubb Group;
Chairman,
Chubb Agriculture and
Rain and Hail
Ross Bertossi
Vice President,
Chubb Group;
Global Underwriting
Judy Gonsalves
Vice President,
Chubb Group;
Division President,
Chubb Bermuda
Scott A. Meyer
Senior Vice President,
Chubb Group;
Division President,
Westchester
Paul O’Connell
Senior Vice President,
Chubb Group;
Chief Actuary
Margaret Peloso
Senior Vice President,
Chubb Group;
Global Climate Officer;
Executive Director,
Chubb Charitable Foundation
Jo Ann Rabitz
Senior Vice President,
Chubb Group;
Global Human Resources Officer
*Chubb Limited Executive Management and Executive Officer for SEC reporting purposes
**Executive Officer for SEC reporting purposes
44
Other Executives
Wayne Ashley
Division President,
Chubb Tempest Re International
Alex Faynberg
Division President,
Chubb Workplace Benefits
Samantha Froud
Chief Administration Officer,
Bermuda Operations
Daniela Hernandez
Division President,
International Accident & Health,
Overseas General Insurance
Mark Homan
Division President,
International Property
and Casualty,
Overseas General Insurance
Jeremiah Konz
Chief Reinsurance Officer,
Chubb Group
Edward Kopp
Regional President,
Far East
Eric Larson
Chief Compliance Officer,
Chubb Group
David Lupica
Chief Operating & Distribution
Management Officer,
Westchester
Sara Mitchell
Division President,
Continental Europe,
Middle East and North Africa
Michael O’Donnell
Division President,
Chubb Tempest Re USA
George Ohsiek
Chief Auditor,
Chubb Group
Sam Peters
Division President,
Chubb Tempest Re Bermuda
Mark Roberts
Division President,
United Kingdom, Ireland
and South Africa
Drew Spitzer
Treasurer,
Chubb Group
Rich Williams
President,
Combined Insurance
Annmarie Hagan
Vice President,
Chubb Group;
Chief Accounting Officer
Stephen M. Haney
Vice President,
Chubb Group;
Division President,
North America Surety;
Chief Underwriting Officer,
Global Surety
Michael Jones
Vice President,
Chubb Group;
North America Operations
and Technology
Michael Kessler
Vice President,
Chubb Group;
Division President,
Global Cyber Risk
Thomas Kropp
Vice President,
Chubb Group;
International Operations
and Technology
Gordon Mackechnie
Vice President,
Chubb Group;
Global Chief Technology Officer
Michael Mollica
Vice President,
Chubb Group;
Division President,
North America Financial Lines
Yancy Molnar
Vice President,
Chubb Group;
Head of International
Government Affairs &
Public Policy
Darryl Page
Vice President,
Chubb Group;
Chief Culture Officer
Ana Robic
Vice President,
Chubb Group;
Division President,
North America Personal
Risk Services
Benjamin Rockwell
Vice President,
Chubb Group;
Division President,
North America Middle Market
John Thompson
Vice President,
Chubb Group;
Division President,
International Personal Lines,
Overseas General Insurance
Karen Valanzano
Vice President,
Chubb Group;
Head of Federal Government
& Political Affairs
45
Chubb Limited Board of Directors
Evan G. Greenberg
Chairman and
Chief Executive Officer
Chubb Limited
Michael G. Atieh
Retired Chief Financial
and Business Officer
Ophthotech Corporation
Michael P. Connors
Independent Lead Director
Chubb Limited
Chairman and
Chief Executive Officer
Information Services
Group, Inc.
Michael L. Corbat
Former Chief
Executive Officer
Citigroup Inc.
Olivier Steimer
Former Chairman
Banque Cantonale
Vaudoise
Frances F. Townsend
Advisory Services,
Frances Fragos
Townsend, LLC
Kathy Bonanno
Business Finance Officer
Google Cloud
Robert J. Hugin
Former Chairman and
Chief Executive Officer
Celgene Corporation
Nancy K. Buese
Chief Financial Officer
Baker Hughes Company
Robert W. Scully
Retired Co-President
Morgan Stanley
Sheila P. Burke
Faculty Research Fellow
John F. Kennedy School
of Government
Harvard University
Theodore E. Shasta
Retired Partner
Wellington Management
Company
David H. Sidwell
Retired Chief
Financial Officer
Morgan Stanley
Board Committees
Audit Committee
Robert W. Scully, Chair
Kathy Bonanno
Nancy K. Buese
Theodore E. Shasta
Compensation Committee
Frances F. Townsend, Chair
Michael P. Connors
David H. Sidwell
Nominating & Governance
Committee
David H. Sidwell, Chair
Michael P. Connors
Frances F. Townsend
Risk & Finance Committee
Olivier Steimer, Chair
Michael G. Atieh
Sheila P. Burke
Michael L. Corbat
Robert J. Hugin
Executive Committee
Evan G. Greenberg, Chair
Michael P. Connors
Robert W. Scully
David H. Sidwell
Olivier Steimer
Frances F. Townsend
46
Shareholder Information
Visit investors.chubb.com, write to the
Investor Relations Department at Chubb
Limited or email investorrelations@chubb.com
for copies of the company’s reports to the
Securities and Exchange Commission on
Form 10–K, Form 10–Q or Form 8–K, all of
which are available without charge.
Address Investor Relations Inquiries to:
Investor Relations
Chubb Limited
1133 Avenue of the Americas
11th Floor
New York, NY 10036
Tel: 212-827-4445
Email: investorrelations@chubb.com
Transfer Agent & Registrar
Computershare
150 Royall St., Suite 101
Canton, MA 02021 USA
U.S.: 877-522-3752
Outside the U.S.: 201-680-6898
Address Shareholder Inquiries to:
By regular mail:
Computershare
P.O. Box 43006
Providence, RI 02940-3006 USA
By overnight delivery:
Computershare
150 Royall St., Suite 101
Canton, MA 02021 USA
Website:
www.computershare.com/investor
This annual report contains trademarks, trade
names and service marks owned by Chubb
Limited and its subsidiaries, including Chubb®,
Chubb logo® and Chubb. Insured®. In addition,
this report contains trademarks, trade names or
service marks of companies other than Chubb,
which belong to their respective owners.
This report is printed on papers certified to the
international standards of the Forest Stewardship
Council (FSC), which promotes responsible
management of the world’s forests.
Send Certificates for Transfer and Address
Changes to:
Cautionary Statement Regarding
Forward-Looking Statements
Computershare
P.O. Box 43006
Providence, RI 02940-3006 USA
Independent Auditors
PricewaterhouseCoopers AG
Birchstrasse 160
8050 Zurich
Switzerland
Tel: 41-58-792-44-00
PricewaterhouseCoopers LLP
Two Commerce Square
2001 Market Street, Suite 1800
Philadelphia, PA 19103 USA
Tel: 267-330-3000
New York Stock Exchange Symbol
CB
Chubb Common Shares CUSIP Number
H1467J 104
Forward-looking statements made in
this document, such as those related
to company performance, growth
opportunities, economic and market
conditions, product and service offerings,
commitments, 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, infection rates and
severity of pandemics and their effects
on our business operations and claims
activity, 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 management’s response to these
factors, and other factors identified in our
filings with the U.S. Securities and Exchange
Commission. 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.
47
Non-GAAP Financial Measures
Non-GAAP Financial Measures
This document contains non-GAAP financial measures.
The below non-GAAP financial measures, which may be
defined differently by other companies, are important for an
understanding of our overall results of operations and financial
condition. However, these measures should not be viewed
as a substitute for measures determined in accordance with
generally accepted accounting principles (GAAP).
activities of the Cigna acquisition. The costs are not related
to the ongoing activities of the individual segments and are
therefore also excluded from our definition of segment income.
We believe these integration expenses are not indicative of
our underlying profitability, and excluding these integration
expenses facilitates the comparison of our financial results to
our historical operating results. References to core operating
income measures mean net of tax, whether or not noted.
We provide certain financial measures on a constant-dollar
basis (i.e., excluding the impact of foreign exchange). We believe
it is useful to evaluate the trends in our results exclusive of
the effect of fluctuations in exchange rates between the U.S.
dollar and the currencies in which our international business is
transacted, as these exchange rates could fluctuate significantly
between periods and distort the analysis of trends. The impact
is determined by assuming constant foreign exchange rates
between periods by translating prior period results using the
same local currency exchange rates as the comparable current
period.
Certain metrics in this document are presented excluding the
one-time deferred tax benefit of $1.14 billion for transition
provisions included as part of Bermuda’s newly enacted income
tax law. We believe that excluding the impact of the one-
time deferred tax benefit provides a better evaluation of our
operating performance and enhances the understanding of the
trends in the underlying business that may be obscured by this
one-time item.
As Adjusted results in this document are results for prior
periods presented in accordance with the Long-Duration
Targeted Improvements (LDTI) U.S. GAAP guidance.
Core operating income, net of tax, relates only to Chubb
income, which excludes noncontrolling interests. It excludes
from Chubb net income the after-tax impact of adjusted net
realized gains (losses), market risk benefit gains (losses), Cigna
integration expenses, the amortization of fair value adjustment
of acquired invested assets and long-term debt related to
certain acquisitions. 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, and fluctuates
in part according to, the availability of market opportunities.
We exclude the amortization of fair value adjustments on
purchased invested assets and long-term debt related to
certain acquisitions due to the size and complexity of these
acquisitions. We also exclude Cigna integration expenses,
which are incurred by the overall company and are included in
Corporate. These expenses include legal and professional
fees and all other costs directly related to the integration
48
The following table presents the reconciliation of Chubb net
income to Core operating income and Chubb net income per
share to Core operating income per share:
(in millions of U.S. dollars,
except share and
per share data)
Chubb net income
Amortization of fair
value adjustment
of acquired invested
assets and long-term
debt, pre-tax
Tax (expense) benefit
on amortization
adjustment
Cigna integration
expenses, pre-tax
Tax benefit on
Cigna integration
expenses
Adjusted realized gains
(losses), pre-tax(1)
Net realized gains
(losses) related to
unconsolidated entities,
pre-tax(2)
Tax benefit on
adjusted net realized
gains (losses)
Market risk benefits
gains (losses), pre- and
after-tax
Core operating income
Tax benefit on
Bermuda’s income
tax law
Core operating income
excluding tax benefit
Impact of tax benefit
on core operating
income
Denominator:
Adj. wtd. avg. shares
outstanding and
assumed conversions
Full Year
2023
$9,028
As Adjusted
Full Year
2022
% Change
$5,246
72.1%
5
(20)
(8)
(69)
1
(48)
14
10
(539)
(1,074)
422
(262)
173
130
(307)
$9,337
80
$6,429
45.2%
1,135
-
$8,202
$6,429
27.6%
12%
414,202,568 423,527,444
Non-GAAP Financial Measures (continued)
(in millions of U.S. dollars,
except share and
per share data)
Diluted earnings
per share:
Full Year
2023
As Adjusted
Full Year
2022
% Change
Chubb net income
$21.80
$12.39
75.9%
(in millions of U.S. dollars except ratios)
Chubb net income
Core operating income
As
Adjusted
Full Year
Full Year
2023
2022
$9,028
$9,337
$5,246
$6,429
Amortization of fair
value adjustment of
acquired invested
assets and long-term
debt, net of tax
Cigna integration
expenses, net of tax
Adjusted net realized
gains (losses), net of tax
Market risk benefits
gains (losses), net of tax
Core operating income
Tax benefit on
Bermuda’s income
tax law
Core operating income
excluding tax benefit
(0.01)
(0.04)
(0.13)
(0.09)
0.14
(2.85)
(0.74)
$22.54
0.19
$15.18
48.5%
2.74
-
$19.80
$15.18
30.4%
(1) Excludes realized gains (losses) on crop derivatives of $(5) million and $(11) million for 2023 and
2022, respectively.
(2) Realized gains (losses) on partially owned entities, which are investments where we hold more
than an insignificant percentage of the investee’s shares. The net income or loss is included in Other
income (expense) in our income statement on a GAAP basis.
Core operating return on equity (ROE) and Core operating
return on tangible equity (ROTE) are annualized non-GAAP
financial measures. The numerator includes core operating
income (loss), net of tax. The denominator includes the average
Chubb shareholders’ equity for the period adjusted to exclude
unrealized gains (losses) on investments, current discount rate
on future policy benefits (FPB), and instrument-specific credit
risk on market risk benefits (MRB), all net of tax and attributable
to Chubb. For the ROTE calculation, the denominator is also
adjusted to exclude Chubb goodwill and other intangible assets,
net of tax. These measures enhance the understanding of the
return on shareholders’ equity by highlighting the underlying
profitability relative to shareholders’ equity and tangible
equity excluding the effect of these items as these are heavily
influenced by changes in market conditions. We believe ROTE
is meaningful because it measures the performance of our
operations without the impact of goodwill and other intangible
assets.
Equity — beginning of period, as reported
$50,519
$58,328
Less: unrealized gains (losses) on
investments, net of deferred tax
Less: changes in current discount rate on FPB,
net of deferred tax
Less: changes in instrument-specific credit risk
on MRB, net of deferred tax
(7,279)
2,256
(75)
(1,399)
(24)
(57)
Equity — beginning of period, as adjusted
$57,897
$57,528
Less: Chubb goodwill and other intangible
assets, net of tax
Equity — beginning of period, as
adjusted, excluding Chubb goodwill and
other intangible assets
20,455
19,456
$37,442
$38,072
Equity — end of period, as reported
$59,507
$50,519
Less: unrealized gains (losses) on
investments, net of deferred tax
Less: changes in current discount rate on FPB,
net of deferred tax
Less: changes in instrument-specific credit risk
on MRB, net of deferred tax
(4,177)
(7,279)
51
(75)
(22)
(24)
Equity — end of period, as adjusted
$63,655
$57,897
Less: Chubb goodwill and other intangible
assets, net of tax
Equity — end of period, as
adjusted, excluding Chubb goodwill and
other intangible assets
23,853
20,455
$39,802
$37,442
Weighted average equity, as reported
$55,013
$54,424
Weighted average equity, as adjusted
$60,776
$57,713
Weighted average equity, as adjusted,
excluding Chubb goodwill and other
intangible assets
ROE
Core operating ROTE
Core operating ROE
Core operating ROTE excluding tax benefit
Core operating ROE excluding tax benefit
$38,622
$37,757
9.6%
17.0%
11.1%
16.4%
24.2%
15.4%
21.6%
13.6%
49
Non-GAAP Financial Measures (continued)
Combined ratio measures the underwriting profitability of
our property and casualty business. P&C combined ratio and
P&C Current Accident Year (CAY) combined ratio excluding
Catastrophe losses (CATs) are non-GAAP financial measures.
Refer to the Non-GAAP Reconciliation section in the 2023
Form 10-K, on pages 68-71, for the definition of these
non-GAAP financial measures and reconciliation to the
Combined ratio.
Life Insurance net premiums written and deposits is a non-
GAAP financial measure that includes Life Insurance net
premiums written and deposits collected on universal life and
investment contracts. 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, new life deposits are an important component
of production and key to our efforts to grow our business.
The following table presents the reconciliation of combined
ratio to P&C combined ratio, and the reconciliation of P&C
combined ratio to P&C CAY combined ratio excluding CATs:
Combined ratio
Add: impact of gains and losses
on crop derivatives
P&C combined ratio
Less: catastrophe losses
Less: prior period development
Full Year
Full Year
2023
2022
86.5%
87.6%
0.0%
0.0%
86.5%
87.6%
4.5%
5.9%
–1.9%
–2.5%
P&C CAY combined ratio excluding CATs
83.9%
84.2%
Book value per common share is Chubb shareholders’ equity
divided by the shares outstanding. Tangible book value per
common share is Chubb shareholders’ equity less Chubb
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.
The following table presents a reconciliation of book value per
common share to tangible book value per common share:
(in millions of U.S. dollars,
except share and
per share data)
Chubb shareholders’
equity
Less: Chubb goodwill
and other intangible
assets, net of tax
Numerator for tangible
book value per share
December 31
As Adjusted
December 31
2023
2022
% Change
$59,507
$50,519
23,853
20,455
The following table presents a reconciliation of Life Insurance net
premiums written and deposits:
As
Adjusted
Full Year
Full Year
(in millions of U.S. dollars)
2023
2022
Life Insurance net premiums written
$5,465
$3,608
Life Insurance deposits
1,590
1,800
Total Life Insurance net premiums written
and deposits
$7,055
$5,408
% Change from prior year
Life Insurance gross premiums written
Total Life Insurance gross premiums written
and deposits
30.5%
$5,754
$7,344
Adjusted net investment income is net investment income
excluding the amortization of the fair value adjustment on
acquired invested assets from certain acquisitions, and including
investment income from partially owned investment companies
(private equity partnerships) where our ownership interest is in
excess of 3% that are accounted for under the equity method.
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.
The following table presents a reconciliation of net investment
income to adjusted net investment income:
(in millions of U.S. dollars)
Net investment income
Less: amortization expense of fair
value adjustment on acquired
invested assets
Full Year
Full Year
2023
2022
$4,937
$3,742
(21)
(41)
$35,654
$30,064
Add: other income (expense) from private
Denominator: shares
outstanding
405,269,637 414,594,856
equity partnerships
385
240
Adjusted net investment income
$5,343
$4,023
% Change from prior year
32.8%
Book value per
common share
Tangible book value
per common share
50
$146.83
$121.85
20.5%
$87.98
$72.51
21.3%
Non-GAAP Financial Measures (continued)
P&C underwriting income is underwriting income excluding the
Life Insurance segment. We use P&C underwriting income (loss)
and operating ratios to monitor the pre-tax results of our P&C
operations without the impact of certain factors, including net
investment income, other income (expense), interest expense,
amortization expense of purchased intangibles, Cigna integration
expense, amortization of fair value of acquired invested assets
and debt, income tax expense, adjusted net realized gains
(losses), and market risk benefits gains (losses).
The following table presents a reconciliation of net income to
P&C underwriting income:
As
Adjusted
Full Year
Full Year
(in millions of U.S. dollars)
Net income, as reported
Less: Income tax (expense) benefit
Amortization expense of purchased
intangibles
Other income (expense)
Interest expense
Net investment income
Net realized gains (losses)
Market risk benefits gains (losses)
Cigna integration expenses
Life Insurance underlying income (loss)(1)
Add: Realized gains (losses) on crop
derivatives
P&C underwriting income
2023
2022
$9,015
$5,246
(511)
(1,239)
(310)
836
(672)
4,937
(607)
(307)
(69)
253
(285)
(89)
(570)
3,742
(1,085)
80
(48)
174
(5)
(11)
$5,460
$4,555
% Change from prior year
19.9%
(1) Life Insurance underlying income (loss) is calculated by subtracting losses and loss expenses,
policy benefits, policy acquisition costs and administrative expenses from net premiums earned
related to the Life Insurance segment.
Book value per common share and tangible book value per
common share excluding accumulated other comprehensive
income (loss) (AOCI), excludes AOCI from the numerator
because it eliminates the effect of items that can fluctuate
significantly from period to period, primarily based on changes
in interest rates and foreign currency movement, to highlight
underlying growth in book and tangible book value.
The following table provides a reconciliation of growth in book
value per common share and tangible book value per common
share excluding AOCI:
(in millions of U.S. dollars,
except share and
per share data)
Book value
Less: AOCI
Book value excluding
AOCI
December 31
2023
$59,507
(6,809)
As Adjusted
December 31
2022
% Change
$50,519
(10,185)
$66,316
$60,704
Tangible book value
$35,654
$30,064
Less: tangible AOCI
(5,999)
(9,279)
Tangible book value
excluding tangible AOCI
$41,653
$39,343
Denominator: shares
outstanding
Book value per share
excluding AOCI
Tangible book value
per share excluding
tangible AOCI
405,269,637
414,594,856
$163.64
$146.42
11.8%
$102.78
$94.90
8.3%
51
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2023
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
☑
☐
For the Transition Period from to
Commission File No. 1-11778
CHUBB LIMITED
(Exact name of registrant as specified in its charter)
Switzerland
(State or other jurisdiction of incorporation or
organization)
98-0091805
(I.R.S. Employer Identification No.)
Baerengasse 32
Zurich, Switzerland CH-8001
(Address of principal executive offices) (Zip Code)
+41 (0)43 456 76 00
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Common Shares, par value CHF 0.50 per share
Guarantee of Chubb INA Holdings Inc. 0.30% Senior Notes due 2024
Guarantee of Chubb INA Holdings Inc. 0.875% Senior Notes due 2027
Guarantee of Chubb INA Holdings Inc. 1.55% Senior Notes due 2028
Guarantee of Chubb INA Holdings Inc. 0.875% Senior Notes due 2029
Guarantee of Chubb INA Holdings Inc. 1.40% Senior Notes due 2031
Guarantee of Chubb INA Holdings Inc. 2.50% Senior Notes due 2038
Trading Symbol(s)
Name of each exchange on
which registered
CB
CB/24A
CB/27
CB/28
CB/29A
CB/31
CB/38A
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☑ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☑
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to
Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was
required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” "smaller reporting company,"
and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Non-accelerated filer
☑
☐
Accelerated filer
☐
Smaller reporting company ☐
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. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of
its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C 7262(b)) by the registered public
accounting firm that prepared or issued its audit report. ☑
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based
compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑
The aggregate market value of voting stock held by non-affiliates as of June 30, 2023 (the last business day of the registrant's most
recently completed second fiscal quarter), was approximately $79 billion. For the purposes of this computation, shares held by directors
and officers of the registrant have been excluded. Such exclusion is not intended, nor shall it be deemed, to be an admission that such
persons are affiliates of the registrant.
As of February 16, 2024, there were 405,758,796 Common Shares par value CHF 0.50 of the registrant outstanding.
Certain portions of the registrant's definitive proxy statement relating to its 2024 Annual General Meeting of Shareholders are incorporated
by reference into Part III of this report.
Documents Incorporated by Reference
CHUBB LIMITED INDEX TO FORM 10-K
PART I
ITEM 1. Business
ITEM 1A. Risk Factors
ITEM 1B. Unresolved Staff Comments
ITEM 1C. Cybersecurity and Risk Governance
ITEM 2. Properties
ITEM 3.
Legal Proceedings
ITEM 4. Mine Safety Disclosures
PART II
ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases
of Equity Securities
ITEM 6.
[Reserved]
ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk
ITEM 8.
Financial Statements and Supplementary Data
ITEM 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
ITEM 9A. Controls and Procedures
ITEM 9B. Other Information
ITEM 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
PART III
ITEM 10. Directors, Executive Officers and Corporate Governance
ITEM 11. Executive Compensation
ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
ITEM 13. Certain Relationships and Related Transactions and Director Independence
ITEM 14. Principal Accounting Fees and Services
PART IV
ITEM 15. Exhibits, Financial Statements Schedules
ITEM 16. Form 10-K Summary
SIGNATURES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
2
22
34
34
36
36
36
37
38
39
90
95
95
95
95
95
96
96
96
96
96
97
103
103
F-2
1
PART I
ITEM 1. Business
General
Chubb Limited is the Swiss-incorporated holding company of the Chubb Group of Companies. Chubb Limited, which is
headquartered in Zurich, Switzerland, and its direct and indirect subsidiaries (collectively, the Chubb Group of Companies,
Chubb, we, us, or our) are a global insurance and reinsurance organization, serving the needs of a diverse group of clients
worldwide. At December 31, 2023, we had total assets of $231 billion and total Chubb shareholders’ equity, which excludes
noncontrolling interests, of $60 billion. Chubb was incorporated in 1985 at which time it opened its first business office in
Bermuda and continues to maintain operations in Bermuda. We have grown our business through increased premium volume,
expansion of product offerings and geographic reach, and the acquisition of other companies, to become a global property and
casualty (P&C) leader. We expanded our personal accident and supplemental health (A&H), and life insurance business with the
acquisition of Cigna's business in several Asian markets in 2022. We further advanced our goal of greater product, customer,
and geographical diversification with incremental purchases that led to a controlling majority interest in Huatai Insurance Group
Co. Ltd (Huatai Group), a Chinese financial services holding company with separate P&C, life, and asset management
subsidiaries (collectively, Huatai) on July 1, 2023. At December 31, 2023, our ownership interest in Huatai Group was
approximately 76.5 percent. Refer to Note 2 to the Consolidated Financial Statements for additional information on our
acquisitions.
With operations in 54 countries and territories, Chubb provides commercial and consumer P&C insurance, A&H, reinsurance,
and life insurance to a diverse group of clients. We provide commercial insurance products and service offerings such as risk
management programs, loss control, and engineering and complex claims management. We provide specialized insurance
products ranging from Directors & Officers (D&O) and financial lines to various specialty-casualty and umbrella and excess
casualty lines to niche areas such as aviation and energy. We also offer consumer lines insurance coverage including
homeowners, automobile, valuables, umbrella liability, and recreational marine products. In addition, we supply A&H and life
insurance to individuals in select countries.
We serve multinational corporations, mid-size and small businesses with property and casualty insurance and risk engineering
services; affluent and high net worth individuals with substantial assets to protect; individuals purchasing life, personal
accident, supplemental health, homeowners, automobile in certain international markets and for high net worth individuals in
the U.S., and specialty personal insurance coverage; companies and affinity groups providing or offering accident and health
insurance programs and life insurance to their employees or members; and insurers managing exposures with reinsurance
coverage.
We make available free of charge through our website (investors.chubb.com, under Financials) our annual report on Form 10-K,
quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports, if any, filed or furnished
pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after they have been electronically
filed with or furnished to the U.S. Securities and Exchange Commission (SEC). Also available through our website (under
Investor Relations / Corporate Governance) are our Corporate Governance Guidelines, Code of Conduct, and Charters for the
Committees of the Board of Directors (the Board). Printed documents are available by contacting our Investor Relations
Department (Telephone: +1 (212) 827-4445, E-mail: investorrelations@chubb.com).
We also use our website as a means of disclosing material, non-public information and for complying with our disclosure
obligations under SEC Regulation FD (Fair Disclosure). Accordingly, investors should monitor the Investor Relations portion of
our website, in addition to following our press releases, SEC filings, and public conference calls and webcasts. The information
contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this
report. The SEC maintains an Internet site (www.sec.gov) that contains reports, proxy and information statements, and other
information regarding issuers that file with the SEC.
Customers
For most commercial and personal lines of business we offer, insureds typically use the services of an insurance broker or agent.
An insurance broker acts as an agent for the insureds, offering advice on the types and amount of insurance to purchase, and
assists in the negotiation of price and terms and conditions. We obtain business from the local and major international
insurance brokers and typically pay a commission to brokers for any business accepted and bound. Loss of all or a substantial
portion of the business provided by one or more of these brokers could have a material adverse effect on our business. In our
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opinion, no material part of our business is dependent upon a single insured or group of insureds. We do not believe that the
loss of any one insured would have a material adverse effect on our financial condition or results of operations.
Competition
Competition in the insurance and reinsurance marketplace is substantial. We compete on an international and regional basis
with major U.S., Bermuda, European, and other international insurers and reinsurers and with underwriting syndicates, some of
which have greater financial, technological, marketing, distribution and management resources than we do. In addition, capital
market participants have created alternative products that are intended to compete with reinsurance products. We also compete
with new companies and existing companies that move into the insurance and reinsurance markets. Competitors include other
stock companies, mutual companies, alternative risk sharing groups (such as group captives and catastrophe pools), and other
underwriting organizations. Competitors sell through various distribution channels and business models, across a broad array of
product lines, and with a high level of variation regarding geographic, marketing, and customer segmentation. We compete for
business not only on the basis of price but also on the basis of availability of coverage desired by customers and quality of
service. We also compete in China for assets under management (AUM) with investment management firms, banks, and other
financial institutions that offer products that are similar to those offered by Huatai's asset management companies.
The insurance industry is changing rapidly. Our ability to compete is dependent on a number of factors, particularly our ability to
maintain the appropriate financial strength ratings as assigned by independent rating agencies and effectively using digital
capabilities, including the growth of new digital-based distribution models, in an everchanging competitive landscape and
incorporating, among other things, climate and environmental changes into our insurance processes, products, and services. Our
broad market capabilities in personal, commercial, specialty, and A&H lines made available by our underwriting expertise,
business infrastructure, and global presence, help define our competitive advantage. Our superior claims service is a significant
asset to our business, our business partners and customers, and is unique in the industry. Our strong balance sheet is attractive
to businesses, and our strong capital position and global platform affords us opportunities for growth not available to smaller,
less diversified insurance companies. Refer to “Segment Information” for competitive environment by segment.
Trademarks and Trade Names
Various trademarks and trade names we use protect names of certain products and services we offer and are important to the
extent they provide goodwill and name recognition in the insurance industry. We use commercially reasonable efforts to protect
these proprietary rights, including various trade secret and trademark laws. We intend to retain material trademark rights in
perpetuity, so long as it satisfies the use and registration requirements of applicable countries. One or more of the trademarks
and trade names could be material to our ability to sell our products and services. We have taken appropriate steps to protect
our ownership of key names, and we believe it is unlikely that anyone would be able to prevent us from using names in places
or circumstances material to our operations.
Human Capital Management
Our workforce includes approximately 40,000 people across our 54 countries and territories around the world, including 40
percent in North America, 10 percent in Europe, Eurasia and Africa, 37 percent in Asia (including Huatai Group in China), and
13 percent in Latin America. Chubb effectively manages voluntary turnover, which, during 2023, generally moderated and
returned to pre-pandemic levels. The average age of our workforce is 41 years, and the average tenure is 7.8 years.
We seek to attract, retain, and develop the very best insurance professionals and to provide an inclusive and supportive culture
that allows all of our employees to reach their full potential. We strive to achieve a true meritocracy as we recognize our
responsibility to ensure that all employees feel comfortable and energized to do their best, contribute, and be recognized and
rewarded.
We know that our success in a diverse world requires a team reflecting the global diversity of the talent that we seek to recruit.
As we continue to recruit and advance top talent, Chubb is committed to improving gender and racial diversity across the
company and within our executive leadership. To ensure progress on diversity, we hold our leaders accountable, applying the
same rigor to our diversity efforts that exist in other areas of our business.
Chubb leadership tracks several metrics that are aligned to our talent objectives, and these are shared and discussed with the
Board of Directors (Board). The metrics include workforce diversity, hiring, promotion, retention, turnover and learning and
development activity. Senior management also provides our Board with regular updates on matters including employee
succession and talent development, including detailed overviews of bench strength and talent profiles multiple levels below the
senior executive level, highlighting qualifications, experience, and development areas.
In 2023, there was year-over-year progress on gender and racial diversity at the leadership level, most notably on racial diversity
at our senior vice president and above levels, and we also improved the diversity of hiring into our development programs. At
December 31, 2023, 31 percent of Chubb's U.S. workforce are underrepresented minorities.
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Chubb Culture
Chubb is a diverse group of professionals, committed to Chubb’s superior underwriting, service and execution. Our extensive
efforts in this area include mentorships, affinity groups, diversity awareness training, and education, open dialogue on race and
racism, management development programs, and inclusive hiring practices. We depend on our culture of leadership
accountability to foster a diverse and inclusive meritocracy at Chubb.
Our embrace of diversity is reflected in Chubb's variety of employee resource groups, called Business Roundtables, that are
aimed at fostering an inclusive work environment. These groups provide support, mentorship, and networking opportunities for
various underrepresented groups. They also play a significant role in business development, community outreach and influence.
Some of the Business Roundtables at Chubb include: Mosaic aims to foster the professional development of diverse talent
including Black, Asian and Latinx employees through networking, coaching, mentoring, and through individual Black Alliance,
Asian Alliance, and Latinx Alliance Business Roundtables within Mosaic; Impact is dedicated to the support, development, and
advancement of women to realize their career goals while strengthening ties to clients, brokers, and the insurance industry;
Thrive seeks to advance the development of and engagement of colleagues with visible and invisible disabilities, while
leveraging the group’s diverse perspectives to strengthen Chubb’s culture and market position; Pride provides a supportive
community for LGBTQ+ employees and their allies; Salute supports employees who are veterans, active service members,
military spouses, and family members. These groups not only help to create a more inclusive work environment, but they also
contribute to our overall success by promoting a wide range of ideas and perspectives.
In 2023, we also continued our leadership and involvement externally in the Black Insurance Industry Collective (BIIC), whose
mission is to accelerate the advancement of Black professionals within the insurance industry and to increase representation of
Black leaders at the executive level. Other internal programs include: Chubb Start, which supports the continuous professional
development of women who are early in their careers; Chubb Signatures, a global and regional lecture series for successful
senior women, diverse men and inclusion champions to share their unique backgrounds, experiences and hard-earned lessons in
business; and Advancing Women Leaders, a global program to enable executives to understand challenges and opportunities for
advancing women.
Talent Strategy
Our ability to deliver excellence in underwriting and superior service depends upon attracting, retaining, and engaging top talent
and building a talent pipeline for the future. Chubb has several formalized programs to support the recruitment and retention of
the talent that is necessary to the growth and success of our business. Formal training and development opportunities include
the Chubb Associate Program in North America, which is a technical, experiential learning program for early career
professionals. In addition, Chubb Apprenticeships are earn-and-learn programs that combine formal classroom learning with on-
the-job training. Chubb recruits early-career professionals without a 4-year university degree for Apprentice roles in Claims,
Underwriting and Technology. Since inception eighteen months ago, more than 50 Apprentices have been hired in North
America; 89 percent are racially diverse, 53 percent are women, and 81 percent are still with the organization, having
graduated into full-time positions.
Compensation and Benefits
Chubb is committed to delivering competitive compensation and benefits to its employees worldwide to attract and retain a
highly qualified, experienced, talented, and motivated workforce. We vary and adjust our compensation to support the human
resources requirements of our business in markets around the world and we utilize various analytical tools to monitor and
address racial and gender pay equity. Additionally, we structure our compensation programs for leaders to include a mix of
short- and long-term awards, with a focus on linking pay to Chubb's performance and the enhancement of shareholder value
over the medium- and long-term.
Segment Information
Chubb operates through six business segments: North America Commercial P&C Insurance, North America Personal P&C
Insurance, North America Agricultural Insurance, Overseas General Insurance, Global Reinsurance, and Life Insurance. In 2023,
consolidated net premiums earned (NPE) was $45.7 billion. On July 1, 2023, in connection with obtaining a controlling
ownership interest in Huatai Group, we discontinued equity method accounting and applied consolidation accounting to our
investment. Therefore, the business activity for, and the financial position of, Huatai Group is reported at 100 percent on the
Consolidated Financial Statements as of that date. The relevant amounts attributable to shareholders other than Chubb are
reflected under Noncontrolling interests. Huatai Group's life insurance and asset management businesses are included in the Life
Insurance segment, and Huatai Group's P&C business is included in the Overseas General Insurance segment. Results for Huatai
Group's non-insurance operations, comprising real estate and holding company activity, are included in Corporate. Refer to Note
19 to the Consolidated Financial Statements for additional information about our segments.
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North America Commercial P&C Insurance (40 percent of 2023 Consolidated NPE)
Overview
The North America Commercial P&C Insurance segment comprises operations that provide P&C and A&H insurance and
services to large, middle market, and small commercial businesses in the U.S., Canada, and Bermuda. This segment includes:
•
Commercial Insurance (40 percent of this segment's 2023 NPE), which includes our retail division focused on middle
market customers and small businesses
• Major Accounts (38 percent of this segment's 2023 NPE), our retail division focused on large institutional organizations and
corporate companies
• Westchester (17 percent of this segment's 2023 NPE), our wholesale and specialty division
Chubb Bermuda (5 percent of this segment’s 2023 NPE), our high excess retail division
•
Products and Distribution
The Commercial Insurance operations provide a broad range of P&C, financial lines, and A&H products targeted to U.S and
Canadian-based middle market customers in a variety of industries, while the Small Commercial operations provide a broad
range of property and casualty, workers' compensation, small commercial management and professional liability for small
businesses based in the U.S.
•
•
Commercial Insurance products and services offered include traditional property and casualty lines of business, including
Package, which combines property and general liability, workers' compensation, automobile, umbrella; financial lines of
business, including professional liability, management liability and cyber risk coverage; and other lines including
environmental, A&H, and international coverages. Commercial Insurance distributes its insurance products through a North
American network of independent retail agents and regional, multinational and digital brokers. Generally, our customers
purchase insurance through a single retail agent or broker, do not employ a risk management department, and do not retain
significant risk through self-insured retentions. The majority of our customers purchase a Package product or a portfolio of
products, which is a collection of insurance offerings designed to cover various needs.
Small Commercial Insurance products and services offered include property and casualty lines of business, including a
business owner policy which contains property and general liability; financial lines, including professional liability,
management liability and cyber risk coverage; and other lines including workers’ compensation, automobile liability, and
international coverages. Products are generally offered through a North American network of independent agents and retail
brokers, as well as eTraditional, which are digital platforms where we electronically quote, bind, and issue for agents and
brokers. An example of this is the Chubb Marketplace.
Major Accounts provides a broad array of commercial lines of products and services, including traditional and specialty P&C,
risk management, and A&H products to large U.S. and Canadian-based institutional organizations and corporate companies.
Major Accounts distributes its insurance products primarily through a limited number of retail brokers. In addition to using
brokers, certain products are also distributed through general agents, independent agents, managing general agents (MGA),
managing general underwriters, alliances, affinity groups, and direct marketing operations. Products and services offered include
property, professional liability, cyber risk, excess casualty, workers’ compensation, general liability, automobile liability,
commercial marine, surety, environmental, construction, medical risk, inland marine, A&H coverages, as well as claims and risk
management products and services.
The Major Accounts operations are organized into the following distinct business units, each offering specialized products and
services targeted at specific markets:
•
Chubb Global Casualty offers a range of customized risk management primary casualty products designed to help large
insureds, including national accounts, and managing risk for workers’ compensation, general liability, and automobile
liability coverages as well as offering casualty insurance solutions for commercial real estate. Chubb Global Casualty also
provides products which insure specific global operating risks of U.S.-based multinational companies and include deductible
programs, captive programs, and paid or incurred loss retrospective plans. Within Chubb Global Casualty, Chubb
Alternative Risk Solutions Group underwrites contractual indemnification policies which provides prospective coverage for
loss events within the insured’s policy retention levels, and underwrites assumed loss portfolio transfer (LPT) contracts in
which insured loss events have occurred prior to the inception of the contract.
•
Property provides products and services including primary, quota share and excess all-risk insurance, risk management
programs and services, commercial, inland marine, and aerospace products.
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•
•
•
•
•
Casualty Risk provides coverages including umbrella and excess liability, environmental risk, casualty programs for
commercial construction related projects for companies and institutions, and medical risk specialty liability products for the
healthcare industry.
Surety offers a wide variety of surety products and specializes in underwriting both commercial and contract bonds and has
the capacity for bond issuance on an international basis.
Accident & Health (A&H) products are targeted to large corporate and affinity groups, and include employee benefit plans,
occupational accident, student accident, and worldwide travel accident and global medical programs. With respect to
products that include supplemental medical and hospital indemnity coverages, we typically pay fixed amounts for claims
and are therefore insulated from rising healthcare costs. A&H also provides specialty consumer lines products, including
credit card enhancement programs (identity theft, rental car collision damage waiver, trip travel, and purchase protection
benefits).
Financial Lines provides management liability and professional liability (D&O and E&O), transactional risk, and cyber risk
products to public companies as well as to private and not for profit organizations.
ESIS Inc. (ESIS) is an in-house third-party claims administrator that performs claims management and risk control services
for domestic and international organizations as well as for the North America Commercial P&C Insurance segment. ESIS
services include comprehensive medical managed care; integrated disability services; pre-loss control and risk management;
health, safety, and environmental consulting; salvage and subrogation; and healthcare recovery services. The net results for
ESIS are included in North America Commercial P&C Insurance’s administrative expenses.
Westchester is our wholesale and specialty division that serves the market for business risks that tend to be hard to place or not
easily covered by traditional policies due to unique or complex exposures and provides specialty products for property, casualty,
environmental, professional liability, inland marine, product recall, small business, binding and program coverages in the U.S.
and Canada. Products are offered through the wholesale distribution channel.
Chubb Bermuda is our high excess retail division which provides commercial insurance products on an excess basis including
excess liability, D&O, professional liability, property, and political risk, the latter being written by Sovereign Risk Insurance Ltd.,
a wholly-owned managing agent. Chubb Bermuda focuses on Fortune 1000 companies and targets risks that are generally low
in frequency and high in severity. Products are offered primarily through the Bermuda offices of major, internationally recognized
insurance brokers.
Competitive Environment
The Commercial Insurance operations compete against numerous insurance companies ranging from large national carriers to
small and mid-size insurers who provide specialty coverages and standard P&C products. Recent competitive developments
include the growth of new digital-based distribution models. Westchester competes against a number of large, national carriers
as well as regional competitors and other entities offering risk alternatives such as self-insured retentions and captive programs.
Chubb Bermuda competes against international commercial carriers writing business on an excess of loss basis.
Major Accounts competes against a number of large, global carriers as well as regional competitors and other entities offering
risk alternatives such as self-insured retentions and captive programs. The markets in which we compete are subject to
significant cycles of fluctuating capacity and wide disparities in price adequacy. We pursue a specialist strategy and focus on
market opportunities where we can compete effectively based on service levels and product design, while still achieving an
adequate level of profitability. We also achieve a competitive advantage through Major Accounts’ innovative product offerings
and our ability to provide multiple products to a single client due to our nationwide local presence. In addition, all our domestic
commercial units are able to deliver global products and coverage to customers in concert with our Overseas General Insurance
segment.
North America Personal P&C Insurance (12 percent of 2023 Consolidated NPE)
Overview
The North America Personal P&C Insurance segment includes the business written by Chubb Personal Risk Services division,
which includes high net worth personal lines business, with operations in the U.S. and Canada. This segment provides affluent
and high net worth individuals and families with homeowners, high value automobile and collector cars, valuable articles
(including fine arts), personal and excess liability/umbrella, travel insurance, cyber, and recreational marine insurance and
services. Our homeowners business, including valuable articles, represented 69 percent of North America Personal P&C
Insurance’s net premiums earned in 2023.
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Products and Distribution
Chubb Personal Risk Services offers comprehensive personal insurance products and services to meet the evolving needs of high
net worth families and individuals. Our seamless customer experience and superior coverage protect not only our clients’ most
valuable possessions, but also their standard of living. Our target customers consist of high net worth consumers with insurance
needs that typically extend beyond what mass market carriers can offer. These coverages are offered on both an admitted and
excess and surplus lines basis through independent regional agents and brokers, as well as digital partnerships.
Competitive Environment
Chubb Personal Risk Services competes against insurance companies of varying sizes that sell personal lines products through
various distribution channels, including retail agents as well as online distribution channels. We achieve a competitive
advantage through our ability to address the specific needs of high net worth families and individuals, to provide superior service
to our customers, and to develop and deploy digital production and processes.
North America Agricultural Insurance (7 percent of 2023 Consolidated NPE)
Overview
The North America Agricultural Insurance segment comprises our U.S. and Canadian based businesses that provide a variety of
coverages including crop insurance, primarily Multiple Peril Crop Insurance (MPCI) and crop-hail insurance through Rain and
Hail Insurance Service, Inc. (Rain and Hail) as well as farm and ranch and specialty P&C commercial insurance products and
services through our Chubb Agribusiness unit.
Products and Distribution
Rain and Hail provides comprehensive MPCI and crop-hail insurance coverages.
• MPCI is federally subsidized crop protection from numerous causes of loss, including drought, excessive moisture, freeze,
disease and more. The MPCI program is offered in conjunction with the U.S. Department of Agriculture. MPCI products
include revenue protection (defined as providing both commodity price and yield coverages), yield protection, margin
protection, prevented planting coverage and replant coverage. For additional information on our MPCI program, refer to
“Crop Insurance” under Item 7.
•
Crop-Hail coverage provides crop protection from damage caused by hail and/or fire, with options in some markets for other
perils such as wind or theft. Coverage is provided on an acre-by-acre basis and is available in the U.S. and in some parts of
Canada. Crop-Hail can be used in conjunction with MPCI or other comprehensive coverages to offset the deductible and
provide protection up to the actual cash value of the crop.
Chubb Agribusiness comprises Commercial Agribusiness and Farm and Ranch Agribusiness.
•
•
Commercial Agribusiness offers specialty P&C coverages for commercial companies that manufacture, process and
distribute agricultural products. Commercial products and services include property, general liability for premises/operations
and product liability, commercial automobile, workers' compensation, employment practices liability coverage, built-in
coverage for premises pollution, cyber and information security, and product withdrawal.
Farm and Ranch Agribusiness offers an extensive line of coverages for farming operations from Hobby/Gentleman farms to
complex corporate farms and equine services including personal use, boarding, and training. Coverages include farm and
ranch structures, automobile and other vehicle coverages, and machinery and other equipment coverages.
Competitive Environment
Rain and Hail primarily operates in a federally regulated program where all approved providers offer the same product forms and
rates through independent and/or captive agents. We seek a competitive advantage through our ability to provide superior
service to our customers, including the development of digital solutions. Chubb Agribusiness competes against both national and
regional competitors offering specialty P&C insurance coverages to companies that manufacture, process, and distribute
agricultural products.
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Overseas General Insurance (27 percent of 2023 Consolidated NPE)
Overview
The Overseas General Insurance segment comprises our retail division Chubb International, which includes Huatai Property &
Casualty Insurance Co., Ltd. (Huatai P&C), our wholesale division Chubb Global Markets (CGM), and the international
supplemental A&H business of Combined International Insurance, which is no longer writing new business. Chubb International
comprises our international retail commercial P&C and corporate A&H traditional and specialty lines serving large corporations,
middle market and small customers; consumer A&H and traditional and specialty personal lines business serving local territories
outside the U.S., Bermuda, and Canada. CGM, our London-based international specialty and excess and surplus lines wholesale
business, includes Lloyd's of London (Lloyd's) Syndicate 2488, a wholly-owned Chubb syndicate supported by funds at Lloyd’s
provided by Chubb Corporate Members. Syndicate 2488 has an underwriting capacity of £630 million for the Lloyd’s 2024
account year. The syndicate is managed by Chubb’s Lloyd’s managing agency, Chubb Underwriting Agencies Limited. At
December 31, 2023, our ownership interest in Huatai P&C was approximately 76.5 percent.
Products and Distribution
Chubb International maintains a presence in every major insurance market in the world and is organized geographically along
product lines as follows: Europe, Middle East and Africa, Asia Pacific (including Huatai P&C), Japan, and Latin America.
Products offered include commercial P&C and corporate A&H lines, including specialty coverages and services, and consumer
lines, including A&H and personal lines insurance products. Chubb International's P&C business is generally written, on both a
direct and assumed basis, through major international, regional, and local brokers and agents. Certain branded products are
also offered via digital-commerce platforms, allowing agents and brokers to quote, bind, and issue policies at their convenience.
Huatai P&C provides a range of commercial and personal P&C products in China, including automobile, homeowners, property,
professional liability, product liability, employer liability, business interruption, marine cargo, personal accident, and specialty
risk. These products are marketed through various distribution channels including nearly 200 licensed sales locations in 28
Chinese provinces. Property insurance products include traditional commercial fire coverage, as well as energy industry-related,
marine, construction, and other technical coverages. Principal casualty products are commercial primary and excess casualty,
environmental, and general liability. A&H and other consumer lines products are distributed through brokers, agents, direct
marketing programs, including thousands of telemarketers, and sponsor relationships. The A&H operations primarily offer
personal accident and supplemental medical coverages including accidental death, business/holiday travel, specified disease,
disability, medical and hospital indemnity, and income protection. We are not in the primary healthcare business. With respect
to our supplemental medical and hospital indemnity products, we typically pay fixed amounts for claims and are therefore
largely insulated from the direct impact of rising healthcare costs. Chubb International specialty coverages include D&O,
professional indemnity, cyber, surety, aviation, political risk, and specialty personal lines products. Chubb International personal
lines operations provide a wide range of consumer lines products to meet the needs of specific target markets around the world.
Products include high net worth homes, traditional homeowners, automobile, and specialty products that cover smart phones,
eyeglasses, and personal cyber risk.
CGM offers products through its parallel distribution network via two legal entities, Chubb European Group SE (CEG) and Chubb
Underwriting Agencies Limited, managing agent of Syndicate 2488. CGM uses the Syndicate to underwrite P&C business on a
global basis through Lloyd's worldwide licenses. They also use CEG to underwrite similar classes, including in the U.S. where
they are eligible to write excess and surplus lines business. Factors influencing the decision to place business with the Syndicate
or CEG include licensing eligibilities and client/broker preference. CGM also has a presence outside London, in the U.S.,
Canada, Europe, Asia and Latin America, for certain specialty lines of business (political risk and trade credit as well as aviation)
which are underwritten by local Chubb entities. All business underwritten by CGM is accessed through registered brokers,
except for a limited number of direct relationships, where risks are written without an intermediary. The main lines of business
include aviation, property, energy, professional lines, marine, financial lines, political risk, and credit.
Competitive Environment
Chubb International's primary competitors include U.S.-based companies with global operations, as well as non-U.S. global
carriers and indigenous companies in regional and local markets. Huatai P&C's primary competitors are China-based insurers,
including state-owned or government related entities. For the A&H and personal lines businesses, locally based competitors also
include financial institutions and bank owned insurance subsidiaries. Our international operations have the distinct advantage of
being part of one of the few international insurance groups with a global network of licensed companies able to write policies on
a locally admitted basis. Our international operations also have the advantage of selling products through a variety of
distribution channels including partnerships with major international, regional, and local brokers and agents. Additionally, as
noted above, certain branded products are also offered via digital-commerce platforms. The principal competitive factors that
affect the international operations are underwriting expertise and pricing, relative operating efficiency, product differentiation,
producer relations, and the quality of policyholder services. A competitive strength of our international operations is our global
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network and breadth of insurance programs, which assist individuals and business organizations to meet their risk management
objectives, while also having a significant presence in all of the countries in which we operate, giving us the advantage of
accessing local technical expertise and regulatory environments, understanding local markets and culture, accomplishing a
spread of risk, and offering a global network to service multinational accounts.
CGM is one of the preeminent international specialty insurers in London and is an established lead underwriter on a significant
portion of the risks it underwrites for all lines of business. All lines of business face competition, depending on the business
class, from Lloyd's syndicates, other carriers operating in the London market, and other major international insurers and
reinsurers. Competition for international risks is also seen from domestic insurers in the country of origin of the insured. CGM
differentiates itself from competitors through long standing experience in its product lines, its multiple insurance entities
(Syndicate 2488 and CEG), and the quality of its underwriting and claims service.
Global Reinsurance (2 percent of 2023 Consolidated NPE)
Overview
The Global Reinsurance segment represents Chubb's reinsurance operations comprising Chubb Tempest Re Bermuda, Chubb
Tempest Re USA, Chubb Tempest Re International, and Chubb Tempest Re Canada. Global Reinsurance markets its
reinsurance products worldwide primarily through reinsurance brokers under the Chubb Tempest Re brand name and provides a
broad range of traditional and non-traditional reinsurance coverage to a diverse array of primary P&C companies.
Products and Distribution
Global Reinsurance services clients globally through its major units. Major international brokers submit business to one or more
of these units' underwriting teams who have built strong relationships with both key brokers and clients by providing a
responsive, client-focused approach to risk assessment and pricing. Global Reinsurance’s diversified portfolio is produced
through reinsurance intermediaries.
Chubb Tempest Re Bermuda principally provides property catastrophe reinsurance to insurers of commercial and personal
property. Property catastrophe reinsurance is on an occurrence or aggregate basis and protects a ceding company against an
accumulation of losses covered by its issued insurance policies, arising from a common event or occurrence. Chubb Tempest Re
Bermuda underwrites reinsurance principally on an excess of loss basis, meaning that its exposure only arises after the ceding
company's accumulated losses have exceeded the attachment point of the reinsurance treaty. Chubb Tempest Re Bermuda also
writes other types of reinsurance on a limited basis for some select clients.
Chubb Tempest Re USA offers an array of traditional and specialty P&C reinsurance for the North American market, principally
on a treaty basis, with a focus on writing property and casualty reinsurance. Chubb Tempest Re USA underwrites reinsurance
on both a proportional and excess of loss basis.
Chubb Tempest Re International offers an array of traditional and specialty P&C reinsurance to insurance companies worldwide,
with emphasis on non-U.S. and non-Canadian risks, including but not limited to property, property catastrophe, casualty,
marine, and specialty through its London- and Zurich-based offices. Chubb Tempest Re International underwrites reinsurance on
both a proportional and excess of loss basis.
Chubb Tempest Re Canada offers an array of traditional and specialty P&C reinsurance for the Canadian market, including but
not limited to property, property catastrophe, casualty, surety, and crop-hail. Chubb Tempest Re Canada underwrites
reinsurance on both a proportional and excess of loss basis.
Competitive Environment
The Global Reinsurance segment competes worldwide with major U.S. and non-U.S. reinsurers as well as reinsurance
departments of numerous multi-line insurance organizations. In addition, capital markets participants have developed alternative
capital sources intended to compete with traditional reinsurance. Government sponsored or backed catastrophe funds can also
affect demand for reinsurance. Global Reinsurance is typically involved in the negotiation and quotation of the terms and
conditions of the majority of the contracts in which it participates. Global Reinsurance competes effectively in P&C markets
worldwide because of Chubb's strong capital position, analytical capabilities, experienced underwriting team and quality
customer service. The key competitors in Global Reinsurance's markets vary by geographic region and product line. An
advantage of Global Reinsurance's international platform is that we can change our mix of business in response to changes in
competitive conditions in the territories in which it operates. Global Reinsurance's geographic reach is also sought by
multinational ceding companies since its offices, except for Bermuda, provide local reinsurance license capabilities which benefit
our clients in dealing with country regulators.
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Life Insurance (12 percent of 2023 Consolidated NPE)
Overview
The Life Insurance segment comprises our international life operations (Chubb Life), which includes Huatai Life Insurance Co.,
Ltd. (Huatai Life), Chubb Tempest Life Re (Chubb Life Re), and the supplemental A&H and life business of Combined
Insurance. Also included in the Life Insurance segment are Huatai’s asset management companies, principally Huatai Asset
Management Co. Ltd and Huatai Boaxing Fund Management. At December 31, 2023, our direct and indirect ownership interest
in Huatai Life was 81.0 percent, Huatai Asset Management Co. Ltd. was 69.6 percent, and Huatai Boaxing Fund Management
was 65.1 percent.
Products and Distribution
Chubb Life provides individual life and group benefit insurance primarily in Asia, including South Korea, mainland China, Hong
Kong, Taiwan, Thailand, Vietnam, New Zealand, Indonesia, and Myanmar. Chubb Life also provides insurance coverage in
Egypt and selectively in Latin America, mainly Chile, Brazil, Ecuador and Mexico through a joint distribution model with Chubb
P&C.
Chubb Life offers a broad portfolio of protection and savings products including whole life, universal life, unit linked contracts,
endowment plans, individual and life, group term life, health protection, personal accident, credit life, group employee benefits,
and credit protection insurance for automobile, motorcycle, and home loans. The policies written by Chubb Life generally
provide funds to beneficiaries of insureds upon death and/or protection and/or savings benefits while the contract owner is living.
We earn income from both insurance contracts subject to mortality and morbidity risks and investment contracts not subject to
insurance risks. Net investment income is a significant component of Segment income and is earned through strategic asset
allocation based on asset liability matching. Funds received from policyholders for investment contracts are not recorded as
premium revenue, but rather as policyholder deposits with an offsetting policyholder account balance liability on the balance
sheet. We earn income on investment contracts from both net investment spreads on policyholder account balances and fees for
management and administrative services. These investment contracts are an important component of production and are key to
our efforts to grow our business.
Chubb Life sells to consumers through a variety of distribution channels including captive and independent agencies,
bancassurance, worksite marketing, retailers, brokers, telemarketing, and direct to consumer marketing. Huatai Life offers a
broad portfolio of insurance products including whole life, universal life, medical and health, personal accident, and disability.
These products are marketed through a variety of distribution channels including nearly 400 licensed sales locations in 20
Chinese provinces. We continue to grow Chubb Life with a focus on opportunities in Asia that we believe will result in
sustainable operating profits and achieve our target returns on invested capital. Our captive agency distribution and
telemarketing channels sell Chubb Life products exclusively and enable us to maintain direct contact with the individual
consumer, promote quality sales practices, and generate higher persistency. We have developed a substantial sales force of
agents principally located in our Asia businesses and have market leading positions in telemarketing industry in South Korea,
Taiwan and Indonesia. Independent brokers complement our agency channel, reaching a wider pool of mass affluent customers,
especially in South Korea, Hong Kong and Taiwan.
Huatai Asset Management is licensed to manage institutional, pension, and retail mutual fund investments. Huatai asset
management companies earn management and performance fees from the management of third-party assets and also earn fees
related to the origination, distribution and management of private loans on behalf of highly rated domestic institutions in China.
Chubb Life Re's core business is a Bermuda-based operation which provides reinsurance to primary life insurers, focusing on
guarantees included in certain variable annuity products and also on more traditional mortality reinsurance protection. Chubb
Life Re's U.S.-based traditional life reinsurance operation was discontinued for new business in January 2010. Since 2007,
Chubb Life Re has not quoted on new opportunities in the variable annuity reinsurance marketplace and our focus has been on
managing the current portfolio of risk, both in the aggregate and on a contract basis. This business is managed with a long-term
perspective and short-term net income volatility is expected.
Combined Insurance distributes specialty supplemental A&H and life insurance products targeted to middle income consumers
and businesses in the U.S. and Canada through both worksite and direct marketing sales. In the U.S., worksite products for mid
and large-market employers are distributed through our Chubb Workplace Benefits division while the U.S. Agency division
focuses on the small to mid-market employers. Combined Insurance's substantial sales force distributes a wide range of
supplemental accident and sickness insurance products, including personal accident, short-term disability, critical illness,
Medicare supplement products, and hospital confinement/recovery. Most of these products are primarily fixed-indemnity benefit
obligations and are not directly subject to escalating medical cost inflation.
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Competitive Environment
Chubb Life's competition differs by location but generally includes multinational insurers, local insurers, joint ventures, and
state-owned insurers. Chubb's financial strength and reputation as an entrepreneurial organization with a global presence and
strong local management capabilities gives Chubb Life a strong base from which to compete and grow revenues. Combined
Insurance competes for A&H business in the U.S. against numerous A&H and life insurance companies across various industry
segments.
In China, we also compete for assets under management (AUM) with investment management firms, banks, and other financial
institutions that offer products that are similar to those offered by Huatai Group’s asset management companies.
Corporate
Corporate results primarily include results of all run-off asbestos and environmental (A&E) exposures, the results of our run-off
Brandywine business, the results of Westchester specialty operations for 1996 and prior years, certain other run-off exposures
including molestation exposures, and income and expenses not attributable to reportable segments and the results of our non-
insurance companies. The run-off operations do not actively sell insurance products, but are responsible for the management of
existing policies and settlement of related claims. Effective July 1, 2023, Huatai Group’s non-insurance operations results,
comprising real estate and holding company activity, are included in Corporate.
Our exposure to A&E, abuse or molestation claims principally arises out of liabilities acquired when we purchased Westchester
Specialty in 1998, CIGNA’s P&C business in 1999, and The Chubb Corporation in 2016. The A&E liabilities principally relate to
claims arising from bodily-injury claims related to asbestos products and remediation costs associated with hazardous waste
sites.
Underwriting
Chubb is an underwriting company and we strive to emphasize quality of underwriting rather than volume of business or market
share. Our underwriting strategy is to manage risk by employing consistent, disciplined pricing and risk selection. This, coupled
with writing a number of less cyclical product lines, has helped us develop flexibility and stability of our business, and has
allowed us to maintain a profitable book of business throughout market cycles. Clearly defined underwriting authorities,
standards, and guidelines coupled with a strong underwriting audit function are in place in each of our local operations and
global profit centers. Global product boards ensure consistency of approach and the establishment of best practices throughout
the world. Our priority is to help ensure adherence to criteria for risk selection by maintaining high levels of experience and
expertise in our underwriting staff. In addition, we employ a business review structure that helps ensure control of risk quality
and appropriate use of policy limits and terms and conditions. Underwriting discipline is at the heart of our operating
philosophy.
Actuaries in each region work closely with the underwriting teams to provide additional expertise in the underwriting process.
We use internal and external data together with sophisticated analytical, catastrophe loss and risk modeling techniques to
ensure an appropriate understanding of risk, including diversification and correlation effects, across different product lines and
territories. We recognize that climate changes and weather patterns, as well as inflationary forces, are integral to our
underwriting process and we continually adjust our process to address these changes. This is intended to help ensure that
exposures are priced appropriately and resulting losses are contained within our risk tolerance and appetite for individual
product lines, businesses, and Chubb as a whole. Our use of such tools and data also reflects an understanding of their inherent
limitations and uncertainties. We also purchase protection from third parties, including, but not limited to, reinsurance as a tool
to diversify risk and limit the net loss potential of catastrophes and large or unusually hazardous risks. For additional information
refer to "Risk Factors" under Item 1A, “Reinsurance Protection”, below, “Catastrophe Management” and “Global Property
Catastrophe Reinsurance Program”, under Item 7, and Note 5 to the Consolidated Financial Statements, under Item 8.
Reinsurance Protection
As part of our risk management strategy, we purchase reinsurance protection to mitigate our exposure to losses, including
certain catastrophes, to a level consistent with our risk appetite. Although reinsurance agreements contractually obligate our
reinsurers to reimburse us for an agreed-upon portion of our gross paid losses, reinsurance does not discharge our primary
liability to our insureds and, thus, we ultimately remain liable for the gross direct losses. In certain countries, reinsurer selection
is limited by local laws or regulations. In most countries there is more freedom of choice, and the counterparty is selected based
upon its financial strength, claims settlement record, management, line of business expertise, and its price for assuming the risk
transferred. In support of this process, we maintain a Chubb authorized reinsurer list that stratifies these authorized reinsurers
by classes of business and acceptable limits. This list is maintained by our Reinsurance Security Committee (RSC), a committee
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comprising senior management personnel and a dedicated reinsurer security team. Changes to the list are authorized by the
RSC and recommended to the Chair of the Risk and Underwriting Committee. The reinsurers on the authorized list and potential
new markets are regularly reviewed and the list may be modified following these reviews. In addition to the authorized list, there
is a formal exception process that allows authorized reinsurance buyers to use reinsurers already on the authorized list for higher
limits or different lines of business, for example, or other reinsurers not on the authorized list if their use is supported by
compelling business reasons for a particular reinsurance program.
A separate policy and process exists for captive reinsurance companies. Generally, these reinsurance companies are established
by our clients or our clients have an interest in them. It is generally our policy to obtain collateral equal to the expected losses
that may be ceded to the captive. Where appropriate, exceptions to the collateral requirement are granted but only after senior
management review. Specific collateral guidelines and an exception process are in place for the North America Commercial P&C
Insurance, North America Personal P&C Insurance, and Overseas General Insurance segments, all of which have credit
management units evaluating the captive's credit quality and that of their parent company. The credit management units,
working with actuaries, determine reasonable exposure estimates (collateral calculations), ensure receipt of collateral in an
acceptable form, and coordinate collateral adjustments as and when needed. Financial reviews and expected loss evaluations
are performed annually for active captive accounts and as needed for run-off exposures. In addition to collateral, parental
guarantees are often used to enhance the credit quality of the captive. In general, we seek to place our reinsurance with highly
rated companies with which we have a strong trading relationship. For additional information refer to “Catastrophe
Management” and “Global Property Catastrophe Reinsurance Program” under Item 7, and Note 5 to the Consolidated Financial
Statements, under Item 8.
Unpaid Losses and Loss Expenses
We establish reserves for unpaid losses and loss expenses, which are estimates of future payments on reported and unreported
claims for losses and related expenses, with respect to insured events that have occurred. These reserves are recorded in Unpaid
losses and loss expenses in the Consolidated balance sheets. The process of establishing loss and loss expense reserves for P&C
claims can be complex and is subject to considerable uncertainty as it requires the use of informed estimates and judgments
based on circumstances known at the date the loss is recognized. These estimates and judgments are based on numerous
factors and may be revised as additional experience and other data become available and are reviewed, as new or improved
methodologies are developed, or as laws change. Internal actuaries regularly analyze the levels of loss and loss expense
reserves, taking into consideration factors that may impact the ultimate settlement value of the unpaid losses and loss expenses.
These analyses could result in future changes in the estimates of loss and loss expense reserves or reinsurance recoverables and
any such changes would be reflected in our results of operations in the period in which the estimates are changed. Losses and
loss expenses are charged to income as incurred. The reserve for unpaid losses and loss expenses represents the estimated
ultimate losses and loss expenses less paid losses and loss expenses, and comprises case reserves and incurred but not reported
(IBNR) reserves. With the exception of certain structured settlements, for which the timing and amount of future claim
payments are reliably determinable, and certain reserves for unsettled claims, our loss reserves are not discounted for the time
value of money. The net undiscounted reserves related to structured settlements and certain reserves for unsettled claims are
immaterial.
For each product line, management, after consultation with internal actuaries, develops a “best estimate” of the ultimate
settlement value of the unpaid losses and loss expenses that it believes provides a reasonable estimate of the required reserve.
We evaluate our estimates of reserves quarterly in light of developing information. While we are unable at this time to determine
whether additional reserves may be necessary in the future, we believe that our reserves for unpaid losses and loss expenses are
adequate at December 31, 2023. Future additions to reserves, if needed, could have a material adverse effect on our financial
condition, results of operations, and cash flows. For additional information refer to “Critical Accounting Estimates – Unpaid
losses and loss expenses”, under Item 7, and Note 8 to the Consolidated Financial Statements, under Item 8.
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Future Policy Benefits
We establish future policy benefits reserves for long-duration contracts which generally cover accident and supplemental health
(A&H), term and whole life, and annuity products. These life insurance contracts provide payments for various covered events
such as death, disability, life annuity, policy surrender, and policy maturity. Future policy benefits reserves reflect the present
value of expected future benefits to be paid less the present value of expected future net premiums, which is the portion of the
gross premium used to fund expected future liabilities. Reserves for limited-payment contracts, under which benefits extend
beyond the period of premium collection, include a deferred profit liability that represents gross premiums received in excess of
expected net premiums. Deferred profit liabilities are amortized over the duration of the underlying insured liabilities. Future
policy benefits reserves are recorded in Future policy benefits in the Consolidated balance sheets.
The process of establishing future policy benefits reserves can be complex and is subject to considerable uncertainty, requiring
the use of informed estimates and judgments based on numerous factors including discount rates, mortality, morbidity,
persistency and unpaid loss adjustment expenses. These assumptions represent management's long-term best estimates.
Internal actuaries review, at least annually, best estimate assumptions, which could result in changes to future policy benefits
reserves or the associated reinsurance recoverables. Any changes are reflected in our results of operations in the period in which
the estimates are changed. For additional information, refer to "Critical Accounting Estimates – Future policy benefits reserves",
under Item 7, and Note 1 l) and Note 9 to the Consolidated Financial Statements, under Item 8.
Policyholder Account Balances
Policyholder account balances represent the contract value that has accrued to the benefit of the policyholder as of the balance
sheet date. This liability is primarily associated with the accumulated account deposits, plus interest credited, less policyholder
withdrawals and other charges against the account balance, as applicable. These policyholder account balances also include
certain unearned revenue liabilities, primarily relating to universal life and other savings products, which represent policy
charges for services to be provided in future periods. For additional information, refer to Note 10 to the Consolidated Financial
Statements, under Item 8.
Investments
Our objective is to maximize investment income and total return while ensuring an appropriate level of liquidity, investment
quality, and diversification. As such, Chubb's investment portfolio is invested primarily in investment-grade fixed-income
securities as measured by the major rating agencies. We also invest in limited partnerships and investment funds. We do not
allow leverage in our investment portfolio. The critical aspects of the investment process are controlled by Chubb Asset
Management, an indirect wholly-owned subsidiary of Chubb. These aspects include asset allocation, portfolio and guideline
design, risk management, and oversight of external asset managers. In this regard, Chubb Asset Management:
•
conducts formal asset allocation modeling for each of the Chubb subsidiaries, providing formal recommendations for the
portfolio's structure;
establishes recommended investment guidelines that are appropriate to the prescribed asset allocation targets;
provides the analysis, evaluation, and selection of our external investment advisors;
establishes and develops investment-related analytics to enhance portfolio engineering and risk control;
•
•
•
• monitors and aggregates the correlated risk of the overall investment portfolio; and
•
provides governance over the investment process for each of our operating companies to ensure consistency of approach
and adherence to investment guidelines.
Under our guidance and direction, external asset managers conduct security and sector selection and transaction execution. Use
of multiple managers benefits Chubb in several ways – it provides us with operational and cost efficiencies, diversity of styles
and approaches, innovations in investment research and credit and risk management, all of which enhance the risk adjusted
returns of our portfolios.
Chubb Asset Management determines the investment portfolio's allowable, targeted asset allocation and ranges for each of the
segments. These asset allocation targets are derived from sophisticated asset and liability modeling that measures correlated
histories of returns and volatility of returns. Allowable investment classes are further refined through analysis of our operating
environment including expected volatility of cash flows, potential impact on our capital position, and regulatory and rating
agency considerations.
Huatai Asset Management has over $120 billion in assets under management (AUM) in China, and is licensed to manage
institutional, pension, and retail mutual fund investments. Huatai’s asset management companies manage Huatai's investments
internally. In addition, over 90 percent of total AUM are managed on behalf of third-party clients. Huatai asset management
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companies earn management and performance fees from the management of third-party assets and also earn fees related to the
origination, distribution and management of private loans on behalf of highly rated domestic institutions in China.
The Board has established a Risk & Finance Committee which helps execute the Board's supervisory responsibilities pertaining
to enterprise risk management including investment risk. Under the overall supervision of the Risk & Finance Committee,
Chubb's governance over investment management is rigorous and ongoing. Among its responsibilities, the Risk & Finance
Committee of the Board:
•
•
•
reviews and approves asset allocation targets and investment policy to ensure that it is consistent with our overall goals,
strategies, and objectives;
reviews and approves investment guidelines to ensure that appropriate levels of portfolio liquidity, credit quality,
diversification, and volatility are maintained; and
systematically reviews the portfolio's exposures including any potential violations of investment guidelines.
We have long-standing global credit limits for our entire portfolio across the organization and for individual obligors. Exposures
are aggregated, monitored, and actively managed by our Global Credit Committee, comprising senior executives, including our
Chief Financial Officer, our Chief Risk Officer, our Chief Investment Officer, and our Treasurer.
Within the guidelines and asset allocation parameters established by the Risk & Finance Committee, individual investment
committees of the segments determine tactical asset allocation. Additionally, these committees review all investment-related
activity that affects their operating company, including the selection of outside investment advisors, proposed asset allocation
changes, and the systematic review of investment guidelines.
For additional information regarding the investment portfolio, including breakdowns of the sector and maturity distributions,
refer to Note 3 to the Consolidated Financial Statements under Item 8.
Regulation
Our insurance and reinsurance subsidiaries conduct business globally, including in all 50 states of the United States, the District
of Columbia, and all U.S. Territories. Our business is subject to varying degrees of regulation and supervision in each of the
jurisdictions in which our insurance and reinsurance subsidiaries are domiciled and on a group basis. The laws and regulations
of the jurisdictions in which our insurance and reinsurance subsidiaries are domiciled require among other things that these
subsidiaries maintain minimum levels of statutory capital, surplus, and liquidity, meet solvency standards, and submit to
periodic examinations of their financial condition. The complex regulatory environments in which Chubb operates are subject to
change and are regularly monitored.
Group Supervision
The Pennsylvania Insurance Department (Department) is the group-wide supervisor for the Chubb Group of Companies. In
consultation with other insurance regulatory bodies that oversee Chubb's insurance activities, the Department has convened the
Chubb Supervisory College (College) bi-annually since 2012, with regulator-only interim Colleges held in intervening years since
2017. The most recent College was held in September 2023. During these meetings, the College reviewed extensive
information about Chubb, without material adverse comment.
The following is an overview of regulations for our operations in Switzerland, the U.S., Bermuda, and other international
locations.
Swiss Operations
The Swiss Financial Market Supervisory Authority (FINMA) has the discretion to supervise Chubb on a group-wide basis.
However, FINMA acknowledges the Department's assumption of group supervision over us.
In 2008, we formed Chubb Insurance (Switzerland) Limited which offers property and casualty insurance to Swiss companies,
A&H, and personal lines insurance for individuals of Swiss companies. We have also formed a reinsurance subsidiary named
Chubb Reinsurance (Switzerland) Limited, which we operate as primarily a provider of reinsurance to Chubb entities. Both
companies are licensed and governed by FINMA.
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U.S. Operations
Our U.S. insurance subsidiaries are subject to extensive regulation by the states in which they do business. The laws of the
various states establish departments of insurance with broad authority to regulate, among other things: the standards of
solvency that must be met and maintained, the licensing of insurers and their producers, approval of policy forms and rates, the
nature of and limitations on investments, restrictions on the size of the risks which may be insured under a single policy,
deposits of securities for the benefit of policyholders, requirements for the acceptability of reinsurers, periodic examinations of
the affairs of insurance companies, the form and content of reports of financial condition required to be filed, and the adequacy
of reserves for unearned premiums, losses, and other exposures.
Our U.S. insurance subsidiaries are required to file detailed annual and quarterly statutory financial statements with state
insurance regulators. In addition, our U.S. insurance subsidiaries' operational and financial records are subject to examination at
regular intervals by state regulators.
All states have enacted legislation that regulates insurance holding companies. This legislation provides that each U.S.
insurance company in the insurance holding company system (system) is required to register with the insurance department of
its state of domicile and furnish information concerning the operations of companies within the system that may materially
affect the operations, management, or financial condition of our U.S. insurers. All transactions within a system must be fair and
equitable. Notice to the appropriate insurance departments is required prior to the consummation of transactions affecting the
ownership or control of an insurer and of certain material transactions between an insurer and an entity in its system. In
addition, certain transactions may not be consummated without the prior approval of one or more such insurance departments.
We are also required to file annually with our domiciliary state insurance regulators an enterprise risk report that identifies
material risks within our system that could pose enterprise risk to our U.S. insurers, a disclosure report that identifies our
corporate governance practices, a report reflecting our internal assessment of material risks associated with our current business
plan and the sufficiency of our capital resources to support those risks, and a group capital calculation report that provides a
baseline quantitative measure for group risks.
Statutory surplus is an important measure used by the regulators and rating agencies to assess our U.S. insurance subsidiaries'
ability to pay claims, support business operations, and provide dividend capacity. Our U.S. insurance subsidiaries are subject to
various state statutory and regulatory restrictions that limit the amount of dividends that may be paid without prior approval
from regulatory authorities. These restrictions differ by state, but are generally based on calculations incorporating statutory
surplus, statutory net income, and/or investment income.
The National Association of Insurance Commissioners (NAIC) has promulgated a recommended risk-based capital requirement
for P&C insurance companies. This risk-based capital formula is used by many state regulatory authorities to identify insurance
companies that may be undercapitalized and which merit further regulatory attention. These requirements are designed to
monitor capital adequacy using a formula that prescribes a series of risk measurements to determine a minimum capital amount
for an insurance company, based on the profile of the individual company. The ratio of a company's adjusted policyholder
surplus to its minimum capital requirement will determine whether state regulatory action is required. There are progressive risk-
based capital failure levels that trigger more stringent and intrusive regulatory action. If an insurer's policyholders' surplus falls
below the Mandatory Control Level (70 percent of the Authorized Control Level, as defined by the NAIC), the relevant insurance
commissioner is required to place the insurer under regulatory control.
However, an insurance regulator may allow a P&C company operating below the Mandatory Control Level that is writing no
business and is running off its existing business to continue its run-off. Brandywine is running off its liabilities consistent with
the terms of an order issued by the Insurance Commissioner of Pennsylvania. This includes periodic reporting obligations to the
Department.
Government intervention continues in the insurance and reinsurance markets in relation to terrorism coverage in the U.S. (and
through industry initiatives in other countries). The U.S. Terrorism Risk Insurance Act (TRIA), which was enacted in 2002 to
ensure the availability of insurance coverage for certain types of terrorist acts in the U.S., has been extended under the
Terrorism Risk Insurance Program Reauthorization Act of 2019 (TRIPRA) through December 31, 2027, and applies to certain
of our operations.
From time to time, Chubb and its subsidiaries and affiliates receive inquiries from state agencies and attorneys general, with
which we generally comply, seeking information concerning business practices, such as underwriting, claims handling, loss
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experience, and insurance availability. Moreover, many recent factors, such as consequences of and reactions to industry and
economic conditions and focus on domestic issues, have contributed to the potential for change in the legal and regulatory
framework applicable to Chubb's U.S. operations and businesses. We cannot assure that changes in laws or investigative or
enforcement activities in the various states in the U.S. will not have a material adverse impact on our financial condition, results
of operations, or business practices.
We are subject to numerous U.S. federal and state laws governing the protection of personal and confidential information of our
clients or employees. These laws and regulations are increasing in complexity, and the requirements are extensive and detailed.
Numerous states require us to certify our compliance with their data protection laws.
We are subject to the New York Department of Financial Services’ Cybersecurity Regulation (the NYDFS Cybersecurity
Regulation) which mandates detailed cybersecurity standards and other obligations for all institutions, including insurance
entities, authorized by the NYDFS to operate in New York. Among the requirements are the maintenance of a cybersecurity
program with governance controls, risk-based minimum data security standards for technology systems, cyber breach
preparedness and response requirements, including reporting obligations, vendor oversight, training, program record keeping,
audit and risk assessment requirements, and certification obligations. Because our North America systems are integrated, our
companies domiciled in other states may also be impacted by this requirement.
Additionally, the NAIC adopted an Insurance Data Security Model Law, which requires licensed insurance entities to comply
with detailed information security requirements. The NAIC model law is similar in many respects to the NYDFS Cybersecurity
Regulation.
The NAIC has also adopted a Model Bulletin on the Use of Artificial Intelligence Systems by Insurers. This is intended to be a
template for state regulators to use when issuing guidance about AI governance, risk management controls, internal audit
functions, and third-party systems. The Model Bulletin also advises insurers of the information and documentation that
insurance regulators may request during exams and investigation of insurers' AI systems, including third-party AI systems. This
bulletin may be adopted by state insurance departments which in turn may impact our use of artificial intelligence tools in our
business operations.
Bermuda Operations
The Insurance Act 1978 of Bermuda and related regulations, as amended (the Insurance Act), regulates the insurance business
of our Bermuda domiciled (re)insurance subsidiaries (Bermuda domiciled subsidiaries) and provides that no person may carry
on any insurance business in or from within Bermuda unless registered as an insurer by the Bermuda Monetary Authority
(BMA). The Insurance Act imposes solvency and liquidity standards and auditing and reporting requirements on Bermuda
insurance companies and grants the BMA powers to supervise, investigate, and intervene in the affairs of insurance companies.
Bermuda domiciled subsidiaries must prepare and file with the BMA, audited annual statutory financial statements and audited
annual financial statements prepared in accordance with accounting principles generally accepted in the U.S. (U.S. GAAP),
International Financial Reporting Standards (IFRS), or any such other generally accepted accounting principles as the BMA may
recognize. The U.S. GAAP audited financial statements are made public by the BMA. The Insurance Act prescribes rules for the
preparation and content of the statutory financial statements that require Bermuda domiciled subsidiaries to give detailed
information and analyses regarding premiums, claims, reinsurance, and investments. In addition, each year, the Bermuda
domiciled insurers are required to file with the BMA a capital and solvency return along with an annual statutory financial
return. The prescribed form of capital and solvency return is comprised of the BMA’s risk-based capital model, termed the
Bermuda Solvency Capital Requirement (BSCR) or an approved internal capital model in lieu thereof; a statutory economic
balance sheet; the approved actuary’s opinion; and several prescribed schedules. The BSCR is a tool to assist the BMA both in
measuring risk and in determining appropriate levels of capitalization. The BSCR employs a standard mathematical model that
correlates the risk underwritten by Bermuda insurers to their capital. The BSCR framework applies a standard measurement
format to the risk associated with an insurer's assets, liabilities, and premiums, including a formula to take into account
catastrophe risk exposure.
The BMA established risk-based regulatory capital adequacy and solvency margin requirements for Bermuda insurers that
mandate that a Bermuda domiciled subsidiary’s Enhanced Capital Requirement (ECR) be calculated by either (a) BSCR, or (b)
an internal capital model which the BMA has approved for use for this purpose. The Bermuda domiciled subsidiaries use the
BSCR in calculating their solvency requirements. Bermuda statutory reporting rules include an Economic Balance Sheet (EBS)
framework. The EBS framework is embedded as part of the BSCR and forms the basis of our ECR.
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In order to minimize the risk of a shortfall in capital arising from an unexpected adverse deviation the BMA has established a
threshold capital level, (termed the Target Capital Level (TCL)), set at 120 percent of ECR, that serves as an early warning tool
for the BMA. Failure to maintain statutory capital at least equal to the TCL would likely result in increased BMA regulatory
oversight.
Under the BMA’s powers to set standards on public disclosure under the Insurance Act, the Bermuda domiciled subsidiaries are
required to prepare and publish a Financial Condition Report (FCR). The FCR provides details of measures governing the
business operations, corporate governance framework, solvency and financial performance. The FCR must be filed with the BMA
and requires Bermuda insurance companies to make the FCR publicly available.
Under the Insurance Act, Chubb's Bermuda domiciled subsidiaries are prohibited from declaring or paying any dividends of more
than 25 percent of total statutory capital and surplus, as shown in its previous financial year statutory balance sheet, unless at
least seven days before payment of the dividends, it files with the BMA an affidavit signed by at least two directors of the
relevant Bermuda domiciled subsidiary (one of whom must be a director resident in Bermuda) and by the relevant Bermuda
domiciled subsidiary’s principal representative, that it will continue to meet its required solvency margins. Furthermore,
Bermuda domiciled subsidiaries may only declare and pay a dividend from retained earnings and a dividend or distribution from
contributed surplus if it has no reasonable grounds for believing that it is, or would after the payment be, unable to pay its
liabilities as they become due, or if the realizable value of its assets would be less than the aggregate of its liabilities.
In addition, Chubb's Bermuda domiciled subsidiaries must obtain the BMA's prior approval before reducing total statutory
capital, as shown in its previous financial year's financial statements, by 15 percent or more.
Other International Operations
The extent of insurance regulation varies significantly among the countries in which non-U.S. Chubb operations conduct
business. While each country imposes licensing, solvency, auditing, and financial reporting requirements, such as the
International Accounting Standard Board’s accounting standard for insurance contracts (IFRS 17), the type and extent of the
requirements differ substantially. For example:
•
•
•
•
•
•
in some countries, insurers are required to prepare and file monthly and/or quarterly financial reports, and in others, only
annual reports;
some regulators require intermediaries to be involved in the sale of insurance products, whereas other regulators permit
direct sales contact between the insurer and the customer;
the extent of restrictions imposed upon an insurer's use of local and offshore reinsurance vary;
policy form filing and rate regulation vary by country;
the frequency of contact and periodic on-site examinations by insurance authorities differ by country; and
regulatory requirements relating to insurer dividend policies vary by country.
Significant variations can also be found in the size, structure, and resources of the local regulatory departments that oversee
insurance activities. Certain regulators prefer close relationships with all subject insurers and others operate a risk-based
approach.
Chubb operates in some countries through subsidiaries and in some countries through branches of subsidiaries. Local capital
requirements applicable to a subsidiary generally include its branches. Certain Chubb companies are jointly owned with local
companies to comply with legal requirements for local ownership. Other legal requirements include discretionary licensing
procedures, compulsory cessions of reinsurance, local retention of funds and records, data privacy and protection program
requirements such as the General Data Protection Regulation (GDPR), and foreign exchange controls. Chubb's international
companies are also subject to multinational application of certain U.S. laws.
There are various regulatory bodies and initiatives that impact Chubb in multiple international jurisdictions and the potential for
significant impact on Chubb could be heightened as a result of recent industry and economic developments.
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Enterprise Risk Management
As an insurer, Chubb is in the business of profitably managing risk for its customers. Since risk management must permeate an
organization conducting a global insurance business, we have an established Enterprise Risk Management (ERM) framework,
which encompasses climate risk, that is integrated into management of our businesses and is led by Chubb's senior
management. As a result, ERM is a part of the day-to-day management of Chubb and its operations.
Our global ERM framework is broadly multi-disciplinary and its strategic objectives include:
•
•
External Risks: identify, analyze, quantify, and where possible, mitigate significant external risks that could materially
hamper the financial condition of Chubb and/or the achievement of corporate business objectives over the next 36 months;
Exposure Accumulations: identify and quantify the accumulation of exposure to individual counterparties, products or
industry sectors, particularly those that materially extend across or correlate between business units or divisions and/or the
balance sheet;
• Risk Modeling: develop and use various data-sets, advanced analytics, metrics and processes (such as probabilistic
exposure and economic capital models to assess aggregation risk from natural and other catastrophes) that help business
and corporate leaders make informed underwriting, portfolio management and risk management decisions within a
consistent risk/reward framework;
• Governance:
establish and coordinate risk guidelines that reflect the corporate appetite for risk;
•
• monitor exposure accumulations relative to established guidelines; and
•
ensure effective internal risk management communication up to management and the Board (including our Risk &
Finance Committee), down to the various business units and legal entities, and across the firm; and
• Disclosure: develop protocols and processes for risk-related disclosure internally as well as externally to rating agencies,
regulators, shareholders and analysts.
Chubb Group's Risk and Underwriting Committee (RUC) reports to and assists the Chief Executive Officer in the oversight and
review of the ERM framework which covers the processes and guidelines used to manage the entire landscape of insurance,
financial, strategic, and operational risks. The RUC is chaired by Chubb Group’s Chief Risk Officer (Chair). The RUC meets at
least twice a quarter, and is comprised of Chubb Group's most senior executives which, in addition to the Chair, includes the
Chief Executive Officer, President and Chief Operating Officer, Chief Financial Officer, Chief Investment Officer, Chief Actuary,
Chief Claims Officer, General Counsel, President – North America Insurance, President – Overseas General Insurance, and Chief
Underwriting Officer.
The RUC is assisted in its activities by Chubb's Enterprise Risk Unit (ERU) and Product Boards. The ERU is responsible for the
collation and analysis of risk insight in two key areas. The first relates to external information that provides insight to the RUC
on existing or emerging risks that might significantly impact Chubb's key objectives while the second involves internal risk
aggregations arising from Chubb's business writings and other activities such as investments and operations. The ERU is
independent of the operating units and reports to our Chief Risk Officer. The Product Boards exist to provide oversight for
products that we offer globally. A Product Board currently exists for each of Chubb's major product areas. Each Product Board is
responsible for ensuring consistency in underwriting and pricing standards, identification of emerging issues, and guidelines for
relevant accumulations.
Chubb's Chief Risk Officer also reports to the Board's Risk & Finance Committee, which helps execute the Board's supervisory
responsibilities pertaining to ERM. The role of the Risk & Finance Committee includes evaluation of the integrity and
effectiveness of our ERM procedures, systems, and information; governance on major policy decisions pertaining to risk
aggregation and minimization; and assessment of our major decisions and preparedness levels pertaining to perceived material
risks. The Audit Committee meets with the Risk & Finance Committee at least annually in order to exercise its duties under New
York Stock Exchange Rules.
Others within the overall ERM structure contribute toward accomplishing Chubb's ERM objectives, including regional
management, Corporate Underwriting, Internal Audit, Compliance, external consultants, and managers of our internal control
processes and procedures.
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Chubb has a comprehensive, coordinated global environmental program that is embedded in all areas of the organization and its
activities and performance are reported to the executive team. The senior executive responsible for overseeing the global
environmental program is the Global Climate Officer (GCO). The GCO reports to both the CEO, who approves the goals and
objectives of the environmental program, and Chubb's General Counsel. The GCO has executive management responsibility for
Chubb's climate-related strategies, including business and policy initiatives and coordination with the Chief Risk Officer and
Chief Underwriting Officer regarding the execution of related underwriting and portfolio management processes.
The potential impacts of climate change on the insurance industry, including Chubb, are complex, myriad and will develop over
a multi-year time horizon. These risks primarily include physical risks, transition risks and liability risks. Physical risks arise from
direct weather–related events, such as floods, storms and wildfire and these risks may increase insurance claims.
Our insurance contracts are typically renewable annually. Consequently, we can respond to changes as needed by adjusting our
pricing or by restricting our exposure.
As described in "Catastrophe Management" under Item 7, Chubb uses catastrophe models to quantify natural catastrophe risk
for product pricing and portfolio management purposes. Based on science and our own experience to date, we have conducted
extensive work to understand the potential impact of climate change on our risk profile. These findings actively inform our
underwriting risk appetite for property-related exposures for wild-fire, where we have significantly reduced our business in
certain western states, and other perils such as flood and hurricane.
Chubb regularly applies exclusions as part of its underwriting process, which depend on the specific conditions and
circumstances of the risk being evaluated. Those exclusions may reflect risk-based environmental and climate-related
considerations, such as restricted participation in certain industries, including mining and reclamation operations, oil refining,
pipeline and related distribution operations, and chemical manufacturing and distribution. Chubb adopted a policy limiting
underwriting in companies involved in thermal coal and projects involving direct mining or in-situ extraction and processing of
bitumen from oil sands. Chubb also introduced underwriting criteria for oil and gas extraction projects which require reduction of
methane emissions and is supporting clients with Chubb’s Methane Resource Hub which offers clients information and insights
for measuring and mitigating methane emissions. Additionally, we continue to assess our investment in carbon–intensive
industries and plans for transitioning to a lower–carbon economy. As part of this assessment, Chubb has pledged to not make
new debt or equity investments in companies that generate more than 30 percent of revenues from thermal coal mining or
energy production from coal. Chubb closely follows emerging trends in climate litigation to assess potential risks to additional
insurance products.
Chubb mitigates exposure to climate change risk by ceding catastrophe risk in our insurance portfolio through both reinsurance
and capital markets, and our investment portfolio through the diversification of risk, industry, location, type and duration of
security. Asset concentrations are actively managed in hurricane-and flood-exposed areas, and our investment portfolio is
relatively short in duration with an average duration of about five years.
Chubb supports industries involved in mitigating climate risk, through our global climate business unit, Chubb Climate+, which
offers solutions to Cleantech companies and the renewable energy sector.
Tax Matters
Refer to “Risk Factors”, under Item 1A and Note 1 t) and Note 12 to the Consolidated Financial Statements, under Item 8.
19
Information about our Executive Officers
The following sets forth information regarding our executive officers as of February 23, 2024:
Name
Age
Position
Evan G. Greenberg
Timothy A. Boroughs
Peter C. Enns
Bryce L. Johns
John W. Keogh
John J. Lupica
Frances D. O'Brien
Juan Luis Ortega
Joseph F. Wayland
69
74
58
48
59
58
65
49
66
Chairman, Chief Executive Officer, and Director
Executive Vice President and Chief Investment Officer
Executive Vice President and Chief Financial Officer
Senior Vice President; President, Chubb Life
President and Chief Operating Officer
Vice Chairman; President, North America Insurance
Executive Vice President; Chief Risk Officer
Executive Vice President; President, Overseas General Insurance
Executive Vice President and General Counsel
Evan G. Greenberg has been a director of Chubb Limited since August 2002. Mr. Greenberg was elected Chairman of the Board
of Directors in May 2007. Mr. Greenberg was appointed to the position of President and Chief Executive Officer of Chubb
Limited in May 2004, and in June 2003, was appointed President and Chief Operating Officer of Chubb Limited. Mr. Greenberg
was appointed to the position of Chief Executive Officer of Chubb Overseas General in April 2002. He joined Chubb as Vice
Chairman, Chubb Limited, and Chief Executive Officer of Chubb Tempest Re in November 2001. Prior to joining Chubb, Mr.
Greenberg was President and Chief Operating Officer of American International Group (AIG), a position he held from 1997 until
2000.
Timothy A. Boroughs was appointed Chief Investment Officer of Chubb Group in 2000 and Executive Vice President in 2014.
Prior to joining Chubb, Mr. Boroughs was Director of Fixed Income at Tudor Investment Corporation from 1997 to 2000, and
Managing Partner and Director of Global Leveraged Investment Activity at Fischer Francis Trees & Watts from 1976 to 1997.
Peter C. Enns was appointed Executive Vice President and Chief Financial Officer of Chubb Limited in July 2021. Mr. Enns,
who joined Chubb in April 2021 as Executive Vice President, Finance, has more than 30 years of finance and investment
banking experience. Before joining Chubb, Mr. Enns held several management positions at HSBC from 2018 to 2020, including
Global Head of Financial Institutions Group, Global Co-Head of Corporate Finance Coverage, and Global Co-Head of Investment
Banking Coverage. Prior to HSBC, Mr. Enns held several senior positions through 2017 during a more than 20-year career at
Goldman Sachs, including Chairman and CEO of Goldman Sachs Canada, Head of the Asia Financial Institutions Group, and
Partner of the U.S. Financial Institutions Group.
Bryce L. Johns was appointed Senior Vice President, Chubb Group and President, Chubb Life in April 2022. Mr. Johns has
more than 25 years of experience in insurance, wealth management and capital management. Mr. Johns previously served as
Group General Manager and Global CEO of HSBC Life and Insurance Partnerships from August 2016 to December 2021, where
he was responsible for HSBC Life's 10 businesses across Asia, Europe and Latin America, and the group's strategic insurance
distribution partnerships globally. Prior to joining HSBC in 2016, Mr. Johns led bancassurance for Citigroup globally and held a
leadership role for regional branch distribution in Asia. Earlier in his career, Mr. Johns held leadership roles at Manulife Asia in
Hong Kong and at Old Mutual Group in South Africa, India and the U.K.
John W. Keogh was appointed President of Chubb in December 2020, and has served as Chief Operating Officer since July
2011. Mr. Keogh was appointed Vice Chairman of Chubb Limited in 2010 and Executive Vice Chairman in 2015. Mr. Keogh
joined Chubb in 2006 as Chairman, Insurance – Overseas General. Before joining Chubb, Mr. Keogh held a range of positions
with increasing responsibility during a 20-year career with AIG, including Senior Vice President, Domestic General Insurance,
and President and Chief Executive Officer of National Union Fire Insurance Company of Pittsburgh, an AIG member company.
He began his insurance career as an underwriter with AIG in 1986.
John J. Lupica was appointed President, North America Insurance in September 2020 and has served as Vice Chairman of
Chubb since November 2013. Prior to his current role, Mr. Lupica served in several senior management positions since joining
Chubb in 2000, including President, North America Major Accounts and Specialty Insurance; Chairman, Insurance - North
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America; Chief Operating Officer, Insurance - North America; President of ACE USA; Division President of U.S. Professional Risk
business and U.S. Regional Operations; and Executive Vice President of Professional Risk. Prior to joining Chubb, he served as
Senior Vice President for Munich-American Risk Partners, Inc. He also held various management positions at AIG.
Frances D. O'Brien was appointed Executive Vice President, Chubb Group and Chief Risk Officer of Chubb Limited in April
2023. Ms. O'Brien has more than 40 years of insurance industry experience. Before her current role, Ms. O'Brien served as
Senior Vice President and Deputy Chief Risk Officer from January 2022 to March 2023, and from 2016 to 2021 was Division
President, North America Personal Risk Services. Ms. O'Brien served as Senior Vice President, Chief Risk Officer of The Chubb
Corporation at the time of its acquisition by Chubb Limited in 2016, and prior to that served in a number of positions at The
Chubb Corporation of increasing responsibility in actuarial, product development and underwriting, including Chubb Personal
Insurance (CPI) Chief Underwriting Officer, CPI Chief Underwriting Officer for International Business, and CPI Worldwide
Underwriting Manager.
Juan Luis Ortega was appointed Executive Vice President, Chubb Group and President, Overseas General Insurance in August
2019. Mr. Ortega previously served as Senior Vice President, Chubb Group and Regional President of Latin America from 2016
to 2019, and Regional President of Asia Pacific from 2013 to 2016. Mr. Ortega had also held several senior roles since joining
Chubb in 1999, including Senior Vice President, Accident & Health, for the Asia Pacific region from 2011 to 2013 and Senior
Vice President and Regional Head of Accident & Health for the Latin America region from 2008 to 2010. Mr. Ortega joined
Chubb in 1999 and advanced through a series of accident and health and credit insurance management positions in Miami,
Puerto Rico, and Mexico, before being named Country President of Chile in 2005.
Joseph F. Wayland was appointed Executive Vice President of Chubb Limited in January 2016, and General Counsel and
Secretary of Chubb Limited in July 2013. Mr. Wayland joined Chubb from the law firm of Simpson Thacher & Bartlett LLP,
where he was a partner since 1994. From 2010 to 2012, he served in the United States Department of Justice, first as Deputy
Assistant Attorney General of the Antitrust Division, and was later appointed as the Acting Assistant Attorney General in charge
of that division.
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ITEM 1A. Risk Factors
Factors that could have a material impact on our results of operations or financial condition are outlined below. Additional risks
not presently known to us or that we currently deem insignificant may also impair our business or results of operations as they
become known or as facts and circumstances change. Any of the risks described below could result in a material adverse effect
on our results of operations or financial condition.
Insurance
Our results of operations or financial condition could be adversely affected by the occurrence of natural and man-made
disasters.
We have substantial exposure to losses resulting from natural disasters, man-made catastrophes, such as terrorism or cyber-
attack, and other catastrophic events, including pandemics. This could impact a variety of our businesses, including our
commercial and personal lines, and life and accident and health (A&H) products. Catastrophes can be caused by various events,
including hurricanes, typhoons, earthquakes, hailstorms, droughts, explosions, severe winter weather, fires, war, acts of
terrorism, nuclear accidents, political instability, and other natural or man-made disasters, including a global or other wide-
impact pandemic or a significant cyber-attack. The incidence and severity of catastrophes are inherently unpredictable and our
losses from catastrophes could be substantial. In addition, climate change and resulting changes in global temperatures,
weather patterns, and sea levels may both increase the frequency and severity of natural catastrophes and the resulting losses in
the future and impact our risk modeling assumptions. We cannot predict the impact that changing climate conditions, if any,
may have on our results of operations or our financial condition. Additionally, we cannot predict how legal, regulatory and/or
social responses to concerns around global climate change and the resulting impact on various sectors of the economy may
impact our business. Exposure to cyber risk is increasing systematically due to greater digital dependence and increases possible
losses due to a catastrophic cyber event. Cyber catastrophic scenarios are not bound by time or geographic limitations and cyber
catastrophic perils do not have well-established definitions and fundamental physical properties. Rather, cyber risks are
engineered by human actors and thus are continuously evolving, often in ways that are engineered specifically to evade
established loss mitigation controls. The occurrence of claims from catastrophic events could result in substantial volatility in our
results of operations or financial condition for any fiscal quarter or year. Although we attempt to manage our exposure to such
events through the use of underwriting controls, risk models, and the purchase of third-party reinsurance, catastrophic events
are inherently unpredictable and the actual nature of such events, when they occur, could be more frequent or severe than
contemplated in our pricing and risk management expectations. As a result, the occurrence of one or more catastrophic events
could have an adverse effect on our results of operations and financial condition.
If actual claims exceed our loss reserves, our financial results could be adversely affected.
Our results of operations and financial condition depend upon our ability to accurately assess the potential losses associated
with the risks that we insure and reinsure. We establish reserves for unpaid losses and loss expenses, which are estimates of
future payments of reported and unreported claims for losses and related expenses, with respect to insured events that have
occurred at or prior to the balance sheet date. The process of establishing reserves can be highly complex and is subject to
considerable variability as it requires the use of informed estimates and judgments.
Actuarial staff in each of our segments regularly evaluates the levels of loss reserves. Any such evaluation could result in future
changes in estimates of losses or reinsurance recoverables and would be reflected in our results of operations in the period in
which the estimates are changed. Losses and loss expenses are charged to income as incurred. During the loss settlement
period, which can be many years in duration for some of our lines of business, additional facts regarding individual claims and
trends often will become known which may result in a change in overall reserves. In addition, application of statistical and
actuarial methods may require the adjustment of overall reserves upward or downward from time to time.
We include in our loss reserves liabilities for latent claims, such as asbestos and environmental (A&E), which are principally
related to claims arising from remediation costs associated with hazardous waste sites and bodily-injury claims related to
exposure to asbestos products and environmental hazards. At December 31, 2023, gross A&E liabilities represented
approximately 1.8 percent of our gross loss reserves. The estimation of these liabilities is subject to many complex variables
including: the current legal environment; specific settlements that may be used as precedents to settle future claims;
assumptions regarding trends with respect to claim severity and the frequency of higher severity claims; assumptions regarding
the ability to allocate liability among defendants (including bankruptcy trusts) and other insurers; the ability of a claimant to
bring a claim in a state in which it has no residency or exposure; the ability of a policyholder to claim the right to non-products
coverage; whether high-level excess policies have the potential to be accessed given the policyholder's claim trends and liability
situation; payments to unimpaired claimants; and the potential liability of peripheral defendants. Accordingly, the ultimate
settlement of losses, arising from either latent or non-latent causes, may be significantly greater or less than the loss and loss
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expense reserves held at the balance sheet date. In addition, the amount and timing of the settlement of our P&C liabilities are
uncertain and our actual payments could be higher than contemplated in our loss reserves owing to the impact of insurance,
judicial decisions, and/or social inflation. If our loss reserves are determined to be inadequate, we may be required to increase
loss reserves at the time of the determination and our net income and capital may be reduced.
The effects of emerging claim and coverage issues on our business are uncertain.
As industry practices and legislative, regulatory, judicial, social, financial, technological and other environmental conditions
change, unexpected and unintended issues related to claims and coverage may emerge. These issues may adversely affect our
business by either extending coverage beyond our underwriting intent or by increasing the frequency and severity of claims. For
example, "reviver" legislation in certain states does allow civil claims relating to molestation to be asserted against policyholders
that would otherwise be barred by statutes of limitations. As a result, the full extent of liability under our insurance or
reinsurance contracts may not be known for many years after issuance.
The failure of any of the loss limitation methods we use could have an adverse effect on our results of operations and
financial condition.
We seek to manage our loss exposure by maintaining a disciplined underwriting process throughout our insurance operations.
We also look to limit our loss exposure by writing a number of our insurance and reinsurance contracts on an excess of loss
basis. Excess of loss insurance and reinsurance indemnifies the insured against losses in excess of a specified amount. In
addition, we limit program size for each client and purchase third-party reinsurance for our own account. In the case of our
assumed proportional reinsurance treaties, we seek per occurrence limitations or loss and loss expense ratio caps to limit the
impact of losses ceded by the client. In proportional reinsurance, the reinsurer shares a proportional part of the premiums and
losses of the reinsured. We also seek to limit our loss exposure by geographic diversification. Geographic zone limitations involve
significant underwriting judgments, including the determination of the area of the zones and the inclusion of a particular policy
within a particular zone's limits.
However, there are inherent limitations in all of these tactics, and no assurance can be given against the possibility of an event
or series of events that could result in loss levels that could have an adverse effect on our financial condition or results of
operations. It is also possible that losses could manifest themselves in ways that we do not anticipate and that our risk
mitigation strategies are not designed to address. Additionally, various provisions of our policies, such as limitations or
exclusions from coverage or choice of forum negotiated to limit our risks, may not be enforceable in the manner we intend. As a
result, one or more natural or man-made catastrophes, terrorism, or other events could result in claims that substantially exceed
our expectations, which could have an adverse effect on our results of operations and financial condition.
We may be unable to purchase reinsurance, and/or if we successfully purchase reinsurance, we are subject to the possibility
of non-payment.
We purchase protection from third parties including, but not limited to, reinsurance to protect against catastrophes and other
sources of volatility, to increase the amount of protection we can provide our clients, and as part of our overall risk management
strategy. Our reinsurance business also purchases retrocessional protection which allows a reinsurer to cede to another company
all or part of the reinsurance originally assumed by the reinsurer. A reinsurer's or retrocessionaire's insolvency or inability or
unwillingness to make timely payments under the terms of its reinsurance agreement with us could have an adverse effect on us
because we remain liable to the insured. From time to time, market conditions have limited, and in some cases have prevented,
insurers and reinsurers from obtaining the types and amounts of reinsurance or retrocessional reinsurance that they consider
adequate for their business needs.
There is no guarantee our desired amounts of reinsurance or retrocessional reinsurance will be available in the marketplace in
the future. In addition to capacity risk, the remaining capacity may not be on terms we deem appropriate or acceptable or with
companies with whom we want to do business. Finally, we face some degree of counterparty risk whenever we purchase
reinsurance or retrocessional reinsurance. Consequently, the insolvency of these counterparties, or the inability, or unwillingness
of any of our present or future reinsurers to make timely payments to us under the terms of our reinsurance or retrocessional
agreements could have an adverse effect on us. At December 31, 2023, we had $20.2 billion of reinsurance recoverables, net
of reserves for uncollectible recoverables.
Certain active Chubb companies are primarily liable for A&E and other exposures they have reinsured to our inactive run-off
company Century Indemnity Company (Century). At December 31, 2023, the aggregate reinsurance balances ceded by our
active subsidiaries to Century were approximately $1.8 billion. Should Century's loss reserves experience adverse development
in the future and should Century be placed into rehabilitation or liquidation, the reinsurance recoverables due from Century to its
affiliates would be payable only after the payment in full of third-party expenses and liabilities, including administrative expenses
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and direct policy liabilities. Thus, the intercompany reinsurance recoverables would be at risk to the extent of the shortage of
assets remaining to pay these recoverables. While we believe the intercompany reinsurance recoverables from Century are not
impaired at this time, we cannot assure that adverse development with respect to Century's loss reserves, if manifested, will not
result in Century's insolvency, which could result in our recognizing a loss to the extent of any uncollectible reinsurance from
Century. This could have an adverse effect on our results of operations and financial condition.
Our net income and Shareholders' equity may be volatile because certain products sold by our life insurance businesses
expose us to future policy benefit (FPB) reserve and market risk benefits changes that are directly affected by market and
other factors and assumptions.
Our pricing, establishment of liabilities for life insurance and annuity products, including reinsurance programs, are based upon
various assumptions, including but not limited to equity market changes, interest rates, mortality rates, morbidity rates, and
policyholder behavior. With the adoption of long-duration targeted improvements (LDTI), the accounting for our FPB reserves is
also sensitive to changing interest rate conditions. We are required to update for changes in discount rates quarterly and review
assumptions at least annually, which could cause volatility in our net income and shareholders' equity.
Guaranteed minimum death benefits (GMDB) and guaranteed living benefits (GLB), principally guaranteed minimum income
benefits (GMIB), associated with variable annuity contracts, are collectively referred to as market risk benefits (MRB). The
process of establishing MRB liabilities relies on our ability to accurately estimate insured events that have not yet occurred but
that are expected to occur in future periods. Significant deviations in actual experience from assumptions used for pricing and
for MRB liabilities could have an adverse effect on the profitability of our products and our business.
Under reinsurance programs covering variable annuity guarantees, we assumed the risk of GMDB and GMIB associated with
variable annuity contracts. We ceased writing this business in 2007. Our net income is directly impacted by the changes in the
MRB liability reflecting market conditions, policyholder behavior, and other changes in assumptions. We view our variable
annuity reinsurance business as having a similar risk profile to that of catastrophe reinsurance, with the probability of long-term
economic loss relatively small at the time of pricing. Adverse changes in market factors and policyholder behavior will have an
impact on consolidated net income.
Payment of obligations under surety bonds could have an adverse effect on our results of operations.
The surety business tends to be characterized by infrequent but potentially high severity losses. The majority of our surety
obligations are intended to be performance-based guarantees. When losses occur, they may be mitigated, at times, by recovery
rights to the customer’s assets, contract payments, and collateral and bankruptcy recoveries. We have substantial commercial
and construction surety exposure for current and prior customers. In that regard, we have exposures related to surety bonds
issued on behalf of companies that have experienced or may experience deterioration in creditworthiness. If the financial
condition of these companies were adversely affected by the economy or otherwise, we may experience an increase in filed
claims and may incur high severity losses, which could have an adverse effect on our results of operations.
Our exposure to various commercial and contractual counterparties, our reliance on brokers, and certain of our policies may
subject us to credit risk.
We have exposure to counterparties through a variety of commercial transactions and arrangements, including reinsurance
transactions; agreements with banks, hedge funds and other investment vehicles; and derivative transactions, that expose us to
credit risk in the event our counterparty fails to perform its obligations. This includes exposure to financial institutions in the
form of secured and unsecured debt instruments and equity securities.
In accordance with industry practice, we generally pay amounts owed on claims to brokers who, in turn, remit these amounts to
the insured or ceding insurer. Although the law is unsettled and depends upon the facts and circumstances of the particular
case, in some jurisdictions, if a broker fails to make such a payment, we might remain liable to the insured or ceding insurer for
the deficiency. Conversely, in certain jurisdictions, if a broker does not remit premiums paid for these policies over to us, these
premiums might be considered to have been paid and the insured or ceding insurer will no longer be liable to us for those
amounts, whether or not we have actually received the premiums from the broker. Consequently, we assume a degree of credit
risk associated with a broker with whom we transact business. However, due to the unsettled and fact-specific nature of the
law, we are unable to quantify our exposure to this risk. To date, we have not experienced any material losses related to this
credit risk.
Under the terms of certain high-deductible policies which we offer, such as workers’ compensation and general liability, our
customers are responsible to reimburse us for an agreed-upon dollar amount per claim. In nearly all cases, we are required
under such policies to pay covered claims first and then seek reimbursement for amounts within the applicable deductible from
our customers. This obligation subjects us to credit risk from these customers. While we generally seek to mitigate this risk
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through collateral agreements and maintain a provision for uncollectible accounts associated with this credit exposure, an
increased inability of customers to reimburse us in this context could have an adverse effect on our financial condition and
results of operations. In addition, a lack of credit available to our customers could impact our ability to collateralize this risk to
our satisfaction, which in turn, could reduce the amount of high-deductible policies we could offer.
Since we depend on a few brokers and agents for a large portion of our revenues, loss of business provided by any one of
them could adversely affect us.
We market our insurance and reinsurance worldwide, primarily through independent insurance agents, insurance and
reinsurance brokers, and bancassurance relationships. Accordingly, our business is dependent on the willingness of these agents
and brokers to recommend our products to their customers, who may also promote and distribute the products of our
competitors. Deterioration in relationships with our agent and broker distribution network or their increased promotion and
distribution of our competitors' products could adversely affect our ability to sell our products. Loss of all or a substantial portion
of the business provided by one or more of these agents and brokers could have an adverse effect on our business.
Financial
Our investment performance may affect our financial results and our ability to conduct business.
Our investment assets are invested by professional investment management firms under the direction of our management team
in accordance with investment guidelines approved by the Risk & Finance Committee of the Board of Directors. Although our
investment guidelines stress diversification of risks and conservation of principal and liquidity, our investments are subject to
market risks and risks inherent in individual securities. Our investment performance is highly sensitive to many factors, including
interest rates, inflation, monetary and fiscal policies, and domestic and international political conditions. The volatility of our
losses may force us to liquidate securities, which may cause us to incur capital losses. Realized and unrealized losses in our
investment portfolio would reduce our book value, and if significant, can affect our ability to conduct business.
Volatility in interest rates could impact the performance of our investment portfolio which could have an adverse effect on our
investment income and operating results. Although we take measures to manage the risks of investing in a changing interest
rate environment, we may not be able to effectively mitigate interest rate sensitivity. Our mitigation efforts include maintaining a
high-quality portfolio of primarily fixed income investments with a relatively short duration to reduce the effect of interest rate
changes on book value. A significant increase in interest rates would generally have an adverse effect on our book value. Our life
insurance investments typically focus on longer duration bonds to better match the obligations of this business. For the life
insurance business, policyholder behavior may be influenced by changing interest rate conditions and require a re-balancing of
duration to effectively manage our asset/liability position.
As stated, our fixed income portfolio is primarily invested in high quality, investment-grade securities. However, a smaller
portion of the portfolio, approximately 17 percent at December 31, 2023, is invested in below investment-grade securities.
These securities, which pay a higher rate of interest, also have a higher degree of credit or default risk and may also be less
liquid in times of economic weakness or market disruptions. While we have put in place procedures to monitor the credit risk
and liquidity of our invested assets, it is possible that, in periods of economic weakness (such as recession), we may experience
credit or default losses in our portfolio, which could adversely affect our results of operations and financial condition.
As a part of our ongoing analysis of our investment portfolio, we are required to assess current expected credit losses for our
private debt held-for-investment and evaluate expected credit losses for available-for-sale securities when fair value is below
amortized cost, which considers reasonable and supportable forecasts of future economic conditions in addition to information
about past events and current conditions. This analysis requires a high degree of judgment. Financial assets with similar risk
characteristics and relevant historical loss information are included in the development of an estimate of expected lifetime
losses. Declines in relevant stock and other financial markets and other factors impacting the value of our investments could
result in an adverse effect on our net income and other financial results.
We may require additional capital or financing sources in the future, which may not be available or may be available only on
unfavorable terms.
Our future capital and financing requirements depend on many factors, including our ability to write new business successfully
and to establish premium rates and reserves at levels sufficient to cover losses, as well as our investment performance and
capital expenditure obligations, including with respect to acquisitions. We may need to raise additional funds through financings
or access funds through existing or new credit facilities or through short-term repurchase agreements. We also from time to time
seek to refinance debt or credit as amounts become due or commitments expire. Any equity or debt financing or refinancing, if
available at all, may be on terms that are not favorable to us. In the case of equity financings, dilution to our shareholders could
result, and in any case, such securities may have rights, preferences, and privileges that are senior to those of our Common
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Shares. Our access to funds under existing credit facilities is dependent on the ability of the banks that are parties to the
facilities to meet their funding commitments. Under Swiss law, we would be prohibited from selling shares in an equity
financing at a purchase price below our then-current par value. If we cannot obtain adequate capital or sources of credit on
favorable terms, or at all, we could be forced to use assets otherwise available for our business operations, and our business,
results of operations, and financial condition could be adversely affected.
We may be required to post additional collateral because of changes in our reinsurance liabilities to regulated insurance
companies, or because of regulatory changes that affect our companies.
If our reinsurance liabilities increase, including in our property & casualty and variable annuity reinsurance businesses, we may
be required to post additional collateral for insurance company clients. In addition, regulatory changes sometimes affect our
obligations to post collateral. The need to post this additional collateral, if significant enough, may require us to sell investments
at a loss in order to provide securities of suitable credit quality or otherwise secure adequate capital at an unattractive cost. This
could adversely impact our net income and liquidity and capital resources.
U.S. and global economic and financial industry events and their consequences could harm our business, our liquidity and
financial condition, and our stock price.
The consequences of adverse global or regional market and economic conditions may affect (among other aspects of our
business) the demand for and claims made under our products, the ability of customers, counterparties, and others to establish
or maintain their relationships with us, our ability to access and efficiently use internal and external capital resources, the
availability of reinsurance protection, the risks we assume under reinsurance programs covering variable annuity guarantees,
and our investment performance. The increasing impact of climate change could affect our cost of claims, loss ratios, and
financial results. Volatility in the U.S. and other securities markets may adversely affect our stock price.
A decline in our financial strength ratings could affect our standing among distribution partners and customers and cause our
premiums and earnings to decrease. A decline in our credit ratings could increase our borrowing costs and impact our ability
to access capital markets.
Ratings are an important factor in establishing the competitive position of insurance and reinsurance companies. The objective
of these rating systems is to provide an opinion of an insurer's financial strength and ability to meet ongoing obligations to its
policyholders. A ratings downgrade could result in a substantial loss of business as insureds, ceding companies, and brokers
move to other insurers and reinsurers with higher ratings. If one or more of our debt ratings were downgraded, we could also
incur higher borrowing costs, and our ability to access the capital markets could be impacted. Additionally, we could be
required to post collateral or be faced with the cancellation of policies and resulting premium in certain circumstances. We
cannot give any assurance regarding whether or to what extent any of the rating agencies might downgrade our ratings in the
future.
Our ability to pay dividends and/or to make payments on indebtedness may be constrained by our holding company structure.
Chubb Limited is a holding company that owns shares of its operating insurance and reinsurance subsidiaries along with several
loans receivable from affiliates. Beyond this it does not itself have any significant operations or liquid assets. Repayment of
loans receivable, guarantee fees and dividends and other permitted distributions from our insurance subsidiaries are its primary
sources of funds to meet ongoing cash requirements, including any future debt service payments, other expenses, repurchases of
its shares, and paying dividends to our shareholders. Some of our insurance subsidiaries are subject to significant regulatory
restrictions limiting their ability to declare and pay dividends. The inability of our insurance subsidiaries to pay dividends (or
other intercompany amounts due, such as intercompany debt obligations) in an amount sufficient to enable us to meet our cash
requirements at the holding company level could have an adverse effect on our operations and our ability to repurchase shares
and pay dividends to our shareholders.
Swiss law imposes certain restrictions on our ability to repurchase our shares.
Swiss law imposes certain withholding tax and other restrictions on a Swiss company’s ability to return earnings or capital to its
shareholders, including through the repurchase of its own shares. We may only repurchase shares to the extent that sufficient
freely distributable reserves are available. In addition, Swiss law requires that the total par value of Chubb's treasury shares
must not be in excess of 10 percent of its total share capital, although an exemption from the 10 percent limit applies for
repurchased treasury shares dedicated for cancellation and acquired pursuant to a shareholder-ratified repurchase program. As a
result, in order to maintain our share repurchase program, our shareholders must periodically approve a reduction in our share
capital through the cancellation of designated blocks of repurchased shares held in treasury and may from time to time as
necessary, in a separate vote, ratify our share repurchase program. If our shareholders do not approve the cancellation of
repurchased shares or, if necessary, ratify our share repurchase program, we may be restricted or unable to return capital to
shareholders through share repurchases in the future. Furthermore, our current repurchase program relies on Swiss tax rulings.
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Any future revocation, lapse, expiration, or loss of our Swiss tax rulings or the inability to conduct repurchases in accordance
with these rulings could jeopardize our ability to continue repurchasing our shares.
Our operating results and shareholders' equity may be adversely affected by currency fluctuations.
Our reporting currency is the U.S. dollar. In general, we match assets and liabilities in local currencies. Where possible, capital
levels in local currencies are limited to satisfy minimum regulatory requirements and to support local insurance operations. The
principal currencies creating foreign exchange risk are the Korean won, Chinese yuan, Canadian dollar, Australian dollar, Taiwan
dollar, Mexican peso, Brazilian real, Thai baht, British pound sterling, and euro. At December 31, 2023, approximately 31.8
percent of our unhedged net assets were denominated in foreign currencies. We may experience losses resulting from
fluctuations in the values of non-U.S. currencies, which could adversely impact our results of operations and financial condition.
Operational
The regulatory and political regimes under which we operate, and their volatility, could have an adverse effect on our
business.
We may from time-to-time face challenges resulting from changes in applicable law and regulations in particular jurisdictions, or
changes in approach to oversight of our business from insurance or other regulators.
Our insurance and reinsurance subsidiaries conduct business globally. Our businesses in each jurisdiction are subject to varying
degrees of regulation and supervision. The laws and regulations of the jurisdictions in which our insurance and reinsurance
subsidiaries are domiciled require, among other things, maintenance of minimum levels of statutory capital, surplus, and
liquidity; various solvency standards; and periodic examinations of subsidiaries' financial condition. In some jurisdictions, laws
and regulations also restrict payments of dividends and reductions of capital. Applicable statutes, regulations, and policies may
also restrict the ability of these subsidiaries to write insurance and reinsurance policies, to make certain investments, and to
distribute funds. The purpose of insurance laws and regulations generally is to protect policyholders and ceding insurance
companies, not our shareholders. For example, some jurisdictions have enacted various consumer protection laws that make it
more burdensome for insurance companies to sell policies and interact with customers in personal lines businesses. Failure to
comply with such regulations can lead to significant penalties and reputational injury.
The foreign and U.S. federal and state laws and regulations that are applicable to our operations are complex and may increase
the costs of regulatory compliance or subject our business to the possibility of regulatory actions or proceedings. Laws and
regulations not specifically related to the insurance industry include trade sanctions that relate to certain countries, anti-money
laundering laws, and anti-corruption laws. The insurance industry is also affected by political, judicial, and legal developments
that may create new and expanded regulations and theories of liability. The current economic and financial climates present
additional uncertainties and risks relating to increased regulation and the potential for increased involvement of the U.S. and
other governments in the financial services industry.
Furthermore, governments, regulators, investors, customers, and other stakeholders have increased their focus on climate
change risk reporting. A variety of governments and regulators have adopted or are in the process of adopting climate change
and greenhouse gas emissions disclosure requirements for which Chubb and certain of its individual subsidiaries are or will be
subject to in the future. Chubb also receives requests for information from investors, customers and other stakeholders from
time to time on various aspects of its policies and strategies relating to climate change. This has resulted in expanded and
increasingly complex expectations related to reporting under multiple, various, disparate and potentially inconsistent reporting
requirements, increased due diligence, and potential requirements for the reporting of scope 3 emissions. Responding to such
disclosure requirements and requests involves risks and uncertainties, including depending in part on estimates and third-party
data that is outside our control. New reporting standards, regulations and requirements with various aims and goals could
expose us to legal, regulatory, investor and other stakeholder scrutiny, and customers that disagree with our actions or reporting
on climate change may determine not to do business with us, all of which may adversely affect our business, reputation and
results of operations.
Regulators in countries where we have operations continue to work with the International Association of Insurance Supervisors
(IAIS) to consider changes to insurance company supervision, including with respect to group supervision and solvency
requirements. The IAIS has developed a Common Framework for the Supervision of Internationally Active Insurance Groups
(ComFrame), which is focused on the effective group-wide supervision of international active insurance groups (IAIGs), such as
Chubb. As part of ComFrame, the IAIS is developing an international capital standard for such IAIGs. The details of this global
capital standard and its applicability to Chubb are evolving and uncertain at this time. In addition, Chubb businesses across the
European Union (EU) are subject to Solvency II, a capital and risk management regime, and our Bermuda businesses are
subject to an equivalent of the EU's Solvency II regime. Also applicable to Chubb businesses are the requirements of the Swiss
Financial Market Supervisory Authority (FINMA) whose regulations include Swiss Solvency Tests. There are also Risk Based
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Capital (RBC) requirements in the U.S. which are also subject to revision in response to global developments. The impact to
Chubb of these developments remains uncertain, although currently we do not expect that our capital management strategies,
results of operations and financial condition will be materially affected by these regulatory changes.
Evolving privacy and data security regulations could adversely affect our business.
We are subject to numerous U.S. federal and state laws and non-U.S. regulations governing the protection of personal and
confidential information of our clients and employees, including in relation to medical records, credit card data and financial
information. These laws and regulations are increasing in complexity and number, change frequently, sometimes conflict, and
could expose Chubb to significant monetary damages, regulatory enforcement actions, fines and/or criminal prosecution in one
or more jurisdictions.
For example, we are subject to the New York Department of Financial Services’ Cybersecurity Regulation (the NYDFS
Cybersecurity Regulation) which mandates detailed cybersecurity standards and other obligations for all institutions, including
insurance entities, authorized by the NYDFS to operate in New York. The NYDFS Cybersecurity Regulation has increased our
compliance costs and could increase the risk of noncompliance and subject us to regulatory enforcement actions and penalties,
as well as reputation risk.
Additionally, the National Association of Insurance Commissioners (NAIC) adopted an Insurance Data Security Model Law,
which requires licensed insurance entities to comply with detailed information security requirements. A number of states have
enacted it into law, and it is not yet known whether or not, and to what extent, additional states will enact it. Such enactments,
especially if inconsistent between states or with existing laws and regulations could raise compliance costs or increase the risk
of noncompliance, with the attendant risk of being subject to regulatory enforcement actions and penalties, as well as
reputational harm.
The EU General Data Protection Regulation (the GDPR) is a comprehensive regulation applying across all EU member states. All
our business units (regardless of whether they are located in the EU) may be subject to the GDPR when personal data is
processed in relation to the offer of goods and services to individuals within the EU. Our failure to comply with GDPR and other
countries’ privacy or data security-related laws, rules or regulations could result in significant penalties imposed by regulators,
which could have an adverse effect on our business, financial condition, and results of operations.
Significant other comprehensive privacy laws have been enacted by other jurisdictions, most notably the California Consumer
Privacy Act (CCPA), the California Privacy Rights Act (CPRA), and Brazil’s Lei Geral de Protecao de Dados (LGPD), which may
affect our use of data and could affect our operations and subject us to fines and actions for noncompliance. In the U.S., several
other states are considering similar legislation, and there are ongoing discussions regarding a National Privacy Law. New laws
similar to the GDPR and the CCPA are expected to be enacted in coming years in various countries and jurisdictions in which
we operate.
Regulatory standards relating to the use of artificial intelligence are evolving in the countries where we do business, and may
increase risks associated with bias, unfair discrimination, transparency, and information security. The application of existing law
and introduction of new or revised laws and regulations may require changes in our operations and increase compliance costs.
Our worldwide operations, particularly in developing nations, expose us to global geopolitical developments that could have
an adverse effect on our business, liquidity, results of operations, and financial condition.
With operations in 54 countries and territories, we provide insurance and reinsurance products and services to a diverse group
of clients worldwide, including operations in various developing nations. Both current and future foreign operations could be
adversely affected by unfavorable geopolitical developments, including law changes; tax changes; changes in trade policies;
changes to visa or immigration policies; regulatory restrictions; government leadership changes; political events and upheaval;
sociopolitical instability; social, political or economic instability resulting from climate change; and nationalization of our
operations without compensation. Adverse activity in any one country could negatively impact operations, increase our loss
exposure under certain of our insurance products, and could, otherwise, have an adverse effect on our business, liquidity, results
of operations, and financial condition depending on the magnitude of the events and our net financial exposure at that time in
that country.
A failure in our operational systems or infrastructure or those of third parties, including due to security breaches or cyber-
attacks, could disrupt business, damage our reputation, and cause losses.
Our operations rely on the secure processing, storage, and transmission of confidential and other information and assets,
including in our computer systems and networks and those of third-party service providers. Our business depends on effective
information security and systems and the integrity and timeliness of the data our information systems use to run our business.
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Our ability to adequately price products and services, to establish reserves, to provide effective, efficient and secure service to
our customers, to value our investments and to timely and accurately report our financial results also depends significantly on
the integrity and availability of the data we maintain, including that within our information systems, as well as data in and
assets held through third-party service providers and systems. Like all global companies, our systems and those of our third-
party service providers, have been, and will likely continue to be, targeted by or subject to viruses, malware or other malicious
codes, unauthorized access, cyber-attacks, cyber frauds, ransomware or other unauthorized occurrences, on or conducted
through our information systems, which jeopardize the confidentiality, integrity or availability of our information or information
systems. Cybersecurity threats are rapidly evolving and those threats and the means for obtaining access to our systems are
becoming increasingly sophisticated. Cybersecurity threats can originate from a wide variety of sources including terrorists,
nation states, financially motivated actors, internal actors, or third parties, such as external service providers, and the
techniques used change frequently or are often not recognized until after they have been launched. The rapid evolution and
increased adoption of artificial intelligence technologies may intensify our cybersecurity risks including the deployment of
artificial intelligence by bad actors intent on finding and exploiting vulnerabilities, their use of "deep fakes," and long-term
persistent attacks. Although we have implemented administrative and technical controls and have taken protective actions
designed to reduce the risk of cyber incidents and to protect our information technology and assets, including conducting due
diligence security reviews and negotiating agreements with third-party service providers, and we additionally endeavor to modify
such procedures and agreements as circumstances warrant, such measures may be insufficient to prevent unauthorized access,
computer viruses, malware or other malicious code or cyber-attack, ransomware, phishing scams, or similar attempts to
fraudulently induce our employees or others to take actions which compromise our information or information systems, business
compromise attacks, catastrophic events, system failures and disruptions, employee errors, negligence or malfeasance, loss of
assets or data and other events that could have security consequences (each, a Security Event). As the breadth and complexity
of our security infrastructure continues to grow, the risk of a Security Event increases. Such an event or events may jeopardize
Chubb's or its clients' or counterparties' confidential and other information processed and stored within Chubb, and transmitted
through its information systems, or otherwise cause interruptions, delays, or malfunctions in Chubb's, its clients', its
counterparties', or third parties' operations, or result in data loss or loss of assets which could result in significant losses,
reputational damage or an adverse effect on our operations and critical business functions. Chubb may be required to expend
significant additional resources to modify our protective measures or to investigate and remediate vulnerabilities or other
exposures and to pursue recovery of lost data or assets and we may be subject to litigation costs and losses, regulatory penalties
(as described above) and financial losses that are either not insured against or not fully covered by insurance maintained. In
instances where we rely on third parties to perform business functions and process data on our behalf, Chubb may be exposed
to additional data security risk as a result of Security Events that impact the third party or others upon whom they rely.
Despite the contingency plans and facilities, we have in place and our efforts to observe the regulatory requirements surrounding
information security, our ability to conduct business may be adversely affected by a disruption of the infrastructure that supports
our business in the communities in which we are located, or of outsourced services or functions. This may include a disruption
involving electrical, communications, transportation, or other services used by Chubb or third parties on whom we rely. If a
disruption occurs in one location and Chubb employees in that location are unable to conduct business or communicate with or
travel to other locations, our ability to service and interact with clients may suffer and we may not be able to successfully
implement contingency plans that depend on communication or travel.
We use analytical models to assist our decision-making in key areas, such as underwriting, claims, reserving, and catastrophe
risks, but actual results could differ materially from the model outputs and related analyses.
We use various modeling techniques (e.g., scenarios, predictive, stochastic and/or forecasting) and data analytics to analyze and
estimate exposures, loss trends and other risks associated with our assets and liabilities. We use the modeled outputs and
related analyses to assist us in decision-making (e.g., underwriting, pricing, claims, reserving, reinsurance, and catastrophe risk)
and to maintain competitive advantage. The modeled outputs and related analyses are subject to various assumptions,
uncertainties, model errors and the inherent limitations of any statistical analysis, including the use of historical internal and
industry data. In addition, the modeled outputs and related analyses may from time to time contain inaccuracies, perhaps in
material respects, including as a result of inaccurate inputs or applications thereof. Climate change may make modeled
outcomes less certain or produce new, non-modeled risks. Consequently, actual results may differ materially from our modeled
results. If, based upon these models or other factors, we misprice our products or underestimate the frequency and/or severity of
loss events, or overestimate the risks we are exposed to, new business growth and retention of our existing business may be
adversely affected which could have an adverse effect on our results of operations and financial condition.
We could be adversely affected by the loss of one or more key executives or by an inability to attract and retain qualified
personnel.
Our success depends on our ability to retain the services of our existing key executives and to attract and retain additional
qualified personnel in the future. The loss of the services of any of our key executives or the inability to hire and retain other
highly qualified personnel in the future could adversely affect our ability to conduct or grow our business. This risk may be
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particularly acute for us relative to some of our competitors because some of our senior executives work in countries where they
are not citizens, and work permit and immigration issues could adversely affect the ability to retain or hire key persons. We do
not maintain key person life insurance policies with respect to our employees.
Employee error and misconduct may be difficult to detect and prevent and could adversely affect our business, results of
operations, and financial condition.
Losses may result from, among other things, fraud, errors, failure to document transactions properly, failure to obtain proper
internal authorization, failure to comply with underwriting or other internal guidelines, or failure to comply with regulatory
requirements. It is not always possible to deter or prevent employee misconduct, and the precautions that we take to prevent
and detect this activity may not be effective in all cases. Resultant losses could adversely affect our business, results of
operations, and financial condition.
Strategic
The continually changing landscape, including competition, technology and products, and existing and new market entrants
could reduce our margins and adversely impact our business and results of operations.
Insurance and reinsurance markets are highly competitive. We compete on an international and regional basis with major U.S.,
Bermuda, European, and other international insurers and reinsurers and with underwriting syndicates, some of which have
greater financial, technological, marketing, distribution and/or management resources than we do. In addition, capital market
participants have created alternative products that are intended to compete with reinsurance products. We also compete with
new companies and existing companies that move into the insurance and reinsurance markets. If competition, or technological
or other changes to the insurance markets in which we operate, limits our ability to retain existing business or write new
business at adequate rates or on appropriate terms, our business and results of operations could be materially and adversely
affected. Increased competition could also result in fewer submissions, lower premium rates, and less favorable policy terms and
conditions, which could reduce our profit margins and adversely impact our net income and shareholders' equity.
Recent technological advancements in the insurance industry and information technology industry present new and fast-evolving
competitive risks as participants seek to increase transaction speeds, lower costs, and create new opportunities. Advancements
in technology are occurring in underwriting, claims, distribution, and operations at a pace that may quicken, including as
companies increase use of data analytics, artificial intelligence and other technology as part of their business strategy. We will
be at a competitive disadvantage if, over time, our competitors are more effective than us in their utilization of technology and
evolving data analytics. If we do not anticipate or keep pace with these technological and other changes impacting the
insurance industry, it could limit our ability to compete in desired markets.
Insurance and reinsurance markets are historically cyclical, and we expect to experience periods with excess underwriting
capacity and unfavorable premium rates.
The insurance and reinsurance markets have historically been cyclical, characterized by periods of intense price competition due
to excessive underwriting capacity as well as periods when shortages of capacity permitted favorable premium levels. An
increase in premium levels is often offset by an increasing supply of insurance and reinsurance capacity, either by capital
provided by new entrants or by the commitment of additional capital by existing insurers or reinsurers, which may cause prices
to decrease. Any of these factors could lead to a significant reduction in premium rates, less favorable policy terms, and fewer
submissions for our underwriting services. In addition to these considerations, changes in the frequency and severity of losses
suffered by insureds and insurers may affect the cycles of the insurance and reinsurance markets significantly, as could periods
of economic weakness (such as recession).
The integration of acquired companies may not be as successful as we anticipate.
Acquisitions involve numerous operational, strategic, financial, accounting, legal, tax, and other risks; potential liabilities
associated with the acquired businesses; and uncertainties related to design, operation and integration of acquired businesses’
internal controls over financial reporting. Difficulties in integrating an acquired company, along with its personnel, may result in
the acquired company performing differently than we expected, in operational challenges or in our failure to realize anticipated
expense-related efficiencies. This may also apply to companies in which we acquire majority ownership. Our existing businesses
could also be negatively impacted by acquisitions. In addition, goodwill and intangible assets recorded in connection with
insurance company acquisitions may be impaired if premium growth, underwriting profitability, agency retention and policy
persistency, among other factors, differ from expectations.
There is also the potential that proposed acquisitions that have been publicly announced will not be consummated, even if a
definitive agreement has been signed by the parties. If an agreement is terminated before closing, the result would be that our
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proposed acquisition would not occur, which could, among other things, expose us to damages or liability and adversely impact
our stock price and future operations.
We may be subject to U.S. tax and Bermuda tax which may have an adverse effect on our results of operations and
shareholder investment.
Chubb Limited and our non-U.S. subsidiaries operate in a manner so that none of these companies should be subject to U.S.
tax (other than U.S. excise tax on insurance and reinsurance premium income attributable to insuring or reinsuring U.S. risks
and U.S. withholding tax on some types of U.S. source investment income), because none of these companies should be treated
as engaged in a trade or business within the U.S. However, because there is considerable uncertainty as to the activities that
constitute being engaged in a trade or business within the U.S., we cannot be certain that the Internal Revenue Service (IRS)
will not contend successfully that Chubb Limited or its non-U.S. subsidiaries are engaged in a trade or business in the U.S. If
Chubb Limited or any of its non-U.S. subsidiaries were considered to be engaged in a trade or business in the U.S., such entity
could be subject to U.S. corporate income and branch profits taxes on the portion of its earnings effectively connected to such
U.S. business, in which case our results of operations and our shareholders' investments could be adversely affected.
Historically, our Bermuda operations have not been subject to Bermuda income tax. However, on December 27, 2023, the
Government of Bermuda enacted a 15 percent income tax effective January 1, 2025.
We currently anticipate that the new Bermuda income tax would be a covered tax under the OECD’s global minimum tax regime
discussed in our Risk Factor below titled “The Organization for Economic Cooperation and Development (OECD), European
Union (EU), Swiss Federal Council, and other jurisdictions are considering, have considered, or have passed measures that
might change long standing tax principles that could increase our taxes.” Therefore, we would expect any implementation of the
OECD global minimum tax regime to count any enacted Bermuda income tax toward such OECD minimum tax.
The imposition of the Bermuda corporate income tax could have an adverse effect on our results of operations beginning in
2025.
We could be adversely affected by certain features of the Inflation Reduction Act.
On August 16, 2022, President Biden signed the Inflation Reduction Act (IRA) of 2022 (H.R. 5376). Key tax provisions
included in the IRA include a 15 percent corporate alternative minimum tax (CAMT) on adjusted financial statement income for
corporations with average profits over $1 billion, and a 1 percent excise tax on repurchases of corporate stock. The CAMT and
the excise tax on share repurchases are effective for tax years beginning after December 31, 2022. Since enactment, the IRS
and U.S. Treasury Department have issued notices to assist taxpayers in understanding and implementing the new provisions.
This guidance remains subject to comment; thus, there are many uncertainties relating to its ultimate application and effects on
our company.
The Organization for Economic Cooperation and Development (OECD), European Union (EU), Swiss Federal Council, and
other jurisdictions are considering, have considered, or have passed measures that might change long standing tax principles
that could increase our taxes.
The OECD has published a framework for taxation that in many respects is different than long standing international tax
principles. This framework and proposed changes could redefine what income is taxed in which country and institute a 15
percent global minimum tax in 2024 or later years. To date, many EU and other countries have enacted the 15 percent global
minimum tax. Switzerland has enacted aspects of these rules but has not enacted the income inclusion rule or under taxed
payment rule. The enactment of these reforms remains uncertain at this time, but if enacted could cause uncertainties to and
increases in our income taxes.
Several multilateral organizations, including the EU and the OECD have, in recent years, expressed concern about some
countries not participating in adequate tax information exchange arrangements and have threatened those that do not agree to
cooperate with punitive sanctions by member countries. It is still unclear what all these sanctions might be, which countries
might adopt them, and when or if they might be imposed. We cannot assure, however, that the Tax Information Exchange
Agreements (TIEAs) that have been entered into by Switzerland and Bermuda will be sufficient to preclude all of the sanctions
described above, which, if ultimately adopted, could adversely affect us or our shareholders.
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Shareholders
There are provisions in our charter documents that may reduce the voting rights and diminish the value of our Common
Shares.
Our Articles of Association generally provide that shareholders have one vote for each Common Share held by them and are
entitled to vote at all meetings of shareholders. However, the voting rights exercisable by a shareholder may be limited so that
certain persons or groups are not deemed to hold 10 percent or more of the voting power conferred by our Common Shares.
Moreover, these provisions could have the effect of reducing the voting power of some shareholders who would not otherwise be
subject to the limitation by virtue of their direct share ownership. The Board of Directors may refuse to register holders of shares
as shareholders with voting rights based on certain grounds, including if the holder would, directly or indirectly, formally,
constructively or beneficially own (as described in Articles 8 and 14 of our Articles of Association) or otherwise control voting
rights with respect to 10 percent or more of the registered share capital recorded in the commercial register. In addition, the
Board of Directors shall reject entry of holders of registered shares as shareholders with voting rights in the share register or
shall decide on their deregistration when the acquirer or shareholder upon request does not expressly state that she/he has
acquired or holds the shares in her/his own name and for her/his account.
Applicable laws may make it difficult to effect a change of control of our company.
Before a person can acquire control of a U.S. insurance company, prior written approval must be obtained from the insurance
commissioner of the state where the domestic insurer is domiciled. Prior to granting approval of an application to acquire control
of a domestic insurer, the state insurance commissioner will consider such factors as the financial strength of the applicant, the
integrity and management of the applicant's Board of Directors and executive officers, the acquirer's plans for the future
operations of the domestic insurer, and any anti-competitive results that may arise from the consummation of the acquisition of
control. Generally, state statutes provide that control over a domestic insurer is presumed to exist if any person, directly or
indirectly, owns, controls, holds with the power to vote, or holds proxies representing 10 percent or more of the voting securities
of the domestic insurer. Because a person acquiring 10 percent or more of our Common Shares would indirectly control the
same percentage of the stock of our U.S. insurance subsidiaries, the insurance change of control laws of various U.S.
jurisdictions would likely apply to such a transaction. Laws of other jurisdictions in which one or more of our existing
subsidiaries are, or a future subsidiary may be, organized or domiciled may contain similar restrictions on the acquisition of
control of Chubb.
While our Articles of Association limit the voting power of any shareholder to less than 10 percent, we cannot assure that the
applicable regulatory body would agree that a shareholder who owned 10 percent or more of our Common Shares did not,
because of the limitation on the voting power of such shares, control the applicable insurance subsidiary.
These laws may discourage potential acquisition proposals and may delay, deter, or prevent a change of control of Chubb,
including transactions that some or all of our shareholders might consider to be desirable.
Shareholder voting requirements under Swiss law may limit our flexibility with respect to certain aspects of capital
management.
Swiss law allows our shareholders to authorize share capital which can be issued by the Board of Directors without shareholder
approval, but this authorization must be renewed by the shareholders every two years. Swiss law also does not provide as much
flexibility in the various terms that can attach to different classes of stock as permitted in other jurisdictions. Swiss law also
reserves for approval by shareholders many corporate actions over which the Board of Directors had authority prior to our re-
domestication to Switzerland. For example, dividends must be approved by shareholders. While we do not believe that Swiss
law requirements relating to our capital management will have an adverse effect on Chubb, we cannot assure that situations will
not arise where such flexibility would have provided substantial benefits to our shareholders.
Chubb Limited is a Swiss company; it may be difficult to enforce judgments against it or its directors and executive officers.
Chubb Limited is incorporated pursuant to the laws of Switzerland. In addition, certain of our directors and officers reside
outside the U.S. and all or a substantial portion of our assets and the assets of such persons are located in jurisdictions outside
the U.S. As such, it may be difficult or impossible to effect service of process within the U.S. upon those persons or to recover
against us or them on judgments of U.S. courts, including judgments predicated upon civil liability provisions of the U.S. federal
securities laws.
Chubb has been advised by its Swiss counsel that there is doubt as to whether the courts in Switzerland would enforce:
•
judgments of U.S. courts based upon the civil liability provisions of the U.S. federal securities laws obtained in actions
against it or its directors and officers, who reside outside the U.S.; or
original actions brought in Switzerland against these persons or Chubb predicated solely upon U.S. federal securities laws.
•
32
Chubb has also been advised by its Swiss counsel that there is no treaty in effect between the U.S. and Switzerland providing
for this enforcement, and there are grounds upon which Swiss courts may not enforce judgments of U.S. courts. Some remedies
available under the laws of U.S. jurisdictions, including some remedies available under the U.S. federal securities laws, would
not be allowed in Swiss courts as contrary to that nation's public policy.
Shareholders may be subject to Swiss withholding taxes on the payment of dividends.
Our dividends are generally subject to a Swiss withholding tax at a rate of 35 percent; however, payment of a dividend in the
form of a capital contribution reserve reduction or par value reduction is not subject to Swiss withholding tax. We have
previously obtained shareholder approval for dividends to be paid in such form. It is our practice to recommend to shareholders
that they annually approve the payment of dividends in such form, but we cannot assure that our shareholders will continue to
approve a reduction in such form each year or that we will be able to meet the other legal requirements for a reduction, or that
Swiss withholding tax rules will not be changed in the future. We estimate we would be able to pay dividends in such form, and
thus exempt from Swiss withholding tax, until 2028–2033. This range may vary depending upon changes in annual dividends,
special dividends, certain share repurchases, the U.S. dollar/Swiss franc exchange rate, changes in par value or capital
contribution reserves or adoption of changes or new interpretations to Swiss corporate or tax law or regulations.
Under certain circumstances, U.S. shareholders may be subject to adverse U.S. federal income tax consequences.
Under certain circumstances, a U.S. person who owns or is deemed to own 10 percent or more of the voting power or value of
a foreign corporation that is a “controlled foreign corporation” (CFC) (a foreign corporation in which 10 percent U.S.
shareholders own or are deemed to own more than 50 percent of the voting power or value of the stock of a foreign corporation
or more than 25 percent of certain foreign insurance corporations) for any period during a taxable year must include in gross
income for U.S. federal income tax purposes a pro rata share of the CFC's "subpart F income". We believe that because of the
dispersion of our share ownership it is unlikely that any U.S. person who acquires shares of Chubb Limited directly or indirectly
through one or more foreign entities should be required to include any subpart F income in income under the CFC rules of U.S.
tax law.
Separately, any U.S. persons who hold shares may be subject to U.S. federal income taxation at ordinary income tax rates on
their proportionate share of our Related Person Insurance Income (RPII). If the RPII of any of our non-U.S. insurance
subsidiaries (each a "Non-U.S. Insurance Subsidiary") were to equal or exceed 20 percent of that company's gross insurance
income in any taxable year and direct or indirect insureds (and persons related to those insureds) own directly or indirectly
through foreign entities 20 percent or more of the voting power or value of Chubb Limited, then a U.S. person who owns any
shares of Chubb Limited (directly or indirectly through foreign entities) on the last day of the taxable year would be required to
include in his or her income for U.S. federal income tax purposes such person's pro rata share of such company's RPII for the
taxable year. In addition, any RPII that is includible in the income of a U.S. tax-exempt organization may be treated as unrelated
business taxable income. We believe that the gross RPII of each Non-U.S. Insurance Subsidiary did not in prior years of
operation and is not expected in the foreseeable future to equal or exceed 20 percent of each such company's gross insurance
income. Likewise, we do not expect the direct or indirect insureds of each Non-U.S. Insurance Subsidiary (and persons related
to such insureds) to directly or indirectly own 20 percent or more of either the voting power or value of our shares. However, we
cannot be certain that this will be the case because some of the factors which determine the extent of RPII may be beyond our
control. If these thresholds are met or exceeded, any U.S. person’s investment in Chubb Limited could be adversely affected. In
2022, the U.S. Treasury Department and the IRS released proposed regulations that may cause more income to be treated as
RPII than under current law.
A U.S. tax-exempt organization may recognize unrelated business taxable income if a portion of our insurance income is
allocated to the organization. This generally would be the case if either (i) Chubb Limited is considered a CFC and the tax-
exempt shareholder is a 10 percent U.S. shareholder or (ii) there is RPII, certain exceptions do not apply, and the tax-exempt
organization, directly (or indirectly through foreign entities) owns any shares of Chubb Limited. Although we do not believe that
any U.S. tax-exempt organization should be allocated such insurance income, we cannot be certain that this will be the case.
Potential U.S. tax-exempt investors are advised to consult their tax advisors.
U.S. persons who hold shares will be subject to adverse tax consequences if we are considered to be a Passive Foreign
Investment Company (PFIC) for U.S. federal income tax purposes.
If Chubb Limited is considered a PFIC for U.S. federal income tax purposes, a U.S. person who holds Chubb Limited shares will
be subject to adverse U.S. federal income tax consequences in which case their investment could be adversely affected. In
addition, if Chubb Limited were considered a PFIC, upon the death of any U.S. individual owning shares, such individual's heirs
or estate would not be entitled to a "step-up" in the basis of the shares which might otherwise be available under U.S. federal
33
income tax laws. We believe that we are not, have not been, and currently do not expect to become, a PFIC for U.S. federal
income tax purposes. We cannot assure, however, that we will not be deemed a PFIC by the IRS. Recently enacted U.S. federal
tax law and recent final and proposed regulations issued by the IRS and U.S. Treasury Department contain new rules that may
affect the application of the PFIC provisions to an insurance company. Shareholders are advised to consult their tax advisors.
ITEM 1B. Unresolved Staff Comments
There are currently no unresolved SEC staff comments regarding our periodic or current reports.
ITEM 1C. Cybersecurity and Risk Governance
Risk management and strategy
As detailed in our risk factors included in Item 1A, Chubb recognizes the significant risks posed by cybersecurity and data
protection challenges, which could adversely affect our business, financial condition, and results of operations. We have
implemented a risk-based approach to identify and assess the cybersecurity threats that could affect our business and
information systems, and we evaluate changes and enhancements to our technology environment as well as conduct third party
assessments to confirm that they meet our information security control requirements. Our cybersecurity program and control
environment incorporate appropriate industry standards and best practices, such as the National Institutes of Standards and
Technology Cyber Security Framework (NIST CSF), and is designed to comply with numerous U.S. federal and state and
international laws, rules and regulations governing the protection of personal and confidential information of our clients and
employees. We use various tools and methods to assess, identify and manage cybersecurity risk that are tested regularly,
including the following:
Technological Tools
Chubb uses information security tools designed to protect information and systems. Our Information Security team regularly
monitors these tools to discover and respond promptly to anomalous and suspicious patterns. We also participate in information
sharing networks (government and private) and deploy system updates and other technologies.
Employee Training
We endeavor to provide all employees with data protection training. Employees involved with information protection, privacy
and other risk management specialties also engage in specialized role-based training as is practicable. We use a variety of
training methods, including computer-based training, role-based training, company intranet awareness campaigns and various
simulation exercises.
Data Protection Culture
Chubb actively promotes a data protection culture. We maintain policies and standards designed to protect personal and
corporate information. The policies and standards are developed by a multi-disciplinary team, with participation from
information security and IT compliance, privacy, IT legal, compliance and business representatives.
Risk Assessments and Operational Audit
Our information security policies and protocols undergo regular assessments and audits, and we engage with external parties to
review our protections, including benchmarking to industry standards and best practices, such as the NIST CSF. In addition, we
benchmark our programs against key regulatory frameworks and conduct technical assessments of our controls, which may
include penetration testing and other technical testing. These processes are integrated into our established Enterprise Risk
Management (ERM) framework, which is led by Chubb's senior management and overseen by our Board's Risk & Finance
Committee. Refer to “Enterprise Risk Management“ under Item 1 for further description of our ERM function and Board
oversight.
Chubb uses risk-based processes to oversee and identify cybersecurity risks associated with the use of third-party service
providers and third-party hardware. These processes include contractual controls as well as risk-based diligence processes,
periodic assessments, and monitoring. Chubb recognizes the growing risk associated with third-party hardware, software, and
services, and we have taken steps we believe are appropriate to manage those risks. We review third-party software and
hardware in our environment to understand the components used and what impact they could have on our overall cyber risk
environment.
34
To our knowledge, and as of the filing date on this annual report, risks from cybersecurity threats, including potential risks
arising from previous cybersecurity incidents, have not materially affected, nor are they reasonably likely to materially affect
Chubb’s business strategy, results of operations, or financial condition. For more detail regarding cybersecurity threats, see our
risk factor titled “A failure in our operational systems or infrastructure or those of third parties, including due to security
breaches or cyber-attacks, could disrupt business, damage our reputation, and cause losses” under Item 1A.
Board and Management Governance
We have cybersecurity and information technology oversight at the Board and management levels. Direct Chubb Board-level
oversight is generally within the purview of two of the Board’s committees: Audit and Risk & Finance.
The Audit Committee is responsible for oversight of our cybersecurity program and related exposures and risks. The Audit
Committee periodically reports to the full Board and consults with the Risk & Finance Committee on such matters. The Audit
Committee’s review and oversight generally encompasses data breach risk and impact, cyber protection and detection controls,
privacy matters, third-party risks (including risks from cybersecurity threats associated with any third-party service providers),
cyber trends and events, and other topics. The Risk & Finance Committee is responsible for oversight of risk generally and
identifying significant risks, which may include risks relating to cybersecurity and privacy, business continuity risk (including the
resilience of IT operations and physical infrastructure) and cyber underwriting risk. The oversight responsibilities of the Audit and
Risk & Finance Committees with respect to cyber security and information technology risks are each set forth in their respective
charters. Members of management, including our Chief Information Security Officer (CISO) and Global Chief Technology Officer
(CTO), regularly provide updates to these committees in person and through written reports. The Audit and Risk & Finance
Committees also conduct a joint meeting on ERM matters, which includes coverage of strategic risk priorities, as well as
Chubb’s actions and mitigation efforts in response to such risks.
Cybersecurity risk management oversight is led by our CISO and CTO. Prior to joining Chubb in 2015, our CISO was Director of
the threat analytics platform for a major cybersecurity incident detection and response company. Prior to that, our CISO was an
executive leader within the information security practice and a technical architect with two global accounting firms. Our CTO
has extensive experience as a chief technology officer in digital-first environments and was previously the chief technology officer
of a large global bank, responsible for the bank’s core infrastructure, end-user technology, production support, group
architecture, cloud technology, and software license management. Our CTO holds a master’s degree in geographical information
systems and a bachelor’s degree in artificial intelligence and computer science. Chubb management also benefits from the
advice provided by a Cyber Advisory Board of external experts. The members of the Cyber Advisory Board have extensive
experience and deep expertise on cybersecurity matters, several having served in senior government positions with executive
responsibility for identifying and mitigating cyber threats across the globe.
Chubb management continues to prioritize investments in cybersecurity to protect the confidentiality, integrity and availability of
our data. In accordance with our cybersecurity risk assessment processes, we have deployed a set of cybersecurity controls to
protect Chubb. We also maintain a data security incident response plan, applied at an enterprise level, to facilitate our ability to
rapidly detect and address data security incidents with the goals of: (i) minimizing risk to data and systems; (ii) quickly
recovering and resuming operations; (iii) where applicable, providing timely notice of an incident to regulators and providing
timely notice and remediation services to affected individuals; (iv) minimizing potential brand damage; (v) managing litigation,
investigations and disputes that may arise in the aftermath of an incident; and (vi) identifying opportunities to enhance Chubb’s
data security approach. Consistent with our incident response plan, the CISO informs the Chief Privacy Officer, who is a
member of our legal team, and they notify other members of management of significant cybersecurity incidents and provide
them with regular updates on the status of such incidents, including mitigation, remediation, and steps to avoid recurrence.
35
ITEM 2. Properties
We maintain office facilities around the world including in North America, China, Europe (including our principal executive
offices in Switzerland), Bermuda, Latin America, Asia Pacific, and Japan. Most of our office facilities are leased, although we
own major facilities in Hamilton, Bermuda; Seoul, South Korea; Beijing and Shanghai, China; and in the U.S., including in
Philadelphia, Pennsylvania; Wilmington, Delaware; and Simsbury, Connecticut. Management considers its office facilities
suitable and adequate for the current level of operations.
ITEM 3. Legal Proceedings
The information required with respect to Item 3 is included in Note 14 i) to the Consolidated Financial Statements, under Item
8, which is hereby incorporated herein by reference.
ITEM 4. Mine Safety Disclosures
Item not applicable.
36
PART II
ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Our Common Shares have been listed on the New York Stock Exchange since March 25, 1993, with a current par value of CHF
0.50 per share. The trading symbol for our Common Shares is "CB".
We have paid dividends each quarter since we became a public company in 1993. In 2023 and 2022, our annual dividends
were paid by way of a distribution from capital contribution reserves (Additional paid-in capital) through the transfer of dividends
from Additional paid-in capital to Retained earnings (free reserves) as approved by our shareholders.
Chubb Limited is a holding company whose principal sources of income are dividends and interest income from its operating
subsidiaries. The ability of the operating subsidiaries to pay dividends to us and our ability to pay dividends to our shareholders
are each subject to legal and regulatory restrictions. The recommendation and payment of future dividends will be based on the
determination of the Board of Directors (Board) and will be dependent upon shareholder approval, profits and financial
requirements of Chubb and other factors, including legal restrictions on the payment of dividends and other such factors as the
Board deems relevant. Refer to Part I, Item 1A and Part II, Item 7 for additional information.
The number of record holders of Common Shares as of February 16, 2024 was 6,922. This is not the actual number of
beneficial owners of Chubb's Common Shares since most of our shareholders hold their shares through a stockbroker, bank or
other nominee rather than directly in their own names.
Refer to Part III, Item 12 for information relating to compensation plans under which equity securities are authorized for
issuance.
Issuer's Repurchases of Equity Securities for the Three Months Ended December 31, 2023
Period
October 1 through October 31
November 1 through November 30
December 1 through December 31
Total
Total Number of
Shares Purchased (1)
Average Price
Paid per Share
Total Number of
Shares Purchased as
Part of Publicly
Announced Plan (2)
Approximate Dollar
Value of Shares that
May Yet be
Purchased Under the
Plan (3)
98,280 $
955,371 $
2,146,123 $
3,199,774 $
209.37
224.25
226.90
225.57
96,000 $
4.38 billion
953,000 $
4.17 billion
2,142,000 $
3.68 billion
3,191,000
(1)
(2)
(3)
This column represents open market share repurchases and the surrender to Chubb of Common Shares to satisfy tax withholding obligations in connection with the vesting
of restricted stock issued to employees and to cover the cost of the exercise of options by employees through stock swaps.
The aggregate value of shares purchased in the three months ended December 31, 2023 as part of the publicly announced plan was $720 million. Refer to Note 15 to the
Consolidated Financial Statements for more information on the Chubb Limited securities repurchase authorizations.
For the period January 1, 2024 through February 22, 2024, we repurchased 269,450 Common Shares for a total of $67 million in a series of open market transactions. As
of February 22, 2024, $3.62 billion in share repurchase authorization remained.
37
Performance Graph
Set forth below is a line graph comparing the dollar change in the cumulative total shareholder return on Chubb's Common
Shares from December 31, 2018, through December 31, 2023, as compared to the cumulative total return of the Standard &
Poor's 500 Stock Index and the cumulative total return of the Standard & Poor's Property-Casualty Insurance Index. The
cumulative total shareholder return is a concept used to compare the performance of a company's stock over time and is the
ratio of the stock price change plus the cumulative amount of dividends over the specified time period (assuming dividend
reinvestment), to the stock price at the beginning of the time period. The chart depicts the value on December 31, 2019, 2020,
2021, 2022, and 2023, of a $100 investment made on December 31, 2018, with all dividends reinvested.
12/31/18
12/31/19
12/31/20
12/31/21
12/31/22
12/31/23
Chubb
S&P 500 Index
S&P 500 P&C Index
12/31/2018
12/31/2019
12/31/2020
12/31/2021
12/31/2022
12/31/2023
$100
$100
$100
$123
$131
$126
$125
$156
$135
$159
$200
$161
$185
$164
$191
$193
$207
$212
$250
$200
$150
$100
$50
Chubb Limited
S&P 500 Index
S&P 500 P&C Index
ITEM 6. [Reserved]
Item not applicable.
38
ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following is a discussion of our financial condition and results of operations for the years ended December 31, 2023 and
2022 and comparisons between 2023 and 2022. This discussion should be read in conjunction with the Consolidated
Financial Statements and related Notes, under Item 8 of this Form 10-K. Comparisons between 2022 and 2021 have been
omitted from this Form 10-K, but can be found in "Management's Discussion and Analysis of Financial Condition and Results of
Operations" in Part II, Item 7 of our Form 10-K for the year ended December 31, 2022.
All comparisons in this discussion are to the prior year unless otherwise indicated. All dollar amounts are rounded. However,
percent changes and ratios are calculated using whole dollars. Accordingly, calculations using rounded dollars may differ.
MD&A Index
Forward-Looking Statements
Overview
Critical Accounting Estimates
Consolidated Operating Results
Segment Operating Results
Effective Income Tax Rate
Net Realized and Unrealized Gains (Losses)
Non-GAAP Reconciliation
Net Investment Income
Interest Expense
Amortization of Purchased Intangibles and Other Amortization
Investments
Asbestos and Environmental (A&E)
Catastrophe Management
Global Property Catastrophe Reinsurance Program
Political Risk and Credit Insurance
Crop Insurance
Liquidity
Capital Resources
Ratings
Information provided in connection with outstanding debt of subsidiaries
Credit Facilities
Page
40
41
42
52
58
66
67
68
72
72
73
74
78
79
81
82
82
84
86
88
89
90
39
Forward-Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. Any written or oral
statements made by us or on our behalf may include forward-looking statements that reflect our current views with respect to
future events and financial performance. The words “believe,” “anticipate,” “estimate,” “project,” “should,” “plan,” “expect,”
“intend,” “hope,” “feel,” “foresee,” “will likely result,” “will continue,” and variations thereof and similar expressions, identify
forward-looking statements. These forward-looking statements are subject to certain risks, uncertainties, and other factors that
could, should potential events occur, cause actual results to differ materially from such statements. These risks, uncertainties,
and other factors, which are described in more detail under Part I, Item 1A, under Risk Factors, and elsewhere herein and in
other documents we file with the U.S. Securities and Exchange Commission (SEC), include but are not limited to:
actual amount of new and renewal business, premium rates, underwriting margins, market acceptance of our products, and
risks associated with the introduction of new products and services and entering new markets; the competitive environment
in which we operate, including trends in pricing or in policy terms and conditions, which may differ from our projections
and changes in market conditions that could render our business strategies ineffective or obsolete;
losses arising out of natural or man-made catastrophes; actual loss experience from insured or reinsured events and the
timing of claim payments; the uncertainties of the loss-reserving and claims-settlement processes, including the difficulties
associated with assessing environmental damage and asbestos-related latent injuries, the impact of aggregate-policy-
coverage limits, the impact of bankruptcy protection sought by various asbestos producers and other related businesses,
and the timing of loss payments;
changes in the distribution or placement of risks due to increased consolidation of insurance and reinsurance brokers;
material differences between actual and expected assessments for guaranty funds and mandatory pooling arrangements; the
ability to collect reinsurance recoverable, credit developments of reinsurers, and any delays with respect thereto and
changes in the cost, quality, or availability of reinsurance;
uncertainties relating to governmental, legislative and regulatory policies, developments, actions, investigations, and
treaties; judicial decisions and rulings, new theories of liability, legal tactics, and settlement terms; the effects of data
privacy or cyber laws or regulation; global political conditions and possible business disruption or economic contraction that
may result from such events;
severity of pandemics and related risks, and their effects on our business operations and claims activity, and any adverse
impact to our insureds, brokers, agents, and employees; actual claims may exceed our best estimate of ultimate insurance
losses incurred which could change including as a result of, among other things, the impact of legislative or regulatory
actions taken in response to a pandemic;
developments in global financial markets, including changes in interest rates, stock markets, and other financial markets;
increased government involvement or intervention in the financial services industry; the cost and availability of financing,
and foreign currency exchange rate fluctuations; changing rates of inflation; and other general economic and business
conditions, including the depth and duration of potential recession;
the availability of borrowings and letters of credit under our credit facilities; the adequacy of collateral supporting funded
high deductible programs; the amount of dividends received from subsidiaries;
changes to our assessment as to whether it is more likely than not that we will be required to sell, or have the intent to sell,
available-for-sale fixed maturity investments before their anticipated recovery;
actions that rating agencies may take from time to time, such as financial strength or credit ratings downgrades or placing
these ratings on credit watch negative or the equivalent;
the effects of public company bankruptcies and accounting restatements, as well as disclosures by and investigations of
public companies relating to possible accounting irregularities, and other corporate governance issues;
acquisitions made performing differently than expected, our failure to realize anticipated expense-related efficiencies or
growth from acquisitions, the impact of acquisitions on our pre-existing organization, and risks and uncertainties relating to
our outstanding purchases of additional interests in Huatai Insurance Group Co., Ltd. (Huatai Group);
risks associated with being a Swiss corporation, including reduced flexibility with respect to certain aspects of capital
management and the potential for additional regulatory burdens; share repurchase plans and share cancellations;
loss of the services of any of our executive officers without suitable replacements being recruited in a reasonable time frame;
•
•
•
•
•
•
•
•
•
•
•
•
•
40
•
the ability of our technology resources, including information systems and security, to perform as anticipated such as with
respect to preventing material information technology failures or third-party infiltrations or hacking resulting in
consequences adverse to Chubb or its customers or partners; the ability of our company to increase use of data analytics
and technology as part of our business strategy and adapt to new technologies; and
• management’s response to these factors and actual events (including, but not limited to, those described above).
You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. We
undertake no obligation to publicly update or review any forward-looking statements, whether as a result of new information,
future events or otherwise.
Overview
We operate through six business segments: North America Commercial P&C Insurance, North America Personal P&C Insurance,
North America Agricultural Insurance, Overseas General Insurance, Global Reinsurance, and Life Insurance. For more
information on our segments refer to “Segment Information” under Item 1.
We have grown our business through increased premium volume, expansion of product offerings and geographic reach, and
acquisitions of other companies. Refer to Note 2 to the Consolidated Financial Statements for our most recent acquisitions.
Our product and geographic diversification differentiate us from the vast majority of our competitors and has been a source of
stability during periods of industry volatility. Our long-term business strategy focuses on sustained growth in book value achieved
through a combination of underwriting and investment income. By doing so, we provide value to our clients and shareholders
through use of our substantial capital base in the insurance and reinsurance markets.
We are organized along a profit center structure by line of business and territory that does not necessarily correspond to
corporate legal entities. Profit centers can access various legal entities subject to licensing and other regulatory rules. Profit
centers are expected to generate underwriting income and appropriate risk-adjusted returns. Our corporate structure has
facilitated the development of management talent by giving each profit center's senior management team the necessary
autonomy within underwriting authorities to make operating decisions and create products and coverages needed by its target
customer base. We are focused on delivering underwriting profit by only writing policies which we believe adequately
compensate us for the risk we accept.
Our insurance and reinsurance operations generate gross revenues from two principal sources: premiums and investment
income. Cash flow is generated from premiums collected and investment income received less paid losses and loss expenses,
policy acquisition costs, and administrative expenses. Invested assets are substantially held in liquid, investment grade fixed
income securities of relatively short duration. Claims payments in any short-term period are highly unpredictable due to the
random nature of loss events and the timing of claims awards or settlements. The value of investments held to pay future claims
is subject to market forces such as the level of interest rates, stock market volatility, and credit events such as corporate
defaults. The actual cost of claims is also volatile based on loss trends, inflation rates, court awards, and catastrophes. We
believe that our cash balance, our highly liquid investments, credit facilities, and reinsurance protection provide sufficient
liquidity to meet unforeseen claim demands that might occur in the year ahead. Refer to “Liquidity” and “Capital Resources” for
additional information.
41
Critical Accounting Estimates
Our Consolidated Financial Statements include amounts that, either by their nature or due to requirements of generally accepted
accounting principles in the U.S. (U.S. GAAP), are determined using best estimates and assumptions. While we believe that the
amounts included in our Consolidated Financial Statements reflect our best judgment, actual amounts could ultimately
materially differ from those currently presented. We believe the items that require the most subjective and complex estimates
are:
•
•
•
•
•
•
•
•
unpaid loss and loss expense reserves, including long-tail asbestos and environmental (A&E) reserves and non-A&E casualty
exposures;
future policy benefits reserves;
the valuation of value of business acquired (VOBA);
the assessment of risk transfer for certain structured insurance and reinsurance contracts;
reinsurance recoverable, including a valuation allowance for uncollectible reinsurance;
the valuation of our investment portfolio and assessment of valuation allowance for expected credit losses;
the valuation of deferred income taxes; and
the assessment of goodwill for impairment.
We believe our accounting policies for these items are of critical importance to our Consolidated Financial Statements. The
following discussion provides more information regarding the estimates and assumptions required to arrive at these amounts
and should be read in conjunction with the sections entitled: Prior Period Development, Asbestos and Environmental (A&E),
Reinsurance Recoverable on Ceded Reinsurance, Investments, and Net Realized and Unrealized Gains (Losses).
Unpaid losses and loss expenses
As an insurance and reinsurance company, we are required by applicable laws and regulations and U.S. GAAP to establish loss
and loss expense reserves for the estimated unpaid portion of the ultimate liability for losses and loss expenses under the terms
of our policies and agreements with our insured and reinsured customers. At December 31, 2023, our gross unpaid loss and
loss expense reserves were $80.1 billion and our net unpaid loss and loss expense reserves were $62.2 billion. With the
exception of certain structured settlements, for which the timing and amount of future claim payments are reliably determinable,
and certain reserves for unsettled claims, our loss reserves are not discounted for the time value of money. The net
undiscounted reserves related to structured settlements and certain reserves for unsettled claims are immaterial.
The following table presents a roll-forward of our unpaid losses and loss expenses:
(in millions of U.S. dollars)
Balance, beginning of year
Losses and loss expenses incurred
Losses and loss expenses paid
Other (including foreign exchange translation)
Consolidation of Huatai
Balance, end of year
(1)
Net of valuation allowance for uncollectible reinsurance.
December 31, 2023
December 31, 2022
Gross
Losses
Reinsurance
Recoverable (1) Net Losses
Gross
Losses
Reinsurance
Recoverable (1) Net Losses
$ 75,747 $
17,086 $ 58,661 $ 72,330 $
16,132 $ 56,198
31,346
7,246
24,100
29,424
6,852
22,572
(27,802)
(6,791)
(21,011)
(25,170)
(5,633)
(19,537)
—
831
(83)
426
83
405
(837)
(265)
(572)
—
—
—
$ 80,122 $
17,884 $ 62,238 $ 75,747 $
17,086 $ 58,661
The estimate of the liabilities includes provisions for claims that have been reported but are unpaid at the balance sheet date
(case reserves) and for obligations on claims that have been incurred but not reported (IBNR) at the balance sheet date. IBNR
may also include provisions to account for the possibility that reported claims may settle for amounts that differ from the
established case reserves. Loss reserves also include an estimate of expenses associated with processing and settling unpaid
claims (loss expenses). Our loss reserves comprise approximately 78 percent casualty-related business, which typically
encompasses long-tail risks, and other risks where a high degree of judgment is required.
42
The process of establishing loss reserves for property and casualty claims can be complex and is subject to considerable
uncertainty as it requires the use of informed estimates and judgments based on circumstances underlying the insured losses
known at the date of accrual. For example, the reserves established for high excess casualty claims, asbestos and environmental
claims, claims from major catastrophic events, or for our various product lines each require different assumptions and
judgments to be made. The effects of recent heightened inflation create additional uncertainty, while climate change could, over
time, add new uncertainties to the loss reserving process.
Necessary judgments are based on numerous factors and may be revised as additional experience and other data become
available and are reviewed, as new or improved methods are developed, or as laws change. Hence, ultimate loss payments may
differ from the estimate of the ultimate liabilities made at the balance sheet date. Changes to our previous estimates of prior
period loss reserves impact the reported calendar year underwriting results adversely if our estimates increase or favorably if our
estimates decrease. The potential for variation in loss reserve estimates is impacted by numerous factors. Reserve estimates for
casualty lines are particularly uncertain given the lengthy reporting patterns and corresponding need for IBNR.
Case reserves for those claims reported by insureds or ceding companies to us prior to the balance sheet date and where we
have sufficient information are determined by our claims personnel as appropriate based on the circumstances of the claim(s),
standard claim handling practices, and professional judgment. Furthermore, for our Brandywine run-off operations and our
assumed reinsurance operation, Global Reinsurance, we may adjust the case reserves as notified by the ceding company if the
judgment of our respective claims department differs from that of the cedant.
With respect to IBNR reserves and those claims that have been incurred but not reported prior to the balance sheet date, there
is, by definition, limited actual information to form the case reserve estimate and reliance is placed upon historical loss
experience and actuarial methods to estimate the ultimate loss obligations and the corresponding amount of IBNR. IBNR
reserve estimates are generally calculated by first projecting the ultimate amount of losses for a product line and subtracting
paid losses and case reserves for reported claims. The judgments involved in projecting the ultimate losses may pertain to the
use and interpretation of various standard actuarial reserving methods that place reliance on the extrapolation of actual
historical data, loss development patterns, industry data, and other benchmarks as appropriate. The estimate of the required
IBNR reserve also requires judgment by actuaries and management to reflect the impact of more contemporary and subjective
factors, both qualitative and quantitative. Among some of these factors that might be considered are changes in business mix or
volume, changes in ceded reinsurance structures, changes in claims handling practices, reported and projected loss trends,
inflation, the legal environment, and the terms and conditions of the contracts sold to our insured parties.
Determining management's best estimate
Our recorded reserves represent management's best estimate of the provision for unpaid claims as of the balance sheet date,
and establishing them involves a process that includes collaboration with various relevant parties in the company. For
information on our reserving process, refer to Note 8 to the Consolidated Financial Statements.
Sensitivity to underlying assumptions
While we believe that our reserve for unpaid losses and loss expenses at December 31, 2023, is adequate, new information
or emerging trends that differ from our assumptions may lead to future development of losses and loss expenses that is
significantly greater or less than the recorded reserve, which could have a material effect on future operating results. As noted
previously, our best estimate of required loss reserves for most portfolios is judgmentally selected for each origin year after
considering the results from a number of reserving methods and is not a purely mechanical process. Therefore, it is difficult to
convey, in a simple and quantitative manner, the impact that a change to a single assumption will have on our best estimate.
In the examples below, we attempt to give an indication of the potential impact by isolating a single change for a specific
reserving method that would be pertinent in establishing the best estimate for the product line described. We consider each of
the following sensitivity analyses to represent a reasonably likely deviation in the underlying assumption.
43
North America Commercial P&C Insurance - Workers' Compensation
Given the long reporting and paid development patterns for workers' compensation business, the development factors used to
project actual current losses to ultimate losses for our current exposure require considerable judgment that could be material to
consolidated loss and loss expense reserves. Specifically, adjusting ground up ultimate losses by a one percentage point change
in the tail factor (i.e., 1.04 changed to either 1.05 or 1.03) would cause a change of approximately $1.1 billion, either positive
or negative, for the projected net loss and loss expense reserves. This represents an impact of about 10.7 percent relative to
recorded net loss and loss expense reserves of approximately $10.2 billion.
North America Commercial P&C Insurance – Liability
As is the case for Workers’ Compensation above, given the long reporting and paid development patterns, the development
factors used to project actual current losses to ultimate losses for our current exposure require considerable judgment that could
be material to consolidated loss and loss expense reserves. Specifically, for our main U.S. Excess/Umbrella portfolios, a five
percentage point change in the tail factor (e.g., 1.10 changed to either 1.15 or 1.05) would cause a change of approximately
$0.7 billion, either positive or negative, for the projected net loss and loss expense reserves. This represents an impact of about
18 percent relative to recorded net loss and loss expense reserves of approximately $3.9 billion for these portfolios.
The reserve portfolio for our Chubb Bermuda operations contains exposure to predominantly high excess liability coverage on
an occurrence-first-reported basis (typically with attachment points in excess of $325 million and gross limits of up to $150
million) and D&O and other professional liability coverage on a claims-made basis (typically with attachment points in excess
of $100 million and gross limits of up to $75 million). Due to the layer of exposure covered, the expected frequency for this
book is very low. As a result of the low frequency/high severity nature of the book, a small difference in the actual vs. expected
claim frequency, either positive or negative, could result in a material change to the projected ultimate loss if such change in
claim frequency was related to a policy where significant limits were deployed.
North America Personal P&C Insurance
Due to the relatively short-tailed nature of many of the coverages involved (e.g., homeowners property damage), most of the
incurred losses in Personal Lines are resolved within a few years of occurrence. As shown in our loss triangle disclosure, the vast
majority (almost 95 percent) of Personal Lines net ultimate losses and allocated loss adjustment expenses are typically paid
within five years of the accident date and almost 80 percent within two years. Even though there are significant reserves
associated with some liability exposures such as personal excess/umbrella liability, our incurred loss triangle also shows a
roughly consistent pattern of only relatively minor movements in incurred estimates over time by accident year especially after
twenty-four months of maturity. While the liability exposures are subject to additional uncertainties from more protracted
resolution times, the main drivers of volatility in the Personal Lines business are relatively short-term in nature and relate to
things like natural catastrophes, non-catastrophe weather events, man-made risks, and individual large loss volatility from other
fortuitous claim events.
North America Agricultural Insurance
Approximately 69 percent of the reserves for this segment are from the crop related lines, which all have short payout
patterns, with the majority of the liabilities expected to be resolved in the ensuing twelve months. Claim reserves for our
Multiple Peril Crop Insurance (MPCI) product are set on a case-by-case basis and our aggregate exposure is subject to state
level risk sharing formulae as well as third-party reinsurance. The majority of the development risk arises out of the accuracy
of case reserve estimates and the time needed for final crop conditions to be assessed. We do not view our Agriculture
reserves as substantially influenced by the general assumptions and risks underlying more typical P&C reserve estimates.
Overseas General Insurance
Certain long-tail lines, such as casualty and financial lines, are particularly susceptible to changes in loss trend and claim
inflation. Heightened perceptions of tort and settlement awards around the world can increase the demand for these products
as well as contributing to the uncertainty in the reserving estimates. Our reserving methods rely on loss development patterns
estimated from historical data and while we attempt to adjust such factors for known changes in the current tort environment,
it is possible that such factors may not entirely reflect all recent trends in tort environments. For example, when applying the
reported loss development method, the lengthening of our selected loss development patterns by six months would increase
reserve estimates on long-tail casualty and financial lines for accident years 2021 and prior by approximately $556 million.
This represents an impact of 12 percent relative to recorded net loss and loss expense reserves of approximately $4.6 billion.
44
Global Reinsurance
At December 31, 2023, net unpaid losses and loss expenses for the Global Reinsurance segment aggregated to $1.7 billion,
consisting of $744 million of case reserves and $909 million of IBNR. In comparison, at December 31, 2022, net unpaid
losses and loss expenses for the Global Reinsurance segment aggregated to $1.7 billion, consisting of $764 million of case
reserves and $938 million of IBNR.
For our catastrophe business, we principally estimate unpaid losses and loss expenses on an event basis by considering various
sources of information, including specific loss estimates reported by our cedants, ceding company and overall industry loss
estimates reported by our brokers, and our internal data regarding reinsured exposures related to the geographical location of the
event. Our internal data analysis enables us to establish catastrophe reserves for known events with more certainty at an earlier
date than would be the case if we solely relied on reports from third parties to determine carried reserves.
For our casualty reinsurance business, we generally rely on ceding companies to report claims and then use that data as a key
input to estimate unpaid losses and loss expenses. Due to the reliance on claims information reported by ceding companies, as
well as other factors, the estimation of unpaid losses and loss expenses for assumed reinsurance includes certain risks and
uncertainties that are unique relative to our direct insurance business. These include, but are not necessarily limited to, the
following:
•
•
•
The reported claims information could be inaccurate;
Typically, a lag exists between the reporting of a loss event to a ceding company and its reporting to us as a reinsurance
claim. The use of a broker to transmit financial information from a ceding company to us increases the reporting lag.
Because most of our reinsurance business is produced by brokers, ceding companies generally first submit claim and other
financial information to brokers, who then report the proportionate share of such information to each reinsurer of a
particular treaty. The reporting lag generally results in a longer period of time between the date a claim is incurred and the
date a claim is reported compared with direct insurance operations. Therefore, the risk of delayed recognition of loss reserve
development is higher for assumed reinsurance than for direct insurance lines; and
The historical claims data for a particular reinsurance contract can be limited relative to our insurance business in that there
may be less historical information available. Further, for certain coverages or products, such as excess of loss contracts,
there may be relatively few expected claims in a particular year so the actual number of claims may be susceptible to
significant variability. In such cases, the actuary often relies on industry data from several recognized sources.
We mitigate the above risks in several ways. In addition to routine analytical reviews of ceding company reports to ensure
reported claims information appears reasonable, we perform regular underwriting and claims audits of ceding companies to
ensure reported claims information is accurate, complete, and timely. As appropriate, audit findings are used to adjust claims in
the reserving process. We also use our knowledge of the historical development of losses from individual ceding companies to
adjust the level of adequacy we believe exists in the reported ceded losses. If pricing a renewal contract, we compare data in the
renewal submission to our financial data and investigate any discrepancies.
On occasion, there will be differences between our carried loss reserves and unearned premium reserves and the amount of loss
reserves and unearned premium reserves reported by the ceding companies. This is due to the fact that we receive consistent
and timely information from ceding companies only with respect to case reserves. For IBNR, we use historical experience and
other statistical information, depending on the type of business, to estimate the ultimate loss. We estimate our unearned
premium reserve by applying estimated earning patterns to net premiums written for each treaty based upon that treaty's
coverage basis (i.e., risks attaching or losses occurring). At December 31, 2023, the case reserves, net of retrocessions,
reported to us by our ceding companies approximated our recorded case reserves. Our policy is to post additional case reserves
in addition to the amounts reported by our cedants when our evaluation of the ultimate value of a reported claim is different
than the evaluation of that claim by our cedant.
Typically, there is inherent uncertainty around the length of paid and reported development patterns, especially for certain
casualty lines such as excess workers' compensation or general liability, which may take decades to fully develop. This
uncertainty is accentuated by the need to supplement client development patterns with industry development patterns due to
the sometimes low statistical credibility of the data. The underlying source and selection of the final development patterns can
thus have a significant impact on the selected ultimate net losses and loss expenses. For example, a 20 percent shortening or
lengthening of the development patterns used for U.S. long-tail lines would cause the loss reserve estimate derived by the
reported Bornhuetter-Ferguson method for these lines to change by approximately $185 million. This represents an impact of
23 percent relative to recorded net loss and loss expense reserves of approximately $815 million.
45
Corporate
Within Corporate, we have exposure to certain liability insurance and reinsurance lines that have been in run-off, generally,
since 1994. Unpaid losses and loss expenses relating to this run-off business reside within the Brandywine Division. Most of the
remaining unpaid loss and loss expense reserves for the run-off business relate to A&E as well as molestation claims.
The A&E liabilities principally relate to claims arising from bodily-injury claims related to asbestos products and remediation
costs associated with hazardous waste sites. The estimation of our A&E liabilities is particularly sensitive to future changes in
the legal, social, and economic environment. We have not assumed any such future changes in setting the value of our A&E
liabilities, which include provisions for both reported and IBNR claims.
There are many complex variables that we consider when estimating the reserves for our inventory of asbestos accounts and
these variables may directly impact the predicted outcome. We believe the most significant variables relating to our asbestos
liabilities include the current legal environment; specific settlements that may be used as precedents to settle future claims;
assumptions regarding trends with respect to claim severity and the frequency of higher severity claims; assumptions regarding
the ability to allocate liability among defendants (including bankruptcy trusts) and other insurers; the ability of a claimant to
bring a claim in a state in which they have no residency or exposure; the ability of a policyholder to claim the right to
unaggregated coverage; whether high-level excess policies have the potential to be accessed given the policyholder's claim
trends and liability situation; payments to unimpaired claimants; and the potential liability of peripheral defendants. Based on
the policies, the facts, the law, and a careful analysis of the impact that these factors will likely have on any given account, we
estimate the potential liability for indemnity, policyholder defense costs, and coverage litigation expense.
The results in asbestos cases announced by other carriers or defendants may well have little or no relevance to us because
coverage exposures are highly dependent upon the specific facts of individual coverage and resolution status of disputes among
carriers, policyholders, and claimants.
Chubb's exposure to molestation claims principally arises out of liabilities acquired when it purchased CIGNA's P&C business in
1999 and Chubb Corp in 2016. The vast majority of the current liability relates to exposure from recently enacted "reviver"
legislation in certain states that allow civil claims relating to molestation to be asserted against policyholders that would
otherwise be barred by statutes of limitations.
For additional information refer to the “Asbestos and Environmental (A&E)” section and to Note 8 to the Consolidated Financial
Statements.
Future policy benefits
Chubb issues contracts that are classified as long-duration, which generally cover accident and supplemental health (A&H)
products; term, credit, and whole life products (both participating and non-participating); endowment products; and annuities.
Accordingly, Chubb establishes a liability for future policy benefits (FPBL) which comprises the present value of estimated future
policy benefits to be paid along with certain related expenses, less the present value of estimated future net premiums to be
collected. For traditional and limited-payment life insurance contracts, the FPBL is established using a net premium valuation
methodology, such that expected policyholder benefit payments are accrued in proportion to premium revenue recognized.
Under the net premium methodology, a net premium ratio (NPR) is calculated which requires assumptions on the future cash
flow impact of numerous factors including mortality, morbidity, persistency, policyholder behavior, discount rates, and unpaid
loss adjustment expenses. We have elected to use unpaid loss adjustment expense assumptions that are locked in at contract
inception and are not subsequently reviewed or updated. Except for these expenses, assumptions are regularly reviewed.
The following sections discuss the determination of assumptions that management believes to be critical accounting estimates,
which depend on the application of significant, subjective, and complex judgments.
Determining management’s best estimates
For traditional and limited-payment long-duration contracts, actuarial assumptions on mortality, morbidity, persistency, and
policyholder behavior represent management’s long-term best estimates. These best estimate assumptions are generally based
on our experience, industry experience, or other factors if there is not sufficient credibility. In establishing best estimate
assumptions, we take into consideration the prospective impact of experience deterioration, product changes, distribution
changes, and other relevant environmental changes which could result in differences from historically observed experience.
Generally, we do not expect trends to change significantly in the short term and, to the extent trends may change, we expect the
46
change to be gradual over the long term. Best estimate assumptions are reviewed and updated at least annually, and may be
updated in interim periods if we observe a material change indicative of a long-term trend. Changes to best estimate
assumptions impact expected future cash flows and result in a remeasurement of the FPBL. The FPBL is also remeasured to
account for differences between expected and actual experience on mortality, morbidity, and persistency. All such
remeasurements are reflected in Policy benefits in the Consolidated statements of operations in the period in which best
estimate assumptions were updated.
The discount rates used to calculate the net premium ratio are locked in at policy inception, and serve as the basis to recognize
interest expense for the life of the policy. Discount rates used to measure the carrying value of the FPBL are updated quarterly,
and the differences between the liability balances calculated using the locked-in discount rates and the updated discount rates
are recognized in Other comprehensive income (OCI). The discount rate methodology is designed to prioritize observable inputs
based on market data available in the local debt markets where the respective policies were issued in the currency in which the
policies are denominated. For the discount rates applicable to tenors for which the single-A debt market is not liquid or there is
little or no observable market data, we use various estimation techniques, which include, but are not limited to: (i) for tenors
where there is less observable market data and/or the observable market data is available for similar instruments, estimating
tenor-specific single-A credit spreads and applying them to risk-free government rates; (ii) for tenors where there is very limited
or no observable single-A or similar market data, interpolation and extrapolation techniques.
Deferred profit liabilities
Reserves for limited-payment contracts, under which benefits extend beyond the period of premium collection, also include a
deferred profit liability (DPL) that represents gross premiums received in excess of expected net premiums. The amortization of
DPL is included in Policy benefits on the Consolidated statements of operations, and is in relation to either the discounted
amount of insurance in force for life insurance, or expected benefit payments for annuity contracts. The DPL is subject to the
same best estimate assumptions used to determine future policy benefits reserves, however, there is no remeasurement of the
DPL using then-current discount rates.
Sensitivities to underlying assumptions
At December 31, 2023, our liability for future policy benefits was $13.9 billion. While we believe that our future policy benefits
reserves are appropriate at December 31, 2023, new information or emerging trends that impact best estimate assumptions
may have a material effect on the FPBL and future operating results.
In the table below, we give an indication of the potential impact on operating results from a hypothetical change in a single
assumption; we do not consider a simultaneous change in a combination of assumptions. Additionally, the table assumes a
parallel global shift in best estimate assumptions; however, these may be non-parallel in practice. While we consider each of
the following assumption changes to represent a reasonably likely deviation, actual development may be materially different.
Further, changes in best estimate assumptions could result in impacts to the Consolidated Financial Statements that are in
excess of the amounts illustrated.
47
The following table shows the increase or (decrease) of the FPBL as a result of changes in various best estimate assumptions:
Liability for Future Policy Benefits
(in millions of U.S. dollars)
Discount rate
+100 basis points
- 100 basis points
Mortality
+10%
- 10%
Morbidity
+10%
- 10%
Persistency
+10%
- 10%
Term Life Whole Life
A&H
Other
Total
Life Insurance
(increase)/decrease in OCI
$
(26) $ (1,369) $
(314) $
(53) $ (1,762)
(increase)/decrease in OCI
27
1,454
346
56
1,883
(increase)/decrease in net income
14
12
(increase)/decrease in net income
(13)
(12)
2
3
(increase)/decrease in net income
(increase)/decrease in net income
(increase)/decrease in net income
(increase)/decrease in net income
1
(1)
(2)
1
6
155
(7)
(145)
(3)
3
(5)
8
—
—
—
—
—
1
28
(22)
162
(153)
(10)
13
Valuation of value of business acquired (VOBA) and amortization of VOBA
As part of the acquisition of businesses that sell long-duration contracts, such as life products, we established an intangible
asset related to VOBA, which represents the estimated fair value of the future profits of the in-force long duration contracts. The
valuation of VOBA at the time of acquisition is derived from similar assumptions to those used to establish the associated future
policy benefits reserves, including mortality, morbidity, persistency, investment yields, expenses, and the discount rate. The
most significant input in this calculation is the discount rate used to arrive at the present value of the net cash flows. We
amortize the VOBA as a component of Policy acquisition costs in the Consolidated statements of operations in relation to the
profit emergence of the underlying contracts, which is generally in proportion to premium revenue recognized based upon the
same assumptions used at the time of the acquisition.
At least annually, a review is performed of the recoverability of the VOBA asset using a premium deficiency test to ensure that
the unamortized portion does not exceed the expected recoverable amounts. If it is determined that the premium margins or
gross profits are less than the unamortized balance, then the asset will be adjusted downward with the adjustment recorded as
an expense in the current period. Unrecoverable costs are expensed in the period identified.
Risk transfer
In the ordinary course of business, we both purchase (or cede) and sell (or assume) reinsurance protection. We discontinued the
purchase of all finite risk reinsurance contracts, as a matter of policy, in 2002. For both ceded and assumed reinsurance, risk
transfer requirements must be met in order to use reinsurance accounting, principally resulting in the recognition of cash flows
under the contract as premiums and losses. If risk transfer requirements are not met, a contract is to be accounted for as a
deposit, typically resulting in the recognition of cash flows under the contract through a deposit asset or liability and not as
revenue or expense. To meet risk transfer requirements, a reinsurance contract must include both insurance risk, consisting of
underwriting and timing risk, and a reasonable possibility of a significant loss for the assuming entity. We also apply similar risk
transfer requirements to determine whether certain commercial insurance contracts should be accounted for as insurance or a
deposit. Contracts that include fixed premium (i.e., premium not subject to adjustment based on loss experience under the
contract) for fixed coverage generally transfer risk and do not require judgment.
Reinsurance and insurance contracts that include both significant risk sharing provisions, such as adjustments to premiums or
loss coverage based on loss experience, and relatively low policy limits, as evidenced by a high proportion of maximum premium
assessments to loss limits, can require considerable judgment to determine whether or not risk transfer requirements are met.
For such contracts, often referred to as finite or structured products, we require that risk transfer be specifically assessed for
each contract by developing expected cash flow analyses at contract inception. To support risk transfer, the cash flow analyses
must demonstrate that a significant loss is reasonably possible. We use various tests to accomplish this, one of which is the
ratio of the net present value of losses and commissions divided by the net present value of premiums equals or exceeds 110
percent with at least a 10 percent probability. For purposes of cash flow analyses, we generally use a risk-free rate of return
consistent with the expected average duration of loss payments. In addition, to support insurance risk, we must prove the
reinsurer's risk of loss varies with that of the reinsured and/or support various scenarios under which the assuming entity can
recognize a significant loss.
48
To ensure risk transfer requirements are routinely assessed, qualitative and quantitative risk transfer analyses and memoranda
supporting risk transfer are developed by underwriters for all structured products. We have established protocols for all products
that include criteria triggering a risk transfer review of the contract prior to binding. If any criterion is triggered, a contract must
be reviewed by a committee established by each of our segments with reporting oversight, including peer review, from our global
Structured Transaction Review Committee.
With respect to ceded reinsurance, we entered into a few multi-year excess of loss retrospectively-rated contracts, principally in
2002. These contracts primarily provided severity protection for specific product divisions. Because traditional one-year
reinsurance coverage had become relatively costly, these contracts were generally entered into in order to secure a more cost-
effective reinsurance program. All of these contracts transferred risk and were accounted for as reinsurance. In addition, we
maintain a few aggregate excess of loss reinsurance contracts that were principally entered into prior to 2003, such as the
National Indemnity Company (NICO) contracts referred to in the section entitled, “Asbestos and Environmental (A&E)”. We have
not purchased any other retroactive ceded reinsurance contracts since 1999.
With respect to assumed reinsurance and insurance contracts, products giving rise to judgments regarding risk transfer were
primarily sold by our financial solutions business. Although we have significantly curtailed writing financial solutions business,
several contracts remain in-force and principally include multi-year retrospectively-rated contracts and loss portfolio transfers.
Because transfer of insurance risk is generally a primary client motivation for purchasing these products, relatively few insurance
and reinsurance contracts have historically been written for which we concluded that risk transfer criteria had not been met. For
certain insurance contracts that have been reported as deposits, the insured desired to self-insure a risk but was required,
legally or otherwise, to purchase insurance so that claimants would be protected by a licensed insurance company in the event
of non-payment from the insured.
Reinsurance recoverable
Reinsurance recoverable includes balances due to us from reinsurance companies for paid and unpaid losses and loss expenses
and is presented net of a valuation allowance for uncollectible reinsurance. The valuation allowance for uncollectible reinsurance
is determined based upon a review of the financial condition of the reinsurers and other factors. Ceded reinsurance contracts do
not relieve our primary obligation to our policyholders. Consequently, an exposure exists with respect to reinsurance recoverable
to the extent that any reinsurer is unable or unwilling to meet its obligations or disputes the liabilities assumed under the
reinsurance contracts. We determine the reinsurance recoverable on unpaid losses and loss expenses using actuarial estimates
as well as a determination of our ability to cede unpaid losses and loss expenses under existing reinsurance contracts.
The recognition of a reinsurance recoverable asset requires two key judgments. The first judgment involves our estimation based
on the amount of gross reserves and the percentage of that amount which may be ceded to reinsurers. Ceded IBNR, which is a
major component of the reinsurance recoverable on unpaid losses and loss expenses, is generally developed as part of our loss
reserving process and, consequently, its estimation is subject to similar risks and uncertainties as the estimation of gross IBNR
(refer to “Critical Accounting Estimates – Unpaid losses and loss expenses”). The second judgment involves our estimate of the
amount of the reinsurance recoverable balance that we may ultimately be unable to recover from reinsurers due to insolvency,
contractual dispute, or for other reasons. Estimated uncollectible amounts are reflected in a valuation allowance that reduces
the reinsurance recoverable asset and, in turn, shareholders' equity. Changes in the valuation allowance for uncollectible
reinsurance are reflected in net income.
Although the obligation of individual reinsurers to pay their reinsurance obligations is based on specific contract provisions, the
collectability of such amounts requires estimation by management. The majority of the recoverable balance will not be due for
collection until sometime in the future, and the duration of our recoverables may be longer than the duration of our direct
exposures. Over this period of time, economic conditions and operational performance of a particular reinsurer may impact their
ability to meet these obligations and while they may continue to acknowledge their contractual obligation to do so, they may not
have the financial resources or willingness to fully meet their obligation to us.
To estimate the valuation allowance for uncollectible reinsurance, the reinsurance recoverable must first be determined for each
reinsurer. This determination is based on a process rather than an estimate, although an element of judgment must be applied.
As part of the process, ceded IBNR is allocated to reinsurance contracts because ceded IBNR is not generally calculated on a
contract by contract basis. The allocations are generally based on premiums ceded under reinsurance contracts, adjusted for
actual loss experience and historical relationships between gross and ceded losses. If actual premium and loss experience vary
materially from historical experience, the allocation of reinsurance recoverable by reinsurer will be reviewed and may change.
While such change is unlikely to result in a large percentage change in the valuation allowance for uncollectible reinsurance, it
could, nevertheless, have a material effect on our net income in the period recorded.
49
Generally, we use a default analysis to estimate uncollectible reinsurance. The primary components of the default analysis are
reinsurance recoverable balances by reinsurer, net of collateral, and forward looking default factors used to estimate the
probability that the reinsurer may be unable to meet its future obligations in full. The definition of collateral for this purpose
requires some judgment and is generally limited to assets held in a Chubb-only beneficiary trust, letters of credit, and liabilities
held by us with the same legal entity for which we believe there is a right of offset. We do not currently include multi-beneficiary
trusts. However, we have several reinsurers that have established multi-beneficiary trusts for which certain of our companies are
beneficiaries. The determination of the default factor is principally based on the financial strength rating of the reinsurer and a
corresponding default factor applicable to the financial strength rating. Default factors require considerable judgment and are
determined using the current financial strength rating, or rating equivalent, of each reinsurer as well as other key considerations
and assumptions. Significant considerations and assumptions include, but are not necessarily limited to, the following:
•
•
•
For reinsurers that maintain a financial strength rating from a major rating agency, and for which recoverable balances are
considered representative of the larger population (i.e., default probabilities are consistent with similarly rated reinsurers
and payment durations conform to averages), the judgment exercised by management to determine the valuation allowance
for uncollectible reinsurance of each reinsurer is typically limited because the financial rating is based on a published source
and the default factor we apply is based on a historical default factor of a major rating agency applicable to the particular
rating class. Default factors applied for financial ratings of AAA, AA, A, BBB, BB, B, and CCC, are 0.8 percent, 1.2 percent,
1.7 percent, 4.9 percent, 19.6 percent, 34.0 percent, and 62.2 percent, respectively. Because our model is predicated on
the historical default factors of a major rating agency, we do not generally consider alternative factors. However, when a
recoverable is expected to be paid in a brief period of time by a highly-rated reinsurer, such as certain property catastrophe
claims, a default factor may not be applied;
For balances recoverable from reinsurers that are both unrated by a major rating agency and for which management is
unable to determine a credible rating equivalent based on a parent or affiliated company, we may determine a rating
equivalent based on our analysis of the reinsurer that considers an assessment of the creditworthiness of the particular
entity, industry benchmarks, or other factors as considered appropriate. We then apply the applicable default factor for that
rating class. For balances recoverable from unrated reinsurers for which our ceded reserve is below a certain threshold, we
generally apply a default factor of 34.0 percent;
For balances recoverable from reinsurers that are either insolvent or under regulatory supervision, we establish a default
factor and resulting valuation allowance for uncollectible reinsurance based on specific facts and circumstances surrounding
each company. Upon initial notification of an insolvency, we generally recognize expense for a substantial portion of all
balances outstanding, net of collateral, through a combination of write-offs of recoverable balances and increases to the
valuation allowance for uncollectible reinsurance. When regulatory action is taken on a reinsurer, we generally recognize a
default factor by estimating an expected recovery on all balances outstanding, net of collateral. When sufficient credible
information becomes available, we adjust the valuation allowance for uncollectible reinsurance by establishing a default
factor pursuant to information received; and
•
For captives and other recoverables, management determines the valuation allowance for uncollectible reinsurance based
on the specific facts and circumstances.
The following table summarizes reinsurance recoverables and the valuation allowance for uncollectible reinsurance for each type
of recoverable balance at December 31, 2023:
(in millions of U.S. dollars)
Type
Reinsurers with credit ratings
Reinsurers not rated
Reinsurers under supervision and insolvent reinsurers
Captives
Other, including structured settlements and pools
Total
Gross Reinsurance
Recoverable on
Losses and Loss
Expenses
Recoverables
(net of Usable
Collateral)
Valuation allowance
for Uncollectible
Reinsurance (1)
$
16,035 $
13,961 $
311
101
2,653
1,219
221
100
420
1,191
$
20,319 $
15,893 $
156
74
35
16
86
367
(1) The valuation allowance for uncollectible reinsurance is based on a default analysis applied to gross reinsurance recoverables, net of approximately $4.4 billion of collateral
at December 31, 2023.
At December 31, 2023, the use of different assumptions within our approach could have a material effect on the valuation
allowance for uncollectible reinsurance. To the extent the creditworthiness of our reinsurers was to deteriorate due to an adverse
50
event affecting the reinsurance industry, such as a large number of major catastrophes, actual uncollectible amounts could be
significantly greater than our valuation allowance for uncollectible reinsurance. Such an event could have a material adverse
effect on our financial condition, results of operations, and our liquidity. Given the various considerations used to estimate our
uncollectible valuation allowance, we cannot precisely quantify the effect a specific industry event may have on the valuation
allowance for uncollectible reinsurance. However, based on the composition (particularly the average credit quality) of the
reinsurance recoverable balance at December 31, 2023, we estimate that a ratings downgrade of one notch for all rated
reinsurers (e.g., from A to A- or A- to BBB+) could increase our valuation allowance for uncollectible reinsurance by
approximately $97 million or approximately 0.5 percent of the gross reinsurance recoverable balance, assuming no other
changes relevant to the calculation. While a ratings downgrade would result in an increase in our valuation allowance for
uncollectible reinsurance and a charge to earnings in that period, a downgrade in and of itself does not imply that we will be
unable to collect all of the ceded reinsurance recoverable from the reinsurers in question. Refer to Note 5 to the Consolidated
Financial Statements, under item 8, for additional information.
Fair value measurements
Accounting guidance defines fair value as the price to sell an asset or transfer a liability (an exit price) in an orderly transaction
between market participants and establishes a three-level valuation hierarchy based on the reliability of the inputs. The fair
value hierarchy gives the highest priority to quoted prices in active markets (Level 1 inputs) and the lowest priority to
unobservable data (Level 3 inputs). Level 2 includes inputs, other than quoted prices within Level 1, that are observable for
assets or liabilities either directly or indirectly. Refer to Note 4 and Note 17 to the Consolidated Financial Statements, under
item 8, for information on our fair value measurements.
Assessment of investment portfolio credit losses
Each quarter, we evaluate expected credit losses (ECL) for fixed maturity securities classified as available-for-sale. Because our
investment portfolio is the largest component of consolidated assets, ECL could be material to our financial condition and results
of operations. Refer to Notes 1 f) and 3 to the Consolidated Financial Statements, under item 8, for more information.
Deferred income taxes
At December 31, 2023, the Consolidated balance sheet reflects a deferred tax asset of $1.74 billion and a deferred tax liability
of $1.56 billion. Our deferred tax assets and liabilities primarily result from temporary differences between the amounts
recorded in our Consolidated Financial Statements and the tax basis of our assets and liabilities. We determine deferred tax
assets and liabilities separately for each tax-paying component (an individual entity or group of entities that is consolidated for
tax purposes) in each tax jurisdiction. The realization of deferred tax assets depends upon the existence of sufficient taxable
income within the carryback or carryforward periods under the tax law in the applicable tax jurisdiction. There may be changes
in tax laws in a number of countries where we transact business that impact our deferred tax assets and liabilities. At each
balance sheet date, management assesses the need to establish a valuation allowance that reduces deferred tax assets when it
is more likely than not that all, or some portion, of the deferred tax assets will not be realized. The determination of the need for
a valuation allowance is based on all available information including projections of future taxable income, principally derived
from business plans and where appropriate available tax planning strategies. Projections of future taxable income incorporate
assumptions of future business and operations that are apt to differ from actual experience. If our assumptions and estimates
that resulted in our forecast of future taxable income prove to be incorrect, an additional valuation allowance could become
necessary, which could have a material adverse effect on our financial condition, results of operations, and liquidity. At
December 31, 2023, the valuation allowance of $716 million reflects management's assessment that it is more likely than not
that a portion of the deferred tax assets will not be realized due to the inability of certain subsidiaries to generate sufficient
taxable income.
Goodwill impairment assessment
Goodwill, which represents the excess of acquisition cost over the estimated fair value of net assets acquired, was $19.7 billion
and $16.2 billion at December 31, 2023 and 2022, respectively. During 2023, our Goodwill balance increased, primarily
reflecting the consolidation of Huatai Group, which added $3.4 billion. Goodwill is assigned to applicable reporting units of
acquired entities at the time of acquisition. Our reporting units are the same as our reportable segments. For Goodwill balances
by reporting units, refer to Note 7 to the Consolidated Financial Statements, under item 8. Goodwill is not amortized but is
subject to a periodic evaluation for impairment at least annually, or earlier if there are any indications of possible impairment.
Impairment is tested at the reporting unit level. The impairment evaluation first uses a qualitative assessment to determine
whether it is more likely than not (i.e., more than a 50 percent probability) that the fair value of a reporting unit is greater than
its carrying amount. If a reporting unit fails this qualitative assessment, a single quantitative analysis is used to measure and
51
record the amount of the impairment. In assessing the fair value of a reporting unit, we make assumptions and estimates about
the profitability attributable to our reporting units, including:
•
•
short-term and long-term growth rates; and
estimated cost of equity and changes in long-term risk-free interest rates.
If our assumptions and estimates made in assessing the fair value of acquired entities change, we could be required to write-
down the carrying value of Goodwill which could be material to our results of operations in the period the charge is taken. Based
on our impairment testing for 2023, we determined no impairment was required and none of our reporting units were at risk for
impairment.
Consolidated Operating Results – Years Ended December 31, 2023, 2022, and 2021
(in millions of U.S. dollars, except for percentages)
Net premiums written
Net premiums written - constant dollars (1)
Net premiums earned
Net investment income
Net realized gains (losses)
Market risk benefits gains (losses)
Total revenues
Losses and loss expenses
Policy benefits
Policy acquisition costs
Administrative expenses
Interest expense
Other (income) expense
Amortization of purchased intangibles
Cigna integration expenses
Total expenses
Income before income tax
Income tax expense
Net income
2023
2022
2021
$ 47,361 $ 41,720 $ 37,827
45,712
40,360
36,292
4,937
3,742
(607)
(1,085)
(307)
80
49,735
24,100
3,628
8,259
4,007
672
(836)
310
69
43,097
22,572
2,314
7,339
3,395
570
89
285
48
3,456
1,030
91
40,869
21,030
1,740
6,758
3,135
492
(2,367)
287
—
40,209
36,612
31,075
2023 vs.
2022
13.5 %
13.5 %
13.3 %
31.9 %
(44.0) %
% Change
2022 vs.
2021
10.3 %
13.0 %
11.2 %
8.3 %
NM
NM
(12.0) %
15.4 %
6.8 %
56.8 %
12.5 %
18.0 %
18.0 %
NM
8.7 %
43.5 %
9.8 %
5.5 %
7.3 %
33.0 %
8.6 %
8.3 %
15.9 %
NM
(0.7) %
NM
17.8 %
9,526
511
9,015
6,485
1,239
5,246
9,794
1,269
8,525
—
46.9 %
(33.8) %
(58.8) %
(2.3) %
71.9 %
(38.5) %
NM
NM
Net loss attributable to noncontrolling interests
(13)
—
Net income attributable to Chubb
$
9,028 $
5,246 $
8,525
72.1 %
(38.5) %
NM - not meaningful
(1)
On a constant-dollar basis. Amounts are calculated by translating prior period results using the same local currency exchange rates as the comparable current period.
52
Financial Highlights for the Year Ended December 31, 2023
• On July 1, 2023, Chubb acquired a majority controlling interest in its investment in Huatai Group, discontinued the equity
method of accounting, and applied consolidation accounting. Chubb's investment in Huatai Group was approximately 76.5
percent as of December 31, 2023. Business activity for, and the financial position of, Huatai Group is reported at 100
percent on the Consolidated Financial Statements. The relevant amounts attributable to investors other than Chubb are
reflected under Noncontrolling interests, Net income (loss) attributable to noncontrolling interests, and Comprehensive
income (loss) attributable to noncontrolling interests on the Consolidated Financial Statements. Refer to Note 2 to the
Consolidated Financial Statements for additional information.
• Net income attributable to Chubb was a record $9.0 billion compared with $5.2 billion in 2022. Net income in 2023 was
driven by strong underwriting results, including growth in net premiums earned, and record net investment income. Net
income in 2023 also includes the one-time deferred tax benefit of $1.1 billion, reflecting the transition provisions related to
the enactment of Bermuda’s new income tax law (tax benefit). In connection with the tax benefit, we elected to step up the
tax basis for assets in Bermuda to fair value resulting in the one-time deferred tax benefit.
•
•
•
•
•
Consolidated net premiums written were $47.4 billion, up 13.5 percent. P&C net premiums written increased 9.9 percent,
with commercial lines and consumer lines up 8.6 percent and 13.8 percent, respectively. Life Insurance segment net
premiums written increased 51.5 percent, driven substantially by the acquisition of Cigna's Asian business on July 1, 2022
and consolidation of Huatai on July 1, 2023. The consolidation of Huatai Group added 1.5 percentage points, 1.0
percentage points, and 7.3 percentage points to consolidated, P&C, and Life insurance net premiums written growth,
respectively.
Consolidated net premiums earned were $45.7 billion, up 13.3 percent, or 13.1 percent in constant dollars. The
consolidation of Huatai Group added 1.7 percentage points to consolidated net premiums earned growth.
Total pre-tax and after-tax catastrophe losses, net of reinsurance and including reinstatement premiums, were $1.8 billion
(4.5 percentage points of the P&C combined ratio) and $1.5 billion, respectively, compared with $2.2 billion (5.9
percentage points of the P&C combined ratio) and $1.8 billion, respectively, in 2022.
Total pre-tax and after-tax favorable prior period development were $773 million (1.9 percentage points of the P&C
combined ratio) and $604 million, respectively, including pre-tax adverse development of $149 million related to legacy
asbestos and environmental exposures, and $49 million for molestation claims. Excluding the adverse development we had
pre-tax favorable development of $971 million, with 5 percent in long-tail lines, and 95 percent in short-tail lines. This
compares with $876 million (2.5 percentage points of the P&C combined ratio) and $729 million, respectively, in 2022.
The P&C combined ratio was 86.5 percent compared with 87.6 percent in 2022. The current year ratio improved primarily
due to lower catastrophe losses, partially offset by lower favorable prior period development. The P&C current accident year
(CAY) combined ratio excluding catastrophe losses was 83.9 percent compared with 84.2 percent in 2022.
• Net investment income was a record $4.9 billion compared with $3.7 billion in 2022, primarily due to higher reinvestment
rates on fixed maturities.
• Net loss attributable to noncontrolling interests of $13 million reflects segment income that was more than offset by
realized losses principally from mark-to-market movement in Huatai’s investment portfolio.
• Operating cash flow was a record $12.6 billion compared with $11.3 billion in 2022.
•
Chubb shareholders' equity increased $9.0 billion in 2023, primarily from net income attributable to Chubb of $9.0 billion
and net unrealized gains on investments of $3.1 billion after-tax, partially offset by total capital returned to shareholders of
$3.9 billion. Total capital returned to shareholders comprises share repurchases of $2.5 billion, at an average purchase
price of $209.52 per share, and dividends of $1.4 billion. Relative to our share repurchase program, our Board of Directors
approved a new program of up to $5 billion with no expiration date, effective July 1, 2023.
•
Effective January 1, 2023, we adopted the Long-Duration Targeted Improvements (LDTI) U.S. GAAP guidance, which
principally impacted the Life Insurance segment. Financial data for the prior reporting periods in this report are adjusted, as
53
applicable, and are presented in accordance with the new guidance. The impact of this adoption to 2022 and 2021 results
was immaterial.
Outlook
2023 was an exceptional year reflecting double-digit premium growth, a P&C combined ratio of 86.5 percent, and record net
investment income. Relative to our Major Accounts business, growth in the fourth quarter was adversely impacted by about
$125 million of lower premium from underwriting actions we planned for, and took in, a segment of our primary and excess
casualty business. One half of the reduction in premium was the result of increased client retentions with the balance due to lost
business. For clarity, these actions are expected to contribute to future growth in underwriting income.
Regarding future North America commercial growth given current market conditions and our capabilities across all segments of
commercial P&C, including large accounts, E&S and middle market, we fully expect to return to more robust growth beginning
with the first quarter of 2024.
Overall, we had another record-setting year and we are well positioned to continue producing outstanding results going forward.
Net Premiums Written
(in millions of U.S. dollars, except for percentages)
Property and other short-tail lines
Commercial casualty
Financial lines
Workers' compensation
Commercial multiple peril (1)
Surety
Total Commercial P&C lines
Agriculture
Personal homeowners
Personal automobile
Personal other
Total Personal lines
Global A&H - P&C
Reinsurance lines
Total Property and Casualty lines
Life Insurance
Total consolidated
% Change
2023
2022
2021
2023 vs.
2022
2022 vs.
2021
C$ 2023
vs. 2022
$ 8,414 $ 7,195 $ 6,425
16.9 %
12.0 %
17.5 %
8,291
7,715
6,994
7.5 %
10.3 %
5,069
5,070
5,067
—
—
2,239
2,164
2,130
3.5 %
1.6 %
7.8 %
0.3 %
3.5 %
1,492
1,311
1,193
13.7 %
10.0 %
13.7 %
691
622
572
11.0 %
26,196
24,077
22,381
8.8 %
8.6 %
7.6 %
9.6 %
9.1 %
3,188
2,907
2,388
9.7 %
21.7 %
9.7 %
4,429
3,901
3,719
13.6 %
4.9 %
13.9 %
1,991
1,631
1,525
22.1 %
6.9 %
16.9 %
1,929
1,817
1,825
6.1 %
(0.4) %
6.2 %
8,349
7,349
7,069
13.6 %
4.0 %
12.7 %
3,145
2,836
2,680
10.9 %
5.8 %
10.9 %
1,018
943
873
41,896
38,112
35,391
8.0 %
9.9 %
8.0 %
7.7 %
8.2 %
9.9 %
5,465
3,608
2,436
51.5 %
48.1 %
50.9 %
$ 47,361 $ 41,720 $ 37,827
13.5 %
10.3 %
13.5 %
(1)
Commercial multiple peril represents retail package business (property and general liability).
The increase in consolidated net premiums written in 2023 principally reflects growth across most product lines driven by
strong premium retention, including rate and exposure increases, and strong new business. The increase also reflects
contributions from the acquisition of Cigna's business in Asia on July 1, 2022, and the consolidation of Huatai Group on July 1,
2023. The consolidation of Huatai Group added 1.5 percentage points to consolidated net premiums written growth.
•
•
Property and other short-tail lines grew globally due to strong new business, including rate and exposure increases.
Commercial casualty grew in all regions globally, principally in North America and Europe, driven by strong premium
retention, including both rate and exposure increases, and strong new business. Growth was partially offset by the
unfavorable impact of planned corrective underwriting actions in North America in the fourth quarter of 2023.
54
•
•
•
•
Commercial multiple peril increased due to strong premium retention, including both rate and exposure increases, and
strong new business in North America.
Surety growth reflects strong new business in North America.
Agriculture growth reflects lower premium cessions to the U.S. government of $386 million due to higher losses
experienced in certain states in 2023 and strong new business in Chubb Agribusiness.
Personal lines grew principally in North America and Latin America, with growth strongest in homeowners. Growth was
driven by rate and exposure increases.
• Global A&H – P&C increased primarily due to the acquisition of Cigna's business in Asia; and higher new business and
increased consumer activity, including higher travel volume, in Europe, and Latin America.
• Reinsurance lines growth reflects continued growth in the portfolio, mainly in property lines, partially offset by the impact of
•
catastrophe reinstatement premiums recognized in 2022.
Life Insurance increased primarily due to the acquisition of Cigna's business in Asia in the third quarter of 2022, the
consolidation of Huatai Group in the third quarter of 2023, and underlying growth in existing business in Latin America and
Asia. The consolidation of Huatai Group contributed $265 million, or 7.3 percentage points to growth.
For additional information on net premiums written, refer to the segment results discussions.
Net Premiums Earned
Net premiums earned for short-duration contracts, typically P&C contracts, generally reflect the portion of net premiums written
that was recorded as revenues for the period as the exposure periods expire. Net premiums earned for long-duration contracts,
typically traditional life contracts, generally are recognized as earned when due from policyholders. Net premiums earned
increased $5.4 billion, up 13.3 percent, or 13.1 percent in constant dollars in 2023. P&C net premiums earned increased 9.4
percent, comprising growth in commercial and consumer lines of 8.8 percent and 11.1 percent, respectively.
Catastrophe Losses and Prior Period Development
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 losses and
affects a significant number of insureds. For events outside of the U.S. and Canada, we generally use a similar definition.
Catastrophe losses are net of reinsurance and include reinstatement premiums, which 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.
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. PPD includes adjustments relating 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.
Refer to the Non-GAAP Reconciliation section for further information on reinstatement premiums on catastrophe losses and
adjustments to prior period development.
(in millions of U.S. dollars)
Net catastrophe losses
Favorable prior period development
2023
2022
2021
1,828 $
2,182 $
2,401
773 $
876 $
926
$
$
Catastrophe losses were primarily from the following events:
• 2023: Severe weather-related events in the U.S. and internationally, Hawaii wildfires, and New Zealand storms.
• 2022: Hurricane Ian losses of $975 million, winter storm Elliott losses of $400 million, severe weather-related events in the
U.S. and internationally, Australia storms, and Colorado wildfires.
• 2021: Hurricane Ida losses of $834 million, winter storm losses in the U.S., flooding in Europe, and other severe weather-
related events in the U.S. and internationally.
55
Pre-tax net favorable prior period development for 2023 was $773 million, including adverse development of $149 million
related to legacy asbestos and environmental exposures and $49 million for molestation claims. The remaining net favorable
development of $971 million primarily comprises 5 percent in long-tail lines, principally from accident years 2013 through
2018, and 95 percent in short-tail lines, mainly in property, A&H, and surety lines.
Pre-tax net favorable prior period development for 2022 was $876 million, including adverse development of $155 million for
molestation claims, primarily reviver statute-related, and $113 million related to legacy asbestos and environmental exposures.
The remaining favorable development of $1,144 million primarily comprises 18 percent in long-tail lines, principally from
accident years 2011 through 2017, and 82 percent in short-tail lines, mainly in property and A&H lines.
Pre-tax net favorable prior period development for 2021 was $926 million, including adverse development of $443 million for
molestation claims, of which $375 million was related to the pending Boy Scouts of America settlement in the fourth quarter,
and $83 million related to legacy A&E exposures. The remaining favorable development of $1,452 million, including favorable
development of $430 million for COVID-related claims, primarily comprises 39 percent in long-tail lines, principally from
accident years 2020 and 2017 and prior, and 61 percent in short-tail lines, mainly in homeowners, accident and health,
property, and surety lines.
Refer to the Prior Period Development section in Note 8 to the Consolidated Financial Statements for additional information.
P&C Combined Ratio
In evaluating our segments excluding Life Insurance financial performance, we use the P&C combined ratio, the loss and loss
expense ratio, the policy acquisition cost ratio, and the administrative expense ratio. We calculate these ratios by dividing the
respective expense amounts by net premiums earned. We do not calculate these ratios for the Life Insurance segment as we do
not use these measures to monitor or manage the business in that segment. The P&C combined ratio is determined by adding
the loss and loss expense ratio, the policy acquisition cost ratio, and the administrative expense ratio. A P&C combined ratio
under 100 percent indicates underwriting income, and a combined ratio exceeding 100 percent indicates underwriting loss.
Loss and loss expense ratio
CAY loss ratio excluding catastrophe losses
Catastrophe losses
Favorable prior period development
Loss and loss expense ratio
Policy acquisition cost ratio
Administrative expense ratio
P&C Combined ratio
2023
2022
2021
58.2 %
4.5 %
(2.1) %
60.6 %
17.8 %
8.1 %
86.5 %
58.8 %
6.0 %
(2.8) %
62.0 %
17.8 %
7.8 %
87.6 %
58.3 %
7.1 %
(2.8) %
62.6 %
18.3 %
8.2 %
89.1 %
The loss and loss expense ratio improved in 2023, reflecting lower catastrophe losses, partially offset by lower favorable prior
period development. The CAY loss ratio excluding catastrophe losses decreased in 2023, primarily from a higher percentage of
net premiums earned from lines with a lower loss ratio, most notably in property.
The administrative expense ratio increased in 2023, primarily due to higher pension expenses and higher employee-related
expenses, partially offset by the favorable impact of higher net premiums earned. The increase in pension expense reflects the
adverse impact of market conditions in 2022.
Policy benefits
Policy benefits represent losses on contracts classified as long-duration and generally include accident and supplemental health
products, term and whole life products, endowment products, and annuities. Refer to the Life Insurance segment operating
results section for further discussion.
Policy benefits were $3,628 million, $2,314 million and $1,740 million in 2023, 2022, and 2021, respectively, which
included (gains) losses from fair value changes in separate account liabilities that do not qualify for separate account reporting
under U.S. GAAP of $(45) million, $(42) million and $(8) million, respectively. The offsetting movements of these liabilities are
recorded in Other (income) expense on the Consolidated statements of operations. Excluding the separate account gains and
losses, Policy benefits were $3,673 million, $2,356 million, and $1,748 million in 2023, 2022, and 2021, respectively. The
56
increase in Policy benefits for 2023 is primarily due to the acquisition of Cigna's business in Asia and the consolidation of
Huatai.
Refer to the respective sections that follow for a discussion of Net investment income, Other (income) expense, Net realized
gains (losses), Interest expense, Amortization of purchased intangibles, and Income tax expense.
57
Segment Operating Results – Years Ended December 31, 2023, 2022, and 2021
We operate through six business segments: North America Commercial P&C Insurance, North America Personal P&C Insurance,
North America Agricultural Insurance, Overseas General Insurance, Global Reinsurance, and Life Insurance. In addition, the
results of our run-off Brandywine business, including all run-off asbestos and environmental (A&E) exposures, and the results of
Westchester specialty operations for 1996 and prior years are presented within Corporate.
North America Commercial P&C Insurance
The North America Commercial P&C Insurance segment comprises operations that provide P&C insurance and services to large,
middle market, and small commercial businesses in the U.S., Canada, and Bermuda. This segment includes our North America
Major Accounts and Specialty Insurance division (large corporate accounts and wholesale business), and the North America
Commercial Insurance division (principally middle market and small commercial accounts).
(in millions of U.S. dollars, except for percentages)
2023
2022
2021
Net premiums written
Net premiums earned
Losses and loss expenses
Policy acquisition costs
Administrative expenses
Underwriting income
Net investment income
Other (income) expense
Segment income
Loss and loss expense ratio:
$ 19,237
$ 17,889
$ 16,415
18,416
17,107
15,461
11,256
10,828
10,015
2,515
2,313
2,082
1,250
1,113
1,052
3,395
2,853
2,312
3,017
2,247
2,078
22
17
31
$ 6,390
$ 5,083
$ 4,359
2023 vs.
2022
% Change
2022 vs.
2021
7.5 %
7.7 %
4.0 %
8.7 %
12.4 %
19.0 %
34.3 %
27.4 %
25.7 %
9.0 %
10.6 %
8.1 %
11.1 %
5.7 %
23.4 %
8.1 %
(45.9) %
16.6 %
CAY loss ratio excluding catastrophe losses
60.2 %
61.3 %
62.7 % (1.1)
pts (1.4)
Catastrophe losses
Prior period development
Loss and loss expense ratio
Policy acquisition cost ratio
Administrative expense ratio
Combined ratio
3.8 %
(2.9) %
61.1 %
13.7 %
6.8 %
5.6 %
(3.6) %
63.3 %
13.5 %
6.5 %
7.2 % (1.8)
pts (1.6)
(5.1) % 0.7
pts 1.5
64.8 % (2.2)
pts (1.5)
13.4 % 0.2
pts 0.1
6.8 % 0.3
pts (0.3)
81.6 %
83.3 %
85.0 % (1.7)
pts (1.7)
pts
pts
pts
pts
pts
pts
pts
Net Catastrophe Losses and Prior Period Development
(in millions of U.S. dollars)
Net catastrophe losses
Favorable prior period development
2023
2022
2021
$
$
710 $
961 $ 1,112
494 $
562 $
762
Catastrophe losses were primarily from the following events:
•2023: U.S. flooding, hail, tornadoes, wind events, winter storm losses, and Hawaii wildfires.
•2022: Hurricane Ian losses, winter storm Elliott losses, and other severe weather-related events in the U.S.
•2021: Hurricane Ida losses; winter storm losses and flooding; hail, tornados, and wind events in the U.S.
Refer to Note 8 to the Consolidated Financial Statements for detail on prior period development.
Premiums
Net premiums written increased $1,348 million, or 7.5 percent, in 2023, reflecting rate and exposure increases, and strong
new business. The increase in premiums was across most lines of business, most notably in property, but also in select casualty
and commercial multiple peril lines.
Net premiums earned increased $1,309 million, or 7.7 percent, in 2023, reflecting the growth in net premiums written
described above.
58
Combined Ratio
The loss and loss expense ratio and the CAY loss ratio excluding catastrophe losses improved in 2023, reflecting a higher
percentage of premiums earned from lines that have a lower loss ratio, as well as earned rate and exposure exceeding loss trend
in certain lines. The loss and loss expense ratio was also favorably impacted by lower catastrophe losses, partially offset by
lower favorable prior period development.
The administrative expense ratio increased in 2023 primarily from higher pension expenses and higher employee-related
expenses, partially offset by the favorable impact of higher net premiums earned. The increase in pension expense reflects the
adverse impact of market conditions in 2022.
North America Personal P&C Insurance
The North America Personal P&C Insurance segment comprises operations that provide high net worth personal lines products,
including homeowners and complementary products such as valuable articles, excess liability, automobile, and recreational
marine insurance and services in the U.S. and Canada.
(in millions of U.S. dollars, except for percentages)
Net premiums written
Net premiums earned
Losses and loss expenses
Policy acquisition costs
Administrative expenses
Underwriting income
Net investment income
Other (income) expense
Amortization of purchased intangibles
Segment income
Loss and loss expense ratio:
2023
2022
2021
$ 5,878
$ 5,313
$ 5,002
5,536
5,180
4,915
3,511
3,186
2,924
1,128
1,057
1,001
329
291
276
568
646
714
358
283
249
3
9
4
10
(2)
10
$ 914
$ 915
$ 955
2023 vs.
2022
% Change
2022 vs.
2021
10.6 %
6.9 %
10.2 %
6.7 %
12.9 %
(12.2) %
27.0 %
(35.2) %
(5.3) %
(0.1) %
6.2 %
5.4 %
8.9 %
5.6 %
5.7 %
(9.5) %
13.3 %
NM
—
(4.2) %
CAY loss ratio excluding catastrophe losses
53.8 %
52.9 %
52.0 % 0.9
pts 0.9
Catastrophe losses
Prior period development
Loss and loss expense ratio
Policy acquisition cost ratio
Administrative expense ratio
Combined ratio
NM – not meaningful
12.1 %
12.2 %
13.6 % (0.1)
pts (1.4)
(2.5) %
(3.6) %
(6.1) % 1.1
pts 2.5
63.4 %
61.5 %
59.5 % 1.9
pts 2.0
20.4 %
20.4 %
20.4 % —
pts —
5.9 %
5.6 %
5.6 % 0.3
pts —
89.7 %
87.5 %
85.5 % 2.2
pts 2.0
Net Catastrophe Losses and Prior Period Development
(in millions of U.S. dollars)
Net catastrophe losses
Favorable prior period development
2023
2022
2021
669 $
631 $
679
134 $
186 $
305
$
$
Catastrophe losses were primarily from the following events:
•2023: U.S. flooding, hail, tornadoes, wind events, winter storm losses, and Hawaii wildfires.
•2022: Hurricane Ian losses, winter storm Elliott losses, and other severe weather-related events in the U.S., including
Colorado wildfires.
•2021: Hurricane Ida losses, winter storm losses, and flooding; hail, tornados, and wind events in the U.S.
Refer to Note 8 to the Consolidated Financial Statements for detail on prior period development.
pts
pts
pts
pts
pts
pts
pts
59
Premiums
Net premiums written increased $565 million, or 10.6 percent, for 2023, primarily driven by strong new business, and rate and
exposure increases, across most lines, but most notably in homeowners.
Net premiums earned increased $356 million, or 6.9 percent, for 2023, reflecting the growth in net premiums written
described above.
Combined Ratio
The CAY loss ratio excluding catastrophe losses increased in 2023, primarily reflecting higher auto and excess liability losses,
partially offset by earned rate and exposure exceeding loss cost trends, as well as lower actual loss experience in homeowners.
The loss and loss expense ratio increased in 2023, primarily due to the factors noted above and lower favorable prior period
development.
The administrative expense ratio increased in 2023, primarily from higher pension expenses, partially offset by the favorable
impact of higher net premiums earned. The increase in pension expense reflects the adverse impact of market conditions in
2022.
North America Agricultural Insurance
The North America Agricultural Insurance segment comprises our North American based businesses that provide a variety of
coverages in the U.S. and Canada including crop insurance, primarily Multiple Peril Crop Insurance (MPCI) and crop-hail
through Rain and Hail Insurance Service, Inc. (Rain and Hail) as well as farm and ranch and specialty P&C commercial
insurance products and services through our Chubb Agribusiness unit.
(in millions of U.S. dollars, except for percentages)
Net premiums written
Net premiums earned
Losses and loss expenses
Policy acquisition costs
Administrative expenses
Underwriting income
Net investment income
Other (income) expense
Amortization of purchased intangibles
Segment income
Loss and loss expense ratio:
2023
2022
2021
$ 3,188
$ 2,907
$ 2,388
3,169
2,838
2,338
2,874
2,557
1,962
150
(1)
146
63
1
25
126
124
(10)
(3)
165
255
36
1
26
28
1
26
$ 183
$ 174
$ 256
2023 vs.
2022
9.7 %
11.7 %
12.4 %
19.4 %
(86.9) %
(11.6) %
74.4 %
—
(2.4) %
5.2 %
% Change
2022 vs.
2021
21.7 %
21.4 %
30.4 %
1.4 %
NM
(35.4) %
26.6 %
—
—
(32.3) %
CAY loss ratio excluding catastrophe losses
90.1 %
90.5 %
81.5 %
(0.4)
pts 9.0
Catastrophe losses
Prior period development
Loss and loss expense ratio
Policy acquisition cost ratio
Administrative expense ratio
Combined ratio
NM – not meaningful
1.2 %
2.2 %
1.7 %
(1.0)
pts 0.5
(0.6) %
(2.6) %
0.7 % 2.0
pts
(3.3)
90.7 %
90.1 %
83.9 % 0.6
pts 6.2
4.7 %
4.4 %
5.3 % 0.3
pts
(0.9)
—
(0.3) %
(0.1) % 0.3
pts
(0.2)
95.4 %
94.2 %
89.1 % 1.2
pts 5.1
Net catastrophe Losses and Prior Period Development
(in millions of U.S. dollars)
Net catastrophe losses
Favorable (unfavorable) prior period development
2023
2022
2021
$
$
39 $
64 $
40
18 $
61 $
(10)
Catastrophe losses were primarily from the following events:
•2023: U.S. flooding, hail, tornadoes, and wind events.
•2022: Hurricane Ian losses, severe weather-related events in the Chubb Agribusiness, and winter storm losses in the U.S.
•2021: U.S. flooding, hail, tornados, and wind events.
60
pts
pts
pts
pts
pts
pts
pts
Refer to Note 8 to the Consolidated Financial Statements for detail on prior period development.
Premiums
Net premiums written increased $281 million, or 9.7 percent, in 2023, primarily reflecting lower premium cessions to the U.S.
government of $386 million and strong new business in Chubb Agribusiness. Under the profit-sharing agreement, we retained
more premium in 2023 because of higher losses experienced in certain states. In 2022, we returned additional premiums to the
government because of lower losses experienced in certain states in 2021.
Net premiums earned increased $331 million, or 11.7 percent, in 2023 reflecting the growth in net premiums written
described above.
Combined Ratio
The CAY loss ratio excluding catastrophe losses improved in 2023, primarily from a higher 2023 crop year margin, partly offset
by the impact of the lower premium cessions to the U.S. government mentioned above, which had a corresponding impact in
incurred losses. The loss and loss expense ratio increased in 2023, reflecting lower favorable prior period development, partially
offset by lower catastrophe losses and the factors noted above.
The policy acquisition cost ratio increased in 2023, reflecting changes in mix of business away from products that have a lower
acquisition cost ratio.
Overseas General Insurance
Overseas General Insurance segment comprises Chubb International and Chubb Global Markets (CGM). Chubb International
comprises our international commercial P&C traditional and specialty lines serving large corporations, middle market and small
customers; A&H and traditional and specialty personal lines business serving local territories outside the U.S., Bermuda, and
Canada. CGM, our London-based international commercial P&C excess and surplus lines business, includes Lloyd's of London
(Lloyd's) Syndicate 2488. Chubb provides funds at Lloyd's to support underwriting by Syndicate 2488 which is managed by
Chubb Underwriting Agencies Limited. Effective July 1, 2023, the Overseas General Insurance segment includes 100 percent of
the results of Huatai Group's P&C business as required under consolidation accounting. We previously included our share of
Huatai results based on our equity method investment within Other (income) expense.
61
(in millions of U.S. dollars, except for percentages)
2023
2022
2021
Net premiums written
Net premiums written - constant dollars
Net premiums earned
Losses and loss expenses
Policy benefits
Policy acquisition costs
Administrative expenses
Underwriting income
Net investment income
Other (income) expense
Amortization of purchased intangibles
Segment income
Loss and loss expense ratio:
CAY loss ratio excluding catastrophe losses
Catastrophe losses
Prior period development
Loss and loss expense ratio
Policy acquisition cost ratio
Administrative expense ratio
Combined ratio
NM – not meaningful
$ 12,575
$ 11,060 $ 10,713
12,231
10,803
10,441
5,643
4,894
4,783
457
358
360
3,113
2,818
2,799
1,219
1,070
1,078
1,799
1,663
1,421
895
626
597
(25)
70
2
57
—
48
$ 2,649
$ 2,230
$ 1,970
2023 vs.
2022
% Change
2022 vs.
2021
13.7 %
13.3 %
13.2 %
15.3 %
27.7 %
10.4 %
14.0 %
8.2 %
43.0 %
NM
22.2 %
18.8 %
3.2 %
11.4 %
3.5 %
2.3 %
(0.6) %
0.7 %
(0.8) %
17.1 %
4.9 %
NM
19.4 %
13.2 %
49.7 %
49.4 %
50.1 %
3.3 %
3.3 %
3.5 %
(3.1) %
(4.1) %
(4.3) %
49.9 %
48.6 %
49.3 %
0.3
—
1.0
1.3
25.4 %
26.1 %
26.8 % (0.7)
10.0 %
9.9 %
10.3 %
85.3 %
84.6 %
86.4 %
0.1
0.7
pts
pts
pts
pts
pts
pts
pts
(0.7)
(0.2)
0.2
(0.7)
(0.7)
(0.4)
(1.8)
pts
pts
pts
pts
pts
pts
pts
Net Catastrophe Losses and Prior Period Development
(in millions of U.S. dollars)
Net catastrophe losses
Favorable prior period development
2023
2022
2021
$
$
403 $
365 $
376 $
448 $
358
441
Catastrophe losses were primarily from the following events:
•2023: Storms in New Zealand, international weather-related events, and Hurricane Otis losses.
•2022: Hurricane Ian losses, international weather-related events, and storms in Australia.
•2021: Hurricane Ida losses, winter-related storms, international weather-related events, and flooding in Europe.
Refer to Note 8 to the Consolidated Financial Statements for detail on prior period development.
62
Net Premiums Written by Region
(in millions of U.S. dollars, except for percentages)
Region
Europe, Middle East, and Africa
Latin America
Asia Pacific (1)
Japan
Other (2)
Net premiums written
Region
Europe, Middle East, and Africa
Latin America
Asia Pacific (1)
Japan
Other (2)
Net premiums written
2023
2022
2021
C$
2022
2023 vs.
2022
2023 vs.
2022
2022 vs.
2021
% Change
C$
$ 5,713
$ 5,222
$ 5,242
$ 5,214
2,653
2,312
2,044
3,621
2,905
2,733
451
137
459
162
520
174
2,454
2,844
426
162
9.4 %
14.8 %
24.7 %
(1.7) %
9.6 %
8.1 %
27.3 %
(0.4) %
13.1 %
6.3 %
5.9 %
(11.7) %
(16.0) %
(15.7) %
(6.7) %
3.2 %
$ 12,575
$ 11,060
$ 10,713
$ 11,100
13.7 %
13.3 %
2023
% of Total
2022
% of Total
2021
% of Total
45 %
21 %
29 %
4 %
1 %
47 %
21 %
27 %
4 %
1 %
49 %
19 %
25 %
5 %
2 %
100 %
100 %
100 %
(1)
(2)
2023 includes the consolidated results of Huatai P&C effective July 1, 2023.
Includes the international supplemental A&H business of Combined Insurance and other international operations.
Premiums
Overall, net premiums written increased $1,515 million in 2023, or $1,475 million on a constant-dollar basis, reflecting
growth in commercial lines of 11.2 percent, or 11.8 percent on a constant-dollar basis, and growth in consumer lines of 17.8
percent, or 15.7 percent on a constant-dollar basis. The consolidation of Huatai Group's P&C business contributed $460
million, or 3.4 percentage points in 2023.
Our European division increased in 2023, supported by both our wholesale and retail divisions. The growth in commercial lines
was primarily driven by higher new business, and positive rate increases, including commercial property and casualty lines.
Consumer lines increased primarily due to increased travel volume in A&H.
Latin America increased in 2023, driven by growth in commercial lines due to exposure increases, positive rate increases, and
new business, primarily property and casualty lines. Growth in consumer was driven by an increase in personal lines.
Asia Pacific increased in 2023, reflecting the consolidation of Huatai Group's P&C business effective July 1, 2023, higher new
business, higher retention and positive rate increases in commercial lines, primarily property and casualty lines. Growth in
consumer lines is attributable to the acquisition of Cigna's business in Asia effective July 1, 2022, as well as increased travel in
A&H.
Japan increased in 2023, on a constant-dollar basis, primarily from higher new business in A&H.
Net premiums earned increased $1,428 million in 2023, or $1,339 million on a constant-dollar basis, reflecting the increase in
net premiums written described above.
Combined Ratio
The loss and loss expense ratio increased in 2023 due to lower favorable prior period development. The CAY loss ratio excluding
catastrophe losses increased in 2023, driven by higher losses in personal lines, principally in the automobile portfolio in Latin
America.
The policy acquisition cost ratio improved in 2023, primarily due to a change in the mix of business, including higher premiums
earned from commercial lines that have a lower acquisition cost ratio than consumer lines.
63
Global Reinsurance
The Global Reinsurance segment represents our reinsurance operations comprising Chubb Tempest Re Bermuda, Chubb
Tempest Re USA, Chubb Tempest Re International, and Chubb Tempest Re Canada. Global Reinsurance markets its
reinsurance products worldwide primarily through reinsurance brokers under the Chubb Tempest Re brand name and provides a
broad range of traditional and non-traditional reinsurance coverage to a diverse array of primary P&C companies.
(in millions of U.S. dollars, except for percentages)
2023
2022
2021
Net premiums written
Net premiums written - constant dollars
Net premiums earned
Losses and loss expenses
Policy acquisition costs
Administrative expenses
Underwriting income (loss)
Net investment income
Other (income) expense
Segment income
Loss and loss expense ratio:
$ 1,018
$ 943
$ 873
962
426
264
37
235
208
(2)
922
670
240
36
(24)
281
1
798
632
200
35
(69)
331
—
$ 445
$ 256
$ 262
2023 vs.
2022
8.0 %
8.2 %
4.3 %
(36.4) %
9.9 %
1.6 %
NM
(26.0) %
NM
74.0 %
% Change
2022 vs.
2021
8.0 %
9.5 %
15.6 %
6.0 %
20.0 %
1.7 %
65.7 %
(15.2) %
NM
(2.3) %
CAY loss ratio excluding catastrophe losses
46.8 %
49.7 %
50.7 % (2.9)
pts (1.0)
Catastrophe losses
Prior period development
Loss and loss expense ratio
Policy acquisition cost ratio
Administrative expense ratio
Combined ratio
NM – not meaningful
(3.3) %
44.3 %
27.4 %
0.8 %
20.3 %
28.3 % (19.5)
pts (8.0)
2.6 %
0.2 % (5.9)
pts 2.4
72.6 %
79.2 % (28.3)
26.1 %
25.1 %
1.3
3.8 %
3.9 %
4.4 % (0.1)
75.5 %
102.6 %
108.7 % (27.1)
pts
pts
pts
pts
(6.6)
1.0
(0.5)
(6.1)
pts
pts
pts
pts
pts
pts
pts
Net Catastrophe Losses and Prior Period Development
(in millions of U.S dollars)
Net catastrophe losses
Favorable (unfavorable) prior period development
2023
2022
2021
$
$
7 $
161 $
212
28 $
(22) $
(3)
Catastrophe losses were primarily from the following events:
•2023: Hurricane Idalia, and other severe weather-related events in the U.S.
•2022: Hurricane Ian losses, and other severe weather-related events in the U.S., Australia, and Canada.
•2021: Hurricane Ida losses, and other severe weather-related events in the U.S., Canada and Europe.
Refer to Note 8 to the Consolidated Financial Statements for detail on prior period development.
Premiums
Net premiums written increased $75 million in 2023, reflecting continued growth in the portfolio, mainly in property lines,
partially offset by the impact of catastrophe reinstatement premiums recognized in the prior year.
Net premiums earned increased $40 million in 2023, primarily reflecting the increase in net premiums written described above.
Combined Ratio
The loss and loss expense ratio improved in 2023, primarily due to lower catastrophe losses and favorable prior period
development. The CAY loss ratio excluding catastrophe losses improved in 2023 primarily from an improvement in market
conditions in several lines of business and a shift in the mix of business towards property lines, which generally has higher
margins.
64
The policy acquisition cost ratio increased in 2023, primarily due to higher catastrophe reinstatement premiums recognized in
the prior year, which have a lower acquisition cost.
Life Insurance
The Life Insurance segment comprises our international life operations, which commencing in the third quarter of 2022,
includes Cigna's A&H and life business in Korea, Taiwan, New Zealand, Hong Kong, and Indonesia, acquired on July 1, 2022.
Effective July 1, 2023, the Life Insurance segment includes 100 percent of the results of Huatai Group's life and asset
management business as required under consolidation accounting. We previously included our share of Huatai results based on
our equity method investment within Other (income) expense. The Life Insurance segment also includes Chubb Tempest Life Re
(Chubb Life Re), and the North American supplemental A&H and life business of Combined Insurance. Results for the years
ended December 31, 2022 and 2021, are adjusted to reflect the adoption of LDTI. Refer to Note 1 x).
(in millions of U.S. dollars, except for percentages)
Net premiums written
Net premiums written - constant dollars
Net premiums earned
Losses and loss expenses
Policy benefits
Policy acquisition costs
Administrative expenses
Net investment income
Other (income) expense
Amortization of purchased intangibles
Segment income
NM - not meaningful
2023
2022
2021
$ 5,465 $ 3,608 $ 2,436
5,398
3,510
2,339
% Change
2023 vs.
2022
2022 vs.
2021
51.5 %
50.9 %
53.8 %
48.1 %
53.1 %
50.1 %
114
3,216
1,089
771
756
85
150
34.1 %
(43.3) %
1,998
1,388
785
510
509
552
332
407
60.9 %
38.8 %
51.0 %
48.5 %
43.9 %
42.3 %
53.7 %
25.0 %
(115)
(30)
(108)
30
10
5
NM
NM
(73.5) %
112.9 %
$ 1,049 $
661 $
427
58.8 %
54.8 %
Premiums
Net premiums written increased $1,857 million in 2023, or $1,843 million on a constant-dollar basis.
For our International Life operations, net premiums written increased 73.8 percent, of which 45.2 percentage points is from the
acquisition of Cigna's business in Asia, effective July 1, 2022, and 10.3 percentage points from the consolidation of Huatai
Group's life insurance business, effective July 1, 2023. The remaining 18.3 percentage points relates to underlying growth in
existing business from Latin America bank distribution channels, and Asia agency and partnership channels.
Net premiums written in our North American Combined Insurance business declined 4.4 percent in 2023, as growth in the
supplemental A&H business was more than offset by the non-renewal of a large program.
Deposits
The following table presents deposits collected on universal life and investment contracts:
(in millions of U.S. dollars, except for percentages)
2023
2022
2021
% Change
2023 vs.
2022
C$ 2023
vs. 2022
2022 vs.
2021
Deposits collected on universal life and investment
contracts
$ 1,590 $ 1,800 $ 2,441
(11.7) %
(7.4) %
(26.2) %
Deposits collected on universal life and investment contracts (life deposits) are not reflected as revenues in our Consolidated
statements of operations in accordance with U.S. GAAP. New life deposits are an important component of production, and
although they do not significantly affect current period income from operations, they are key to our efforts to grow our business.
Life deposits collected decreased $210 million, or $127 million on a constant-dollar basis, in 2023, primarily in Taiwan,
reflecting challenging market conditions for investment linked products due to financial market volatility and a rapid increase in
interest rates. The decrease in collections was partially offset by deposit growth from the consolidation of Huatai Group.
65
Life Insurance segment income
Life Insurance segment income increased $388 million in 2023, reflecting the acquisition of Cigna's business in Asia and the
consolidation of Huatai as noted above, and higher net investment income due to a higher invested asset base and fund
dividends. In addition, other (income) expense increased $85 million in 2023, primarily reflecting the consolidation of Huatai’s
asset management business which added $48 million mainly through management fees.
Corporate
Corporate results primarily include the results of our non-insurance companies, income and expenses not attributable to
reportable segments and loss and loss expenses of asbestos and environmental (A&E) liabilities and certain other non-A&E run-
off exposures, including molestation. Effective July 1, 2023, 100 percent of Huatai Group’s non-insurance operations results,
comprising real estate and holding company activity, are included in Corporate. Results for the years ended December 31, 2022
and 2021 are adjusted to reflect the adoption of LDTI. Refer to Note 1 x).
(in millions of U.S. dollars, except for percentages)
2023
2022
2021
Losses and loss expenses
Administrative expenses
Underwriting loss
Net investment income (loss)
Other (income) expense
Amortization of purchased intangibles
Net realized gains (losses)
Market risk benefits gains (losses)
Interest expense
Cigna integration expenses
Income tax expense
Net income (loss)
Net loss attributable to noncontrolling interests
2023 vs.
2022
% Change
2022 vs.
2021
(22.8) %
(36.4) %
4.5 %
(8.7) %
NM
NM
5.6 %
(20.1) %
NM
NM
$
281 $
363 $
402
683
25
(380)
176
385
748
—
292
182
572
365
937
(55)
(2,118)
198
(3.8) %
(7.8) %
(602)
(1,074)
1,038
(43.9) %
NM
(307)
672
69
511
80
570
48
91
492
—
NM
(12.0) %
18.0 %
43.5 %
15.9 %
NM
1,239
1,269
(58.8) %
(2.3) %
(2,615)
(4,073)
(13)
—
296
—
296
(35.8) %
NM
(36.1) %
NM
NM
NM
Net income (loss) attributable to Chubb
$
(2,602) $
(4,073) $
NM – not meaningful
Losses and loss expenses decreased in 2023 primarily due to lower unfavorable prior period development for molestation claims
partially offset by higher legacy asbestos and environmental claims.
Administrative expenses increased in 2023, primarily due to increased spending to support digital growth initiatives.
Cigna integration expenses of $69 million for 2023 principally comprised legal and professional fees and all other costs directly
related to the integration activities of the Cigna acquisition. These expenses are one-time in nature and are not related to the on-
going business activities of the segments. The Chief Executive Officer does not manage segment results or allocate resources to
segments when considering these costs and they are therefore excluded from our definition of segment income.
Refer to the respective sections that follow for a discussion of Net realized gains (losses), Net investment income (loss),
Amortization of purchased intangibles, and Income tax expense (benefit). Refer to Notes 11 and 18 to the Consolidated
Financial Statements for additional information on Market risk benefits gains (losses) and Other (income) expense, respectively.
Effective Income Tax Rate
Our effective tax rate (ETR) was 5.4 percent, 19.1 percent, and 13.0 percent in 2023, 2022, and 2021, respectively. Our ETR
reflects a mix of income or losses in jurisdictions with a wide range of tax rates, permanent differences between U.S. GAAP and
local tax laws, and the impact of discrete items. A change in the geographic mix of earnings could impact our ETR. The
decrease in the ETR from 2022 to 2023 was primarily due to a one-time deferred tax benefit of $1.14 billion related to the
enactment of Bermuda’s new income tax law, and our mix of earnings among various jurisdictions, partially offset by discrete
tax items.
66
Net Realized and Unrealized Gains (Losses)
We take a long-term view with our investment strategy, and our investment managers manage our investment portfolio to
maximize total return within specific guidelines designed to minimize risk. The majority of our investment portfolio is available-
for-sale and reported at fair value.
The effect of market movements on our fixed maturities available-for-sale portfolio impacts Net income (through Net realized
gains (losses)) when securities are sold, when we write down an asset, or when we record a change to the valuation allowance
for expected credit losses. For a further discussion related to how we assess the valuation allowance for expected credit losses
and the related impact on Net income, refer to Note 1 f) to the Consolidated Financial Statements. The effect of market
movements on fixed maturities related to consolidated investment products in the Huatai portfolio (Fixed maturities - CIP)
impact Net realized gains (losses). Additionally, Net income is impacted through the reporting of changes in the fair value of
public and private equity securities and derivatives, including financial futures, options, and swaps. Changes in unrealized
appreciation and depreciation on available-for-sale securities, resulting from the revaluation of securities held, changes in
cumulative foreign currency translation adjustment, changes in current discount rate on future policy benefits, changes in
instrument-specific credit risk on market risk benefits, unrealized postretirement benefit obligations liability adjustment, and
cross-currency swaps designated as hedges for accounting purposes are reported as separate components of Accumulated other
comprehensive income (loss) in Shareholders’ equity in the Consolidated balance sheets.
The following tables present our net realized and unrealized gains (losses):
(in millions of U.S. dollars)
Fixed maturities (1)
Investment derivatives
Public equity
Sales
Mark-to-market
Private equity (less than 3 percent ownership)
Mark-to-market
Total investment portfolio
Other derivatives
Foreign exchange
Current discount rate on future policy benefits
Instrument-specific credit risk on market risk
benefits
Other (2)
Net gains (losses), pre-tax
Net
Realized
Gains
(Losses)
Net
Unrealized
Gains
(Losses)
2023
Net
Impact
Net
Realized
Gains
(Losses)
Net
Unrealized
Gains
(Losses)
Year Ended December 31
2022
Net
Impact
2021
Net
Realized
Gains
(Losses)
$
(481) $ 3,438 $ 2,957 $ (1,049) $ (10,598) $ (11,647) $
3
(53)
(68)
30
70
—
—
—
—
(53)
(43)
(68)
409
30
(639)
70
(31)
—
—
—
—
(43)
(72)
409
(639)
(31)
157
505
111
704
(502)
3,438
2,936
(1,353)
(10,598)
(11,951)
(10)
—
(10)
(11)
—
(11)
(8)
(183)
(13)
(196)
397
(911)
(514)
340
—
—
88
84
84
2
167
2
255
—
—
1,480
1,480
33
33
(118)
(80)
(198)
—
—
(6)
$
(607) $ 3,678 $ 3,071 $ (1,085) $ (10,076) $ (11,161) $ 1,030
(1)
(2)
2023 includes a net decrease of the valuation allowance of expected credit losses of $47 million on fixed maturities and a net increase of $4 million for the valuation
allowance of expected credit losses on private debt held-for-investment.
2023 includes a one-time realized gain of $135 million as a result of the consolidation of Huatai Group.
Pre-tax net unrealized gains of $3,438 million in 2023 in our investment portfolio reflected the mark-to-market impact in the
fixed income portfolio.
Pre-tax net realized losses of $607 million in 2023 mainly comprised losses from sales and impairments of fixed maturities and
foreign exchange losses.
67
Non-GAAP Reconciliation
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 GAAP.
We provide financial measures, including net premiums written, net premiums earned, and underwriting income on a constant-
dollar basis. 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.
P&C performance metrics comprise consolidated operating results (including Corporate) and exclude the operating results of the
Life Insurance segment. We believe that these measures are useful and meaningful to investors as they are used by
management to assess the company’s P&C operations which are the most economically similar. We exclude the Life Insurance
segment because the results of this business do not always correlate with the results of our P&C operations.
P&C combined ratio is the sum of the loss and loss expense ratio, policy 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 impacts 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 catastrophe losses (CATs) excludes CATs and prior period development (PPD) from the P&C
combined ratio. We exclude CATs 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. The combined ratio numerator is
adjusted to exclude CATs, net premiums earned adjustments on PPD, prior period expense adjustments and reinstatement
premiums on PPD, and the denominator is adjusted to exclude net premiums earned adjustments on PPD and reinstatement
premiums on CATs and PPD. 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 this measure provides a better evaluation of our
underwriting performance and enhances the understanding of the trends in our P&C business that may be obscured by these
items. This measure is commonly reported among our peer companies and allows for a better comparison.
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 PPD 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 adjustable 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. The following tables present the calculation of combined ratio, as reported for each
segment to P&C combined ratio, adjusted for CATs and PPD:
68
For the Year Ended
December 31, 2023
(in millions of U.S. dollars except for ratios)
Numerator
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
Losses and loss expenses/policy benefits
A $ 11,256
$ 3,511
$ 2,874
$ 6,100
$
426
$
281 $ 24,448
Catastrophe losses and related adjustments
Catastrophe losses, net of related adjustments
(710)
(669)
(39)
(403)
Reinstatement premiums collected (expensed) on
catastrophe losses
—
—
Catastrophe losses, gross of related adjustments
(710)
(669)
—
(39)
—
(403)
PPD and related adjustments
PPD, net of related adjustments - favorable
(unfavorable)
Net premiums earned adjustments on PPD -
unfavorable (favorable)
Expense adjustments - unfavorable (favorable)
PPD reinstatement premiums - unfavorable
(favorable)
PPD, gross of related adjustments - favorable
(unfavorable)
494
134
78
20
—
—
—
(2)
592
132
18
6
—
—
24
376
—
—
—
376
(7)
—
(7)
28
—
(1)
8
35
—
—
—
(1,828)
—
(1,828)
(277)
773
—
—
—
84
19
6
(277)
882
CAY loss and loss expense ex CATs
B $ 11,138
$ 2,974
$ 2,859
$ 6,073
$
454
$
4 $ 23,502
Policy acquisition costs and administrative
expenses
Policy acquisition costs and administrative
expenses
C $ 3,765
$ 1,457
$
149
$ 4,332
$
301
$
402 $ 10,406
Expense adjustments - favorable (unfavorable)
(20)
—
—
—
1
—
(19)
Policy acquisition costs and administrative expenses,
adjusted
D $ 3,745
$ 1,457
$
149
$ 4,332
$
302
$
402 $ 10,387
Denominator
Net premiums earned
Net premiums earned adjustments on PPD -
unfavorable (favorable)
PPD reinstatement premiums - unfavorable
(favorable)
E $ 18,416
$ 5,536
$ 3,169
$ 12,231
$
962
$ 40,314
78
—
—
(2)
6
—
—
—
—
8
84
6
Net premiums earned excluding adjustments
F $ 18,494
$ 5,534
$ 3,175
$ 12,231
$
970
$ 40,404
P&C Combined ratio
Loss and loss expense ratio
Policy acquisition cost and administrative expense
ratio
P&C Combined ratio
CAY P&C Combined ratio ex CATs
Loss and loss expense ratio, adjusted
Policy acquisition cost and administrative expense
ratio, adjusted
CAY P&C Combined ratio ex CATs
A/E
C/E
B/F
D/F
Combined ratio
Combined ratio
Add: impact of gains and losses on crop derivatives
P&C Combined ratio
61.1 %
63.4 %
90.7 %
49.9 %
44.3 %
20.5 %
26.3 %
4.7 %
35.4 %
31.2 %
81.6 %
89.7 %
95.4 %
85.3 %
75.5 %
60.2 %
53.8 %
90.1 %
49.7 %
46.8 %
20.3 %
80.5 %
26.3 %
80.1 %
4.6 %
35.4 %
94.7 %
85.1 %
31.1 %
77.9 %
60.6 %
25.9 %
86.5 %
58.2 %
25.7 %
83.9 %
86.5 %
—
86.5 %
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.
69
For the Year Ended
December 31, 2022
(in millions of U.S. dollars except for ratios)
Numerator
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
Losses and loss expenses/policy benefits
A $ 10,828
$ 3,186
$ 2,557
$ 5,252
$
670
$
363 $ 22,856
Catastrophe losses and related adjustments
Catastrophe losses, net of related adjustments
(961)
(631)
(64)
(365)
(161)
Reinstatement premiums collected (expensed) on
catastrophe losses
(1)
(2)
Catastrophe losses, gross of related adjustments
(960)
(629)
—
(64)
(3)
(362)
55
(216)
—
—
—
(2,182)
49
(2,231)
PPD and related adjustments
PPD, net of related adjustments - favorable
(unfavorable)
Net premiums earned adjustments on PPD -
unfavorable (favorable)
Expense adjustments - unfavorable (favorable)
PPD reinstatement premiums - unfavorable
(favorable)
PPD, gross of related adjustments - favorable
(unfavorable)
562
186
61
448
(22)
(359)
876
88
24
—
—
—
—
168
(2)
—
—
—
—
—
1
(2)
—
—
—
256
23
(2)
674
186
227
448
(23)
(359)
1,153
CAY loss and loss expense ex CATs
B $ 10,542
$ 2,743
$ 2,720
$ 5,338
$
431
$
4 $ 21,778
Policy acquisition costs and administrative
expenses
Policy acquisition costs and administrative
expenses
C $ 3,426
$ 1,348
$
116
$ 3,888
$
276
$
385 $ 9,439
Expense adjustments - favorable (unfavorable)
(24)
—
2
—
(1)
—
(23)
Policy acquisition costs and administrative expenses,
adjusted
D $ 3,402
$ 1,348
$
118
$ 3,888
$
275
$
385 $ 9,416
Denominator
Net premiums earned
Reinstatement premiums (collected) expensed on
catastrophe losses
Net premiums earned adjustments on PPD -
unfavorable (favorable)
PPD reinstatement premiums - unfavorable
(favorable)
E $ 17,107
$ 5,180
$ 2,838
$ 10,803
$
922
$ 36,850
1
88
—
2
—
—
—
168
—
3
—
—
(55)
—
(2)
(49)
256
(2)
Net premiums earned excluding adjustments
F $ 17,196
$ 5,182
$ 3,006
$ 10,806
$
865
$ 37,055
P&C Combined ratio
Loss and loss expense ratio
Policy acquisition cost and administrative expense
ratio
P&C Combined ratio
CAY P&C Combined ratio ex CATs
Loss and loss expense ratio, adjusted
Policy acquisition cost and administrative expense
ratio, adjusted
CAY P&C Combined ratio ex CATs
A/E
C/E
B/F
D/F
Combined ratio
Combined ratio
Add: impact of gains and losses on crop derivatives
P&C Combined ratio
63.3 %
61.5 %
90.1 %
48.6 %
72.6 %
20.0 %
26.0 %
4.1 %
36.0 %
30.0 %
83.3 %
87.5 %
94.2 %
84.6 %
102.6 %
61.3 %
52.9 %
90.5 %
49.4 %
49.7 %
19.8 %
81.1 %
26.0 %
78.9 %
3.9 %
36.0 %
94.4 %
85.4 %
31.8 %
81.5 %
62.0 %
25.6 %
87.6 %
58.8 %
25.4 %
84.2 %
87.6 %
—
87.6 %
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.
70
For the Year Ended
December 31, 2021
(in millions of U.S. dollars except for ratios)
Numerator
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
Losses and loss expenses/policy benefits
A $ 10,015
$ 2,924
$ 1,962
$ 5,143
$
632
$
572 $ 21,248
Catastrophe losses and related adjustments
Catastrophe losses, net of related adjustments
(1,112)
(679)
(40)
(358)
(212)
—
(2,401)
Reinstatement premiums collected (expensed) on
catastrophe losses
Catastrophe losses, gross of related adjustments
PPD and related adjustments
PPD, net of related adjustments - favorable
(unfavorable)
Net premiums earned adjustments on PPD -
unfavorable (favorable)
Expense adjustments - unfavorable (favorable)
PPD reinstatement premiums - unfavorable
(favorable)
PPD, gross of related adjustments - favorable
(unfavorable)
—
(1,112)
(16)
(663)
(2)
(38)
—
(358)
28
(240)
—
—
10
(2,411)
762
305
(10)
441
(3)
(569)
926
67
6
6
—
—
(1)
(25)
(3)
—
—
—
7
841
304
(38)
448
—
—
3
—
—
—
—
42
3
15
(569)
986
CAY loss and loss expense ex CATs
B $ 9,744
$ 2,565
$ 1,886
$ 5,233
$
392
$
3 $ 19,823
Policy acquisition costs and administrative
expenses
Policy acquisition costs and administrative
expenses
C $ 3,134
$ 1,277
$
121
$ 3,877
$
235
$
365 $ 9,009
Expense adjustments - favorable (unfavorable)
(6)
—
3
—
—
—
(3)
Policy acquisition costs and administrative expenses,
adjusted
D $ 3,128
$ 1,277
$
124
$ 3,877
$
235
$
365 $ 9,006
Denominator
Net premiums earned
Reinstatement premiums (collected) expensed on
catastrophe losses
Net premiums earned adjustments on PPD -
unfavorable (favorable)
PPD reinstatement premiums - unfavorable
(favorable)
E $ 15,461
$ 4,915
$ 2,338
$ 10,441
$
798
$ 33,953
—
67
6
16
—
(1)
2
(25)
—
—
—
7
(28)
—
3
(10)
42
15
Net premiums earned excluding adjustments
F $ 15,534
$ 4,930
$ 2,315
$ 10,448
$
773
$ 34,000
P&C Combined ratio
Loss and loss expense ratio
A/E
64.8 %
59.5 %
83.9 %
49.3 %
79.2 %
Policy acquisition cost and administrative expense
ratio
P&C Combined ratio
CAY P&C Combined ratio ex CATs
C/E
20.2 %
26.0 %
5.2 %
37.1 %
29.5 %
85.0 %
85.5 %
89.1 %
86.4 %
108.7 %
Loss and loss expense ratio, adjusted
B/F
62.7 %
52.0 %
81.5 %
50.1 %
50.7 %
Policy acquisition cost and administrative expense
ratio, adjusted
D/F
20.2 %
25.9 %
5.3 %
37.1 %
CAY P&C Combined ratio ex CATs
82.9 %
77.9 %
86.8 %
87.2 %
30.5 %
81.2 %
Combined ratio
Combined ratio
Add: impact of gains and losses on crop derivatives
P&C Combined ratio
62.6 %
26.5 %
89.1 %
58.3 %
26.5 %
84.8 %
89.1 %
—
89.1 %
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.
71
Net Investment Income
(in millions of U.S. dollars, except for percentages)
Average invested assets (1)
Net investment income (2)
Yield on average invested assets
Market yield on fixed maturities
2023
2022
2021
$ 118,357
$ 110,865
$ 108,870
$
4,937
$
3,742
$
3,456
4.2 %
5.3 %
3.4 %
5.6 %
3.2 %
2.3 %
(1)
(2)
Excludes consolidated investment products and private equities where we own more than three percent.
Includes $21 million, $41 million, and $84 million of amortization expense related to the fair value adjustment of acquired invested assets in 2023, 2022, and 2021,
respectively. Excludes investment income from our private equities where we own more than 3 percent interest.
Net investment income is influenced by a number of factors including the amounts and timing of inward and outward cash
flows, the level of interest rates, and changes in overall asset allocation. Net investment income increased 31.9 percent in 2023
compared with 2022, primarily due to higher reinvestment rates on fixed maturities and the consolidation of Huatai Group.
Refer to Note 1 f) to the Consolidated Financial Statements for additional information.
For private equities where we own less than three percent, investment income is included within Net investment income in the
table above. For private equities where we own more than three percent, investment income is included within Other (income)
expense in the Consolidated statements of operations. Excluded from Net investment income is the mark-to-market movement
for private equities, which is recorded within either Other (income) expense or Net realized gains (losses) based on our
percentage of ownership. The total mark-to-market movement for private equities excluded from Net investment income was as
follows:
(in millions of U.S. dollars)
Total mark-to-market gain (loss) on private equity, pre-tax
2023
2022
2021
$
504 $
(250) $
2,115
Interest Expense
Interest expense was $672 million, $570 million, and $492 million for the years ended December 31, 2023, 2022, and
2021, respectively. Interest expense increased in 2023 primarily from rising interest rates on held collateral and repurchase
agreements, partially offset by the maturity of $1 billion senior notes in November 2022 and $475 million senior notes in
March 2023. Pre-tax interest expense is expected to total $690 million for 2024 based on our debt obligations as of December
31, 2023, at current foreign exchange rates, fees from expected usage of certain facilities including letters of credit, and interest
on held collateral and repurchase agreements. Refer to Note 13 to the Consolidated Financial Statements, under Item 8, for
more information.
72
Amortization of Purchased Intangibles and Other Amortization
Amortization of purchased intangibles
Amortization expense related to purchased intangibles was $310 million, $285 million, and $287 million for the years ended
December 31, 2023, 2022, and 2021, respectively. The amortization of purchased intangibles expense in 2024 is expected to
be $312 million, or approximately $78 million each quarter. Refer to Note 7 to the Consolidated Financial Statements, under
Item 8, for more information on the expected pre-tax amortization expense of purchased intangibles, at current foreign currency
exchange rates, for the next five years.
At December 31, 2023, the deferred tax liability associated with the Other intangible assets (excluding the fair value adjustment
on Unpaid losses and loss expenses) was $1,558 million.
The following table presents, as of December 31, 2023, the expected reduction to the deferred tax liability associated with the
amortization of Other intangible assets, at current foreign currency exchange rates, for the next five years:
For the Years Ending December 31
(in millions of U.S. dollars)
Reduction to deferred tax liability
associated with intangible assets
2024
2025
2026
2027
2028
Total
$
$
82
73
68
63
60
346
Amortization of the fair value adjustment on assumed long-term debt
The following table presents, as of December 31, 2023, the expected amortization benefit from the fair value adjustment on
assumed long-term debt related to the Chubb Corp acquisition for the next five years:
For the Years Ending December 31
(in millions of U.S. dollars)
Amortization benefit of the fair
value adjustment on assumed
long-term debt (1)
2024
2025
2026
2027
2028
Total
(1)
Recorded as a reduction to Interest expense in the Consolidated statements of operations.
$
$
21
21
21
21
21
105
73
Investments
Our investment portfolio is invested primarily in publicly traded, investment grade, fixed income securities with an average credit
quality of A/A as rated by the independent investment rating services Standard and Poor’s (S&P)/ Moody’s Investors Service
(Moody’s). Excluding Huatai, the portfolio is primarily managed externally by independent, professional investment managers
and is broadly diversified across geographies, sectors, and issuers. We hold no collateralized debt obligations in our investment
portfolio, and we provide no credit default protection. We have long-standing global credit limits for our entire portfolio across
the organization. Exposures are aggregated, monitored, and actively managed by our Global Credit Committee, comprising
senior executives, including our Chief Financial Officer, our Chief Risk Officer, our Chief Investment Officer, and our Treasurer.
We also have well-established, strict contractual investment rules requiring managers to maintain highly diversified exposures to
individual issuers and closely monitor investment manager compliance with portfolio guidelines.
The average duration of our fixed income securities, including the effect of options and swaps, was 4.8 years and 4.5 years at
December 31, 2023 and 2022, respectively. We estimate that a 100 basis point (bps) increase in interest rates would reduce
the valuation of our fixed income portfolio by approximately $5.5 billion at December 31, 2023. The following table shows the
fair value and cost/amortized cost, net of valuation allowance, of our invested assets:
(in millions of U.S. dollars)
Short-term investments
Fixed maturities - Consolidated investment products
Fixed maturities available-for-sale
Fixed maturities held to maturity
Fixed income securities
Equity securities
Private debt held-for-investment
Private equities and other
Total investments
December 31, 2023
Cost/
Amortized
Cost, Net
Fair
Value
December 31, 2022
Cost/
Amortized
Cost, Net
Fair
Value
$
4,551 $
4,551 $
4,960 $
4,962
3,773
3,773
106,571
110,972
—
—
—
85,220
8,439
—
93,186
8,848
114,895
119,296
98,619
106,996
3,455
2,560
3,455
2,553
827
—
827
—
15,832
15,832
13,696
13,696
$ 136,742 $ 141,136 $ 113,142 $ 121,519
The fair value of our total investments increased $23.6 billion during the year ended December 31, 2023, reflecting the
consolidation of Huatai, which added $12.7 billion, of which $7.2 billion was attributable to Chubb. In addition, there was a
net increase reflecting the investing of operating cash flow and unrealized gains, partially offset by share repurchases and
dividend payments.
74
The following tables present the fair value of our fixed income securities at December 31, 2023 and 2022. The first table lists
investments according to type and second according to S&P credit rating:
(in millions of U.S. dollars, except for percentages)
U.S. Treasury / Agency
Corporate and asset-backed securities
Mortgage-backed securities
Municipal
Non-U.S.
Short-term investments
Total (1)
AAA
AA
A
BBB
BB
B
Other
Total (1)
December 31, 2023
December 31, 2022
Fair Value
% of Total
Fair Value
% of Total
$
3,590
3 % $
3,996
42,830
22,058
2,929
38,937
4,551
37 %
38,535
19 %
17,202
3 %
6,964
34 %
26,962
4 %
4,960
4 %
40 %
17 %
7 %
27 %
5 %
$ 114,895
100 % $
98,619
100 %
$
12,669
11 % $
14,779
34,312
27,674
20,810
10,270
8,580
580
30 %
31,195
24 %
18,366
18 %
16,802
9 %
7 %
1 %
8,722
8,347
408
15 %
32 %
19 %
17 %
9 %
8 %
— %
$ 114,895
100 % $
98,619
100 %
(1) Includes fixed maturities related to consolidated investment products (CIP) of $3.8 billion recorded in Other investments in the Consolidated balance sheets.
Corporate and asset-backed securities
The following table presents our 10 largest global exposures to corporate bonds by fair value at December 31, 2023:
(in millions of U.S. dollars)
Bank of America Corp
Morgan Stanley
JPMorgan Chase & Co
Wells Fargo & Co
Citigroup Inc
Goldman Sachs Group Inc
UBS Group AG
HSBC Holdings Plc
AT&T Inc
Verizon Communications Inc
$
Fair Value
801
703
690
605
546
535
421
407
395
392
75
Mortgage-backed securities
The following table shows the fair value and amortized cost, net of valuation allowance, of our mortgage-backed securities:
December 31, 2023
(in millions of U.S. dollars)
AAA
AA
A
BBB
BB and
below
Total
Total
Agency residential mortgage-backed (RMBS)
$
9 $ 18,885 $
— $
— $
— $ 18,894 $ 20,310
Non-agency RMBS
Commercial mortgage-backed securities
Total mortgage-backed securities
881
1,798
74
190
42
107
54
9
7
2
1,058
2,106
1,124
2,283
$ 2,688 $ 19,149 $
149 $
63 $
9 $ 22,058 $ 23,717
S&P Credit Rating
Fair
Value
Amortized
Cost, Net
Municipal
As part of our overall investment strategy, we may invest in states, municipalities, and other political subdivisions fixed maturity
securities (Municipal). We apply the same investment selection process described previously to our Municipal investments. The
portfolio is highly diversified primarily in state general obligation bonds and essential service revenue bonds including education
and utilities (water, power, and sewers).
Non-U.S.
Chubb’s local currency investment portfolios have strict contractual investment guidelines requiring managers to maintain a high
quality and diversified portfolio to both sector and individual issuers. Investment portfolios are monitored daily to ensure
investment manager compliance with portfolio guidelines.
Our non-U.S. investment grade fixed income portfolios are currency-matched with the insurance liabilities of our non-U.S.
operations. The average credit quality of our non-U.S. fixed income securities is A and 39 percent of our holdings are rated AAA
or guaranteed by governments or quasi-government agencies. Within the context of these investment portfolios, our government
and corporate bond holdings are highly diversified across industries and geographies. Issuer limits are based on credit rating (AA
—two percent, A—one percent, BBB—0.5 percent of the total portfolio) and are monitored daily via an internal compliance
system. We manage our indirect exposure using the same credit rating based investment approach. Accordingly, we do not
believe our indirect exposure is material.
The following table summarizes the fair value and amortized cost, net of valuation allowance, of our non-U.S. fixed income
portfolio by country/sovereign for non-U.S. government securities at December 31, 2023:
(in millions of U.S. dollars)
Republic of Korea
People's Republic of China
Taiwan
Canada
United Mexican States
Federative Republic of Brazil
Province of Ontario
Kingdom of Thailand
Commonwealth of Australia
Socialist Republic of Vietnam
Other Non-U.S. Government Securities
Total
76
Fair Value
Amortized Cost, Net
$
1,784 $
1,452
996
922
604
577
574
568
493
484
5,957
$
14,411 $
1,723
1,391
965
954
626
576
596
561
558
362
6,204
14,516
The following table summarizes the fair value and amortized cost, net of valuation allowance, of our non-U.S. fixed income
portfolio by country/sovereign for non-U.S. corporate securities at December 31, 2023:
(in millions of U.S. dollars)
Fair Value
Amortized Cost, Net
China
United Kingdom
Canada
France
South Korea
United States (1)
Australia
Japan
Germany
Netherlands
Other Non-U.S. Corporate Securities
Total
$
5,842 $
2,641
2,084
1,546
1,542
1,532
1,102
820
621
568
6,228
$
24,526 $
5,854
2,749
2,123
1,584
1,521
1,565
1,156
849
651
590
6,484
25,126
(1)
The countries that are listed in the non-U.S. corporate fixed income portfolio above represent the ultimate parent company's country of risk. Non-U.S. corporate securities
could be issued by foreign subsidiaries of U.S. corporations.
Below-investment grade corporate fixed income portfolio
Below-investment grade securities have different characteristics than investment grade corporate debt securities. Risk of loss
from default by the borrower is greater with below-investment grade securities. Below-investment grade securities are generally
unsecured and are often subordinated to other creditors of the issuer. Also, issuers of below-investment grade securities usually
have higher levels of debt and are more sensitive to adverse economic conditions, such as recession or increasing interest rates,
than investment grade issuers. At December 31, 2023, our corporate fixed income investment portfolio included below-
investment grade and non-rated securities which, in total, comprised approximately 15 percent of our fixed income portfolio.
Our below-investment grade and non-rated portfolio includes over 1,600 issuers, with the greatest single exposure being $168
million.
We manage high-yield bonds as a distinct and separate asset class from investment grade bonds. The allocation to high-yield
bonds is explicitly set by internal management and is targeted to securities in the upper tier of credit quality (BB/B). Our
minimum rating for initial purchase is BB/B. Sixteen external investment managers are responsible for high-yield security
selection and portfolio construction. Our high-yield managers have a conservative approach to credit selection and very low
historical default experience. Holdings are highly diversified across industries and generally subject to a 1.5 percent issuer limit
as a percentage of high-yield allocation. We monitor position limits daily through an internal compliance system. Derivative and
structured securities (e.g., credit default swaps and collateralized debt obligations) are not permitted in the high-yield portfolio.
77
Asbestos and Environmental (A&E)
Asbestos and environmental (A&E) reserving considerations
For asbestos, Chubb faces claims relating to policies issued to manufacturers, distributors, installers, and other parties in the
chain of commerce for asbestos and products containing asbestos. Claimants will generally allege damages across an extended
time period which may coincide with multiple policies covering a wide range of time periods for a single insured.
Environmental claims present exposure for remediation and defense costs associated with the contamination of property or
bodily injury as a result of pollution.
The following table presents count information for asbestos claims and environmental claims by account, for direct policies only:
Open at beginning of year
Newly reported/reopened
Closed or otherwise disposed
Open at end of year
2023
1,795
230
241
Asbestos
2022
1,739
208
152
Environmental
2022
1,230
64
99
2023
1,195
116
202
1,784
1,795
1,109
1,195
Survival ratios are calculated by dividing the asbestos or environmental loss and allocated loss adjustment expense (ALAE)
reserves by the average asbestos or environmental loss and ALAE payments for the three most recent calendar years (3-year
survival ratio).
The following table presents the gross and net 3-year survival ratios for Asbestos and Environmental loss and ALAE reserves:
(in years)
Asbestos
Environmental
Gross loss and
ALAE reserves
Net loss and
ALAE reserves
4.4
3.1
4.3
3.4
The survival ratios provide only a very rough depiction of reserves and are significantly impacted by a number of factors such as
aggressive settlement practices, variations in gross to ceded relationships within the asbestos or environmental claims, and
levels of coverage provided. Therefore, we urge caution in using these very simplistic ratios to gauge reserve adequacy.
78
Catastrophe Management
We actively monitor and manage our catastrophe risk accumulation around the world from natural perils, which includes setting
risk limits based on probable maximum loss (PML) and purchasing catastrophe reinsurance to ensure sufficient liquidity and
capital to meet the expectations of regulators, rating agencies, and policyholders, and to provide shareholders with an
appropriate risk-adjusted return. Chubb uses internal and external data together with sophisticated, analytical catastrophe loss
and risk modeling techniques to ensure an appropriate understanding of risk, including diversification and correlation effects,
across different product lines and territories. The table below presents our modeled pre-tax estimates of natural catastrophe
PML, net of reinsurance, at December 31, 2023, and does not represent our expected catastrophe losses for any one year.
Worldwide (1)
Annual Aggregate
Modeled Net Probable Maximum Loss (PML) Pre-tax
U.S. Hurricane (2)
Annual Aggregate
California Earthquake (3)
Single Occurrence
(in millions of U.S. dollars,
except for percentages)
Chubb
% of Total Chubb
Shareholders’
Equity
Chubb
% of Total Chubb
Shareholders’
Equity
Chubb
% of Total Chubb
Shareholders’
Equity
1-in-10
1-in-100
1-in-250
$
$
$
2,497
5,613
9,217
4.2 % $
1,373
2.3 % $
155
9.4 % $
3,827
6.4 % $
1,426
15.5 % $
7,041
11.8 % $
1,691
0.3 %
2.4 %
2.8 %
(1) Worldwide aggregate comprises losses arising from tropical cyclones, convective storms, earthquakes, U.S. wildfires, and floods in the U.S., Canada, and Europe, and
excludes "non-modeled" perils such as man-made and other catastrophe risks including pandemic.
(2) U.S. hurricane losses include losses from wind, storm-surge, and related precipitation-induced flooding.
(3)
California earthquakes include the fire-following sub-peril.
The PML for worldwide and key U.S. peril regions are based on our in-force portfolio at October 1, 2023, and reflect the
September 1, 2023, reinsurance program as well as inuring reinsurance protection coverages. This includes a $500 million
excess of loss program for named windstorms and earthquakes within Northeast states, purchased and effective September 1,
2023. Refer to the Global Property Catastrophe Reinsurance section for more information. These estimates assume that
reinsurance recoverable is fully collectible.
According to the model, for the 1-in-100 return period scenario, there is a one percent chance that our pre-tax annual aggregate
losses incurred in any year from U.S. hurricane events could be in excess of $3,827 million (or 6.4 percent of total Chubb
shareholders’ equity at December 31, 2023).
•
•
•
The above estimates of Chubb’s loss profile are inherently uncertain for many reasons, including the following:
• While the use of third-party modeling packages to simulate potential catastrophe losses is prevalent within the insurance
industry, the models are reliant upon significant meteorology, seismology, and engineering assumptions to estimate
catastrophe losses. In particular, modeled catastrophe events are not always a representation of actual events and ensuing
additional loss potential;
There is no universal standard in the preparation of insured data for use in the models, the running of the modeling
software, and interpretation of loss output. These loss estimates do not represent our potential maximum exposures and it is
highly likely that our actual incurred losses would vary materially from the modeled estimates;
The potential effects of climate change add to modeling complexity; and
Changing climate conditions could impact our exposure to natural catastrophe risks. Published studies by leading
government, academic and professional organizations combined with extensive research by Chubb climate scientists reveal
the potential for increases in the frequency and severity of key natural perils such as tropical cyclones, inland flood, and
wildfire. To understand the potential impacts on the Chubb portfolio, we have conducted stress tests on our peak exposure
zone, namely in the U.S., using parameters outlined by the Intergovernmental Panel on Climate Change (IPCC) Climate
Change 2021 report. These parameters consider the impacts of climate change and the resulting climate peril impacts over
a timescale relevant to our business. The tests are conducted by adjusting our baseline view of risk for the perils of
hurricane, inland flood, and wildfire in the U.S. to reflect increases in frequency and severity across the modeled domains
for each of these perils. Based on these tests against the Chubb portfolio we do not expect material impacts to our baseline
PMLs from climate change through December 31, 2024. These tests reflect current exposures only and exclude potentially
mitigating factors such as changes to building codes, public or private risk mitigation, regulation, and public policy.
79
Man-made and other catastrophes
We have substantial exposure to losses resulting from man-made catastrophes including terrorism, cyber-attack, financial
events, and other catastrophe events, including pandemics. These events are inherently unpredictable and could impact a
variety of our businesses, including commercial and personal lines, life insurance, A&H, and reinsurance products. Our losses
from these events could be substantial.
Terrorism
We offer terrorism coverage in the U.S. and in many other countries through various insurance products. We actively monitor
terrorism risk and manage exposures through set risk limits based on modeled losses from certain terrorism attack scenarios, the
purchase of reinsurance, and the reliance on government-sponsored terrorism reinsurance programs. In the U.S., certain
protections of our terrorism exposure are provided through the Terrorism Risk Insurance Program Reauthorization Act of 2019
(TRIPRA). In 2023, TRIPRA covers 81 percent of insured losses above a deductible, estimated to be approximately $3.2
billion. Refer to “Global Property Catastrophe Reinsurance Program” for information on our reinsurance protection purchased. At
our largest exposure location in the U.S., our maximum modeled losses from a 10-ton truck-bomb explosion are estimated to be
$2.1 billion pre-tax based on the exposures, net of reinsurance and TRIPRA, as of December 31, 2023.
Cyber Insurance
While frequency and severity trends are being managed through long-standing underwriting strategies, the potential catastrophe
risk that aggregation of cyber exposures presents to insurers is unique and unprecedented. In contrast with natural catastrophe
risks, catastrophic cyber event scenarios are not bound by time or geography. Further, catastrophic cyber perils do not have
well-established definitions or fundamental physical properties. For these reasons, catastrophic cyber events have the inherent
potential for significant economic loss. Although cyber risk does not represent a material component of our net premiums written
and we engage in significant risk mitigation through our underwriting and use of reinsurance, we are exposed to material losses
in the event of a systemic cyber-attack.
Financial Risk
The consequences of adverse global or regional market and economic conditions may affect our investment portfolio. Our
investment portfolio is subject to credit or default risk and may also be less liquid in times of economic weakness or market
disruptions. Our investments are subject to market risks and risks inherent in individual securities. Our investment performance
is highly sensitive to many factors, including interest rates, inflation, monetary and fiscal policies, and domestic and
international political conditions. The volatility of our losses may force us to liquidate securities, which may cause us to incur
capital losses. Realized and unrealized losses in our investment portfolio would reduce our book value, and if significant, can
affect our ability to conduct business.
Moreover, we have substantial exposure to insurance products which are sensitive to certain system-wide financial conditions,
such as our financial lines, surety, political risk, involuntary loss of employment (outside U.S.), and trade credit products. These
products tend to be characterized by infrequent but potentially high severity losses. The majority of our exposure in these
products may be impacted by an adverse economic climate such as an economic recession or depression. If the financial
condition of these insureds were adversely affected by the economy or otherwise, we may experience an increase in filed claims
and may incur high severity losses, which could have an adverse effect on our results of operations. We monitor credit
exposures to single counterparties and to sectors of interest from sources across our operations (e.g. investments, insurance
products, reinsurance recoverable, bank deposits, letters of credit) and establish guidelines for credit risk exposure at the
counterparty level. Our net income may be volatile because certain variable annuity reinsurance products sold expose us to
reserve and fair value liability changes that are directly affected by market and other factors and assumptions.
Pandemic
An outbreak of pandemic disease, such as the COVID-19 pandemic, could have a materially adverse effect on our results of
operations. The vast majority of our property and liability coverages do not provide coverage for pandemic claims. However, we
are subject to the potential of aggregation of loss from coverages provided in our life, A&H, and workers' compensation
portfolios. We assess our direct pandemic exposure using stress scenarios that consider mortality, morbidity, and other causes
of insured loss such as trip cancellation. Our assessment also incorporates the impact of a severe economic downturn which, as
stated above under Financial Risk, includes an adverse impact to our investment portfolio and to our insurance products
sensitive to certain system-wide financial conditions.
80
Global Property Catastrophe Reinsurance Program
Chubb’s core property catastrophe reinsurance program provides protection against natural catastrophes impacting its primary
property operations (i.e., excluding our Global Reinsurance and Life Insurance segments).
We regularly review our reinsurance protection and corresponding property catastrophe exposures. This may or may not lead to
the purchase of additional reinsurance prior to a program’s renewal date. In addition, prior to each renewal date, we consider
how much, if any, coverage we intend to buy and we may make material changes to the current structure in light of various
factors, including modeled PML assessment at various return periods, reinsurance pricing, our risk tolerance and exposures, and
various other structuring considerations.
Chubb renewed its Global Property Catastrophe Reinsurance Program for our North American and International operations
effective April 1, 2023, through March 31, 2024, with no material changes in coverage to the expired program. The program
consists of three layers in excess of losses retained by Chubb on a per occurrence basis. In addition, Chubb renewed its
terrorism coverage (excluding nuclear, biological, chemical and radiation coverage, with an inclusion of coverage for biological
and chemical coverage for personal lines) for the United States from April 1, 2023, through March 31, 2024, with the same
limits and retention and percentage placed except that the majority of terrorism coverage is on an aggregate basis above our
retentions without a reinstatement.
Effective September 1, 2023, Chubb purchased an additional layer of per occurrence coverage for named windstorms and
earthquakes within Northeast states. Coverage is provided for losses for North American and international operations within the
territory through August 31, 2024.
Loss Location
United States
(excluding Alaska and Hawaii)
United States
(excluding Alaska and Hawaii)
United States
(excluding Alaska and Hawaii)
United States
(excluding Alaska and Hawaii)
United States
(Northeast States Only)
International
(including Alaska and Hawaii)
International
(including Alaska and Hawaii)
Alaska, Hawaii, and Canada
Layer of Loss
$0 million –
$1.1 billion
$1.1 billion –
$1.25 billion
$1.25 billion –
$2.35 billion
$2.35 billion –
$3.5 billion
$3.5 billion –
$4.0 billion
$0 million –
$200 million
$200 million –
$1.3 billion
$1.3 billion –
$2.45 billion
Comments
Notes
Losses retained by Chubb
All natural perils and terrorism
All natural perils and terrorism
All natural perils and terrorism
Named windstorm and earthquake
Losses retained by Chubb
All natural perils and terrorism
All natural perils and terrorism
(a)
(b)
(c)
(d)
(e)
(a)
(c)
(d)
(a)
(b)
(c)
(d)
(e)
Ultimate retention will depend upon the nature of the loss and the interplay between the underlying per risk programs and certain other catastrophe programs purchased by
individual business units. These other catastrophe programs have the potential to reduce our effective retention below the stated levels.
These coverages are partially placed with Reinsurers.
These coverages are both part of the same Second layer within the Global Property Catastrophe Reinsurance Program and are fully placed with Reinsurers.
These coverages are both part of the same Third layer within the Global Property Catastrophe Reinsurance Program and are fully placed with Reinsurers.
Northeast states are defined as Virginia to Maine. This coverage is fully placed with Reinsurers.
81
Political Risk and Credit Insurance
Political risk insurance is a specialized coverage that provides clients with protection against unexpected, catastrophic political
or macroeconomic events, primarily in emerging markets. We participate in this market through our Bermuda based wholly-
owned subsidiary Sovereign Risk Insurance Ltd. (Sovereign), and through a unit of our London-based CGM operation. Chubb is
one of the world's leading underwriters of political risk and credit insurance, has a global portfolio spread across more than 150
countries and is also a member of The Berne Union. Our clients include financial institutions, national export credit agencies,
leading multilateral agencies, private equity firms and multinational corporations. CGM writes political risk and credit insurance
business out of underwriting offices in London, United Kingdom; Hamburg, Germany; Sao Paulo, Brazil; Singapore; Tokyo,
Japan; and in the U.S. in the following locations: Chicago, New York, Los Angeles and Washington, D.C.
Our political risk insurance products provide protection to commercial lenders against defaults on cross border loans, cover
investors against equity losses, and protect exporters against defaults on contracts. Commercial lenders, our largest client
segment, are covered for missed scheduled loan repayments due to acts of confiscation, expropriation or nationalization by the
host government, currency inconvertibility or exchange transfer restrictions, or war or other acts of political violence. In addition,
in the case of loans to government-owned entities or loans that have a government guarantee, political risk policies cover
scheduled payments against risks of non-payment or non-honoring of government guarantees. Private equity investors and
corporations cover their equity investments against financial losses, such as expropriatory events, inability to repatriate
dividends, and physical damage to their operations caused by covered political risk events. Our export contracts product
provides coverage for both exporters and their financing banks against the risk of contract frustration due to government actions,
including non-payment by governmental entities.
CGM's credit insurance businesses cover losses due to insolvency, protracted default, and political risk perils including export
and license cancellation. Our credit insurance product provides coverage to larger companies that have sophisticated credit risk
management systems, with exposure to multiple customers and that have the ability to self-insure losses up to a certain level
through excess of loss coverage. It also provides coverage to trade finance banks, exporters, and trading companies, with
exposure to trade-related financing instruments. CGM also has limited capacity for Specialist Credit insurance products which
provide coverage for project finance and working capital loans for large corporations and banks.
We have implemented structural features in our policies in order to control potential losses within the political risk and credit
insurance businesses. These include basic loss sharing features such as co-insurance and deductibles and, in the case of trade
credit, the use of non-qualifying losses that drop smaller exposures deemed too difficult to assess. Ultimate loss severity is also
limited by using waiting periods to enable the insurer and insured to mitigate losses and to agree on recovery strategies if a
claim does materialize. We have the option to pay claims over the original loan repayment schedule, rather than in a lump sum,
in order to provide insureds and the insurer additional time to remedy problems and work towards full recoveries. It is important
to note that political risk and credit policies are named peril conditional insurance contracts, not financial guarantees, and
claims are only paid after conditions and warranties are fulfilled. Political risk and credit insurance policies do not cover currency
devaluations, bond defaults, movements in overseas equity markets, transactions deemed illegal, situations where corruption or
misrepresentation has occurred, or debt that is not legally enforceable. In addition to assessing and mitigating potential exposure
on a policy-by-policy basis, we also have specific risk management measures in place to manage overall exposure and risk.
These measures include placing country, credit, and individual transaction limits based on country risk and credit ratings,
combined single loss limits on multi-country policies, the use of quota share and excess of loss reinsurance protection as well as
quarterly modeling and stress-testing of the portfolio. We have a dedicated Country and Credit Risk management team that is
responsible for the portfolio.
Crop Insurance
We are, and have been since the 1980s, one of the leading writers of crop insurance in the U.S. and have conducted that
business through a managing general agent subsidiary of Rain and Hail. We provide protection throughout the U.S. on a variety
of crops and are therefore geographically diversified, which reduces the risk of exposure to a single event or a heavy
accumulation of losses in any one region. Given its concentration of risk exposed to temperature, moisture, drought, hail and the
more frequent and severe storms associated with climate change, crop insurance is a business with catastrophe-like features.
Our crop insurance business comprises two components - Multiple Peril Crop Insurance (MPCI) and crop-hail insurance.
The MPCI program, offered in conjunction with the U.S. Department of Agriculture’s Risk Management Agency (RMA), is a
federal subsidized insurance program that covers revenue shortfalls or production losses due to natural causes such as drought,
82
excessive moisture, hail, wind, freeze, insects, and disease. These revenue products are defined as providing both commodity
price and yield coverages. Policies are available for various crops in different areas of the U.S. and generally have deductibles
ranging from 10 percent to 50 percent of the insured's risk. The USDA's Risk Management Agency (RMA) sets the policy terms
and conditions, rates and forms, and is also responsible for setting compliance standards. As a participant in the MPCI program,
we report all details of policies to the RMA and are party to a Standard Reinsurance Agreement (SRA). The SRA sets out the
relationship between private insurance companies and the Federal Crop Insurance Corporation (FCIC) concerning the terms and
conditions regarding the risks each will bear including the pro-rata and state stop-loss provisions, which allows companies to
limit the exposure of any one state or group of states on their underwriting results. In addition to the pro-rata and excess of loss
reinsurance protections inherent in the SRA, we purchase third-party proportional and stop-loss reinsurance for our MPCI
business to reduce our exposure. We may also enter into crop derivative contracts to further manage our risk exposure.
Each year the RMA issues a final SRA for the subsequent reinsurance year (i.e., the 2024 SRA covers the 2024 reinsurance
year from July 1, 2023 through June 30, 2024). There were no significant changes in the terms and conditions from the 2023
SRA and, therefore, the new SRA does not impact Chubb's outlook on the crop program relative to 2024.
We recognize net premiums written as soon as estimable on our MPCI business, which is generally when we receive acreage
reports from the policyholders on the various crops throughout the U.S. This allows us to best determine the premium
associated with the liability that is being planted. The MPCI program has specific timeframes as to when producers must report
acreage to us, and in certain cases the reporting occurs after the close of the respective reinsurance year. Once the net premium
written has been recorded, the premium is then earned over the growing season for the crops. A majority of the crops that are
covered in the program are typically subject to the SRA in effect at the beginning of the year. Given the major crops covered in
the program, we typically see a substantial written and earned premium impact in the second and third quarters.
The pricing of MPCI premium is determined using a number of factors including commodity prices and related volatility (i.e.,
both impact the amount of premium we can charge to the policyholder). For example, in most states, the pricing for the MPCI
revenue product for corn (i.e., insurance coverage for lower than expected crop revenue in a given season) includes a factor
based on the average commodity price in February. If corn commodity prices are higher in February, compared to the February
price in the prior year, and all other factors are the same, the increase in price will increase the corn premium year-over-year.
Pricing is also impacted by volatility factors, which measure the likelihood commodity prices will fluctuate over the crop year.
For example, if volatility is set at a higher rate compared to the prior year, and all other factors are the same, the premium
charged to the policyholder will be higher year-over-year for the same level of coverage.
Losses incurred on the MPCI business are determined using both commodity price and crop yield. With respect to commodity
price, there are two important periods on a large portion of the business: the month of February when the initial premium base
is set, and the month of October when the final harvest price is set. If the price declines from February to October, with yield
remaining at normal levels, the policyholder may be eligible to recover on the policy. However, in most cases there are
deductibles on these policies, therefore, the impact of a decline in price would have to exceed the deductible before a
policyholder would be eligible to recover.
We evaluate our MPCI business at an aggregate level and the combination of all of our insured crops (both winter and summer)
go into our underwriting gain or loss estimate in any given year. Typically, we do not have enough information on the harvest
prices or crop yield outputs to quantify the preliminary estimated impact to our underwriting results until the fourth quarter.
Our crop-hail program is a private offering. Premium is earned on the crop-hail program over the coverage period of the policy.
Given the very short nature of the growing season, most crop-hail business is typically written in the second and third quarters
and the recognition of earned premium is also more heavily concentrated during this timeframe. We use industry data to
develop our own rates and forms for the coverage offered. The policy primarily protects farmers against yield reduction caused
by hail and/or fire, and related costs such as transit to storage. We offer various deductibles to allow the grower to partially self-
insure for a reduced premium cost. We limit our crop-hail exposures through the use of township liability limits and third-party
reinsurance on our net retained hail business.
83
Liquidity
Liquidity is a measure of a company's ability to generate cash flows sufficient to meet short-term and long-term cash
requirements. As a holding company, Chubb Limited possesses assets that consist primarily of the stock of its subsidiaries and
other investments. In addition to net investment income, Chubb Limited's cash flows depend primarily on dividends and other
statutorily permissible payments. Historically, dividends and other statutorily permitted payments have come primarily from
Chubb's Bermuda-based operating subsidiaries, which we refer to as our Bermuda subsidiaries. Our consolidated sources of
funds consist primarily of net premiums written, fees, net investment income, and proceeds from sales and maturities of
investments. Funds are used at our various companies primarily to pay claims, operating expenses, and dividends; to service
debt; to purchase investments; and to fund acquisitions.
We anticipate that positive cash flows from operations (underwriting activities and investment income) should be sufficient to
cover cash outflows under most loss scenarios for the near term. Should the need arise, we generally have access to capital
markets and available credit facilities. Refer to “Credit Facilities” below for additional information. Our access to funds under the
existing credit facility is dependent on the ability of the bank that is a party to the facility to meet its funding commitments.
Should our existing credit provider experience financial difficulty, we may be required to replace credit sources, possibly in a
difficult market. If we cannot obtain adequate capital or sources of credit on favorable terms, on a timely basis, or at all, our
business, operating results, and financial condition could be adversely affected. To date, we have not experienced difficulty
accessing our credit facility or establishing additional facilities when needed.
To further ensure the sufficiency of funds to settle unforeseen claims, we hold certain invested assets in cash and short-term
investments. In addition, for certain insurance, reinsurance, or deposit contracts that tend to have relatively large and reasonably
predictable cash outflows, we attempt to establish dedicated portfolios of assets that are duration-matched with the related
liabilities. With respect to the duration of our overall investment portfolio, we manage asset durations to both maximize return
given current market conditions and provide sufficient liquidity to cover future loss payments. At December 31, 2023, the
average duration of our fixed maturities, including the effect of futures, options, and swaps, (4.8 years) approximates the
average expected duration of our P&C insurance liabilities (3.9 years).
Despite our safeguards, if paid losses accelerate beyond our ability to fund such paid losses from current operating cash flows,
we might need to either liquidate a portion of our investment portfolio or arrange for financing. Potential events causing such a
liquidity strain could include several significant catastrophes occurring in a relatively short period of time, large uncollectible
reinsurance recoverables on paid losses (as a result of coverage disputes, reinsurers' credit problems, or decreases in the value
of collateral supporting reinsurance recoverables) or increases in collateral postings under our variable annuity reinsurance
business. Because each subsidiary focuses on a more limited number of specific product lines than is collectively available from
the Chubb Group of Companies, the mix of business tends to be less diverse at the subsidiary level. As a result, the probability
of a liquidity strain, as described above, may be greater for individual subsidiaries than when liquidity is assessed on a
consolidated basis. If such a liquidity strain were to occur in a subsidiary, we could be required to liquidate a portion of our
investments, potentially at distressed prices, as well as be required to contribute capital to the particular subsidiary and/or
curtail dividends from the subsidiary to support holding company operations.
The payment of dividends or other statutorily permissible distributions from our operating companies are subject to the laws and
regulations applicable to each jurisdiction, as well as the need to maintain capital levels adequate to support the insurance and
reinsurance operations, including financial strength ratings issued by independent rating agencies. During 2023, we were able
to meet all our obligations, including the payments of dividends on our Common Shares, with our net cash flows.
We assess which subsidiaries to draw dividends from based on a number of factors. Considerations such as regulatory and legal
restrictions as well as the subsidiary's financial condition are paramount to the dividend decision. Chubb Limited received
dividends of $3.3 billion and $7.5 billion from its Bermuda subsidiaries in 2023 and 2022, respectively. Chubb Limited
received cash dividends of $28 million and $32 million and non-cash dividends of $291 million and $348 million from Swiss
subsidiaries in 2023 and 2022, respectively. Chubb Limited also received dividends of $134 million from its other international
subsidiary in 2022.
The U.S. insurance subsidiaries of Chubb INA Holdings Inc. (Chubb INA) may pay dividends, without prior regulatory approval,
subject to restrictions set out in state law of the subsidiary's domicile (or, if applicable, commercial domicile). Chubb INA's
international subsidiaries are also subject to insurance laws and regulations particular to the countries in which the subsidiaries
operate. These laws and regulations sometimes include restrictions that limit the amount of dividends payable without prior
84
approval of regulatory insurance authorities. Chubb Limited received no dividends from Chubb INA in 2023 and 2022. Debt
issued by Chubb INA is serviced by statutorily permissible distributions by Chubb INA's insurance subsidiaries to Chubb INA as
well as other group resources. Chubb INA received cash dividends of $2.4 billion and $2.0 billion and non-cash dividends of
$170 million and nil from its subsidiaries in 2023 and 2022, respectively. At December 31, 2023, the amount of dividends
available to be paid to Chubb INA in 2024 from its subsidiaries without prior approval of insurance regulatory authorities totals
$4.0 billion.
Cash Flows
Our insurance and reinsurance operations provide liquidity in that premiums are received in advance, sometimes substantially in
advance, of the time claims are paid. Generally, cash flows are affected by claim payments that, due to the nature of our
operations, may comprise large loss payments on a limited number of claims and which can fluctuate significantly from period
to period. The irregular timing of these loss payments can create significant variations in cash flows from operations between
periods. For additional information regarding estimates of future claim payments over the next twelve months, refer to our
discussion of Cash Requirements within "Capital Resources". Sources of liquidity include cash from operations, routine sales of
investments, and financing arrangements. The following is a discussion of our cash flows for 2023, 2022, and 2021.
Operating cash flows reflect Net income for each period, adjusted for non-cash items and changes in working capital. Operating
cash flows were $12.6 billion in 2023, compared to $11.3 billion and $11.2 billion in 2022 and 2021, respectively.
Operating cash flow increased $1.3 billion in 2023 compared to 2022, due to higher net investment income and net premiums
collected, partially offset by higher net losses paid and income taxes paid. In addition, there were net proceeds from sales of
consolidated investment products (CIP) from Huatai's asset management companies of $450 million.
Cash used for investing was $7.6 billion in 2023, compared to $5.7 billion and $6.7 billion in 2022 and 2021, respectively.
Cash used for investing in the current year increased $1.9 billion in 2023 compared to 2022 due to higher net purchases of
fixed maturities and equity securities of $7.5 billion, offset by a decrease in cash paid for acquisition of subsidiaries of $5.1
billion. In 2023, the incremental cash paid for the additional purchases of Huatai, net of cash acquired, was immaterial given
that there were cash deposits made in the prior years. In 2022, cash paid for acquisition of subsidiaries primarily included the
purchase of Cigna's business in Asia of $5.0 billion, net of cash acquired.
Cash used for financing was $4.5 billion in 2023, compared to $5.1 billion and $4.4 billion in 2022 and 2021, respectively.
The decrease of $653 million in 2023 compared to 2022 is primarily from lower long-term debt repayments of $525 million
and lower common shares repurchased of $483 million. This decrease in cash used for financing was partially offset by net CIP-
related distributions to third-parties of $619 million. These CIPs are related to Huatai's asset management companies. Refer to
Note 15 to the Consolidated Financial Statements for additional information on share repurchases.
Both internal and external forces influence our financial condition, results of operations, and cash flows. Claim settlements,
premium levels, and investment returns may be impacted by changing rates of inflation and other economic conditions. In many
cases, significant periods of time, ranging up to several years or more, may lapse between the occurrence of an insured loss, the
reporting of the loss to us, and the settlement of the liability for that loss.
We use repurchase agreements as a low-cost funding alternative. At December 31, 2023, there were $2.8 billion, including
variable interest entities balances of $1.0 billion, in repurchase agreements outstanding with various maturities over the next
five months.
In addition to cash from operations, routine sales of investments, and financing arrangements, we have agreements with a third-
party bank provider which implemented two international multi-currency notional cash pooling programs to enhance cash
management efficiency during periods of short-term timing mismatches between expected inflows and outflows of cash by
currency. The programs allow us to optimize investment income by avoiding portfolio disruption. In each program, participating
Chubb entities establish deposit accounts in different currencies with the bank provider. Each day the credit or debit balances in
every account are notionally translated into a single currency (U.S. dollars) and then notionally pooled. The bank extends
overdraft credit to all participating Chubb entities as needed, provided that the overall notionally pooled balance of all accounts
in each pool at the end of each day is at least zero. Actual cash balances are not physically converted and are not commingled
between legal entities. Chubb entities may incur overdraft balances as a means to address short-term liquidity needs. Any
overdraft balances incurred under this program by a Chubb entity would be guaranteed by Chubb Limited (up to $300 million in
the aggregate). Our syndicated letter of credit facility allows for same day drawings to fund a net pool overdraft should
participating Chubb entities withdraw contributed funds from the pool.
85
Capital Resources
Capital resources consist of funds deployed or available to be deployed to support our business operations.
(in millions of U.S. dollars, except for percentages)
Short-term debt
Long-term debt
Total financial debt
Trust preferred securities
Total Chubb shareholders’ equity
Total capitalization
Ratio of financial debt to total capitalization
Ratio of financial debt plus trust preferred securities to total capitalization
December 31, 2023
$
1,460
$
13,035
14,495
308
59,507
$
74,310
$
19.5 %
19.9 %
As Adjusted
December 31, 2022
475
14,402
14,877
308
50,519
65,704
22.6 %
23.1 %
The ratios of financial debt to total capitalization in the table above are lower at December 31, 2023 compared to December
31, 2022 from the increase in shareholders' equity, principally reflecting strong net income and net unrealized appreciation on
investments in the current year compared to net unrealized depreciation in 2022.
Repurchase agreements are excluded from the table above and are disclosed separately from short-term debt in the
Consolidated balance sheets. The repurchase agreements are collateralized borrowings where we maintain the right and ability
to redeem the collateral on short notice, unlike short-term debt which comprises the current maturities of our long-term debt
instruments.
We believe our financial strength provides us with the flexibility and capacity to obtain available funds externally through debt or
equity financing on both a short-term and long-term basis. Our ability to access the capital markets is dependent on, among
other things, market conditions and our perceived financial strength. We have accessed both the debt and equity markets from
time to time. We generally maintain the ability to issue certain classes of debt and equity securities via an unlimited Securities
and Exchange Commission (SEC) shelf registration which is renewed every three years. This allows us capital market access for
refinancing as well as for unforeseen or opportunistic capital needs. We also have a shelf registration statement which allows us
to issue an unlimited amount of certain classes of debt and equity from time to time. This shelf registration statement expires in
October 2024.
Securities Repurchases
From time to time, we repurchase shares as part of our capital management program. On July 19, 2021, the Board authorized
a one-time incremental share repurchase program of up to $5.0 billion of Chubb Common Shares effective through June 30,
2022. In May 2022, the Board authorized the repurchase of up to $2.5 billion of Chubb Common Shares effective through
June 30, 2023. In June 2023, the Board authorized the repurchase of up to $5.0 billion of Chubb's Common Shares effective
July 1, 2023 with no expiration date.
Share repurchases may be made in the open market, in privately negotiated transactions, block trades, accelerated repurchases
and/or through option or other forward transactions. In 2023, 2022, and 2021 we repurchased $2.5 billion, $3.0 billion, and
$4.9 billion, respectively, of Common Shares in a series of open market transactions under the Board share repurchase
authorizations at an average per share price of $209.52, $201.96, and $175.85, respectively. For the period January 1, 2024
through February 22, 2024, we repurchased 269,450 Common Shares for a total of $67 million in a series of open market
transactions under the share repurchase program authorization. At February 22, 2024, $3.6 billion in share repurchase
authorization remained.
86
Common Shares
Our Common Shares had a par value of CHF 0.50 each at December 31, 2023.
As of December 31, 2023, there were 26,181,949 Common Shares in treasury with a weighted-average cost of $168.05 per
share.
Under Swiss law, dividends must be stated in Swiss francs though dividend payments are made by Chubb in U.S. dollars.
At our May 2023 annual general meeting, our shareholders approved an annual dividend for the following year of up to $3.44
per share, expected to be paid in four quarterly installments of $0.86 per share after the annual general meeting by way of
distribution from capital contribution reserves, transferred to free reserves for payment. The Board will determine the record and
payment dates at which the annual dividend may be paid until the date of the 2024 annual general meeting, and is authorized
to abstain from distributing a dividend at its discretion. The first three quarterly installments each of $0.86 per share, have been
distributed by the Board as expected.
At our May 2022 annual general meeting, our shareholders approved an annual dividend for the following year of up to $3.32
per share, which was paid in four quarterly installments of $0.83 per share at dates determined by the Board after the annual
general meeting by way of distribution from capital contribution reserves, transferred to free reserves for payment.
Dividend distributions on Common Shares amounted to CHF 3.05 ($3.41) per share for the year ended December 31, 2023.
Refer to Note 15 to the Consolidated Financial Statements for additional information on our dividends.
Cash Requirements
Our cash requirements within the next twelve months include claims payable to claimants and other routine obligations typical
to our business. We also have commitments related to our limited partnerships as well as for the incremental ownership
interests in Huatai Group. We expect the cash required to meet these obligations to be primarily generated through a
combination of cash on hand, cash from operations, routine sales of investments, and financing arrangements. We believe these
sources will be sufficient to meet our anticipated cash requirements for at least the next twelve months, while maintaining
sufficient liquidity for normal operating purposes. We believe our financial strength provides us with the flexibility and capacity
to obtain available funds externally through debt or equity financing on both a short-term and long-term basis, if necessary. At
December 31, 2023, our long-term cash requirements under our various contractual obligations and commitments include:
• Gross loss payments under insurance and reinsurance contracts - We are obligated to pay claims under insurance and
reinsurance contracts for specified loss events covered under those contracts. Total cash requirements are not determinable
from underlying contracts and must be estimated. Gross loss payments under insurance and reinsurance contracts are
estimated at $80.2 billion with $22.4 billion estimated due over the next twelve months. These estimated gross loss
payments are inherently uncertain and the amount and timing of actual loss payments are likely to differ from these
estimates and the differences could be material. Given the numerous factors and assumptions involved in both estimates of
loss reserves and related estimates as to the timing of future loss payments, differences between actual and estimated loss
payments will not necessarily indicate a commensurate change in ultimate loss estimates. Refer to Note 8 to the
Consolidated Financial Statements for additional information.
•
•
Estimated payments for future policy benefits and market risk benefits - Total estimated payments for future policy
benefits and market risk benefits are estimated at $56.0 billion and $1.5 billion, respectively, with a total $2.9 billion
estimated due over the next twelve months. These estimated payments, which are not determinable from the contracts, are
gross of fees or premiums from the underlying contracts. These estimated payments are higher than the future policy
benefits reserves and MRB liability presented on our Consolidated balance sheets which are discounted and are reflected
net of fees and premiums due from the underlying contracts. The timing and amount of actual payments may vary from the
estimates. Refer to Note 1 l) and Note 9 for additional information on future policy benefits, and Note 1 m) and Note 11 for
additional information on market risk benefits.
Short-term and Long-term debt, trust preferred securities, and related interest payments - Total obligations for short-term
and long-term debt and trust preferred securities maturities are $14.6 billion with $1.5 billion due over the next twelve
months. Interest payments related to these obligations total $6.1 billion with $0.5 billion due over the next twelve months.
These estimates are based on current exchange rates. Refer to Note 13 to the Consolidated Financial Statements for
additional information.
87
•
•
Commitments on invested assets - Total obligations for commitments related to our invested assets are $7.2 billion with
$2.1 billion due over the next twelve months. Refer to Note 14 to the Consolidated Financial Statements for additional
information.
Pending acquisition - Cash requirements for pending incremental shares in Huatai Group are approximately $245 million,
based on current exchange rates, expected to be paid in the first quarter of 2024. The timing of completion is contingent
upon important conditions. Refer to Note 2 to the Consolidated Financial Statements for additional information.
• Deposit liabilities - Total obligations for deposit liabilities, including contract holder deposit funds, are $13.5 billion with
$827 million due over the next twelve months. Refer to Note 1 o) to the Consolidated Financial Statements for additional
information.
• Repurchase agreements - We use repurchase agreements as a low-cost funding alternative. At December 31, 2023, there
were $2.8 billion in repurchase agreements outstanding with various maturities over the next five months. Refer to Note 13
to the Consolidated Financial Statements for additional information.
• Operating leases - Total obligations for operating leases are $1.2 billion with $166 million estimated due over the next
twelve months. Refer to Note 14 j) to the Consolidated Financial Statements for additional information. As of December 31,
2023, we entered into a separate lease for office space that is not yet recorded on our Consolidated balance sheets and is
not included in the total obligations referenced above. The lease is expected to commence in December 2024 with an initial
term of approximately 23 years. Total cash requirements are estimated at approximately $621 million over the term of the
lease.
Ratings
Chubb Limited and its subsidiaries are assigned credit and financial strength (insurance) ratings from internationally recognized
rating agencies, including S&P, A.M. Best, Moody's, and Fitch. The ratings issued on our companies by these agencies are
announced publicly and are available directly from the agencies. Our Internet site (investors.chubb.com, under Financials/
Financial Strength Rating) also contains some information about our ratings, but such information on our website is not
incorporated by reference into this report.
Financial strength ratings reflect the rating agencies' opinions of a company's claims paying ability. Independent ratings are one
of the important factors that establish our competitive position in the insurance markets. The rating agencies consider many
factors in determining the financial strength rating of an insurance company, including the relative level of statutory surplus
necessary to support the business operations of the company. These ratings are based upon factors relevant to policyholders,
agents, and intermediaries and are not directed toward the protection of investors. Such ratings are not recommendations to
buy, sell, or hold securities.
Credit ratings assess a company's ability to make timely payments of principal and interest on its debt. It is possible that, in the
future, one or more of the rating agencies may reduce our existing ratings. If one or more of our ratings were downgraded, we
could incur higher borrowing costs, and our ability to access the capital markets could be impacted. In addition, our insurance
and reinsurance operations could be adversely impacted by a downgrade in our financial strength ratings, including a possible
reduction in demand for our products in certain markets. Also, we have insurance and reinsurance contracts which contain
rating triggers. In the event the S&P or A.M. Best financial strength ratings of Chubb fall, we may be faced with the cancellation
of premium or be required to post collateral on our underlying obligation associated with this premium.
88
Information provided in connection with outstanding debt of subsidiaries
Chubb INA Holdings Inc. (Subsidiary Issuer) is an indirect 100 percent-owned and consolidated subsidiary of Chubb Limited
(Parent Guarantor). The Parent Guarantor fully and unconditionally guarantees certain of the debt of the Subsidiary Issuer.
The following table presents the condensed balance sheets of Chubb Limited and Chubb INA Holdings Inc., after elimination of
investment in any non-guarantor subsidiary:
(in millions of U.S. dollars)
Assets
Investments
Cash
Due from parent guarantor/subsidiary issuer
Due from subsidiaries that are not issuers or guarantors
Other assets
Total assets
Liabilities
Due to parent guarantor/subsidiary issuer
Due to subsidiaries that are not issuers or guarantors
Affiliated notional cash pooling programs
Short-term debt
Long-term debt
Trust preferred securities
Other liabilities
Total liabilities
Total shareholders’ equity
Total liabilities and shareholders’ equity
Chubb Limited
(Parent Guarantor)
Chubb INA Holdings Inc.
(Subsidiary Issuer)
As Adjusted
As Adjusted
December 31,
2023
December 31,
2022
December 31,
2023
December 31,
2022
$
— $
— $
103 $
77
441
539
12
40
2
1,791
16
3
—
571
2,785
1,069 $
1,849 $
3,462 $
— $
586 $
441 $
$
$
263
594
—
—
—
657
1,514
(445)
248
252
—
—
—
616
1,702
147
593
455
1,460
13,035
308
1,496
$
1,069 $
1,849 $
3,462 $
3,427
17,788
19,698
(14,326)
(16,271)
135
2
586
598
2,106
3,427
2
1,710
1,496
475
14,402
308
1,305
The following table presents the condensed statements of operations and comprehensive income of Chubb Limited and Chubb
INA Holdings Inc., excluding equity in earnings from non-guarantor subsidiaries:
Year Ended December 31, 2023
(in millions of U.S. dollars)
Net investment income (loss)
Net realized gains (loss)
Administrative expenses
Interest (income) expense
Other (income) expense
Cigna integration expenses
Income tax benefit
Net loss
Comprehensive loss
Chubb Limited
(Parent
Guarantor)
Chubb INA
Holdings Inc.
(Subsidiary
Issuer)
$
(32) $
6
116
(5)
(44)
—
(56)
(37) $
(37) $
$
$
(124)
(100)
(4)
436
82
3
(150)
(591)
(666)
89
Credit Facilities
As our Bermuda subsidiaries are non-admitted insurers and reinsurers in the U.S., the terms of certain U.S. insurance and
reinsurance contracts require them to provide collateral, which can be in the form of letters of credit (LOCs). LOCs may also be
used for general corporate purposes.
Should the need arise, we generally have access to capital markets and to credit facilities. In October 2022, we consolidated
three syndicated facilities into a new group syndicated credit facility with increased capacity expiring in October 2027. Our letter
of credit capacity for the new and existing facilities is $4.0 billion, $3.0 billion of which can be used for revolving credit. At
December 31, 2023, our usage under these facilities was $948 million in LOCs. Our access to credit under these facilities is
dependent on the ability of the banks that are a party to the facilities to meet their funding commitments. Should the existing
credit providers on these facilities experience financial difficulty, we may be required to replace credit sources, possibly in a
difficult market. If we cannot obtain adequate capital or sources of credit on favorable terms, on a timely basis, or at all, our
business, operating results, and financial condition could be adversely affected. To date, we have not experienced difficulty
accessing our credit facilities or establishing additional facilities when needed.
In the event we are required to provide alternative security to clients, the security could take the form of additional insurance
trusts supported by our investment portfolio or funds withheld using our cash resources. The value of LOCs required is driven by,
among other things, statutory liabilities reported by variable annuity guarantee reinsurance clients, loss development of existing
reserves, the payment pattern of such reserves, the expansion of business, and loss experience of such business.
The facilities noted above require that we maintain certain financial covenants, all of which have been met at December 31,
2023. These covenants include:
(i) a minimum consolidated net worth of not less than $41.959 billion; and
(ii) a ratio of consolidated debt to total capitalization of not greater than 0.35 to 1.
At December 31, 2023, (a) the minimum consolidated net worth requirement under the covenant described in (i) above was
$41.959 billion and our actual consolidated net worth, excluding noncontrolling interest, as calculated under that covenant was
$66.3 billion and (b) our ratio of debt to total capitalization, as calculated under the covenant which excludes the fair value
adjustment of debt acquired through the Chubb Corp acquisition and noncontrolling interest, was 0.19 to 1, which is below the
maximum debt to total capitalization ratio of 0.35 to 1 as described in (ii) above.
Our failure to comply with the covenants under any credit facility would, subject to grace periods in the case of certain
covenants, result in an event of default. This could require us to repay any outstanding borrowings or to cash collateralize LOCs
under such facility. Our failure to repay material financial obligations, as well as our failure with respect to certain other events
expressly identified, would result in an event of default under the facility.
ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk
Market Sensitive Instruments and Risk Management
Market risk represents the potential for loss due to adverse changes in the fair value of financial instruments. We are exposed to
potential losses from various market risks including changes in interest rates, equity prices, and foreign currency exchange rates.
Further, through writing the GLB and GMDB products, collectively referred to as market risk benefits (MRB), we are exposed to
volatility in the equity and credit markets, as well as interest rates. Our investment portfolio consists primarily of fixed income
securities, denominated in both U.S. dollars and foreign currencies, which are sensitive to changes in interest rates and foreign
currency exchange rates. The majority of our fixed income portfolio is classified as available-for-sale. The effect of market
movements on our fixed maturities available-for-sale portfolio impacts Net income (through Net realized gains (losses)) when
securities are sold, when we write down an asset, or when we record a change to the allowance for expected credit losses.
Changes in interest rates and foreign currency exchange rates will have an immediate effect on Shareholders' equity and
Comprehensive income and, in certain instances, Net income. The effect of market movements on fixed maturities related to
consolidated investment products in the Huatai portfolio (Fixed maturities - CIP) impacts Net income (through Net realized gains
(losses)). From time to time, we also use derivative instruments such as futures, options, swaps, and foreign currency forward
contracts to manage the duration of our investment portfolio and foreign currency exposures and also to obtain exposure to a
particular financial market. At December 31, 2023 and 2022, our notional exposure to derivative instruments was $10.4
90
billion and $9.8 billion, respectively. These instruments are recognized as assets or liabilities in our Consolidated Financial
Statements and are sensitive to changes in interest rates, foreign currency exchange rates, and equity security prices. As part of
our investing activities, from time to time we purchase to be announced mortgage backed securities (TBAs). Changes in the fair
value of TBAs are included in Net realized gains (losses) and, therefore, have an immediate effect on both our Net income and
Shareholders' equity.
We seek to mitigate market risk using a number of techniques, including maintaining and managing the assets and liabilities of
our international operations consistent with the foreign currencies of the underlying insurance and reinsurance businesses,
thereby limiting exchange rate risk to net assets denominated in foreign currencies. From time-to-time, we use derivatives to
hedge planned cross border transactions and, beginning in September 2022, we designated certain derivatives to hedge foreign
currency risk on our euro denominated debt and exposure in the net investments of certain foreign subsidiaries.
The following is a discussion of our primary market risk exposures at December 31, 2023. Our policies to address these risks in
2023 were not materially different from 2022. We do not currently anticipate significant changes in our primary market risk
exposures or in how those exposures are managed in future reporting periods based upon what is known or expected to be in
effect in future reporting periods.
Interest rate risk – fixed income portfolio and debt obligations
Our fixed income portfolio and debt obligations have exposure to interest rate risk. Changes in investment values attributable to
interest rate changes are mitigated by corresponding and partially offsetting changes in the economic value of our insurance
reserves and debt obligations. We monitor this exposure through periodic reviews of our asset and liability positions.
The following table presents the impact at December 31, 2023 and 2022, on the fair value of our fixed income portfolio of a
hypothetical increase in interest rates of 100 bps applied instantly across the U.S. yield curve (an immediate time horizon was
used as this presents the worst case scenario):
(in billions of U.S. dollars, except for percentages)
Fair value of fixed income portfolio
Pre-tax impact of 100 bps increase in interest rates:
Decrease in dollars
As a percentage of total fixed income portfolio at fair value
2023
2022
$ 114.9
$
98.6
$
5.5
$
4.4
4.8 %
4.5 %
Changes in interest rates will have an immediate effect on Comprehensive income and Shareholders' equity for our available-for-
sale portfolio but will not ordinarily have an immediate effect on Net income. Variations in market interest rates could produce
significant changes in the timing of prepayments due to available prepayment options. For these reasons, actual results could
differ from those reflected in the tables. Changes in interest rates for our fixed income – consolidated investment products will
have an immediate impact on Net income (through Net realized gains (losses)).
Although our debt and trust preferred securities (collectively referred to as debt obligations) are reported at amortized cost and
not adjusted for fair value changes, changes in interest rates could have a material impact on their fair value, albeit there would
be no impact on our Consolidated Financial Statements.
The following table presents the impact at December 31, 2023 and 2022, on the fair value of our debt obligations of a
hypothetical decrease in interest rates of 100 bps applied instantly across the U.S. yield curve (an immediate time horizon was
used as this presents the worst case scenario):
(in billions of U.S. dollars, except for percentages)
Fair value of debt obligations, including repurchase agreements
Pre-tax impact of 100 bps decrease in interest rates:
Increase in dollars
As a percentage of total debt obligations at fair value
2023
2022
$
16.6
$
14.8
$
1.1
$
1.1
6.6 %
7.4 %
91
Foreign currency management
As a global company, Chubb entities transact business in multiple currencies. Our policy is to generally match assets, liabilities
and required capital for each individual jurisdiction in local currency, which would include the use of derivatives.
The following table summarizes the unhedged portion of net assets (liabilities) in non-U.S. currencies at December 31, 2023
and 2022, and excludes noncontrolling interests:
(in millions of U.S. dollars, except for percentages)
Value of
net assets
(liabilities)
2023
Exchange
rate
per USD
Value of
net assets
(liabilities)
2022
Exchange
rate
per USD
2023 vs. 2022
% change in
exchange rate
per USD
Korean won (KRW) (x100)
Chinese yuan renminbi (CNY)
Canadian dollar (CAD)
Australian dollar (AUD)
Mexican peso (MXN)
Brazilian real (BRL)
New Taiwan dollar (TWD)
British pound sterling (GBP)
Baht (THB)
Euro (EUR) (1)
Other foreign currencies
Value of unhedged portion of net assets
denominated in foreign currencies (2)
As a percentage of total net assets
Pre-tax decrease to Chubb Shareholders' equity of
a hypothetical 10 percent strengthening of the
USD
$
6,115
0.0775 $
5,333
5,172
2,362
1,661
973
718
647
588
575
(1,835)
1,952
0.1408
0.7551
0.6812
0.0589
0.2061
0.0327
1.2731
0.0292
4,664
2,166
1,269
801
624
880
486
522
1.1039
(2,006)
various
2,106
$ 18,928
31.8 %
$ 16,845
33.3 %
$
1,721
$
1,531
0.0793
0.1450
0.7378
0.6813
0.0513
0.1892
0.0325
1.2083
0.0289
1.0705
various
(2.3) %
(2.9) %
2.3 %
—
14.9 %
8.9 %
0.5 %
5.4 %
1.0 %
3.1 %
NM
NM – not meaningful
(1)
Includes unhedged portion of euro denominated debt of $3.1 billion and net assets of $1.3 billion in 2023, and $3.0 billion and $1.0 billion, respectively, in 2022.
Excludes hedged euro denominated debt of $1.6 billion in 2023 and 2022.
(2)
The unhedged net assets denominated in foreign currencies comprised goodwill and other intangible assets of approximately 54 percent and 37 percent at December 31,
2023 and 2022, respectively. The additional 17 percentage point increase in goodwill and other intangible assets was driven by the consolidation of Huatai Group in 2023.
In September 2022, Chubb entered into certain cross-currency swaps designated as fair value hedges and net investment
hedges for foreign currency exposure associated with portions of our euro denominated debt and the net investment in certain
foreign subsidiaries, respectively. These cross-currency swaps are agreements under which two counterparties exchange
principal and interest payments in different currencies at a future date.
The objective of the fair value cross-currency swaps is to hedge euro 1.5 billion of the foreign currency risk on our euro
denominated debt by converting cash flows back into the U.S dollar. The objective of the net investment cross-currency swaps
is to hedge the foreign currency exposure in the net investments of certain foreign subsidiaries by converting cash flows from
U.S. dollar to the British pound sterling (GBP 957 million), Japanese yen (JPY 43 billion), and Swiss franc (CHF 96 million).
The hedged risk is designated as the foreign currency exposure arising between the functional currency of the foreign subsidiary
and the functional currency of its parent entity. For additional information refer to Note 14 to the Consolidated Financial
Statements.
92
Reinsurance of market risk benefits
Effective January 1, 2023, we adopted new U.S. GAAP accounting guidance for long-duration contracts that affected the
accounting for guaranteed minimum death benefits (GMDB) and guaranteed living benefits (GLB) liabilities, collectively referred
to as market risk benefits (MRB). MRB are measured at fair value using a valuation model based on current net exposures,
market data, our experience, and other factors. Changes in fair value are recorded to Market risk benefits gains (losses) in the
Consolidated statements of operations, except for the change in fair value due to a change in the instrument-specific credit risk
which is recognized in Other comprehensive income. For additional information refer to Note 1 m) and Note 11 to the
Consolidated Financial Statements, under Item 8.
Chubb views its MRB reinsurance business as having a similar risk profile to that of catastrophe reinsurance, with the
probability of long-term economic loss relatively small at the time of pricing. Adverse changes in market factors and policyholder
behavior will have an impact on both MRB gains (losses) and net income. When evaluating these risks, we expect to be
compensated for taking both the risk of a cumulative long-term economic net loss, as well as the short-term accounting
variations caused by these market movements. Therefore, we evaluate this business in terms of its long-term economic risk and
reward.
The tables below are estimates of the sensitivities to instantaneous changes in economic inputs (e.g., equity shock, interest rate
shock, etc.) at December 31, 2023, for both the fair value of the MRB liability (FVL) and the fair value of specific derivative
instruments held (hedge value) to partially offset the risk in the MRB reinsurance portfolio. The following assumptions should be
considered when using the below tables:
•
Equity shocks impact all global equity markets equally
• Our liabilities are sensitive to global equity markets in the following proportions: 80 percent—90 percent U.S. equity,
and 10 percent—20 percent international equity.
• Our current hedge portfolio is sensitive only to U.S. equity markets.
• We would suggest using the S&P 500 index as a proxy for U.S. equity, and the MSCI EAFE index as a proxy for
international equity.
•
Interest rate shocks assume a parallel shift in the U.S. yield curve
• Our liabilities are also sensitive to global interest rates at various points on the yield curve, mainly the U.S. Treasury
curve in the following proportions: up to 15 percent short-term rates (maturing in less than 5 years), 15 percent—25
percent medium-term rates (maturing between 5 years and 10 years, inclusive), and 70 percent—80 percent long-
term rates (maturing beyond 10 years).
•
A change in AA-rated credit spreads impacts the rate used to discount cash flows in the fair value model. AA-rated
credit spreads are a proxy for both our own credit spreads and the credit spreads of the ceding insurers.
•
•
The hedge sensitivity is from December 31, 2023, market levels and only applicable to the equity and interest rate
sensitivities table below.
The sensitivities do not scale linearly and may be proportionally greater for larger movements in the market factors. Actual
sensitivity of our net income may differ from those disclosed in the tables below due to fluctuations in short-term market
movements.
93
$
$
$
$
Sensitivities to equity and interest rate movements
(in millions of U.S. dollars)
Interest Rate Shock
+100 bps
Flat
Worldwide Equity Shock
+10 %
Flat
-10 %
-20 %
-30 %
-40 %
(Increase)/decrease in FVL
$ 283
$
187 $
73
$
(69)
$ (263)
$
(507)
Increase/(decrease) in hedge value
(119)
—
119
239
358
Increase/(decrease) in net income
$ 164
(Increase)/decrease in FVL
$ 113
Increase/(decrease) in hedge value
(119)
187 $ 192
$ 170
$
95
— $ (135)
$ (313)
$ (539)
—
119
239
358
$
$
478
(29)
(813)
478
Increase/(decrease) in net income
-100 bps
(Increase)/decrease in FVL
$
$
(6)
(100)
— $
(16)
$
(74)
$ (181)
$
(335)
(231) $ (398)
$ (608)
$ (860)
$ (1,160)
Increase/(decrease) in hedge value
(119)
—
119
239
358
478
Increase/(decrease) in net income
$
(219)
$
(231) $ (279)
$ (369)
$ (502)
$
(682)
Sensitivities to Other Economic Variables
(in millions of U.S. dollars)
(Increase)/decrease in FVL
Increase/(decrease) in net income
AA-rated Credit Spreads
Interest Rate Volatility
Equity Volatility
+100 bps
-100 bps
+2 %
-2 %
+2 %
$
$
54
54
$
$
(61) $
(61) $
(1)
(1)
$
$
1
1
$
$
(18)
(18)
$
$
-2 %
17
17
Market Risk Benefits Net Amount at Risk
All our MRB reinsurance treaties include annual or aggregate claim limits and many include an aggregate deductible which limit
the net amount at risk under these programs. The tables below present the net amount at risk at December 31, 2023, following
an immediate change in equity market levels, assuming all global equity markets are impacted equally.
a) Reinsurance covering the GMDB risk only
(in millions of U.S. dollars)
GMDB net amount at risk
+20 %
Flat
-20 %
-40 %
-60 %
-80 %
$ 233
$
252 $
478
$
685
$
668
$
544
Claims at 100% immediate mortality
136
148
151
141
129
115
Equity Shock
The treaty limits function as a ceiling as equity markets fall. As the shocks in the table above become incrementally more
negative, the impacts begin to drop due to the specific nature of these claim limits, many of which are annual claim limits
calculated as a percentage of the reinsured account value. There is also an impact due to a portion of the reinsurance under
which claims are positively correlated to equity markets (claims decrease as equity markets fall).
b) Reinsurance covering the GLB risk only
(in millions of U.S. dollars)
GLB net amount at risk
+20 %
Flat
-20 %
-40 %
-60 %
-80 %
$ 846
$ 1,136 $ 1,596
$ 2,121
$ 2,486
$ 2,767
Equity Shock
The treaty limits cause the net amount at risk to increase at a declining rate as equity markets fall.
94
c) Reinsurance covering both the GMDB and GLB risks on the same underlying policyholders
(in millions of U.S. dollars)
GMDB net amount at risk
GLB net amount at risk
Claims at 100% immediate mortality
Equity Shock
+20 %
Flat
-20 %
-40 %
-60 %
-80 %
$
41
$
48 $
59
$
69
$
78
$
85
351
30
436
29
546
29
668
29
790
29
817
29
The treaty limits cause the GMDB and GLB net amount at risk to increase at a declining rate as equity markets fall.
ITEM 8. Financial Statements and Supplementary Data
The financial statements and supplementary data are included in this Form 10-K commencing on page F-1.
ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
ITEM 9A. Controls and Procedures
Chubb’s management, with the participation of Chubb’s Chief Executive Officer and Chief Financial Officer, evaluated the
effectiveness of Chubb’s disclosure controls and procedures as defined in Rule 13a-15(e) and Rule 15d-15(e) under the
Securities Exchange Act of 1934 as of December 31, 2023. Based upon that evaluation, Chubb’s Chief Executive Officer and
Chief Financial Officer concluded that Chubb’s disclosure controls and procedures are effective in allowing information required
to be disclosed in reports filed under the Securities Exchange Act of 1934 to be recorded, processed, summarized, and reported
within time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to
Chubb’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions
regarding required disclosure.
Effective July 1, 2023, Chubb discontinued the equity method of accounting to its investment in Huatai Group and applied
consolidation accounting. As of and for the year ended December 31, 2023, Huatai Group represented approximately 1 percent
of consolidated revenues and approximately 7 percent of total assets. We currently exclude, and are in the process of working to
incorporate, Huatai Group in our evaluation of internal controls over financial reporting, and related disclosure controls and
procedures.
Other than working to incorporate Huatai Group, as noted above, there have been no changes in Chubb's internal controls over
financial reporting during the three months ended December 31, 2023, that have materially affected, or are reasonably likely to
materially affect, Chubb's internal controls over financial reporting. Chubb's management report on internal control over financial
reporting is included on page F-3 and PricewaterhouseCoopers LLP's audit report is included on pages F-4, F-5, and F-6.
ITEM 9B. Other Information
On December 20, 2023, John J. Lupica, Vice Chairman, Chubb Group, and President, North America Insurance, adopted a
"Rule 10b5-1 trading arrangement" as defined under Item 408 of SEC Regulation S-K. The trading arrangement provides for (i)
the sale of up to 8,985 shares of Chubb's common stock and (ii) the potential exercise of 25,479 stock options expiring
December 20, 2025, and the associated sale of up to 25,479 shares of Chubb's common stock. The arrangement is scheduled
to expire on December 20, 2025, subject to earlier termination in accordance with its terms, or upon the completion of all
authorized transactions under the plan.
During the three months ended December 31, 2023, no other director or officer of Chubb (as defined in Rule 16a-1(f) under
the Exchange Act) informed us of the adoption or termination of a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1
trading arrangement," as those terms are defined in Item 408 of SEC Regulation S-K.
ITEM 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Item not applicable.
95
PART III
ITEM 10. Directors, Executive Officers and Corporate Governance
Information pertaining to this item is incorporated by reference to the sections entitled “Agenda Item 5 - Election of the Board of
Directors”, "Corporate Governance - Delinquent Section 16(a) Reports", “Corporate Governance - The Board of Directors -
Director Nomination Process”, and “Corporate Governance - The Committees of the Board - Audit Committee” of the definitive
proxy statement for the 2024 Annual General Meeting of Shareholders which will be filed with the SEC not later than 120 days
after the close of the fiscal year pursuant to Regulation 14A. Also incorporated herein by reference is the text under the caption
“Information about our Executive Officers” appearing at the end of Part I Item 1 of the Annual Report on Form 10-K.
Code of Ethics
Chubb has adopted a Code of Conduct, which sets forth standards by which all Chubb employees, officers, and directors must
abide as they work for Chubb. Chubb has posted this Code of Conduct on its Internet site (about.chubb.com/governance.html).
Chubb intends to disclose on its Internet site any amendments to, or waivers from, its Code of Conduct that are required to be
publicly disclosed pursuant to the rules of the SEC or the New York Stock Exchange.
ITEM 11. Executive Compensation
This item is incorporated by reference to the sections entitled “Executive Compensation”, “Compensation Committee Report”
and “Director Compensation” of the definitive proxy statement for the 2024 Annual General Meeting of Shareholders which will
be filed with the SEC not later than 120 days after the close of the fiscal year pursuant to Regulation 14A.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
This item is incorporated by reference to the sections entitled "Information About Our Share Ownership" and "Agenda Item 11 -
Approval of the Amended and Restated Chubb Limited Employee Stock Purchase Plan" of the definitive proxy statement for the
2024 Annual General Meeting of Shareholders, which will be filed with the SEC not later than 120 days after the close of the
fiscal year pursuant to Regulation 14A.
ITEM 13. Certain Relationships and Related Transactions and Director Independence
This item is incorporated by reference to the sections entitled “Corporate Governance - What Is Our Related Party Transactions
Approval Policy And What Procedures Do We Use To Implement It?”, “Corporate Governance - What Related Party Transactions
Do We Have?”, and “Corporate Governance - The Board of Directors - Director Independence” of the definitive proxy statement
for the 2024 Annual General Meeting of Shareholders which will be filed with the SEC not later than 120 days after the close of
the fiscal year pursuant to Regulation 14A.
ITEM 14. Principal Accounting Fees and Services
This item is incorporated by reference to the section entitled “Agenda Item 4 – Election of Auditors – 4.2 – Ratification of
appointment of PricewaterhouseCoopers LLP (United States) as independent registered public accounting firm for purposes of
U.S. securities law reporting” of the definitive proxy statement for the 2024 Annual General Meeting of Shareholders which will
be filed with the SEC not later than 120 days after the close of the fiscal year pursuant to Regulation 14A.
96
PART IV
ITEM 15. Exhibits, Financial Statement Schedules
(a)
Financial Statements, Schedules, and Exhibits
1. Consolidated Financial Statements
Page
F-3
F-4
F-7
F-8
F-9
F-10
F-11
–
–
–
–
–
–
–
2.
–
–
–
–
Management's Responsibility for Financial Statements and Internal Control over Financial Reporting
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets at December 31, 2023 and 2022
Consolidated Statements of Operations and Comprehensive Income for the years ended December 31, 2023,
2022, and 2021
Consolidated Statements of Shareholders' Equity for the years ended December 31, 2023, 2022, and 2021
Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022, and 2021
Notes to Consolidated Financial Statements
Financial Statement Schedules
Schedule I - Summary of Investments - Other Than Investments in Related Parties at December 31, 2023
F-117
Schedule II - Condensed Financial Information of Registrant (Parent Company Only) at December 31, 2023 and
2022, and for the years ended December 31, 2023, 2022, and 2021
Schedule IV - Supplemental Information Concerning Reinsurance for the years ended December 31, 2023,
2022, and 2021
Schedule VI - Supplementary Information Concerning Property and Casualty Operations as of and for the years
ended December 31, 2023, 2022, and 2021
F-118
F-120
F-121
Other schedules have been omitted as they are not applicable to Chubb, or the required information has been included in
the Consolidated Financial Statements and related notes.
3. Exhibits
Exhibit
Number
Exhibit Description
Incorporated by Reference
Form
Original
Number
Date Filed
Filed
Herewith
3.1
3.2
4.1
4.2
4.3
4.4
4.5
4.6
Articles of Association of the Company, as amended and restated
8-K
3.1
May 17, 2023
Organizational Regulations of the Company, as amended
10-K
3.2
February 24, 2023
Articles of Association of the Company, as amended and restated
8-K
Organizational Regulations of the Company, as amended
Specimen share certificate representing Common Shares
Indenture, dated March 15, 2002, between ACE Limited and
Bank One Trust Company, N.A.
Senior Indenture, dated August 1, 1999, among ACE INA
Holdings, Inc., ACE Limited and Bank of New York Mellon Trust
Company, N.A. (as successor), as trustee
10-K
8-K
8-K
S-3
ASR
4.1
3.2
4.3
4.1
May 17, 2023
February 24, 2023
July 18, 2008
March 22, 2002
4.4
December 10, 2014
Indenture, dated November 30, 1999, among ACE INA Holdings,
Inc. and Bank One Trust Company, N.A., as trustee
10-K
10.38
March 29, 2000
97
Exhibit
Number
4.7
4.8
4.9
Exhibit Description
Indenture, dated December 1, 1999, among ACE INA Holdings,
Inc., ACE Limited and Bank One Trust Company, National
Association, as trustee
Amended and Restated Trust Agreement, dated March 31, 2000,
among ACE INA Holdings, Inc., Bank One Trust Company,
National Association, as property trustee, Bank One Delaware
Inc., as Delaware trustee and the administrative trustees named
therein
Incorporated by Reference
Form
10-K
Original
Number
Date Filed
Filed
Herewith
10.41
March 29, 2000
10-K
4.17
March 16, 2006
Common Securities Guarantee Agreement, dated March 31,
2000
10-K
4.18
March 16, 2006
4.10
Capital Securities Guarantee Agreement, dated March 31, 2000
10-K
4.19
March 16, 2006
4.11
Description of the Registrant's Securities
X
Form of 4.15 percent Senior Notes due 2043
First Supplemental Indenture dated as of March 13, 2013 to the
Indenture dated as of August 1, 1999 among ACE INA Holdings,
Inc., as Issuer, ACE Limited, as Guarantor, and The Bank of New
York Mellon Trust Company, N.A., as Successor Trustee
Form of 3.35 percent Senior Notes due 2024
Form of 3.150 percent Senior Notes due 2025
Form of Global Note for the 3.050% Senior Notes due 2061
Form of 3.35 percent Senior Notes due 2026
Form of 4.35 percent Senior Notes due 2045
First Supplemental Indenture to the Chubb Corp Senior Indenture
dated as of January 15, 2016 to the Indenture dated as of
October 25, 1989 among ACE INA Holdings, Inc., as Successor
Issuer, ACE Limited, as Guarantor, and The Bank of New York
Mellon Trust Company, N.A., as Trustee
Chubb Corp Senior Indenture (incorporated by reference to
Exhibit 4(a) to Chubb Corp's Registration Statement on Form S-3
filed on October 27, 1989) (File No. 33-31796)
Chubb Corp Junior Subordinated Indenture (incorporated by
reference to Exhibit 4.1 to Chubb Corp's Current Report on Form
8-K filed on March 30, 2007) (File No. 001-08661)
Form of 6.80 percent Chubb Corp Debentures due 2031
(incorporated by reference to Exhibit 4(a) to Chubb Corp's
Registration Statement on Form S-3 filed on October 27, 1989)
(File No. 33-31796)
Form of 6.00 percent Chubb Corp Senior Notes due 2037
(incorporated by reference to Exhibit 4.1 to Chubb Corp's Current
Report on Form 8-K filed on May 11, 2007) (File No.
001-08661)
Form of 6.50 percent Chubb Corp Senior Notes due 2038
(incorporated by reference to Exhibit 4.2 to Chubb Corp's Current
Report on Form 8-K filed on May 6, 2008) (File No.
001-08661)
8-K
8-K
8-K
8-K
8-K
8-K
8-K
8-K
4.2
4.3
4.1
4.1
March 13, 2013
March 13, 2013
May 27, 2014
March 16, 2015
4.3
November 18, 2021
4.3
4.4
4.1
November 3, 2015
November 3, 2015
January 15, 2016
S-3
4(a)
October 27, 1989
8-K
4.1
March 30, 2007
S-3
4(a)
October 27, 1989
8-K
4.1
May 11, 2007
8-K
4.2
May 6, 2008
4.12
4.13
4.14
4.15
4.16
4.17
4.18
4.19
4.20
4.21
4.22
4.23
4.24
98
Exhibit
Number
4.25
Exhibit Description
Procedures regarding the registration of shareholders in the share
register of Chubb Limited
4.26
Form of Officer's Certificate related to the 1.550% Senior Notes
due 2028 and 2.500% Senior Notes due 2038
4.27
Form of Global Note for the 1.550% Senior Notes due 2028
4.28
Form of Global Note for the 2.500% Senior Notes due 2038
4.29
Form of Officer's Certificate related to the 0.875% Senior Notes
due 2027 and 1.400% Senior Notes due 2031
4.30
Form of Global Note for the 0.875% Senior Notes due 2027
4.31
Form of Global Note for the 1.400% Senior Notes due 2031
4.32
Form of Officer’s Certificate related to the 0.300% Senior Notes
due 2024 and 0.875% Senior Notes due 2029
4.33
Form of Global Note for the 0.300% Senior Notes due 2024
4.34
Form of Global Note for the 0.875% Senior Notes due 2029
4.35
Form of Officer's Certificate related to the 1.375% Senior Notes
due 2030
4.36
Form of Global Note for the 1.375% Senior Notes due 2030
4.37
Form of Officer’s Certificate related to the 2.850% Senior Notes
due 2051 and the 3.050% Senior Notes due 2061
Form
10-K
8-K
8-K
8-K
8-K
8-K
8-K
8-K
8-K
8-K
8-K
8-K
8-K
Incorporated by Reference
Original
Number
Date Filed
Filed
Herewith
4.32
February 28, 2017
4.1
4.2
4.3
4.1
4.2
4.3
4.1
4.2
4.3
March 6, 2018
March 6, 2018
March 6, 2018
June 17, 2019
June 17, 2019
June 17, 2019
December 5, 2019
December 5, 2019
December 5, 2019
4.1
September 17, 2020
4.2
September 17, 2020
4.1
November 18, 2021
4.38
Form of Global Note for the 2.850% Senior Notes due 2051
8-K
4.2
November 18, 2021
10.1*
Form of Indemnification Agreement between the Company and
the directors of the Company, dated August 13, 2015
10-K
10.1
February 26, 2016
10.2
Credit Agreement for $1,000,000,000 Senior Unsecured Letter
of Credit Facility, dated as of November 6, 2012, among ACE
Limited, and certain subsidiaries and Wells Fargo Bank, National
Association as Administrative Agent, the Swingline Bank and an
Issuing Bank
10-K
10.13
February 28, 2013
10.3*
Amendment No. 3 to The Chubb Corporation Key Employee
Deferred Compensation Plan (2005)
10-K
10.32
February 28, 2013
10.4*
Pension Excess Benefit Plan of The Chubb Corporation
10-K
10.77
February 25, 2021
10.5*
10.6*
Chubb US Deferred Compensation Plan (as amended and
restated effective January 1, 2023)
10-K
10.79
February 24, 2023
Employment Terms dated December 8, 2020, between Chubb
Limited and Peter Enns [personal email removed]
10-K
10.76
February 24, 2022
99
Exhibit
Number
10.7*
Exhibit Description
Form of employment agreement between the Company (or
subsidiaries of the Company) and executive officers of the
Company to allocate a percentage of aggregate salary to the
Company (or subsidiaries of the Company)
10.8*
Outside Directors Compensation Parameters
Incorporated by Reference
Form
8-K
Original
Number
10.1
Filed
Herewith
Date Filed
July 16, 2008
X
X
10.9*
Amendment No. 2 to The Chubb Corporation Key Employee
Deferred Compensation Plan (2005)
10-K
10.20
March 2, 2009
10.10*
Aircraft Time Sharing Agreement, dated as of September 19,
2022, between Chubb INA Holdings Inc. and Evan G. Greenberg
[certain information omitted]
10-Q
10.1
October 28, 2022
10.11*
The Chubb Corporation Key Employee Deferred Compensation
Plan (2005)
8-K
10.9
March 9, 2005
10.12*
ACE USA Officer Deferred Compensation Plan (as amended and
restated effective January 1, 2011)
10-Q
10.7
October 30, 2013
10.13*
Chubb Limited Clawback Policy
10.14*
First Amendment to the Amended and Restated ACE USA
Officers Deferred Compensation Plan
10-K
10.28
February 25, 2010
10.15*
Form of Swiss Mandatory Retirement Benefit Agreement (for
Swiss-employed named executive officers)
10-Q
10.2
May 7, 2010
10.16*
Amendment One to The Chubb Corporation Key Employee
Deferred Compensation Plan (2005)
8-K
10.1
September 12, 2005
10.17*
ACE Limited Elective Deferred Compensation Plan (as amended
and restated effective January 1, 2011)
10-Q
10.5
October 30, 2013
10.18*
Deferred Compensation Plan amendments, effective January 1,
2009
10-K
10.40
February 27, 2009
10.19*
ACE USA Supplemental Employee Retirement Savings Plan (see
exhibit 10.6 to Form 10-Q filed with the SEC on May 15, 2000)
10-Q
10.6
May 15, 2000
10.20*
10.21*
Form of Restricted Stock Unit Award Terms under the Chubb
Limited 2016 Long-Term Incentive Plan for Swiss Executive
Management
Form of Restricted Stock Award Terms under the Chubb Limited
2016 Long-Term Incentive Plan for Swiss Executive Management
10-K
10.97
February 23, 2018
10-K
10.96
February 23, 2018
10.22*
ACE USA Supplemental Employee Retirement Savings Plan (as
amended and restated)
10-K
10.46
February 27, 2009
10.23*
First Amendment to the Amended and Restated ACE USA
Supplemental Employee Retirement Savings Plan
10-K
10.39
February 25, 2010
10.24*
The ACE Limited 1995 Outside Directors Plan (as amended
through the Seventh Amendment)
10-Q
10.1
August 14, 2003
10.25*
ACE Limited 2004 Long-Term Incentive Plan (as amended
through the Fifth Amendment)
10.26*
ACE Limited 2004 Long-Term Incentive Plan (as amended
through the Sixth Amendment)
8-K
8-K
10
May 21, 2010
10.1
May 20, 2013
100
Exhibit
Number
Exhibit Description
10.27*
Chubb Deferred Stock Unit Plan
Incorporated by Reference
Form
Original
Number
Date Filed
Filed
Herewith
X
10.28*
Director Restricted Stock Award Terms under the ACE Limited
2004 Long-Term Incentive Plan
10-Q
10.1
November 9, 2009
10.29*
10.30*
Form of Performance Based Restricted Stock Award Terms under
the Chubb Limited 2016 Long-Term Incentive Plan for Swiss
Executive Management
10-Q
10.1
May 2, 2023
Form of Performance Based Restricted Stock Award Terms under
the Chubb Limited 2016 Long-Term Incentive Plan for Executive
Officers
10-Q
10.2
May 2, 2023
10.31*
Chubb Limited 2016 Long-Term Incentive Plan, as amended and
restated
8-K
10.1
May 24, 2021
10.32*
Form of Incentive Stock Option Terms under the ACE Limited
2004 Long-Term Incentive Plan
10-Q
10.3
October 30, 2013
10.33*
Amendment No. 4 to the Pension Excess Benefit Plan of The
Chubb Corporation
10-K
10.8
February 25, 2021
10.34*
Amendments to the Chubb U.S. Supplemental Employee
Retirement Plan, the Chubb U.S. Deferred Compensation Plan,
and Pension Excess Benefit Plan of The Chubb Corporation
10-K
10.81
February 25, 2021
10.35*
Form of Non-Qualified Stock Option Terms under the ACE
Limited 2004 Long-Term Incentive Plan
10-Q
10.4
October 30, 2013
10.36*
Form of Restricted Stock Unit Award Terms (for outside directors)
under the ACE Limited 2004 Long-Term Incentive Plan
10-Q
10.2
November 7, 2007
10.37*
Form of Restricted Stock Unit Award Terms (for outside directors)
under the ACE Limited 2004 Long-Term Incentive Plan
10-Q
10.2
August 7, 2009
10.38*
Amendment No. 2 to the Pension Excess Benefit Plan of The
Chubb Corporation
10-K
10.78
February 25, 2021
10.39*
Amendment No. 3 to the Pension Excess Benefit Plan of The
Chubb Corporation
10-K
10.79
February 25, 2021
10.40*
Form of Incentive Stock Option Terms under the ACE Limited
2004 Long-Term Incentive Plan for Swiss Executive Management
10-K
10.71
February 27, 2015
10.41*
Form of Non-Qualified Stock Option Terms under the ACE
Limited 2004 Long-Term Incentive Plan for Swiss Executive
Management
10.42*
Form of Executive Management Non-Competition Agreement
10.43
Commitment Increase Agreement to increase the credit capacity
under the Credit Agreement originally entered into on November
6, 2012 to $1,500,000,000 under the Senior Unsecured Letter
of Credit Facility, dated as of December 11, 2015, among ACE
Limited, and certain subsidiaries, and Wells Fargo Bank, National
Association as Administrative Agent, the Swingline Bank and an
Issuing Bank
10-K
10.72
February 27, 2015
10-Q
10-K
10.1
July 28, 2023
10.72
February 26, 2016
101
Exhibit
Number
10.44*
10.45*
Exhibit Description
Form of Non-Qualified Stock Option Terms under the Chubb
Limited 2016 Long-Term Incentive Plan for Swiss Executive
Management
Form of Incentive Stock Option Terms under the Chubb Limited
2016 Long-Term Incentive Plan
Incorporated by Reference
Original
Number
Date Filed
Filed
Herewith
10.95
February 23, 2018
10.2
August 5, 2016
Form
10-K
10-Q
10.46*
Form of Restricted Stock Award Terms under the Chubb Limited
2016 Long-Term Incentive Plan
10-Q
10.3
August 5, 2016
10.47*
Form of Restricted Stock Unit Award Terms under the Chubb
Limited 2016 Long-Term Incentive Plan
10-Q
10.4
August 5, 2016
10.48*
Form of Non-Qualified Stock Option Terms under the Chubb
Limited 2016 Long-Term Incentive Plan
10-Q
10.5
August 5, 2016
10.49*
Form of Incentive Stock Option Terms under the Chubb Limited
2016 Long-Term Incentive Plan for Swiss Executive Management
10-Q
10.6
August 5, 2016
10.50*
Form of Restricted Stock Award Terms under the Chubb Limited
2016 Long-Term Incentive Plan for Swiss Executive Management
10-Q
10.7
August 5, 2016
Form of Restricted Stock Unit Award Terms under the Chubb
Limited 2016 Long-Term Incentive Plan for Swiss Executive
Management
Form of Non-Qualified Stock Option Terms under the Chubb
Limited 2016 Long-Term Incentive Plan for Swiss Executive
Management
10-Q
10.8
August 5, 2016
10-Q
10.9
August 5, 2016
Chubb Limited Employee Stock Purchase Plan, as amended and
restated
S-8
4.4
May 25, 2017
Director Restricted Stock Award Terms under the Chubb Limited
2016 Long-Term Incentive Plan
10-Q
10.1
August 3, 2017
Amended and Restated Credit Agreement for $1,000,000,000
Senior Unsecured Letter of Credit Facility, dated as of October
25, 2017, among Chubb Limited, and certain subsidiaries and
Wells Fargo Bank, National Association as Administrative Agent,
the Swingline Bank and an Issuing Bank
Second Amended and Restated Credit Agreement for
$3,000,000,000 Senior Unsecured Letter of Credit Facility,
dated as of October 6, 2022, among Chubb Limited, and certain
subsidiaries and Wells Fargo Bank, National Association as
Administrative Agent, the Swingline Bank and an Issuing Bank
10-K
10.88
February 23, 2018
10-K
10.56
February 24, 2022
Form of Incentive Stock Option Terms under the Chubb Limited
2016 Long-Term Incentive Plan for Executive Officers
10-K
10.89
February 23, 2018
Form of Restricted Stock Award Terms under the Chubb Limited
2016 Long-Term Incentive Plan for Executive Officers
10-K
10.90
February 23, 2018
Form of Non-Qualified Stock Option Terms under the Chubb
Limited 2016 Long-Term Incentive Plan for Executive Officers
10-K
10.92
February 23, 2018
Form of Restricted Stock Unit Award Terms under the Chubb
Limited 2016 Long-Term Plan for Executive Officers
10-K
10.93
February 23, 2018
Form of Incentive Stock Option Terms under the Chubb Limited
2016 Long-Term Incentive Plan for Swiss Executive Management
10-K
10.94
February 23, 2018
Subsidiaries of the Company
Guaranteed Securities
X
X
10.51*
10.52*
10.53*
10.54*
10.55
10.56
10.57*
10.58*
10.59*
10.60*
10.61*
21.1
22.1
102
Incorporated by Reference
Form
Original
Number
Date Filed
Filed
Herewith
X
X
X
X
X
X
X
X
Exhibit
Number
Exhibit Description
23.1
31.1
31.2
32.1
32.2
97.1*
97.2*
101
Consent of Independent Registered Public Accounting Firm
Certification Pursuant to Section 302 of The Sarbanes-Oxley Act
of 2002
Certification Pursuant to Section 302 of The Sarbanes-Oxley Act
of 2002
Certification Pursuant to 18 U.S.C. Section 1350, As Adopted
Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002
Certification Pursuant to 18 U.S.C. Section 1350, As Adopted
Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002
Chubb Limited Erroneously Awarded Incentive-Based
Compensation Recovery Policy
Chubb INA Holdings Inc. Erroneously Awarded Incentive-Based
Compensation Recovery Policy
The following financial information from Chubb Limited's Annual
Report on Form 10-K for the year ended December 31, 2023,
formatted in Inline XBRL: (i) Consolidated Balance Sheets at
December 31, 2023 and 2022; (ii) Consolidated Statements of
Operations and Comprehensive Income for the years ended
December 31, 2023, 2022, and 2021; (iii) Consolidated
Statements of Shareholders' Equity for the years ended December
31, 2023, 2022, and 2021; (iv) Consolidated Statements of
Cash Flows for the years ended December 31, 2023, 2022, and
2021; and (v) Notes to the Consolidated Financial Statements
104
The Cover Page Interactive Data File formatted in Inline XBRL
(The cover page XBRL tags are embedded in the Inline XBRL
document and included in Exhibit 101)
* Management contract, compensatory plan or arrangement
ITEM 16. Form 10-K Summary
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized.
CHUBB LIMITED
By:
/s/ Peter C. Enns
Peter C. Enns
Executive Vice President and Chief Financial Officer
February 23, 2024
103
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ Evan G. Greenberg
Chairman, Chief Executive Officer, and Director
February 23, 2024
Evan G. Greenberg
/s/ Peter C. Enns
Executive Vice President and Chief Financial Officer
February 23, 2024
Peter C. Enns
(Principal Financial Officer)
/s/ Annmarie T. Hagan
Chief Accounting Officer
Annmarie T. Hagan
(Principal Accounting Officer)
/s/ Michael G. Atieh
Director
Michael G. Atieh
/s/ Kathy Bonanno
Director
Kathy Bonanno
February 23, 2024
February 23, 2024
February 23, 2024
/s/ Nancy K. Buese
Director
February 23, 2024
Nancy K. Buese
/s/ Sheila P. Burke
Director
February 23, 2024
Sheila P. Burke
/s/ Michael P. Connors
Director
February 23, 2024
Michael P. Connors
/s/ Michael L. Corbat
Director
February 23, 2024
Michael L. Corbat
/s/ Robert J. Hugin
Director
Robert J. Hugin
/s/ Robert W. Scully
Director
Robert W. Scully
/s/ Theodore E. Shasta
Director
Theodore E. Shasta
/s/ David H. Sidwell
Director
David H. Sidwell
/s/ Olivier Steimer
Director
Olivier Steimer
/s/ Frances F. Townsend
Director
Frances F. Townsend
104
February 23, 2024
February 23, 2024
February 23, 2024
February 23, 2024
February 23, 2024
February 23, 2024
CHUBB LIMITED AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2023
F-1
Chubb Limited
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Management's Responsibility for Financial Statements and Internal Control over Financial Reporting
Report of Independent Registered Public Accounting Firm (PCAOB ID 238)
Consolidated Financial Statements
Consolidated Balance Sheets
Consolidated Statements of Operations and Comprehensive Income
Consolidated Statements of Shareholders’ Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Note 1.
Note 2.
Note 3.
Note 4.
Note 5.
Note 6.
Note 7.
Note 8.
Note 9.
Summary of significant accounting policies
Acquisitions
Investments
Fair value measurements
Reinsurance
Deferred acquisition costs
Goodwill, Value of business acquired, and Other intangible assets
Unpaid losses and loss expenses
Future policy benefits
Note 10.
Policyholders' account balances, Separate accounts, and Unearned revenue liabilities
Note 11.
Market risk benefits
Note 12.
Taxation
Note 13.
Debt
Note 14.
Commitments, contingencies, and guarantees
Note 15.
Shareholders' equity
Note 16.
Share-based compensation
Note 17.
Postretirement benefits
Note 18.
Other income and expense
Note 19.
Segment information
Note 20.
Earnings per share
Note 21.
Related party transactions
Note 22.
Statutory financial information
Financial Statement Schedules
Schedule I
Summary of Investments - Other Than Investments in Related Parties
Schedule II
Condensed Financial Information of Registrant
Schedule IV Supplemental Information Concerning Reinsurance
Schedule VI Supplementary Information Concerning Property and Casualty Operations
F-2
Page
F-3
F-4
F-7
F-8
F-9
F-10
F-11
F-24
F-28
F-36
F-43
F-45
F-46
F-48
F-71
F-77
F-82
F-83
F-87
F-89
F-95
F-99
F-102
F-108
F-109
F-114
F-114
F-116
F-117
F-118
F-120
F-121
MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS AND
INTERNAL CONTROL OVER FINANCIAL REPORTING
Financial Statements
The consolidated financial statements of Chubb Limited (Chubb) were prepared by management, which is responsible for their
reliability and objectivity. The statements have been prepared in conformity with accounting principles generally accepted in the
United States of America and, as such, include amounts based on informed estimates and judgments of management. Financial
information elsewhere in this annual report is consistent with that in the consolidated financial statements.
The Board of Directors (Board), operating through its Audit Committee, which is composed entirely of directors who are not
officers or employees of Chubb, provides oversight of the financial reporting process and safeguarding of assets against
unauthorized acquisition, use or disposition. The Audit Committee annually recommends the appointment of an independent
registered public accounting firm and submits its recommendation to the Board for approval.
The Audit Committee meets with management, the independent registered public accountants and the internal auditor;
approves the overall scope of audit work and related fee arrangements; and reviews audit reports and findings. In addition, the
independent registered public accountants and the internal auditor meet separately with the Audit Committee, without
management representatives present, to discuss the results of their audits; the adequacy of Chubb's internal control; the quality
of its financial reporting; and the safeguarding of assets against unauthorized acquisition, use or disposition.
The consolidated financial statements have been audited by an independent registered public accounting firm,
PricewaterhouseCoopers LLP, which has been given access to all financial records and related data, including minutes of all
meetings of the Board and committees of the Board. Chubb believes that all representations made to our independent registered
public accountants during their audits were valid and appropriate.
Management's Report on Internal Control over Financial Reporting
The management of Chubb is responsible for establishing and maintaining adequate internal control over financial reporting.
Pursuant to the rules and regulations of the Securities and Exchange Commission, internal control over financial reporting is a
process designed by, or under the supervision of our Chief Executive Officer and Chief Financial Officer to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of our consolidated financial statements for external
purposes in accordance with accounting principles generally accepted in the United States of America.
As of December 31, 2023, management has evaluated the effectiveness of Chubb's internal control over financial reporting
based on the criteria for effective-internal control over financial reporting established in “Internal Control-Integrated Framework,”
issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. Based on this evaluation,
management has concluded that Chubb's internal control over financial reporting was effective as of December 31, 2023.
In conducting our evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2023, we
have excluded the consolidation of Huatai Group as permitted by the guidance issued by the Office of the Chief Accountant of
the Securities and Exchange Commission (not to extend one year beyond the date of acquisition or one annual reporting period).
Effective July 1, 2023, Chubb discontinued the equity method of accounting to its investment in Huatai Group and applied
consolidation accounting. As of and for the year ended December 31, 2023, Huatai's assets represented 7 percent of
consolidated assets and revenues represented 1 percent of consolidated revenues. See Note 2 for further discussion of this
acquisition and its impact on Chubb's Consolidated financial statements.
PricewaterhouseCoopers LLP, the independent registered public accounting firm that audited the consolidated financial
statements of Chubb included in this Annual Report, has issued a report on the effectiveness of Chubb's internal controls over
financial reporting as of December 31, 2023. The report, which expresses an unqualified opinion on the effectiveness of
Chubb's internal control over financial reporting as of December 31, 2023, is included in this Item under “Report of
Independent Registered Public Accounting Firm” and follows this statement.
/s/ Evan G. Greenberg
Evan G. Greenberg
/s/ Peter C. Enns
Peter C. Enns
Chairman and Chief Executive Officer
Executive Vice President and Chief Financial Officer
F-3
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of Chubb Limited
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Chubb Limited and its subsidiaries (the "Company") as of
December 31, 2023 and 2022, and the related consolidated statements of operations and comprehensive income, of
shareholders' equity and of cash flows for each of the three years in the period ended December 31, 2023, including the related
notes and financial statement schedules listed in the index appearing under Item 15(a)(2) (collectively referred to as the
“consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of
December 31, 2023, based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial
position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of
the three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the
United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over
financial reporting as of December 31, 2023, based on criteria established in Internal Control-Integrated Framework (2013)
issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control
over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the
accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on
the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our
audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)
(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws
and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform
the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material
misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all
material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement
of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated
financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal
control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk
that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on
the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances.
We believe that our audits provide a reasonable basis for our opinions.
As described in Management’s Report on Internal Control over Financial Reporting, management has excluded Huatai Group
from its assessment of internal control over financial reporting as of December 31, 2023 because it was acquired by the
Company in a purchase business combination during 2023. We have also excluded Huatai Group from our audit of internal
control over financial reporting. Huatai Group is a subsidiary whose total assets and total revenues excluded from management’s
assessment and our audit of internal control over financial reporting represent 7 percent and 1 percent, respectively, of the
related consolidated financial statement amounts as of and for the year ended December 31, 2023.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that
(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions
F-4
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial
statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or
disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or
complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated
financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate
opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Valuation of Unpaid Losses and Loss Expenses, Net of Reinsurance
As described in Note 8 to the consolidated financial statements, as of December 31, 2023, the Company’s liability for unpaid
losses and loss expenses, net of reinsurance, was $62.2 billion. The majority of the Company’s net unpaid losses and loss
expenses arise from the Company’s long-tail casualty business (such as general liability and professional liability), U.S. sourced
workers’ compensation, asbestos-related, environmental pollution and other exposures with high estimation uncertainty. The
process of establishing loss and loss expense reserves requires the use of estimates and judgments based on circumstances
underlying the insured loss at the date of accrual. The judgments involved in projecting the ultimate losses include the use and
interpretation of various standard actuarial reserving methods that place reliance on the extrapolation of actual historical data,
loss development patterns, industry data, and other benchmarks as appropriate. The reserves for the various product lines each
require different qualitative and quantitative assumptions and judgments, including changes in business mix or volume, changes
in ceded reinsurance structures, changes in claims handling practices, reported and projected loss trends, inflation, the legal
environment, and the terms and conditions of the contracts sold to the Company’s insured parties.
The principal considerations for our determination that performing procedures relating to the valuation of unpaid losses and loss
expenses, net of reinsurance, from the long-tail and other exposures as described above, is a critical audit matter are (i) the
significant judgment by management in determining the reserve liability, which in turn led to a high degree of auditor
subjectivity and judgment in performing procedures relating to the valuation; (ii) the significant audit effort and judgment in
evaluating the audit evidence relating to the actuarial reserving methods and assumptions related to extrapolation of actual
historical data, loss development patterns, industry data, other benchmarks, and the impact of qualitative and quantitative
subjective assumptions and judgments; and (iii) the audit effort involved the use of professionals with specialized skill and
knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall
opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the
Company’s valuation of unpaid losses and loss expenses, net of reinsurance, including controls over the selection of actuarial
reserving methods and development of significant assumptions. These procedures also included, among others, the involvement
of professionals with specialized skill and knowledge to assist in performing one or a combination of procedures, including (i)
independently estimating reserves on a sample basis using actual historical data and loss development patterns, as well as
industry data and other benchmarks, to develop an independent estimate and comparing the independent estimate to
management’s actuarially determined reserves and (ii) evaluating the appropriateness of management’s actuarial reserving
methods and the reasonableness of the aforementioned assumptions, as well as assessing qualitative adjustments to carried
reserves and the consistency of management’s approach period-over-period. Performing these procedures involved testing the
completeness and accuracy of data provided by management.
F-5
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Philadelphia, PA
February 23, 2024
We have served as the Company’s auditor since 1985, which includes periods before the Company became subject to SEC
reporting requirements.
F-6
CONSOLIDATED BALANCE SHEETS
Chubb Limited and Subsidiaries
(in millions of U.S. dollars, except share and per share data)
Assets
Investments
Short-term investments, at fair value (amortized cost – $4,551 and $4,962) (includes variable interest
entities (VIE) balances of $217 and nil)
Fixed maturities available-for-sale, at fair value, net of valuation allowance – $156 and $169 (amortized
cost – $111,128 and $93,355)
Fixed maturities held to maturity, at amortized cost, net of valuation allowance – nil and $34 (fair value
– nil and $8,439)
Private debt held-for-investment, at amortized cost, net of valuation allowance – $4 and nil
Equity securities, at fair value (includes VIE balances of $1,078 and nil)
Private equities (includes VIE balances of $21 and nil)
Other investments (includes VIE balances of $3,773 and nil)
Total investments
Cash, including restricted cash $172 and $115 (includes VIE balances of $117 and nil)
Securities lending collateral
Accrued investment income
Insurance and reinsurance balances receivable, net of valuation allowance – $53 and $52
Reinsurance recoverable on losses and loss expenses, net of valuation allowance – $367 and $351
Reinsurance recoverable on policy benefits
Deferred policy acquisition costs
Value of business acquired
Goodwill
Other intangible assets
Deferred tax assets
Prepaid reinsurance premiums
Investments in partially-owned insurance companies
Separate account assets
Other assets (includes VIE balances of $33 and nil)
Total assets
Liabilities
Unpaid losses and loss expenses
Unearned premiums
Future policy benefits
Market risk benefits
Policyholders' account balances
Separate account liabilities
Insurance and reinsurance balances payable
Securities lending payable
Accounts payable, accrued expenses, and other liabilities (includes VIE balances of $18 and nil)
Deferred tax liabilities
Repurchase agreements (includes VIE balances of $1,009 and nil)
Short-term debt
Long-term debt
Trust preferred securities
Total liabilities
Commitments and contingencies (refer to Note 14)
Shareholders’ equity
Common Shares (CHF 0.50 and 24.15 par value; 431,451,586 and 446,376,614 shares
issued; 405,269,637 and 414,594,856 shares outstanding)
Common Shares in treasury (26,181,949 and 31,781,758 shares)
Additional paid-in capital
Retained earnings
Accumulated other comprehensive income (loss) (AOCI)
Total Chubb shareholders' equity
Noncontrolling interests (includes VIE balances of $2,705 and nil)
Total shareholders’ equity
Total liabilities and shareholders’ equity
See accompanying notes to the Consolidated Financial Statements
As Adjusted
December 31, 2023 December 31, 2022
$
4,551 $
4,960
$
$
106,571
—
2,553
3,455
14,078
5,527
136,735
2,621
1,299
1,086
13,379
19,952
280
7,152
3,674
19,686
6,775
1,741
3,221
191
5,573
7,317
230,682 $
80,122 $
22,051
13,888
771
7,462
5,573
8,302
1,299
8,332
1,555
2,833
1,460
13,035
308
166,991
241
(4,400)
15,665
54,810
(6,809)
59,507
4,184
63,691
$
230,682 $
85,220
8,848
—
827
12,355
1,341
113,551
2,127
1,523
941
11,933
18,859
302
6,031
3,702
16,228
5,441
—
3,136
2,507
5,190
7,546
199,017
75,747
19,713
10,476
800
3,140
5,190
7,780
1,523
7,148
377
1,419
475
14,402
308
148,498
10,346
(5,113)
7,166
48,305
(10,185)
50,519
—
50,519
199,017
F-7
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
Chubb Limited and Subsidiaries
For the years ended December 31, 2023, 2022, and 2021
(in millions of U.S. dollars, except per share data)
2023
2022
As Adjusted
2021
Revenues
Net premiums written
Increase in unearned premiums
Net premiums earned
Net investment income
Net realized gains (losses)
Market risk benefits gains (losses)
Total revenues
Expenses
Losses and loss expenses
Policy benefits (includes remeasurement gains of $19, $3, and nil)
Policy acquisition costs
Administrative expenses
Interest expense
Other (income) expense
Amortization of purchased intangibles
Cigna integration expenses
Total expenses
Income before income tax
Income tax expense
Net income
Net loss attributable to noncontrolling interests
Net income attributable to Chubb
Other comprehensive income (loss)
Change in:
Unrealized appreciation (depreciation)
Current discount rate on future policy benefits
Instrument-specific credit risk on market risk benefits
Cumulative foreign currency translation adjustment
Other, including postretirement benefit liability adjustment
Other comprehensive income (loss), before income tax
Income tax (expense) benefit related to OCI items
Other comprehensive income (loss)
Comprehensive income (loss)
Comprehensive loss attributable to noncontrolling interests
Comprehensive income (loss) attributable to Chubb
Earnings per share
Basic earnings per share attributable to Chubb
Diluted earnings per share attributable to Chubb
See accompanying notes to the Consolidated Financial Statements
F-8
$
47,361 $
41,720 $
37,827
(1,649)
(1,360)
(1,535)
45,712
40,360
36,292
4,937
3,742
(607)
(1,085)
(307)
80
3,456
1,030
91
49,735
43,097
40,869
24,100
22,572
21,030
3,628
8,259
4,007
672
(836)
310
69
2,314
7,339
3,395
570
89
285
48
1,740
6,758
3,135
492
(2,367)
287
—
40,209
36,612
31,075
9,526
511
6,485
1,239
9,794
1,269
$
9,015 $
5,246 $
8,525
(13)
—
—
$
9,028 $
5,246 $
8,525
$
3,448 $
(10,578) $
(2,938)
84
2
(13)
157
1,480
33
(911)
(100)
387
27
(505)
522
3,678
(10,076)
(2,507)
(317)
965
366
3,361
12,376
(9,111)
(2,141)
(3,865)
6,384
(28)
—
—
$
12,404 $
(3,865) $
6,384
$
$
21.97 $
12.50 $
19.38
21.80 $
12.39 $
19.24
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
Chubb Limited and Subsidiaries
For the years ended December 31, 2023, 2022, and 2021
(in millions of U.S. dollars)
Common Shares
Balance – beginning of year
Par value reduction
Cancellation of treasury shares
Balance – end of year
Common Shares in treasury
Balance – beginning of year
Common Shares repurchased
Cancellation of treasury shares
Net shares issued under employee share-based compensation plans
Balance – end of year
Additional paid-in capital
Balance – beginning of year
Net shares issued under employee share-based compensation plans
Exercise of stock options
Share-based compensation expense
Par value reduction
Net increase due to acquisitions
Funding of dividends declared to Retained earnings
Balance – end of year
Retained earnings
Balance – beginning of year
Cumulative effect of adoption of accounting standards
Balance – beginning of year, as adjusted
Net income attributable to Chubb
Cancellation of treasury shares
Funding of dividends declared from Additional paid-in capital
Dividends declared on Common Shares
Balance – end of year
Accumulated other comprehensive income (loss) (AOCI)
Balance – beginning of year
Cumulative effect of adoption of accounting standards
Balance – beginning of year, as adjusted
Other comprehensive income (loss)
Balance – end of year
Total Chubb shareholders’ equity
Noncontrolling interests
Balance – beginning of year
Net increase due to acquisitions
Net loss attributable to noncontrolling interests
Other comprehensive loss attributable to noncontrolling interests
Balance – end of year
Total shareholders' equity
See accompanying notes to the Consolidated Financial Statements
$
$
2023
2022
As Adjusted
2021
$
10,346 $
10,985 $
11,064
(9,759)
—
(346)
(639)
—
(79)
241
10,346
10,985
(5,113)
(7,464)
(3,644)
(2,478)
(3,014)
(4,861)
2,869
322
4,983
382
590
451
(4,400)
(5,113)
(7,464)
7,166
8,478
9,815
(192)
(20)
(173)
(43)
322
9,759
31
283
—
—
(179)
(52)
286
—
—
(1,401)
(1,379)
(1,392)
15,665
7,166
8,478
48,305
47,403
39,337
—
48,305
9,028
—
47,403
5,246
(2,523)
(4,344)
1,401
1,379
52
39,389
8,525
(511)
1,392
(1,401)
(1,379)
(1,392)
54,810
48,305
47,403
(10,185)
(1,074)
2,869
—
—
(1,802)
(10,185)
(1,074)
1,067
3,376
(9,111)
(2,141)
(6,809)
(10,185)
(1,074)
$
59,507 $
50,519 $
58,328
$
— $
— $
4,212
(13)
(15)
—
—
—
4,184 $
— $
—
—
—
—
—
63,691 $
50,519 $
58,328
F-9
CONSOLIDATED STATEMENTS OF CASH FLOWS
Chubb Limited and Subsidiaries
For the years ended December 31, 2023, 2022, and 2021
(in millions of U.S. dollars)
Cash flows from operating activities
Net income
Adjustments to reconcile net income to net cash flows from operating activities
Net realized (gains) losses
Market risk benefits (gains) losses
Amortization of premiums/discounts on fixed maturities
Amortization of purchased intangibles
Equity in net income of partially-owned entities
Deferred income taxes
Unpaid losses and loss expenses
Unearned premiums
Future policy benefits
Insurance and reinsurance balances payable
Accounts payable, accrued expenses, and other liabilities
Income taxes
Insurance and reinsurance balances receivable
Reinsurance recoverable
Deferred policy acquisition costs
Net sales of investments by consolidated investment products
Other
Net cash flows from operating activities
Cash flows from investing activities
Purchases of fixed maturities available-for-sale
Purchases of fixed maturities held to maturity
Purchases of equity securities
Sales of fixed maturities available-for-sale
Sales of equity securities
Maturities and redemptions of fixed maturities available-for-sale
Maturities and redemptions of fixed maturities held to maturity
Net change in short-term investments
Net derivative instruments settlements
Private equity contributions
Private equity distributions
Acquisition of subsidiaries (net of cash acquired of $560, $366, and nil)
Net deconsolidations of consolidated investment products
Other
Net cash flows used for investing activities
Cash flows from financing activities
Dividends paid on Common Shares
Common Shares repurchased
Proceeds from issuance of long-term debt
Proceeds from issuance of repurchase agreements
Repayment of long-term debt
Repayment of repurchase agreements
Proceeds from share-based compensation plans
Policyholder contract deposits
Policyholder contract withdrawals
Third-party capital invested into consolidated investment products
Third-party capital distributed by consolidated investment products
Other
Net cash flows used for financing activities
Effect of foreign currency rate changes on cash and restricted cash
Net increase (decrease) in cash and restricted cash
Cash and restricted cash – beginning of year
Cash and restricted cash – end of year
Supplemental cash flow information
Taxes paid
Interest paid
See accompanying notes to the Consolidated Financial Statements
F-10
2023
2022
As Adjusted
2021
$
9,015 $
5,246 $
8,525
607
307
(148)
310
(867)
(1,124)
3,470
1,377
848
(155)
(735)
128
(1,072)
(498)
(1,100)
450
1,819
12,632
(28,672)
(208)
(1,395)
14,593
1,084
7,026
708
1,169
(153)
(2,024)
1,164
(34)
(17)
(889)
(7,648)
1,085
(80)
189
285
(1)
318
4,259
1,435
333
446
(68)
(149)
(696)
(1,737)
(396)
—
789
11,258
(27,844)
(618)
(895)
16,855
4,615
9,415
1,712
(1,452)
(84)
(2,649)
1,017
(5,166)
—
(560)
(5,654)
(1,394)
(2,411)
—
4,984
(475)
(4,728)
212
645
(458)
126
(745)
(245)
(4,489)
(1)
494
2,127
2,621 $
(1,375)
(2,894)
—
4,510
(1,000)
(4,508)
264
488
(521)
—
—
(106)
(5,142)
(146)
316
1,811
2,127 $
(1,030)
(91)
332
287
(2,435)
(84)
5,178
1,252
1,040
582
(2,423)
48
(984)
(1,949)
(422)
—
3,325
11,151
(30,222)
(594)
(1,167)
6,596
1,018
17,361
1,964
1,175
(219)
(2,471)
1,421
(1,184)
—
(337)
(6,659)
(1,401)
(4,861)
1,576
1,858
—
(1,858)
300
513
(457)
—
—
(81)
(4,411)
(106)
(25)
1,836
1,811
1,465 $
553 $
1,242 $
552 $
1,298
492
$
$
$
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Chubb Limited and Subsidiaries
1. Summary of significant accounting policies
a) Basis of presentation
Chubb Limited is a holding company incorporated in Zurich, Switzerland. Chubb Limited, through its subsidiaries, provides a
broad range of insurance and reinsurance products to insureds worldwide. Our results are reported through the following
business segments: North America Commercial P&C Insurance, North America Personal P&C Insurance, North America
Agricultural Insurance, Overseas General Insurance, Global Reinsurance, and Life Insurance. Refer to Note 19 for additional
information.
The accompanying Consolidated Financial Statements, which include the accounts of Chubb Limited and its subsidiaries
(collectively, Chubb, we, us, or our), over which Chubb exercises control, including Huatai Group, our majority-owned
subsidiary, and minority-owned entities such as variable interest entities (VIEs) in which Chubb is considered the primary
beneficiary. Noncontrolling interests on the consolidated financial statements represent the portion of majority-owned
subsidiaries and VIEs in which we do not have direct equity ownership. These Consolidated Financial Statements have been
prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and, in the
opinion of management, reflect all adjustments necessary for a fair statement of the results and financial position for such
periods. All significant intercompany accounts and transactions, including internal reinsurance transactions, have been
eliminated.
On July 1, 2023, Chubb discontinued equity method accounting for its investment in Huatai Group upon obtaining a controlling
interest and applied consolidation accounting. Therefore, effective July 1, 2023, business activity for, and the financial position
of, Huatai Group is reported at 100 percent on the Consolidated Financial Statements. At December 31, 2023, our aggregate
ownership interest in Huatai Group was approximately 76.5 percent. Refer to Note 2 for additional information on the
acquisition of Huatai Group. The relevant amounts attributable to shareholders other than Chubb are reflected in the
Consolidated Financial Statements under the captions Noncontrolling interests, Net income (loss) attributable to noncontrolling
interests, and Comprehensive income (loss) attributable to noncontrolling interests.
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the reporting period. Amounts included in the
Consolidated Financial Statements reflect our best estimates and assumptions; actual amounts could differ materially from these
estimates. Chubb's principal estimates include:
•
•
•
•
•
•
•
•
•
unpaid loss and loss expense reserves, including long-tail asbestos and environmental (A&E) reserves and non-A&E casualty
exposures;
future policy benefits reserves;
the valuation of value of business acquired (VOBA);
the assessment of risk transfer for certain structured insurance and reinsurance contracts;
reinsurance recoverable, including a valuation allowance for uncollectible reinsurance;
the valuation of the investment portfolio and assessment of valuation allowance for expected credit losses;
the valuation of deferred income taxes;
the valuation and amortization of purchased intangibles; and
the assessment of goodwill for impairment.
b) Premiums
Premiums are generally recorded as written upon inception of the policy. For multi-year policies for which premiums written are
payable in annual installments, only the current annual premium is included as written at policy inception due to the ability of
the insured/reinsured to commute or cancel coverage within the policy term. The remaining annual premiums are recorded as
written at each successive anniversary date within the multi-year term.
For property and casualty (P&C) insurance and reinsurance products, premiums written are primarily earned on a pro-rata basis
over the policy terms to which they relate. Unearned premiums represent the portion of premiums written applicable to the
F-11
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
unexpired portion of the policies in force. For retrospectively-rated policies, written premiums are adjusted to reflect expected
ultimate premiums consistent with changes to incurred losses, or other measures of exposure as stated in the policy, and earned
over the policy coverage period.
Mandatory reinstatement premiums assessed on reinsurance policies are earned in the period of the loss event that gave rise to
the reinstatement premiums. All remaining unearned premiums are recognized over the remaining coverage period.
Premiums from long-duration contracts such as certain traditional term life, whole life, endowment, and long-duration personal
accident and health (A&H) policies are generally recognized as revenue when due from policyholders. Traditional life policies
include those contracts with fixed and guaranteed premiums and benefits. Benefits and expenses are recognized in relation to
insurance in force resulting in the recognition of profit over the life of the contracts.
Retroactive loss portfolio transfer (LPT) contracts in which the insured loss events occurred prior to contract inception are
evaluated to determine whether they meet criteria for reinsurance accounting. If reinsurance accounting is appropriate, written
premiums are fully earned and corresponding losses and loss expenses recognized at contract inception. These contracts can
cause significant variances in gross premiums written, net premiums written, net premiums earned, and net incurred losses in
the years in which they are written. Reinsurance contracts sold not meeting the criteria for reinsurance accounting are recorded
using the deposit method.
Reinsurance premiums assumed are based on information provided by ceding companies supplemented by our own estimates of
premium when we have not received ceding company reports. Estimates are reviewed and adjustments are recorded in the
period in which they are determined. Premiums are earned over the coverage terms of the related reinsurance contracts and
range from one to three years.
c) Deferred policy acquisition costs (DAC)
Policy acquisition costs consist of commissions (direct and ceded), premium taxes, and certain underwriting costs related
directly to the successful acquisition of new or renewal insurance contracts. Amortization is recorded in Policy acquisition costs
in the Consolidated statements of operations.
Short-duration contracts
Policy acquisition costs are amortized ratably over the period the related premiums are earned. Policy acquisition costs are
reviewed to determine if they are recoverable from future income including investment income. Unrecoverable policy acquisition
costs are expensed in the period identified.
Long-duration contracts
Policy acquisition costs are grouped by contract type and issue year into cohorts consistent with the groupings used in
estimating the associated liability and are expensed on a constant level basis over the expected term of the related contracts to
approximate straight-line amortization at the contract level. The constant level basis used for amortization is the insurance in-
force and is projected using the same assumptions used in estimating the liability for future policy benefits. If those projected
assumptions change in future periods, they will be reflected in the cohort level amortization basis at that time. Unexpected
changes in the in-force portfolio, due to variances in mortality and lapse experience, are recognized over the contract term.
Changes in future mortality and lapse assumptions are also recognized prospectively over the remaining expected contract term.
Advertising costs are expensed as incurred except for direct-response campaigns that qualify for cost deferral. Qualified expenses
include individual direct-response marketing campaigns where we can demonstrate the campaigns have specifically resulted in
incremental sales to customers and such sales have probable future economic benefits. Any costs directly related to the
marketing campaigns are deferred, included with other policy acquisition costs, and expensed as a component of Policy
acquisition costs using the same amortization basis.
d) Value of business acquired (VOBA)
As part of business combination accounting, a VOBA intangible asset is established upon the acquisition of blocks of long-
duration contracts. This intangible represents the present value of estimated net cash flows for the in-force contracts as of the
acquisition date. VOBA is amortized as a component of Policy acquisition costs in the Consolidated statements of operations in
relation to the profit emergence of the underlying acquired contracts. The valuation of VOBA is based on many factors including
F-12
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
mortality, morbidity, persistency, investment yields, expenses, and discount rate. The VOBA intangible is tested for recoverability
at least annually using a premium deficiency test. Unrecoverable VOBA is expensed in the period identified.
e) Reinsurance
Chubb assumes and cedes reinsurance with other insurance companies to provide greater diversification of business and
minimize the net loss potential arising from large risks. Ceded reinsurance contracts do not relieve Chubb of its primary
obligation to policyholders.
For both ceded and assumed reinsurance, risk transfer requirements must be met in order to account for a contract as
reinsurance, principally resulting in the recognition of cash flows under the contract as premiums and losses. To meet risk
transfer requirements, a reinsurance contract must include insurance risk, consisting of both underwriting and timing risk, and a
reasonable possibility of a significant loss for the assuming entity. To assess risk transfer for certain contracts, Chubb generally
develops expected discounted cash flow analyses at contract inception. Deposit accounting is used for contracts that do not
meet risk transfer requirements.
Reinsurance recoverable includes balances due from reinsurance companies for paid and unpaid losses and loss expenses and
future policy benefits that will be recovered from reinsurers, based on contracts in force. The method for determining the
reinsurance recoverable on unpaid losses and loss expenses incurred but not reported (IBNR) involves actuarial estimates
consistent with those used to establish the associated liability for unpaid losses and loss expenses as well as a determination of
Chubb's ability to cede unpaid losses and loss expenses under the terms of the reinsurance agreement.
Reinsurance recoverable is presented net of a valuation allowance for uncollectible reinsurance determined based upon a review
of the financial condition of reinsurers and other factors. The valuation allowance for uncollectible reinsurance is based on an
estimate of the reinsurance recoverable balance that will ultimately be unrecoverable due to reinsurer insolvency, a contractual
dispute, or any other reason. The valuation of this allowance includes several judgments including certain aspects of the
allocation of reinsurance recoverable on IBNR claims by reinsurer and a default analysis to estimate uncollectible reinsurance.
The primary components of the default analysis are reinsurance recoverable balances by reinsurer, net of collateral, and default
factors used to determine the portion of a reinsurer's balance deemed uncollectible. The definition of collateral for this purpose
requires some judgment and is generally limited to assets held in a Chubb-only beneficiary trust, letters of credit, and liabilities
held with the same legal entity for which Chubb believes there is a contractual right of offset. The determination of the default
factor is principally based on the financial strength rating of the reinsurer. Default factors require considerable judgment and are
determined using the current financial strength rating, or rating equivalent, of each reinsurer as well as other key considerations
and assumptions. Changes in the valuation allowance for uncollectible reinsurance recoverables are recorded in Losses and loss
expenses in the Consolidated statements of operations. The more significant considerations to calculate the valuation allowance
include, but are not necessarily limited to, the following:
•
•
•
For reinsurers that maintain a financial strength rating from a major rating agency, and for which recoverable balances are
considered representative of the larger population (i.e., default probabilities are consistent with similarly rated reinsurers
and payment durations conform to averages), the financial rating is based on a published source and the default factor is
based on published default statistics of a major rating agency applicable to the reinsurer's particular rating class. When a
recoverable is expected to be paid in a brief period of time by a highly rated reinsurer, such as certain property catastrophe
claims, a default factor may not be applied;
For balances recoverable from reinsurers that are both unrated by a major rating agency and for which management is
unable to determine a credible rating equivalent based on a parent, affiliate, or peer company, we determine a rating
equivalent based on an analysis of the reinsurer that considers an assessment of the creditworthiness of the particular
entity, industry benchmarks, or other factors as considered appropriate. We then apply the applicable default factor for that
rating class. For balances recoverable from unrated reinsurers for which the ceded reserve is below a certain threshold, we
generally apply a default factor of 34 percent, consistent with published statistics of a major rating agency;
For balances recoverable from reinsurers that are either insolvent or under regulatory supervision, we establish a default
factor and resulting valuation allowance for uncollectible reinsurance based on reinsurer-specific facts and circumstances.
Upon initial notification of an insolvency, we generally recognize an expense for a substantial portion of all balances
outstanding, net of collateral, through a combination of write-offs of recoverable balances and increases to the valuation
allowance for uncollectible reinsurance. When regulatory action is taken on a reinsurer, we generally recognize a default
factor by estimating an expected recovery on all balances outstanding, net of collateral. When sufficient credible information
becomes available, we adjust the valuation allowance for uncollectible reinsurance by establishing a default factor pursuant
to information received; and
F-13
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
•
For other recoverables, management determines the valuation allowance for uncollectible reinsurance based on the specific
facts and circumstances.
The methods used to determine the reinsurance recoverable balance and related valuation allowance for uncollectible
reinsurance are regularly reviewed and updated, and any resulting adjustments are reflected in earnings in the period identified.
The methods used to determine the valuation allowance for uncollectible high deductible recoverable amounts and valuation
allowance for insurance and reinsurance balances receivable are similar to the processes used to determine the valuation
allowance for uncollectible reinsurance recoverable. For information on high deductible policies, refer to section k) Unpaid losses
and loss expenses, below.
Prepaid reinsurance premiums represent the portion of premiums ceded to reinsurers applicable to the unexpired coverage terms
of the reinsurance contracts in-force.
f) Investments
Fixed maturities, equity securities, and short-term investments
Fixed maturities are classified as available-for-sale (AFS) and are reported at fair value, net of a valuation allowance for credit
losses, with changes in fair value recorded as a separate component of AOCI in Shareholders' equity. Prior to June 2023, we
classified securities for which we had the ability and intent to hold to maturity or redemption as held to maturity (HTM), and
reported these securities at amortized cost, net of a valuation allowance for credit losses. In June 2023, we determined that we
no longer had the intent to hold securities in HTM portfolio until maturity. As a result, our entire HTM portfolio was transferred
to the AFS portfolio. Refer to Note 3 a) for additional information.
Equity securities are reported at fair value with changes in fair value recorded in Net realized gains (losses) on the Consolidated
statements of operations.
Short-term investments comprise securities due to mature within one year of the date of purchase and are recorded at fair value
which typically approximates cost.
Interest, dividend income, and amortization of fixed maturity market premiums and discounts, related to these securities are
recorded in Net investment income, net of investment management and custody fees, in the Consolidated statements of
operations. Realized gains or losses on sales of investments are determined on a first-in, first-out basis.
For mortgage-backed securities and any other holdings for which there is a prepayment risk, prepayment assumptions are
evaluated and revised as necessary. Any adjustments required due to the resultant change in effective yields and maturities are
recognized prospectively. Prepayment fees or call premiums that are only payable when a security is called prior to its maturity
are earned when received and reflected in Net investment income.
Valuation allowance for fixed income securities
Management evaluates expected credit losses (ECL) for AFS securities when fair value is below amortized cost. AFS securities
are evaluated for potential credit loss on an individual security level but the evaluation may use assumptions consistent with
expectations of credit losses for a group of similar securities. If management has the intent to sell or will be required to sell the
security before recovery, the entire impairment loss will be recorded through income to Net realized gains and losses. If
management does not have the intent to sell or will not be required to sell the security before recovery, an allowance for credit
losses is established and is recorded through income to Net realized gains and losses, and the non-credit loss portion is
recorded through other comprehensive income.
Examples of criteria that are collectively evaluated to determine if a credit loss has occurred include the following:
•
•
The extent to which the fair value is less than amortized cost;
Adverse conditions related to the security, industry, or geographic area;
• Downgrades in the security's credit rating by a rating agency; and
•
Failure of the issuer to make scheduled principal or interest payments.
AFS securities that meet any one of the criteria included above will be subject to a discounted cash flow analysis by comparing
the present value of expected future cash flows with the amortized cost basis. Projected cash flows are driven primarily by
F-14
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
assumptions regarding probability of default and the timing and amount of recoveries associated with defaults. Chubb developed
the projected cash flows using market data, issuer-specific information, and credit ratings. In combination with contractual cash
flows and the use of historical default and recovery data by Moody's Investors Service (Moody's) rating category we generate
expected cash flows using the average cumulative issuer-weighted global default rates by letter rating.
If the present value of expected future cash flows is less than the amortized cost, a credit loss exists and an allowance for credit
losses will be recognized. If the present value of expected future cash flows is equal to or greater than the amortized cost basis,
management will conclude an expected credit loss does not exist.
Management reviews credit losses and the valuation allowance for expected credit losses each quarter. When all or a portion of
a fixed maturity security is identified to be uncollectible and written off, the valuation allowance for expected credit losses is
reduced. In general, a security is considered uncollectible no later than when all efforts to collect contractual cash flows have
been exhausted. Below are considerations for when a security may be deemed uncollectible:
• We have sufficient information to determine that the issuer of the security is insolvent;
• We receive notice that the issuer of the security has filed for bankruptcy, and the collectability is expected to be adversely
impacted by the bankruptcy;
The issuer of a security has violated multiple debt covenants;
Amounts have been past due for a specified period of time with no response from the issuer;
A significant deterioration in the value of the collateral has occurred; and
•
•
•
• We have received correspondence from the issuer of the security indicating that it doesn’t intend to pay the contractual
principal and interest.
Prior to the transfer of our entire HTM portfolio to the AFS portfolio, as noted above, HTM securities were evaluated for potential
credit loss on a collective pool basis quarterly. Chubb pooled HTM securities and calculated the current expected credit loss for
each pool using Moody's corporate bond default average, corporate bond recovery rate, and an economic cycle multiplier based
on the leading economic index adjusted for a forward-looking economic outlook.
We elected to not measure an allowance for accrued investment income as uncollectible balances are written off in a timely
manner, typically 30 to 45 days after uncollected balances are due.
Private debt held-for-investment
Private debt held-for-investment relates principally to investments in the funding of public and private projects that are mostly
infrastructure related and were acquired as part of Huatai’s investment portfolio upon consolidation. They have stated interest
rates and maturity dates with fixed or determinable payments. Private debt held-for-investment are carried at amortized cost,
net of a valuation allowance for credit losses. Management evaluates current expected credit losses (CECL) for all Private debt
held-for-investment each quarter on a collective pool basis using S&P's corporate bond default average, corporate bond recovery
rate, and an economic cycle multiplier. Interest income is recorded when earned within Net investment income on the
Consolidated statements of operations.
Private equities
Private equities principally consist of Investment funds, limited partnerships, and partially owned investment companies.
Investment funds and limited partnerships
Investment funds, limited partnerships, and all other investments over which Chubb cannot exercise significant influence,
generally, when we own less than three percent of the investee's shares, are accounted for as follows:
•
•
•
•
Income and expenses from these funds are reported within Net investment income.
These funds are carried at net asset value, which approximates fair value with changes in fair value recorded in Net realized
gains (losses) on the Consolidated statements of operations. Refer to Note 4 for a further discussion on net asset value.
As a result of the timing of the receipt of valuation data from the investment managers, these investments are generally
reported on a three-month lag.
Sales of these investments are reported within Net realized gains (losses).
F-15
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
Partially-owned investment companies
Partially-owned investment companies are limited partnerships where our ownership interest is in excess of three percent are
accounted for under the equity method because Chubb exerts significant influence. These investments apply investment
company accounting to determine operating results, and Chubb retains the investment company accounting in applying the
equity method.
•
•
This means that investment income, realized gains or losses, and unrealized gains or losses are included in the portion of
equity earnings reflected in Other (income) expense.
As a result of the timing of the receipt of valuation data from the investment managers, these investments are generally
reported on a three-month lag.
Other investments
• Huatai’s asset management businesses create investment entities known as consolidated investment products which
include mutual funds with primary holdings in fixed maturities. These securities are reported at fair value with changes in
fair value reported through the Consolidated statements of operations within Net realized gains (losses) as required under
investment company accounting standards.
•
•
Policy loans are carried at outstanding balance and interest income is reflected in Net investment income.
Life insurance policies are carried at policy cash surrender value and income is reflected in Other (income) expense.
• Non-qualified separate account assets are supported by assets that do not qualify for separate accounting reporting under
U.S. GAAP and are carried at fair value. Unrealized gains and losses on non-qualified separate account assets are reflected
in Other (income) expense.
Investments in partially-owned insurance companies
Investments in partially-owned insurance companies primarily represent direct investments in which Chubb has significant
influence and as such, meet the requirements for equity method accounting. Generally, we own twenty percent or more of the
investee’s shares. We report our share of the net income or loss of the partially-owned insurance companies in Other (income)
expense.
Securities lending program
Chubb participates in a securities lending program operated by a third-party banking institution whereby certain assets are
loaned to qualified borrowers and from which we earn an incremental return which is recorded within Net investment income in
the Consolidated statements of operations.
Borrowers provide collateral, in the form of either cash or approved securities, at a minimum of 102 percent of the fair value of
the loaned securities. Each security loan is deemed to be an overnight transaction. Cash collateral is invested in a collateral pool
which is managed by the banking institution. The collateral pool is subject to written investment guidelines with key objectives
which include the safeguard of principal and adequate liquidity to meet anticipated redemptions. The fair value of the loaned
securities is monitored on a daily basis, with additional collateral obtained or refunded as the fair value of the loaned securities
changes. The fair value of the securities on loan is included in Fixed maturities available-for-sale and Equity securities in the
Consolidated balance sheets. The collateral is held by the third-party banking institution, and the collateral can only be accessed
in the event that the institution borrowing the securities is in default under the lending agreement. As a result of these
restrictions, we consider our securities lending activities to be non-cash investing and financing activities. An indemnification
agreement with the lending agent protects us in the event a borrower becomes insolvent or fails to return any of the securities on
loan. The securities lending collateral is reported as a separate line in the Consolidated balance sheets with a related liability
reflecting our obligation to return the collateral plus interest.
F-16
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
Repurchase agreements
Similar to securities lending arrangements, securities sold under repurchase agreements, whereby Chubb sells securities and
repurchases them at a future date for a predetermined price, are accounted for as collateralized investments and borrowings and
are recorded at the contractual repurchase amounts plus accrued interest. Assets to be repurchased are the same or
substantially the same as the assets transferred, and the transferor, through right of substitution, maintains the right and ability
to redeem the collateral on short notice. The fair value of the underlying securities is included in fixed maturities. In contrast to
securities lending programs, the use of cash received is not restricted. We report the obligation to return the cash as Repurchase
agreements in the Consolidated balance sheets and record the fees under these repurchase agreements within Interest expense
on the Consolidated statements of operations.
Refer to Note 4 for a discussion on the determination of fair value for Chubb's various investment securities.
g) Consolidation of Variable interest entities (VIEs)
Chubb consolidates entities in which it has a controlling interest or is a primary beneficiary of a VIE. Huatai's asset management
businesses create investment entities known as consolidated investment products which include mutual funds with primary
holdings in fixed maturities. While many investors may not be related parties, Huatai invests in these funds at various ownership
percentages. We consolidate the VIEs if we are the primary beneficiary, which is generally when we hold an economic interest
of 10 percent or more. The consolidation of VIEs requires us to record 100 percent of both the underlying assets and liabilities
of the mutual funds within the Consolidated balance sheets as well as the profit and losses within the Consolidated statements
of operations. The relevant amounts attributable to investors other than Chubb are reflected as Noncontrolling interests.
Purchases and sales of investments by the consolidated VIEs are reported as operating activities on the Statements of Cash
Flows. Where Huatai's ownership in these consolidated investment products is less than 10 percent, we generally would not
expect to be the primary beneficiary of these VIEs and would not consolidate. Our economic risk with respect to each investment
in a consolidated investment product is limited to our equity ownership and any uncollected management and performance fees.
Refer to Note 3 i) for additional information.
h) Derivative instruments
Derivative instruments are carried at fair value in the Consolidated balance sheets in either Accounts payable, accrued expenses,
and other liabilities or Other assets. We participate in these derivative instruments primarily to mitigate financial risks and
manage certain investment portfolio risks and exposures, including assets and liabilities denominated in foreign currencies. We
use derivative instruments including futures, options, swaps, and foreign currency forward contracts. Refer to Note 14 for
additional information.
Changes in fair value of derivatives not designated as hedging instruments are included in Net realized gains (losses) and
changes in fair value of futures contracts on equities related to our variable annuity reinsurance business are included in Market
risk benefits gains (losses) in the Consolidated statements of operations.
We also invest in certain derivative instruments that are designated as hedging instruments and qualify for hedge accounting.
These derivatives designated as hedging instruments must be highly effective in mitigating the designated changes in fair value
or cash flows of the hedged item. We assess at the hedge's inception, and continue to qualitatively assess on a quarterly basis,
whether the derivatives that are used in hedging transactions have been and are expected to be highly effective in offsetting
changes in the hedged items. Derivatives designated as hedging instruments include cross-currency swaps designated as fair
value hedges for foreign currency exposure associated with portions of our euro denominated debt and net investment hedges for
foreign currency exposure in the net investments of certain foreign subsidiaries. Refer to Note 14 for additional information.
Changes in fair value of net investment hedges are recorded in Cumulative translation adjustments (CTA) within OCI. Changes in
fair value of fair value hedges that principally offset the foreign currency remeasurement on the hedged debt is recorded within
Net realized gains (losses) on the Consolidated statement of operations with the remaining change in fair value recorded in
Other, within OCI.
i) Cash
We have agreements with a third-party bank provider which implemented two international multi-currency notional cash pooling
programs. In each program, participating Chubb entities establish deposit accounts in different currencies with the bank
provider and each day the credit or debit balances in every account are notionally translated into a single currency (U.S. dollars)
and then notionally pooled. The bank extends overdraft credit to any participating Chubb entity as needed, provided that the
overall notionally-pooled balance of all accounts in each pool at the end of each day is at least zero. Actual cash balances are
not physically converted and are not commingled between legal entities. Any overdraft balances incurred under this program by
a Chubb entity would be guaranteed by Chubb Limited (up to $300 million in the aggregate). Our syndicated letter of credit
F-17
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
facility allows for same day drawings to fund a net pool overdraft should participating Chubb entities overdraw contributed funds
from the pool.
Restricted cash
Included in Cash is restricted cash of $172 million and $115 million at December 31, 2023 and 2022, respectively. Restricted
cash represents amounts held for the benefit of third parties and is legally or contractually restricted as to withdrawal or usage.
Amounts include deposits with U.S. and non-U.S. regulatory authorities, trust funds set up for the benefit of ceding companies,
and amounts pledged as collateral to meet financing arrangements.
j) Goodwill and Other intangible assets
Goodwill represents the excess of the cost of acquisitions over the fair value of net assets acquired and is not amortized.
Goodwill is assigned at acquisition to the applicable reporting unit of the acquired entities giving rise to the goodwill. Goodwill
impairment tests are performed annually or more frequently if circumstances indicate a possible impairment. For goodwill
impairment testing, we use a qualitative assessment to determine whether it is more likely than not (i.e., more than a 50
percent probability) that the fair value of a reporting unit is greater than its carrying amount. If our assessment indicates it is
more likely than not that carrying value exceeds fair value, we quantitatively estimate a reporting unit's fair value.
Indefinite lived intangible assets are not subject to amortization. Finite lived intangible assets are amortized over their useful
lives, generally with an average original useful life of 25 years. Intangible assets are regularly reviewed for indicators of
impairment. Impairment is recognized if the carrying amount is not recoverable from its undiscounted cash flows and is
measured as the difference between the carrying amount and fair value.
k) Unpaid losses and loss expenses
A liability is established for the estimated unpaid losses and loss expenses under the terms of Chubb's policies and agreements.
Similar to premiums that are recognized as revenues over the coverage period of the policy, a liability for unpaid losses and loss
expenses is recognized as expense when insured events occur over the coverage period of the policy. This liability includes a
provision for both reported claims (case reserves) and incurred but not reported claims (IBNR reserves). IBNR reserve estimates
are generally calculated by first projecting the ultimate cost of all losses that have occurred (expected losses), and then
subtracting paid losses, case reserves, and loss expenses. The methods of determining such estimates and establishing the
resulting liability are reviewed regularly and any adjustments are reflected in income in the period in which they become known.
Future developments may result in losses and loss expenses materially greater or less than recorded amounts.
Except for net unpaid loss and loss expense reserves for certain structured settlements for which the timing and amount of
future claim payments are reliably determinable and certain reserves for unsettled claims, Chubb does not discount its P&C loss
reserves. The net undiscounted reserves related to structured settlements and certain reserves for unsettled claims are
immaterial.
Included in Unpaid losses and loss expenses are liabilities for A&E claims and expenses. These unpaid losses and loss expenses
are principally related to claims arising from remediation costs associated with hazardous waste sites and bodily-injury claims
related to asbestos products and environmental hazards. The estimation of these liabilities is particularly sensitive to changes in
the legal environment including specific settlements that may be used as precedents to settle future claims. However, Chubb
does not anticipate future changes in laws and regulations in setting its A&E reserve levels.
Also included in Unpaid losses and loss expenses is the fair value adjustment of $62 million and $74 million at December 31,
2023 and 2022, respectively, principally related to Chubb Corp’s historical unpaid losses and loss expenses. The estimated fair
value consists of the present value of the expected net unpaid loss and loss adjustment expense payments adjusted for an
estimated risk margin. The estimated cash flows are discounted at a risk-free rate. The estimated risk margin varies based on
the inherent risks associated with each type of reserve. The fair value is amortized through Amortization of purchased
intangibles on the Consolidated statements of operations based on the estimated payout patterns of unpaid loss and loss
expenses at the acquisition date.
Our loss reserves are presented net of contractual deductible recoverable amounts due from policyholders. Under the terms of
certain high deductible policies which we offer, such as workers’ compensation and general liability, our customers are
responsible to reimburse us for an agreed-upon dollar amount per claim. In nearly all cases we are required under such policies
to pay covered claims first, and then seek reimbursement for amounts within the applicable deductible from our customers. We
generally seek to mitigate this risk through collateral agreements.
F-18
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
Prior period development arises from changes to loss estimates recognized in the current year that relate to loss reserves first
reported in previous calendar years and excludes the effect of losses from the development of earned premiums from previous
accident years.
For purposes of analysis and disclosure, management views prior period development to be changes in the nominal value of loss
estimates from period to period, net of premium and profit commission adjustments on loss sensitive contracts. Prior period
development generally excludes changes in loss estimates that do not arise from the emergence of claims, such as those related
to uncollectible reinsurance, interest, unallocated loss adjustment expenses, or foreign currency. Accordingly, specific items
excluded from prior period development include the following: gains/losses related to foreign currency remeasurement; losses
recognized from the early termination or commutation of reinsurance agreements that principally relate to the time value of
money; changes in the value of reinsurance business assumed reflected in losses incurred but principally related to the time
value of money; and losses that arise from changes in estimates of earned premiums from prior accident years. Except for
foreign currency remeasurement, which is included in Net realized gains (losses), these items are included in current year losses
within Losses and loss expenses on the Consolidated statements of operations.
l) Future policy benefits
For traditional and limited-payment contracts, contracts are grouped into cohorts by coverage type and issue year to determine a
liability for future policy benefits. The future policy benefit liability (FPBL) is the present value of estimated future policy benefits
to be paid to or on behalf of policyholders and certain related expenses less the present value of estimated future net premiums
to be collected from policyholders and is accrued as premium revenue is recognized. The valuation of this liability requires
management to make estimates and assumptions regarding expenses, mortality, and persistency. Estimates are primarily based
on historical experience. Actual results could differ materially from these estimates.
The liability is adjusted for differences between actual and expected experience. With the exception of the expense assumption,
we review our future cash flow assumptions at least annually to determine if the net premium ratio (NPR), the mechanism to
record the liability as premium is earned, used to calculate the liability should be changed at that time. We have elected to use
expense assumptions that are locked in at contract inception and are not subsequently reviewed or updated. Each quarter, we
update the cash flows expected over the entire life of each cohort for actual historical experience and projected future cash
flows. These updated cash flows are used to calculate the revised NPR, which is used to derive an updated FPBL as of the
beginning of the current reporting period, discounted at the original contract issuance discount rate. This amount is then
compared to the carrying amount of the liability as of that same date, but before the updating of cash flow assumptions, to
determine the current period change in FPBL. This current period change in the liability is the remeasurement gain or loss and
is recorded in Policy benefits in the Consolidated statements of operations. In subsequent periods, the revised NPR is used to
record the FPBL until future revisions become required.
For traditional and limited-payment contracts, the discount rate assumption is based on an upper-medium grade fixed-income
instrument yield. An equivalent rate is derived based on A-credit-rated fixed-income instruments with similar duration to the
liability. The discount rate assumption is updated quarterly and used to remeasure the liability at each reporting date, with the
resulting change reflected in Other comprehensive income. For liability cash flows that are projected beyond the duration of
market-observable A-credit-rated fixed-income instruments, we use the last market-observable yield level, as the basis for a
linear interpolation to determine yield assumptions for durations that do not have market-observable yields.
Deferred profit liability
For limited-payment products, gross premiums received in excess of net premiums are deferred at initial recognition as a
deferred profit liability (DPL) and recorded as a component of Future policy benefits in the Consolidated balance sheets. Net
premiums are measured using actual cash flows and future cash flow assumptions consistent with those used in the
measurement of the liability for future policy benefits and remeasured quarterly. The DPL is amortized in proportion to the
discounted in-force policies. Interest is accreted on the balance of the DPL using the discount rate consistent with the interest
accretion on the FPBL. The recalculated DPL, including adjusted amortization through the current period, is compared to the
current carrying amount and the difference is recognized as an adjustment to Policy benefits in the Consolidated statements of
operations as a remeasurement gain or loss.
m) Market Risk Benefits
Chubb reinsures various death and living benefit guarantees associated with variable annuities issued primarily in the United
States, which meet the definition of Market risk benefits (MRB). These reinsurance contracts provide protection to the ceding
entity from, and expose us to, other-than-nominal capital market risk. Market risk benefits are measured at fair value using a
valuation model based on current net exposures, market data, our experience, and other factors. Changes in fair value are
F-19
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
recognized in Market risk benefits gains (losses) in the Consolidated statements of operations, except the change in fair value
due to a change in the instrument-specific credit risk, which is recognized in other comprehensive income.
We generally receive a monthly premium during the accumulation phase of the covered annuities (in-force) based on a
percentage of either the underlying accumulated account values or the underlying accumulated guaranteed values. Depending
on an annuitant's age, the accumulation phase can last many years. To limit our exposure under these programs, all reinsurance
treaties include annual or aggregate claim limits and many include an aggregate deductible.
The guarantees which are payable on death, referred to as guaranteed minimum death benefits (GMDB), principally cover
shortfalls between accumulated account value at the time of an annuitant's death and either i) an annuitant's total deposits; ii)
an annuitant's total deposits plus a minimum annual return; or iii) the highest accumulated account value attained at any policy
anniversary date. In addition, a death benefit may be based on a formula specified in the variable annuity contract that uses a
percentage of the growth of the underlying contract value.
Under reinsurance programs covering guaranteed living benefits (GLB), we assume the risk of guaranteed minimum income
benefits (GMIB) associated with variable annuity contracts. The GMIB risk is triggered if, at the time the contract holder elects
to convert the accumulated account value to a periodic payment stream (annuitize), the accumulated account value is not
sufficient to provide a guaranteed minimum level of monthly income.
n) Separate accounts
Separate account assets represent segregated funds where investment risks are borne by the customers, except to the extent of
certain guarantees made by Chubb. Separate account liabilities primarily represent the policyholders’ account balances in
separate account assets and are equal and offsetting to total separate account assets. The assets of each account are legally
segregated and are not subject to claims that arise out of any Chubb’s business. Mortality, policy administration and surrender
charges assessed against the accounts are included in Net premiums earned on the Consolidated statements of operations. The
related investment performance of the separate account assets (including interest, dividends, realized gains and losses, and
changes in unrealized gains and losses) generally accrue to the policyholders and are not included in our Consolidated
statements of operations. Fees charged against the separate accounts are deferred and recorded within Policyholders’ account
balances on the Consolidated balance sheets until they are earned within Net premiums earned on the Consolidated statements
of operations. Unearned revenue liabilities pertaining to separate accounts are recorded in Policyholders' account balances on
the Consolidated balance sheets. Refer to section o) Policyholders’ account balances, below.
o) Policyholders' account balances
Policyholders' account balances represent a liability for investment contracts sold that do not meet the definition of an insurance
contract, and certain of these contracts are sold with a guaranteed rate of return. Consideration received or paid is recorded as a
deposit asset or liability in the balance sheet as opposed to recording premiums and losses in the statements of operations. The
liability for policyholders' account balances equals accumulated policy account values, which consist of consideration received
from the policyholder, plus any credited income, less any relevant charges. Also included within Policyholders' account balances
is an unearned revenue liability which represents policy charges for services to be provided in future periods. The charges are
deferred as incurred and are generally amortized over the expected life of the contract using the same methodology, factors, and
assumptions used to amortize deferred acquisition costs.
Certain of our long-duration contracts are supported by assets that do not qualify for separate account reporting under U.S.
GAAP. These assets are classified as non-qualified separate account assets and reported in Other investments and the offsetting
liabilities are reported in Policyholders’ account balances in the Consolidated balance sheets. Changes in the fair value of
separate account assets that do not qualify for separate account reporting under U.S. GAAP are reported in Other (income)
expense, and the offsetting movements in the liabilities are included in Policy benefits in the Consolidated statements of
operations.
p) Property and equipment
Property and equipment used in operations are capitalized and carried at cost less accumulated depreciation and are reported
within Other assets in the Consolidated balance sheets. At December 31, 2023, property and equipment totaled $2.9 billion,
consisting principally of capitalized software costs of $1.7 billion incurred to develop or obtain computer software for internal
use and company-owned facilities of $510 million. Depreciation is calculated using the straight-line method over the estimated
useful lives of the assets. For capitalized software, the estimated useful life is generally three to five years (for security and
analytics systems), but can be as long as 15 years (for systems of record such as our general ledger and processing systems
such as our policy administration systems). For company-owned facilities the estimated useful life is 40 years. At December 31,
2022, property and equipment totaled $2.4 billion.
F-20
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
q) Foreign currency remeasurement and translation
The functional currency for each of our foreign operations is generally the currency of the local operating environment.
Transactions in currencies other than a foreign operation's functional currency are remeasured into the functional currency, and
the resulting foreign exchange gains and losses are reflected in Net realized gains (losses) in the Consolidated statements of
operations. Functional currency assets and liabilities are translated into the reporting currency, U.S. dollars, using period end
exchange rates and the related translation adjustments are recorded as a separate component of AOCI in Shareholders' equity.
Functional statement of operations amounts expressed in functional currencies are translated using average exchange rates.
r) Administrative expenses
Administrative expenses generally include all operating costs other than policy acquisition costs. The North America Commercial
P&C Insurance segment manages and uses an in-house third-party claims administrator, ESIS Inc. (ESIS). ESIS performs claims
management and risk control services for domestic and international organizations that self-insure P&C exposures as well as
internal P&C exposures. The net operating income (loss) of ESIS is included within Administrative expenses in the Consolidated
statements of operations and was $(2) million, $12 million, and $25 million for the years ended December 31, 2023, 2022,
and 2021, respectively.
s) Asset management and performance fee revenue and expenses
Huatai's asset management companies recognize revenue and expenses from the management of third-party assets which are
unrelated to Chubb's core insurance operations. These revenues include management fees, which are recognized in the period in
which the services are performed, and asset performance fees, which are recognized to the extent it is probable that a
significant reversal will not occur. These fees and expenses are included in Other (income) expense on the Consolidated
statements of operations. Refer to Note 18 for additional information.
t) Income taxes
Income taxes have been recorded related to those operations subject to income tax. Deferred tax assets and liabilities result from
temporary differences between the amounts recorded in the Consolidated Financial Statements and the tax basis of our assets
and liabilities. The effect on deferred tax assets and liabilities of a change in tax law or rates is recognized in the period that
includes the enactment date. A valuation allowance against deferred tax assets is recorded if it is more likely than not that all, or
some portion, of the benefits related to these deferred tax assets will not be realized. The valuation allowance assessment
considers tax planning strategies, where appropriate.
We recognize uncertain tax positions that are determined to be more likely than not of being sustained upon
examination. Recognized income tax positions are measured at the largest amount that has a greater than 50 percent likelihood
of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.
u) Earnings per share
Basic earnings per share is calculated using the weighted-average shares outstanding, including participating securities with
non-forfeitable rights to dividends such as unvested restricted stock. All potentially dilutive securities, including stock options are
excluded from the basic earnings per share calculation. In calculating diluted earnings per share, the weighted-average shares
outstanding is increased to include all potentially dilutive securities. Basic and diluted earnings per share are calculated by
dividing Net income attributable to Chubb by the applicable weighted-average number of shares outstanding during the year.
v) Share-based compensation
Chubb measures and records compensation cost for all share-based payment awards at grant-date fair value. Compensation
costs are recognized for vesting of share-based payment awards with only service conditions on a straight-line basis over the
requisite service period for each separately vesting portion of the award as if the award were, in substance, multiple awards. For
retirement-eligible participants, compensation costs for certain share-based payment awards are recognized immediately at the
date of grant. Refer to Note 16 for additional information.
w) Cigna integration expenses
Direct costs related to business combinations, principally Cigna's business in Asia, were expensed as incurred. Cigna integration
expenses were $69 million and $48 million for the years ended December 31, 2023 and 2022, respectively, and include all
internal and external costs directly related to the integration activities, principally of the acquisition of Cigna's business in Asia.
These expenses principally consisted of third-party consulting fees, employee-related retention costs, and other professional and
legal fees related to the acquisition.
F-21
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
x) New accounting pronouncements
Accounting guidance adopted in 2023
Targeted Improvements to the Accounting for Long-Duration Contracts
Effective January 1, 2023, we adopted new guidance on the accounting for long-duration contracts (LDTI). The new accounting
guidance requires more frequent updating of assumptions and a standardized discount rate for non-participating traditional and
limited pay insurance contract liabilities, a requirement to use the fair value measurement model for policies with market risk
benefits, simplified amortization of deferred acquisition costs, and enhanced disclosures.
With the exception of market risk benefits, we adopted this guidance on a modified retrospective basis. Under the modified
retrospective basis, the liability for future policy benefits is remeasured using the current discount rate at January 1, 2021 (the
transition date) and the impact of the changes are recorded in AOCI and best estimate cash flow assumptions are applied to
contracts in force. The liability for future policy benefits prior to the transition date continues to use the original discount rate
(interest accretion rate). The guidance for long-duration contracts applicable to market risk benefits, primarily assumed
reinsurance programs involving minimum benefit guarantees under variable annuity contracts, was adopted on a retrospective
transition approach. Under the retrospective transition approach, we calculated the fair value of market risk benefits which were
previously accounted for under an insurance accounting model and recognized an adjustment to retained earnings as of January
1, 2021. We also reclassified changes in our own credit risk on Market risk benefits from Retained earnings to Accumulated
other comprehensive income at the transition date.
On January 1, 2023, we recorded a cumulative effect adjustment and increased beginning Retained earnings by $52 million,
and decreased AOCI by $1.8 billion. Results for the prior reporting periods in this report are presented in accordance with the
new guidance. We also adopted the required disclosures in Note 6 Deferred acquisition costs, Note 9 Future policy benefits,
Note 10 Policyholders' account balances, Separate accounts, and Unearned revenue liabilities, and Note 11 Market risk
benefits.
The impact of adoption of the new guidance on our historical financial statements is as follows:
(in millions of U.S. dollars)
Consolidated balance sheet
Reinsurance recoverable on losses and loss expenses
Reinsurance recoverable on policy benefits
Deferred policy acquisition costs
Value of business acquired
Prepaid reinsurance premiums
Investments in partially-owned insurance companies
Unpaid losses and loss expenses
Unearned premiums
Future policy benefits
Market risk benefits
Insurance and reinsurance balances payable
Deferred tax liabilities
Retained earnings
Accumulated other comprehensive income (loss)
As
Previously
Reported
December 31, 2022
LDTI
Adoption
Adjustment
As
Adjusted
$ 18,901 $
(42) $ 18,859
303
5,788
3,596
3,140
2,877
76,323
20,360
10,120
—
7,795
292
(1)
302
243
106
6,031
3,702
(4)
3,136
(370)
2,507
(576)
75,747
(647)
19,713
356
800
10,476
800
(15)
7,780
85
377
48,334
(29)
48,305
(10,193)
8
(10,185)
Excluded from the table above is the reclassification of Separate account assets, Separate account liabilities, and Policyholders'
account balances as separate line items on the Consolidated balance sheets. Separate accounts assets were previously classified
in Other assets, and Separate account liabilities and Policyholders' account balances were previously classified in Accounts
payable, accrued expenses, and other liabilities.
F-22
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
(in millions of U.S. dollars)
Consolidated statements of operations and
comprehensive income
Net premiums written
Net premiums earned
Net realized gains (losses)
Market risk benefits gains (losses)
Losses and loss expenses
Policy benefits
Policy acquisition costs
Other (income) expense
Income tax expense
Net Income
Other comprehensive income
Change in current discount rate on future policy
benefits
Change in instrument-specific credit risk on
market risk benefits
Twelve Months Ended
December 31, 2022
LDTI
Adoption
Adjustment
As
Adjusted
Twelve Months Ended
December 31, 2021
LDTI
Adoption
Adjustment
As
Adjusted
As
Previously
Reported
As
Previously
Reported
$ 41,755 $
(35) $ 41,720 $ 37,868 $
(41) $ 37,827
40,389
(29)
40,360
36,355
(63)
36,292
(965)
(120)
(1,085)
1,152
(122)
1,030
—
80
80
—
91
91
23,342
(770)
22,572
21,980
(950)
21,030
822
2,314
(53)
7,339
699
6,918
1,041
1,740
(160)
6,758
15
89
(2,365)
(16)
1,239
(67)
5,246
1,277
8,539
(2)
(8)
(2,367)
1,269
(14)
8,525
1,480
1,480
—
387
387
1,492
7,392
74
1,255
5,313
—
—
33
33
965
—
427
27
(61)
27
366
Income tax benefit related to OCI items
1,121
(156)
Comprehensive income (loss)
(5,230)
1,365
(3,865)
6,020
364
6,384
(in millions of U.S. dollars)
Consolidated statements of cash flows
Net cash flows from operating activities
Twelve Months Ended
December 31, 2022
LDTI
Adoption
Adjustment
As
Adjusted
Twelve Months Ended
December 31, 2021
LDTI
Adoption
Adjustment
As
Adjusted
As
Previously
Reported
As
Previously
Reported
$ 11,243 $
15 $ 11,258 $ 11,149 $
2 $ 11,151
Net cash flows used for financing activities
(5,127)
(15)
(5,142)
(4,409)
(2)
(4,411)
F-23
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
The following table presents a reconciliation of the pre-adoption December 31, 2020, to the post adoption January 1, 2021,
balance of future policy benefits:
Life Insurance
Overseas
General
Insurance
Offsetting Equity
Line Classification
(in millions of U.S. dollars)
Future policy benefits
Balance – December 31, 2020 (1)
Effect of change in current discount rate
Term Life
Whole
Life
A&H
Other
A&H
Total
$
391 $ 2,578 $ 2,270 $
72 $
754 $ 6,065
63
1,189
299
17
19
1,587 AOCI
Balance – January 1, 2021
$
454 $ 3,767 $ 2,569 $
89 $
773 $ 7,652
(1)
Includes future policy benefits previously included within Unpaid losses and loss expenses on the pre-adoption Consolidated balance sheets, primarily certain international
A&H business, and excludes deferred profit liability and certain guaranteed minimum death benefits reclassified to Market risk benefits on the post adoption period balance
sheets.
The following table presents a reconciliation of the pre-adoption December 31, 2020, to the post adoption January 1, 2021,
balance of market risk benefits:
(in millions of U.S. dollars)
Market risk benefits
Balance – December 31, 2020
Cumulative effect of changes in instrument-specific credit risk between original contract
issuance date and transition date (1)
Other fair value adjustments
Balance – January 1, 2021
(1)
Includes $77 million of instrument-specific credit risk allocated from retained earnings to AOCI.
Offsetting Equity
Line Classification
$
1,138
84 AOCI
(59) Retained Earnings
$
1,163
Accounting guidance not yet adopted
Improvements to Reportable Segment Disclosures
In November 2023, the Financial Accounting Standards Board (FASB) issued guidance that requires expanded reportable
segment disclosures, primarily related to significant segment expenses which are regularly provided to the chief operating
decision maker. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within annual
periods beginning after December 15, 2024. Retrospective application is required. We are currently evaluating the impact of
this disclosure-only requirement.
Improvements to Income Tax Disclosures
In December 2023, the FASB issued guidance that requires expanded income tax disclosures, including the disaggregation of
existing disclosures related to the tax rate reconciliation and income taxes paid. The guidance is effective for annual periods
beginning after December 15, 2024. Prospective application is required, with retrospective application permitted. We are
currently evaluating the impact of this disclosure-only requirement.
2. Acquisitions
Huatai Group
Huatai Insurance Group Co., Ltd. (Huatai Group) is a Chinese financial services holding company and the parent company of,
among others, Huatai Property & Casualty Insurance Co., Ltd. (Huatai P&C), Huatai Life Insurance Co., Ltd. (Huatai Life),
Huatai Asset Management Co., Ltd., and Huatai Baoxing Fund Management Co., Ltd., of which Huatai Group owns 100
percent, 80 percent, 91 percent, and 85 percent, respectively (collectively, Huatai).
On July 1, 2023, Chubb further advanced our goal of greater product, customer, and geographical diversification by obtaining a
controlling interest in our investment in Huatai Group, as we increased ownership interest from approximately 64.2 percent to
approximately 69.6 percent. At that time, Chubb discontinued the equity method of accounting and applied consolidation
accounting. Accordingly, Chubb remeasured the 64.2 percent equity method investment to its fair value of $4.1 billion as of
July 1, 2023, resulting in a one-time realized gain of $763 million after-tax, reflecting the remeasurement of the previously held
F-24
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
equity interest's historical carrying value to fair value. There was also a net realized and unrealized loss of $17 million after-tax
reflecting the write-off of AOCI loss balances accumulated while under equity method accounting of $611 million with an offset
to realized loss of $628 million.
During the fourth quarter of 2023, we closed on incremental ownership interests of approximately 7.0 percent. We paid $727
million for the additional interests acquired in 2023, part of which was previously paid as a deposit. At December 31, 2023,
our ownership interest in Huatai Group was approximately 76.5 percent. In the first quarter of 2024, we closed on incremental
ownership interests of approximately 9.0 percent for $559 million. We paid $338 million in cash, $319 million of which was
previously paid as a deposit, with the remaining $221 million pending payment. Chubb has outstanding agreements for
approximately 0.6 percent of incremental ownership interests, pending completion of certain closing conditions. We have paid
deposits of $12 million related to these outstanding agreements, with approximately $24 million remaining to be paid upon
closing, based on current exchange rates.
The acquisition of a controlling majority interest in Huatai Group on July 1, 2023 generated $3,394 million of Goodwill,
attributable to expected growth and profitability, and $1,655 million of Other intangible assets. None of the goodwill is expected
to be deductible for income tax purposes. Additionally, the acquisition generated $309 million of Value of business acquired
(VOBA). Chubb financed the transaction through available cash on hand. Direct costs related to the acquisition are immaterial,
and were expensed as incurred. These include one-time costs that are directly attributable to third-party consulting fees and
other professional and legal fees related to the acquisition.
The following table summarizes Chubb's best estimate of fair value of the assets acquired and liabilities assumed on July 1,
2023. The fair value of assets and liabilities are preliminary and may change with offsetting adjustments to goodwill. Chubb
may make further adjustments to its purchase price allocation and the fair value of noncontrolling interest through the end of the
permissible one-year measurement period.
Preliminary estimate of Huatai Group assets and liabilities consolidated
(in millions of U.S. dollars)
Assets
Investments and Cash
Accrued investment income
Insurance and reinsurance balances receivable
Reinsurance recoverable on losses and loss expenses
Reinsurance recoverable on future policy benefits
Value of business acquired
Goodwill and intangible assets
Other assets
Total assets
Liabilities
Unpaid losses and loss expenses
Unearned premiums
Future policy benefits
Policyholders' account balances
Insurance and reinsurance balances payable
Accounts payable, accrued expenses, and other liabilities
Deferred tax liabilities
Repurchase agreements
Total liabilities
Net acquired assets, including goodwill, attributable to Chubb
Net acquired assets, attributable to noncontrolling interests
Net acquired assets, including goodwill
July 1
2023
$
13,346
$
$
$
$
60
277
581
27
309
5,049
748
20,397
831
800
2,287
4,014
644
682
232
1,269
10,759
4,428
5,210
9,638
F-25
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
Huatai Group's life insurance and asset management businesses are included in the Life Insurance segment, and Huatai Group's
P&C business is included in the Overseas General Insurance segment. Results for Huatai Group's non-insurance operations,
comprising real estate and holding company activity, are included in Corporate. The following table summarizes the results of
the acquired Huatai Group operations since the acquisition date that have been included within our Consolidated statements of
operations:
(in millions of U.S. dollars)
Total revenues
Net loss
Net loss attributable to Chubb
July 1, 2023 to
December 31, 2023
$
$
$
739
(30)
(17)
The preliminary purchase price allocation to intangible assets recorded in connection with the Huatai Group acquisition and
their related useful lives at July 1, 2023, are as follows:
(in millions of U.S. dollars)
Definite life
Agency distribution relationships
Asset management customer contracts
Unearned premium reserves (UPR) intangible asset
Land use rights
Technology
Indefinite life
Trademarks
Asset management mutual funds
Total identified intangible assets
Amount
Weighted-average
useful life
$
332 20 years
94 16 years
95 3 years
569 31 years
45 6 years
398
Indefinite
122
Indefinite
$
1,655
The following table presents supplemental unaudited pro forma consolidated information for the periods indicated as though the
acquisition of a controlling majority interest in Huatai Group that occurred on July 1, 2023, had instead occurred on January 1,
2022. The unaudited pro forma consolidated financial information is presented for informational purposes only and is not
necessarily indicative of the operating results that would have occurred had the acquisition of a controlling majority interest been
consummated on January 1, 2022, nor is it necessarily indicative of future operating results. Significant assumptions used to
determine pro forma operating results include amortization of VOBA and other intangible assets.
Pro forma:
(in millions of U.S. dollars)
Net premiums earned
Total revenues
Net income
Net income attributable to Chubb
For the Year Ended December 31
2023
2022
46,502 $
41,903
50,550 $
44,936
8,850 $
8,859 $
5,290
5,267
$
$
$
$
Cigna’s Accident and Health (A&H) and Life Insurance Business in Asian Markets
On July 1, 2022, we completed the acquisition of the life and non-life insurance companies that house the personal accident,
supplemental health, and life insurance business of Cigna in several Asian markets. Chubb paid approximately $5.4 billion in
cash for the operations, which include Cigna's accident and health (A&H) and life business in Korea, Taiwan, New Zealand,
Thailand, Hong Kong, and Indonesia, collectively referred to as Cigna's business in Asia. This complementary strategic
acquisition expands our presence and advances our long-term growth opportunity in Asia. Effective July 1, 2022, the results of
operations of this acquired business are reported primarily in our Life Insurance segment and, to a lesser extent, our Overseas
General Insurance segment.
F-26
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
The acquisition of Cigna's business in Asia generated $1,189 million of goodwill, attributable to expected growth and
profitability, and $309 million of other intangible assets. None of the goodwill is expected to be deductible for income tax
purposes. Additionally, the acquisition of Cigna's business in Asia generated $3,633 million of value of business acquired
(VOBA). Chubb financed the transaction through a combination of available cash and $2.0 billion in repurchase agreements
that expired at the end of 2022. Direct costs related to the acquisition were expensed as incurred.
The following table summarizes the fair value of the assets acquired and liabilities assumed at July 1, 2022:
Assets acquired and liabilities assumed from Cigna's business in Asia
(in millions of U.S. dollars)
Assets
Investments and Cash
Accrued investment income
Insurance and reinsurance balances receivable
Reinsurance recoverable on losses and loss expenses
Reinsurance recoverable on future policy benefits
Value of business acquired
Goodwill and intangible assets
Other assets
Total assets
Liabilities
Unpaid losses and loss expenses
Unearned premiums
Future policy benefits
Insurance and reinsurance balances payable
Accounts payable, accrued expenses, and other liabilities
Deferred tax liabilities
Total liabilities
Net acquired assets, including goodwill
Total
July 1
2022
5,281
33
52
3
85
3,633
1,498
651
11,236
12
61
3,856
115
925
887
5,856
5,380
11,236
$
$
$
$
$
The following table summarizes the results of the acquired Cigna business in Asia that were included within our Consolidated
statements of operations for the year ended December 31, 2022:
(in millions of U.S. dollars)
Total revenues
Net income
July 1, 2022 to
December 31, 2022
$
$
1,507
140
F-27
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
The following table presents supplemental unaudited pro forma consolidated information for the periods indicated as though the
acquisition of Cigna's business in Asia that occurred on July 1, 2022, had instead occurred on January 1, 2021. The unaudited
pro forma consolidated financial information is presented for informational purposes only and is not necessarily indicative of the
operating results that would have occurred had the acquisition been consummated on January 1, 2021, nor is it necessarily
indicative of future operating results. Significant assumptions used to determine pro forma operating results include amortization
of VOBA and other intangible assets and recognition of interest expense associated with the repurchase agreement transactions
used to effect the acquisition.
Pro forma:
(in millions of U.S. dollars)
Net premiums earned
Total revenues
Net income
3. Investments
a) Transfers of securities
For the Year Ended December 31
2022
2021
41,884 $
39,432
44,605 $
44,072
5,533 $
8,906
$
$
$
In June 2023, we determined that we no longer have the intent to hold securities in our held to maturity (HTM) portfolio until
maturity. As a result, our entire HTM securities portfolio was transferred to the available-for-sale (AFS) portfolio. This decision
allowed us to increase our flexibility to execute on our investment strategy and take advantage of the continuing higher
reinvestment environment while not making any major change to our current asset allocation. At the time of the transfer on June
30, 2023, these securities had a carrying value of $8.2 billion and a fair value of $7.8 billion, resulting in an increase to
Unrealized depreciation in OCI of $428 million, after-tax. This transfer represents a non-cash transaction and does not impact
the Consolidated statements of cash flows.
b) Fixed maturities
December 31, 2023
(in millions of U.S. dollars)
Available-for-sale
U.S. Treasury / Agency
Non-U.S.
Corporate and asset-backed securities
Mortgage-backed securities
Municipal
December 31, 2022
(in millions of U.S. dollars)
Available-for-sale
U.S. Treasury / Agency
Non-U.S.
Corporate and asset-backed securities
Mortgage-backed securities
Municipal
F-28
Amortized
Cost
Valuation
Allowance
Gross
Unrealized
Appreciation
Gross
Unrealized
Depreciation
Fair Value
$
3,721 $
— $
13 $
(144) $
3,590
35,918
44,695
23,720
3,074
(49)
(104)
(3)
—
592
390
143
10
(1,297)
35,164
(2,151)
42,830
(1,802)
22,058
(155)
2,929
$ 111,128 $
(156) $
1,148 $
(5,549) $ 106,571
Amortized
Cost
Valuation
Allowance
Gross
Unrealized
Appreciation
Gross
Unrealized
Depreciation
Fair Value
$
2,792 $
— $
5 $
(171) $
2,626
28,064
40,547
17,871
4,081
(59)
(107)
(3)
—
108
49
4
8
(2,205)
25,908
(3,534)
36,955
(2,021)
15,851
(209)
3,880
$
93,355 $
(169) $
174 $
(8,140) $
85,220
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
December 31, 2022
(in millions of U.S. dollars)
Held to maturity
U.S. Treasury / Agency
Non-U.S.
Corporate and asset-backed securities
Mortgage-backed securities
Municipal
Amortized
Cost
Valuation
Allowance
Net Carrying
Value
Gross
Unrealized
Appreciation
Gross
Unrealized
Depreciation
Fair Value
$
1,417 $
— $
1,417 $
1 $
(48) $
1,370
1,140
1,733
1,456
3,136
(4)
(28)
(1)
(1)
1,136
1,705
1,455
3,135
—
1
—
1
(82)
1,054
(126)
1,580
(104)
1,351
(52)
3,084
$
8,882 $
(34) $
8,848 $
3 $
(412) $
8,439
The following table presents the amortized cost of our HTM securities according to S&P rating:
(in millions of U.S. dollars, except for percentages)
AAA
AA
A
BBB
BB
Other
Total
The following table presents fixed maturities by contractual maturity:
December 31, 2022
Amortized cost
% of Total
$
1,612
5,023
1,634
593
20
—
18 %
57 %
18 %
7 %
— %
— %
$
8,882
100 %
(in millions of U.S. dollars)
Available-for-sale
Due in 1 year or less
Due after 1 year through 5 years
Due after 5 years through 10 years
Due after 10 years
Mortgage-backed securities
Held to maturity
Due in 1 year or less
Due after 1 year through 5 years
Due after 5 years through 10 years
Due after 10 years
Mortgage-backed securities
Net Carrying
Value
2023
Fair Value
Net Carrying
Value
December 31
2022
Fair Value
$
4,729 $
4,729 $
2,962 $
$
$
33,573
28,480
17,731
84,513
22,058
33,573
28,480
17,731
84,513
22,058
24,791
26,679
14,937
69,369
15,851
106,571 $
106,571 $
85,220 $
— $
— $
1,015 $
—
—
—
—
—
—
—
—
—
—
3,658
1,460
1,260
7,393
1,455
$
— $
— $
8,848 $
2,962
24,791
26,679
14,937
69,369
15,851
85,220
1,003
3,531
1,423
1,131
7,088
1,351
8,439
F-29
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
Expected maturities could differ from contractual maturities because borrowers may have the right to call or prepay obligations,
with or without call or prepayment penalties.
c) Gross unrealized loss
Fixed maturities in an unrealized loss position at December 31, 2023 and 2022 comprised both investment grade and below
investment grade securities for which fair value declined, principally due to rising interest rates since the date of purchase.
The following tables present, for AFS fixed maturities in an unrealized loss position (including securities on loan) that are not
deemed to have expected credit losses, the aggregate fair value and gross unrealized loss by length of time the security has
continuously been in an unrealized loss position:
December 31, 2023
(in millions of U.S. dollars)
U.S. Treasury / Agency
Non-U.S.
Corporate and asset-backed
securities
Mortgage-backed securities
Municipal
0 – 12 Months
Over 12 Months
Fair Value
Gross
Unrealized
Loss
Fair Value
Gross
Unrealized
Loss
Fair Value
Total
Gross
Unrealized
Loss
$
463 $
(9) $
2,504 $
(135) $
2,967 $
(144)
2,464
2,866
1,659
1,117
(43)
15,971
(957)
18,435
(1,000)
(51)
(58)
(15)
20,334
13,831
1,310
(1,194)
23,200
(1,706)
15,490
(137)
2,427
(1,245)
(1,764)
(152)
Total AFS fixed maturities
$
8,569 $
(176) $
53,950 $
(4,129) $
62,519 $
(4,305)
December 31, 2022
(in millions of U.S. dollars)
U.S. Treasury / Agency
Non-U.S.
Corporate and asset-backed
securities
Mortgage-backed securities
Municipal
0 – 12 Months
Over 12 Months
Fair Value
Gross
Unrealized
Loss
Fair Value
Gross
Unrealized
Loss
Fair Value
Total
Gross
Unrealized
Loss
$
2,152 $
(125) $
386 $
(46) $
2,538 $
(171)
15,538
(1,012)
5,490
(704)
21,028
(1,716)
25,687
10,561
3,251
(1,793)
(1,033)
(152)
4,190
4,770
155
(552)
29,877
(941)
15,331
(48)
3,406
(2,345)
(1,974)
(200)
Total AFS fixed maturities
$
57,189 $
(4,115) $
14,991 $
(2,291) $
72,180 $
(6,406)
F-30
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
The following table presents a roll-forward of valuation allowance for expected credit losses on fixed maturities:
(in millions of U.S. dollars)
Available-for-sale
Valuation allowance for expected credit losses - beginning of period
Provision for expected credit loss
Write-offs charged against the expected credit loss
Recovery of expected credit loss
Valuation allowance for expected credit losses - end of period
Held to maturity
Valuation allowance for expected credit losses - beginning of period
Provision for expected credit loss
Recovery of expected credit loss
Valuation allowance for expected credit losses - end of period
Private debt held-for-investment
Valuation allowance for expected credit losses - beginning of period
Provision for expected credit loss
Valuation allowance for expected credit losses - end of period
Year Ended December 31
2023
2022
$
$
$
$
$
$
169 $
214
(5)
(222)
156 $
34 $
—
(34)
— $
— $
4
4 $
14
237
—
(82)
169
35
2
(3)
34
—
—
—
F-31
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
d) Net realized gains (losses)
The following table presents the components of net realized gains (losses) and the change in net unrealized appreciation
(depreciation) of investments:
(in millions of U.S. dollars)
Fixed maturities:
Gross realized gains
Gross realized losses
Other Investments - Fixed maturities
Net (provision for) recovery of expected credit losses
Impairment (1)
Total fixed maturities
Equity securities
Private equities (less than 3 percent ownership)
Foreign exchange
Investment and embedded derivative instruments
Other derivative instruments
Other
Net realized gains (losses) (pre-tax)
Change in net unrealized appreciation (depreciation) on investments (pre-tax):
Fixed maturities available-for-sale
Fixed maturities held to maturity
Other
Income tax (expense) benefit
Change in net unrealized appreciation (depreciation) on investments (after-tax)
(1)
Relates to certain securities we intended to sell and securities written to market entering default.
Year Ended December 31
2023
2022
2021
$
208 $
619 $
(656)
(1,379)
(12)
43
(64)
—
(154)
(135)
(481)
(1,049)
(38)
70
(183)
(53)
(10)
88
(230)
(31)
397
(43)
(11)
(118)
142
(123)
—
14
(30)
3
662
111
340
(72)
(8)
(6)
$
(607) $
(1,085) $
1,030
$
3,563 $
(10,583) $
(2,901)
(125)
10
(15)
20
(328)
1,043
(18)
(19)
521
$
3,120 $
(9,535) $
(2,417)
Realized gains and losses from Other investments, Equity securities and Private equities from the table above include sales of
securities and unrealized gains and losses from fair value changes as follows:
(in millions of U.S. dollars)
Net gains (losses) recognized during the period
Less: Net gains (losses) recognized from sales of securities
Unrealized gains (losses) recognized for securities still held at reporting date
(in millions of U.S. dollars)
Net gains (losses) recognized during the period
Less: Net gains (losses) recognized from sales of securities
Unrealized gains (losses) recognized for securities still held at reporting date
Year Ended December 31, 2023
Other
Investments
Equity
Securities
Private
Equities
$
$
(12) $
(38) $
70 $
—
(68)
—
(12) $
30 $
70 $
Total
20
(68)
88
Year Ended December 31, 2022
Equity
Securities
Private
Equities
Total
$
(230) $
(31) $
(261)
409
—
409
$
(639) $
(31) $
(670)
F-32
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
(in millions of U.S. dollars)
Net gains (losses) recognized during the period
Less: Net gains (losses) recognized from sales of securities
Unrealized gains (losses) recognized for securities still held at reporting date
e) Other investments
(in millions of U.S. dollars)
Fixed maturities - Consolidated Investment Products (1)
Life insurance policies
Policy loans
Non-qualified separate account assets (2)
Other
Total
Year Ended December 31, 2021
Equity
Securities
Private
Equities
$
$
662 $
111 $
157
—
505 $
111 $
Total
773
157
616
2023
3,773 $
463
651
258
382
5,527 $
December 31
2022
—
399
343
223
376
1,341
$
$
(1)
(2)
Refer to Note 1 g) to the Consolidated Financial Statements for additional information on the consolidation of VIEs.
Non-qualified separate account assets are comprised of mutual funds, supported by assets that do not qualify for separate account reporting under U.S. GAAP.
Private equities
Private equities include investment funds and limited partnerships measured at fair value using net asset value (NAV) as a
practical expedient. The following table presents, by investment category, the expected liquidation period, fair value, and
maximum future funding commitments for private equities:
(in millions of U.S. dollars)
Financial
Real assets
Distressed
Private credit
Traditional
Vintage
Investment funds
Expected Liquidation
Period of
Underlying Assets
Fair Value
Maximum
Future Funding
Commitments
Fair Value
2023
December 31
2022
Maximum
Future Funding
Commitments
2 to 10 Years $
1,241 $
364 $
1,074 $
2 to 13 Years
2 to 8 Years
3 to 8 Years
2 to 14 Years
1 to 3 Years
Not Applicable
2,137
1,206
331
8,873
72
218
445
936
298
4,167
—
—
2,166
1,048
215
7,424
55
373
505
681
755
429
5,025
—
—
$ 14,078 $
6,210 $ 12,355 $
7,395
Included in all categories in the above table, except for Investment funds, are investments for which Chubb will never have the
contractual option to redeem but receives distributions based on the liquidation of the underlying assets. Further, for all
categories except for Investment funds, Chubb does not have the ability to sell or transfer the investments without the consent
from the general partner of individual funds.
F-33
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
Investment Category
Consists of investments in private equity funds:
Financial
Real assets
Distressed
Private credit
Traditional
Vintage
targeting financial services companies, such as financial institutions and insurance services worldwide
targeting investments related to hard physical assets, such as real estate, infrastructure and natural
resources
targeting distressed corporate debt/credit and equity opportunities in the U.S.
targeting privately originated corporate debt investments, including senior secured loans and
subordinated bonds
employing traditional private equity investment strategies such as buyout and growth equity globally
funds where the initial fund term has expired
Included in private equities are 174 individual limited partnerships covering a broad range of investment strategies including
large cap buyouts, specialist buyouts, growth capital, distressed, mezzanine, real estate, and co-investments. The underlying
portfolio consists of various public and private debt and equity securities of publicly traded and privately held companies and
real estate assets. The underlying investments across various partnerships, geographies, industries, asset types, and investment
strategies provide risk diversification within the limited partnership portfolio and the overall investment portfolio.
Investment funds employ various investment strategies such as long/short equity and arbitrage/distressed. Included in this
category are investments for which Chubb has the option to redeem at agreed upon value as described in each investment
fund’s subscription agreement. Depending on the terms of the various subscription agreements, investment fund investments
may be redeemed monthly, quarterly, semi-annually, or annually. If Chubb wishes to redeem an investment fund investment, it
must first determine if the investment fund is still in a lock-up period (a time when Chubb cannot redeem its investment so that
the investment fund manager has time to build the portfolio). If the investment fund is no longer in its lock-up period, Chubb
must then notify the investment fund manager of its intention to redeem by the notification date prescribed by the subscription
agreement. Subsequent to notification, the investment fund can redeem Chubb’s investment within several months of the
notification. Notice periods for redemption of the investment funds are up to 270 days. Chubb can redeem its investment funds
without consent from the investment fund managers.
f) Investments in partially-owned insurance companies
The following table presents Investments in partially-owned insurance companies:
December 31, 2023
December 31, 2022
(in millions of U.S. dollars, except for
percentages)
Carrying Value
Goodwill
Huatai Group
$
— $
Huatai Life Insurance Company
Freisenbruch-Meyer
Chubb Arabia Cooperative Insurance
Company
ABR Reinsurance Ltd.
Total
—
12
28
151
$
191 $
—
—
3
—
—
3
Direct
Ownership
Percentage
Carrying Value
Goodwill
— % $
2,490 $
1,247
— %
40 %
30 %
19 %
215
11
24
137
65
3
—
—
$
2,877 $
1,315
Direct
Ownership
Percentage
47 %
20 %
40 %
Domicile
China
China
Bermuda
30 % Saudi Arabia
19 %
Bermuda
Effective July 1, 2023, Huatai Group and Huatai Life Insurance Company are no longer classified as partially-owned insurance
companies when Chubb obtained a controlling interest and applied consolidation accounting. Refer to Note 2 for additional
information.
F-34
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
g) Net investment income
(in millions of U.S. dollars)
Fixed maturities (1)
Short-term investments
Other interest income
Equity securities
Private equities (less than 3 percent ownership)
Other investments
Gross investment income (1)
Investment expenses
Net investment income (1)
(1) Includes amortization expense related to fair value adjustment of acquired invested assets
Year Ended December 31
2023
2022
2021
$
4,619 $
3,594 $
3,300
199
69
119
55
71
81
42
99
63
41
35
11
150
94
53
5,132
3,920
3,643
(195)
(178)
(187)
4,937 $
3,742 $
3,456
(21) $
(41) $
(84)
$
$
h) Restricted assets
Chubb is required to maintain assets on deposit with various regulatory authorities to support its insurance and reinsurance
operations. These requirements are generally promulgated in the statutory regulations of the individual jurisdictions. The assets
on deposit are available to settle insurance and reinsurance liabilities. Chubb is also required to restrict assets pledged under
repurchase agreements, which represent Chubb's agreement to sell securities and repurchase them at a future date for a
predetermined price. We use trust funds in certain large reinsurance transactions where the trust funds are set up for the benefit
of the ceding companies and generally take the place of letter of credit (LOC) requirements. We have investments in segregated
portfolios primarily to provide collateral or guarantees for LOC and derivative transactions. Included in restricted assets are
investments, primarily fixed maturities, totaling $18,242 million and $15,721 million, and cash of $172 million and $115
million, at December 31, 2023 and 2022, respectively.
The following table presents the components of restricted assets:
(in millions of U.S. dollars)
Trust funds
Deposits with U.S. regulatory authorities
Deposits with non-U.S. regulatory authorities
Assets pledged under repurchase agreements
Other pledged assets
Total
i) Variable interest entities (VIEs)
Consolidated VIEs
December 31
2023
$
8,482 $
2,544
3,584
2,924
880
2022
8,120
2,345
2,959
1,527
885
$
18,414 $
15,836
Certain subsidiaries of Huatai Group are the investment manager of, and maintain investments in, sponsored investment
products that are considered Variable interest entities (VIEs). We have determined that we are the primary beneficiary and
consolidate these investment products (CIP) if we hold at least 10 percent ownership. Refer to Note 1 g) for further information
on our consolidation criteria. The assets of these VIEs are not available to our creditors, and the investors in these VIEs have no
recourse to Chubb in excess of the assets contained within the VIEs. Our economic exposures are limited to our investments
based on our ownership interest in these VIEs. Our total exposure to these consolidated investment products represents the
value of our economic ownership interest.
F-35
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
Unconsolidated VIEs
We do not consolidate sponsored investment products where we have determined that we are not the primary beneficiary. At
December 31, 2023, the carrying value of these investments was $153 million and our maximum risk of loss approximates the
carrying amount. These investments are classified within Equity securities.
4. Fair value measurements
a) Fair value hierarchy
Fair value of financial assets and financial liabilities is estimated based on the framework established in the fair value
accounting guidance. The guidance defines fair value as the price to sell an asset or transfer a liability (an exit price) in an
orderly transaction between market participants and establishes a three-level valuation hierarchy based on the reliability of the
inputs. The fair value hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to
unobservable data.
The three levels of the hierarchy are as follows:
•
•
Level 1 – Unadjusted quoted prices for identical assets or liabilities in active markets;
Level 2 – Includes, among other items, inputs other than quoted prices that are observable for the asset or liability such as
interest rates and yield curves, quoted prices for similar assets and liabilities in active markets, and quoted prices
for identical or similar assets and liabilities in markets that are not active; and
•
Level 3 – Inputs that are unobservable and reflect management’s judgments about assumptions that market participants
would use in pricing an asset or liability.
We categorize financial instruments within the valuation hierarchy at the balance sheet date based upon the lowest level of
inputs that are significant to the fair value measurement.
We use pricing services to obtain fair value measurements for the majority of our investment securities. Based on management’s
understanding of the methodologies used, these pricing services only produce an estimate of fair value if there is observable
market information that would allow them to make a fair value estimate. Based on our understanding of the market inputs used
by the pricing services, all applicable investments have been valued in accordance with U.S. GAAP. We do not adjust prices
obtained from pricing services. The following is a description of the valuation techniques and inputs used to determine fair
values for financial instruments carried at fair value, as well as the general classification of such financial instruments pursuant
to the valuation hierarchy.
Fixed maturities
We use pricing services to estimate fair value measurements for the majority of our fixed maturities. The pricing services use
market quotations for fixed maturities that have quoted prices in active markets; such securities are classified within Level 1.
For fixed maturities other than U.S. Treasury securities that generally do not trade on a daily basis, the pricing services prepare
estimates of fair value measurements using their pricing applications or pricing models, which include available relevant market
information, benchmark curves, benchmarking of like securities, sector groupings, and matrix pricing. Additional valuation
factors that can be taken into account are nominal spreads, dollar basis, and liquidity adjustments. The pricing services evaluate
each asset class based on relevant market and credit information, perceived market movements, and sector news. The market
inputs used in the pricing evaluation, listed in the approximate order of priority include: benchmark yields, reported trades,
broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, reference data, and industry and
economic events. The extent of the use of each input is dependent on the asset class and the market conditions. Given the asset
class, the priority of the use of inputs may change, or some market inputs may not be relevant. Additionally, fixed maturities
valuation is more subjective when markets are less liquid due to the lack of market based inputs (i.e., stale pricing) and may
require the use of models to be priced. The lack of market based inputs may increase the potential that an investment's
estimated fair value is not reflective of the price at which an actual transaction would occur. The overwhelming majority of fixed
maturities are classified within Level 2 because the most significant inputs used in the pricing techniques are observable. For a
small number of fixed maturities, we obtain a single broker quote (typically from a market maker). Due to the disclaimers on the
quotes that indicate that the price is indicative only, we include these fair value estimates in Level 3.
F-36
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
Equity securities
Equity securities with active markets are classified within Level 1 as fair values are based on quoted market prices. For equity
securities in markets which are less active, fair values are based on market valuations and are classified within Level 2. Equity
securities for which pricing is unobservable are classified within Level 3.
Short-term investments
Short-term investments, which comprise securities due to mature within one year of the date of purchase that are traded in
active markets, are classified within Level 1 as fair values are based on quoted market prices. Securities such as commercial
paper and discount notes are classified within Level 2 because these securities are typically not actively traded due to their
approaching maturity, and as such, their cost approximates fair value. Short-term investments for which pricing is unobservable
are classified within Level 3.
Private equities
Fair values for Private equities including investments in partially-owned investment companies, investment funds, and limited
partnerships are based on their respective NAV and are excluded from the fair value hierarchy table below.
Other investments
Certain of our long-duration contracts are supported by assets that do not qualify for separate account reporting under U.S.
GAAP. These assets comprise mutual funds, classified within Level 1 in the valuation hierarchy on the same basis as other
equity securities traded in active markets. Other investments principally include fixed maturities carried at fair value with
changes in fair value recorded through the Consolidated statements of operations. These fixed maturities principally relate to the
acquired Huatai investment portfolio and are classified within Level 2. Also included are life insurance policies collateralizing
investments held in rabbi trusts maintained by Chubb for deferred compensation plans and supplemental retirement plans.
These policies are carried at cash surrender value and are classified in the valuation hierarchy within Level 2.
Securities lending collateral
The underlying assets included in Securities lending collateral in the Consolidated balance sheets are fixed maturities which are
classified in the valuation hierarchy on the same basis as other fixed maturities. Excluded from the valuation hierarchy is the
corresponding liability related to Chubb’s obligation to return the collateral plus interest as it is reported at contract value and
not fair value in the Consolidated balance sheets.
Investment derivatives
Actively traded investment derivative instruments, including futures, options, and forward contracts are classified within Level 1
as fair values are based on quoted market prices. The fair value of cross-currency swaps and interest rate swaps is based on
market valuations and is classified within Level 2. Investment derivative instruments are recorded in either Other assets or
Accounts payable, accrued expenses, and other liabilities in the Consolidated balance sheets.
Derivatives designated as hedging instruments
Certain of our derivatives are cross-currency swaps designated as fair value and net investment hedging instruments. The fair
value of cross-currency swaps and interest rate swaps is based on market valuations and is classified within Level 2. Investment
derivative instruments are recorded in either Other assets or Accounts payable, accrued expenses, and other liabilities in the
Consolidated balance sheets.
Other derivative instruments
We maintain positions in exchange-traded equity futures contracts designed to limit exposure to a severe equity market decline,
which would cause an increase in expected market risk benefits (MRB) claims, and therefore an increase in MRB reserves. Our
positions in exchange-traded equity futures contracts are classified within Level 1. The fair value of the majority of the remaining
positions in other derivative instruments is based on significant observable inputs including equity security and interest rate
indices. Accordingly, these are classified within Level 2. Other derivative instruments based on unobservable inputs are
classified within Level 3. Other derivative instruments are recorded in either Other assets or Accounts payable, accrued
expenses, and other liabilities in the Consolidated balance sheets.
Separate account assets
Separate account assets represent segregated funds where investment risks are borne by the customers, except to the extent of
certain guarantees made by Chubb. Separate account assets principally comprise mutual funds classified within Level 1 in the
valuation hierarchy on the same basis as other equity securities traded in active markets. Separate account assets also include
fixed maturities classified within Level 2 because the most significant inputs used in the pricing techniques are observable.
F-37
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
Excluded from the valuation hierarchy are the corresponding liabilities as they are reported at contract value and not fair value in
the Consolidated balance sheets.
Financial instruments measured at fair value on a recurring basis, by valuation hierarchy
December 31, 2023
(in millions of U.S. dollars)
Assets:
Fixed maturities available-for-sale
U.S. Treasury / Agency
Non-U.S.
Corporate and asset-backed securities
Mortgage-backed securities
Municipal
Equity securities
Short-term investments
Other investments (1)
Securities lending collateral
Investment derivatives
Derivatives designated as hedging instruments
Separate account assets
Total assets measured at fair value (1) (2)
Liabilities:
Investment derivatives
Derivatives designated as hedging instruments
Other derivative instruments
Market risk benefits (3)
Total liabilities measured at fair value
Level 1
Level 2
Level 3
Total
$
2,911 $
679 $
— $
—
—
—
—
2,911
3,368
1,915
589
—
54
—
5,482
34,472
40,208
22,051
2,929
692
2,622
7
—
3,590
35,164
42,830
22,058
2,929
100,339
3,321
106,571
—
2,633
4,236
1,299
—
136
91
87
3
—
—
—
—
—
3,455
4,551
4,825
1,299
54
136
5,573
$
$
14,319 $
108,734 $
3,411 $
126,464
136 $
— $
— $
—
37
—
128
5
—
—
—
771
136
128
42
771
$
173 $
133 $
771 $
1,077
(1)
(2)
(3)
Excluded from the table above are other investments of $702 million, principally policy loans at December 31, 2023 measured using NAV as a practical expedient.
Excluded from the table above are Private equities of $14,078 million at December 31, 2023 measured using NAV as a practical expedient.
Refer to Note 11 for additional information on Market risk benefits.
F-38
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
December 31, 2022
(in millions of U.S. dollars)
Assets:
Fixed maturities available-for-sale
U.S. Treasury / Agency
Non-U.S.
Corporate and asset-backed securities
Mortgage-backed securities
Municipal
Equity securities
Short-term investments
Other investments (1)
Securities lending collateral
Investment derivative instruments
Derivatives designated as hedging instruments
Other derivative instruments
Separate account assets
Total assets measured at fair value (1) (2)
Liabilities:
Investment derivatives
Derivatives designated as hedging instruments
Market risk benefits (3)
Total liabilities measured at fair value
Level 1
Level 2
Level 3
Total
$
2,100 $
526 $
— $
—
—
—
—
2,100
737
3,108
552
—
82
—
33
5,101
25,344
34,506
15,840
3,880
80,096
—
1,849
399
1,523
—
17
—
89
564
2,449
11
—
3,024
90
3
—
—
—
—
—
—
2,626
25,908
36,955
15,851
3,880
85,220
827
4,960
951
1,523
82
17
33
5,190
$
$
$
11,713 $
83,973 $
3,117 $
98,803
139 $
— $
— $
—
—
53
—
—
800
139 $
53 $
800 $
139
53
800
992
(1)
(2)
(3)
Excluded from the table above are other investments of $390 million, principally policy loans at December 31, 2022 measured using NAV as a practical expedient.
Excluded from the table above are Private equities of $12,355 million at December 31, 2022 measured using NAV as a practical expedient.
Refer to Note 11 for additional information on Market risk benefits.
F-39
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
Level 3 financial instruments
The following tables present a reconciliation of the beginning and ending balances of financial instruments measured at fair
value using significant unobservable inputs (Level 3). Excluded from the following tables is the reconciliation of Market risk
benefits, refer to Note 11 for additional information:
Year Ended December 31, 2023
(in millions of U.S. dollars)
Balance, beginning of year
Transfers into Level 3
Transfers out of Level 3
Change in Net Unrealized Gains (Losses) in OCI
Net Realized Gains (Losses)
Purchases
Sales
Settlements
Balance, end of year
Net Realized Gains (Losses) Attributable to Changes in Fair Value
at the Balance Sheet date
Change in Net Unrealized Gains (Losses) included in OCI at the
Balance Sheet date
Year Ended December 31, 2022
(in millions of U.S. dollars)
Balance, beginning of year
Transfers into Level 3
Transfers out of Level 3
Change in Net Unrealized Gains (Losses) in OCI
Net Realized Gains (Losses)
Purchases
Sales
Settlements
Balance, end of year
Net Realized Gains (Losses) Attributable to Changes in Fair Value
at the Balance Sheet date
Change in Net Unrealized Gains (Losses) included in OCI at the
Balance Sheet date
Available-for-Sale Debt Securities
Corporate
and asset-
backed
securities
Mortgage-
backed
securities
Non-U.S.
Equity
securities
Short-term
investments
$
564 $
2,449 $
11 $
90 $
21
(22)
13
(4)
258
(82)
(56)
30
(26)
28
(17)
681
(81)
(442)
—
(15)
—
—
15
—
—
—
—
(7)
24
(20)
(4)
—
692 $
2,622 $
7 $
87 $
(1) $
(5) $
— $
(7) $
7 $
12 $
— $
— $
$
$
$
3
—
—
(1)
(1)
5
(3)
—
3
—
—
Available-for-Sale Debt Securities
Corporate
and asset-
backed
securities
Mortgage-
backed
securities
Non-U.S.
Equity
securities
Short-term
investments
$
633 $
2,049 $
26 $
77 $
23
(23)
(53)
(6)
47
(97)
(80)
(14)
156
921
(59)
(85)
—
(9)
—
—
4
—
1
—
—
15
9
(12)
(107)
(292)
(10)
—
564 $
2,449 $
11 $
90 $
(2) $
(9) $
— $
14 $
(53) $
(84) $
— $
— $
$
$
$
7
—
—
—
(2)
3
—
(5)
3
(1)
—
F-40
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
Year Ended December 31, 2021
(in millions of U.S. dollars)
Balance, beginning of year
Transfers into Level 3
Transfers out of Level 3
Change in Net Unrealized Gains (Losses) in OCI
Net Realized Gains (Losses)
Purchases
Sales
Settlements
Balance, end of year
Net Realized Gains (Losses) Attributable to Changes
in Fair Value at the Balance Sheet date
Change in Net Unrealized Gains (Losses) included in
OCI at the Balance Sheet date
$
$
$
Available-for-Sale Debt Securities
Corporate
and asset-
backed
securities
Mortgage-
backed
securities
Non-U.S.
Equity
securities
Short-term
investments
Other
investments
$
546 $
1,573 $
60 $
73 $
5 $
24
(11)
(30)
(1)
91
—
(76)
(18)
15
(2)
275
1,154
(48)
(99)
(122)
(607)
—
—
18
(1)
(33)
—
—
—
8
21
(25)
—
633 $
2,049 $
26 $
77 $
—
—
(1)
—
9
—
(6)
7 $
— $
3 $
— $
5 $
— $
(25) $
17 $
— $
— $
— $
10
—
(10)
—
—
—
—
—
—
—
—
b) Financial instruments disclosed, but not measured, at fair value
Chubb uses various financial instruments in the normal course of its business. Our insurance contracts are excluded from fair
value of financial instruments accounting guidance, and therefore, are not included in the amounts discussed below.
The carrying values of cash, other assets, other liabilities, and other financial instruments not included below approximated their
fair values.
Private debt held-for-investment
The fair value of Private debt held-for-investment is derived using a discounted cash flow approach, which includes an
evaluation of forecasted contractual cash flows and yield curve information, among other loan characteristics and assumptions.
These assumptions are derived from internal and third-party sources. Since the valuation is derived from model-based
techniques, Private debt held-for-investment is classified within Level 3 of the valuation hierarchy.
Investments in partially-owned insurance companies
Fair values for investments in partially-owned insurance companies are based on Chubb’s share of the net assets based on the
financial statements provided by those companies and are excluded from the valuation hierarchy tables below.
Short- and long-term debt, repurchase agreements, and trust preferred securities
Where practical, fair values for short-term debt, long-term debt, repurchase agreements, and trust preferred securities are
estimated using discounted cash flow calculations based principally on observable inputs including incremental borrowing rates,
which reflect Chubb’s credit rating, for similar types of borrowings with maturities consistent with those remaining for the debt
being valued.
F-41
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
The following tables present fair value, by valuation hierarchy, and carrying value of the financial instruments not measured at
fair value:
Level 1
Level 2
Level 3
Total
Fair Value
Net Carrying
Value
$
$
$
— $
— $
— $
— $
2,560 $
2,560 $
2,560 $
2,560 $
2,553
2,553
— $
2,833 $
— $
2,833 $
—
—
—
1,431
11,924
365
—
—
—
1,431
11,924
365
2,833
1,460
13,035
308
$
— $
16,553 $
— $
16,553 $
17,636
Level 1
Level 2
Level 3
Total
Fair Value
Net Carrying
Value
$
1,299 $
71 $
— $
1,370 $
—
—
—
—
1,054
1,580
1,351
3,084
—
—
—
—
1,054
1,580
1,351
3,084
1,299 $
7,140 $
— $
8,439 $
1,417
1,136
1,705
1,455
3,135
8,848
— $
1,419 $
— $
1,419 $
1,419
—
—
—
473
12,495
383
—
—
—
473
475
12,495
14,402
383
308
$
— $
14,770 $
— $
14,770 $
16,604
$
$
December 31, 2023
(in millions of U.S. dollars)
Assets:
Private debt held-for-investment
Total assets
Liabilities:
Repurchase agreements
Short-term debt
Long-term debt
Trust preferred securities
Total liabilities
December 31, 2022
(in millions of U.S. dollars)
Assets:
Fixed maturities held to maturity
U.S. Treasury / Agency
Non-U.S.
Corporate and asset-backed securities
Mortgage-backed securities
Municipal
Total assets
Liabilities:
Repurchase agreements
Short-term debt
Long-term debt
Trust preferred securities
Total liabilities
F-42
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
5. Reinsurance
a) Consolidated reinsurance
Chubb purchases reinsurance to manage various exposures including catastrophe risks. Although reinsurance agreements
contractually obligate Chubb's reinsurers to reimburse it for the agreed-upon portion of its gross paid losses, they do not
discharge Chubb's primary liability. The amounts for net premiums written and net premiums earned in the Consolidated
statements of operations are net of reinsurance. The following table presents direct, assumed, and ceded premiums:
(in millions of U.S. dollars)
Premiums written
Direct
Assumed
Ceded
Net
Premiums earned
Direct
Assumed
Ceded
Net
Year Ended December 31
2023
2022
2021
$
52,969 $
47,511 $
42,811
$
$
4,557
4,467
(10,165)
(10,258)
3,928
(8,912)
47,361 $
41,720 $
37,827
51,582 $
46,160 $
41,116
4,289
4,395
(10,159)
(10,195)
3,609
(8,433)
$
45,712 $
40,360 $
36,292
Ceded losses and loss expenses incurred were $7.2 billion, $6.9 billion, and $5.9 billion for the years ended December 31,
2023, 2022, and 2021, respectively.
b) Reinsurance recoverable on ceded reinsurance
(in millions of U.S. dollars)
Reinsurance recoverable on unpaid losses and loss expenses
Reinsurance recoverable on paid losses and loss expenses
Reinsurance recoverable on losses and loss expenses
Reinsurance recoverable on policy benefits
(1) Net of valuation allowance for uncollectible reinsurance.
December 31, 2023
December 31, 2022
Net Reinsurance
Recoverable (1)
Valuation
allowance
Net Reinsurance
Recoverable (1)
Valuation
allowance
$
$
$
17,884 $
285 $
17,086 $
2,068
82
1,773
19,952 $
367 $
18,859 $
280 $
— $
302 $
289
62
351
4
The increase in reinsurance recoverable on losses and loss expenses in 2023 was primarily due to the consolidation of Huatai
Group and prior period development in certain lines.
The following table presents a roll-forward of valuation allowance for uncollectible reinsurance related to Reinsurance
recoverable on loss and loss expenses:
(in millions of U.S. dollars)
Year Ended December 31
2023
2022
Valuation allowance for uncollectible reinsurance - beginning of period
$
351 $
Provision for uncollectible reinsurance
Write-offs charged against the valuation allowance
Foreign exchange revaluation
47
(32)
1
Valuation allowance for uncollectible reinsurance - end of period
$
367 $
329
43
(19)
(2)
351
F-43
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
The following tables present a listing, at December 31, 2023, of the categories of Chubb's reinsurers:
December 31, 2023
(in millions of U.S. dollars, except for percentages)
Categories
Largest reinsurers
Other reinsurers rated A- or better
Other reinsurers rated lower than A- or not rated
Pools
Structured settlements
Captives
Other
Total
Largest Reinsurers
Gross Reinsurance
Recoverable on
Losses and Loss
Expenses
Valuation
allowance for
Uncollectible
Reinsurance
% of Gross
Reinsurance
Recoverable
$
10,993 $
117
4,898
455
441
493
2,653
386
57
56
14
11
16
96
$
20,319 $
367
1.1 %
1.2 %
12.3 %
3.2 %
2.2 %
0.6 %
24.9 %
1.8 %
ABR Reinsurance Capital Holdings
Lloyd's of London
Renaissance Re Holdings Ltd
Berkshire Hathaway Insurance Group Munich Re Group
Swiss Re Group
HDI Group (Hannover Re)
PartnerRe Group
Categories of Chubb's reinsurers
Comprises:
Largest reinsurers
• All groups of reinsurers or captives where the gross recoverable exceeds one percent
of Total Chubb shareholders' equity.
Other reinsurers rated A- or
better
Other reinsurers rated lower than
A- or not rated
Pools
Structured settlements
Captives
• All reinsurers rated A- or better that were not included in the largest reinsurer
category.
• All reinsurers rated lower than A- or not rated that were not included in the largest
reinsurer category.
• Related to Chubb's voluntary pool participation and Chubb's mandatory pool
participation required by law in certain states.
• Annuities purchased from life insurance companies to settle claims. Since we retain
ultimate liability in the event that the life company fails to pay, we reflect the
amounts as both a liability and a recoverable/receivable for U.S. GAAP purposes.
• Companies established and owned by our insurance clients to assume a significant
portion of their direct insurance risk from Chubb; structured to allow clients to self-
insure a portion of their reinsurance risk. It generally is our policy to obtain
collateral equal to expected losses. Where appropriate, exceptions are granted but
only with review and approval at a senior officer level. Excludes captives included in
the largest reinsurer category.
Other
• Amounts recoverable that are in dispute or are from companies that are in
supervision, rehabilitation, or liquidation.
The valuation allowance for uncollectible reinsurance is principally based on an analysis of the credit quality of the reinsurer and
collateral balances. We establish the valuation allowance for uncollectible reinsurance for the Other category based on a case-
by-case analysis of individual situations including the merits of the underlying matter, credit and collateral analysis, and
consideration.
F-44
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
6. Deferred acquisition costs
Deferred acquisition costs comprise capitalized costs on short-duration contracts of $3,346 million, $2,877 million, and
$2,718 million; and long-duration contracts of $3,806 million, $3,154 million, and $2,970 million at December 31, 2023,
2022, and 2021, respectively.
The following tables present a roll-forward of deferred acquisitions costs on long-duration contracts included in the Life
Insurance segment:
(in millions of U.S. dollars)
Balance – beginning of period
Capitalizations
Amortization expense
Other (including foreign exchange)
Balance – end of period
Overseas General Insurance segment excluded from table
Total deferred acquisition costs on long-duration contracts
(in millions of U.S. dollars)
Balance – beginning of period
Capitalizations
Amortization expense
Other (including foreign exchange)
Balance – end of period
Overseas General Insurance segment excluded from table
Total deferred acquisition costs on long-duration contracts
(in millions of U.S. dollars)
Balance – beginning of period
Capitalizations
Amortization expense
Other (including foreign exchange)
Balance – end of period
Overseas General Insurance segment excluded from table
Total deferred acquisition costs on long-duration contracts
Year Ended December 31, 2023
Term Life
Universal
Life
Whole
Life
A&H
Other
Total
$
324 $
639 $
392 $
891 $
268 $
2,514
176
129
159
564
36
1,064
(100)
(80)
(23)
(137)
(29)
(369)
2
(14)
6
(17)
(1)
(24)
$
402 $
674 $
534 $ 1,301 $
274 $
3,185
621
$
3,806
Year Ended December 31, 2022
Term Life
Universal
Life
Whole
Life
A&H
Other
Total
$
250 $
631 $
330 $
730 $
263 $
2,204
147
118
86
268
48
667
(81)
(64)
(18)
(93)
(31)
(287)
8
(46)
(6)
(14)
(12)
(70)
$
324 $
639 $
392 $
891 $
268 $
2,514
640
$
3,154
Year Ended December 31, 2021
Term Life
Universal
Life
Whole
Life
A&H
Other
Total
$
125 $
557 $
299 $
733 $
220 $
1,934
178
143
52
98
71
542
(47)
(61)
(18)
(98)
(26)
(250)
(6)
(8)
(3)
(3)
(2)
(22)
$
250 $
631 $
330 $
730 $
263 $
2,204
766
$
2,970
F-45
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
7. Goodwill, Value of business acquired, and Other intangible assets
Goodwill
The following table presents a roll-forward of Goodwill by segment:
(in millions of U.S. dollars)
North
America
Commercial
P&C
Insurance
North
America
Personal
P&C
Insurance
North
America
Agricultural
Insurance
Overseas
General
Insurance
Global
Reinsurance
Life
Insurance
Chubb
Consolidated
Balance at December 31, 2021
$
6,972 $
2,240 $
134 $
4,653 $
371 $
843 $
15,213
Acquisition of Cigna's business in Asia
—
—
Foreign exchange revaluation and other
(27)
(10)
—
—
90
(138)
—
—
1,101
1,191
(1)
(176)
Balance at December 31, 2022
$
6,945 $
2,230 $
134 $
4,605 $
371 $
1,943 $
16,228
Purchase price adjustments
Consolidation of Huatai Group
Foreign exchange revaluation and other
Balance at December 31, 2023 (1)
—
—
1
—
—
1
—
—
—
8
562
87
—
—
—
(10)
(2)
2,832
3,394
(23)
66
$
6,946 $
2,231 $
134 $
5,262 $
371 $
4,742 $
19,686
(1)
At December 31, 2023, Goodwill from Huatai Group includes approximately $759 million attributable to noncontrolling interests.
Value of business acquired (VOBA)
The following table presents a roll-forward of VOBA:
(in millions of U.S. dollars)
Balance, beginning of year
Acquisition of Cigna's business in Asia
Consolidation of Huatai Group
Amortization of VOBA (1)
Foreign exchange revaluation and other
Balance, end of year
(1)
Recognized in Policy acquisition costs in the Consolidated statements of operations.
Year Ended December 31
2023
2022
$
3,702 $
235 $
—
309
(281)
(56)
3,633
—
(149)
(17)
$
3,674 $
3,702 $
2021
263
—
—
(23)
(5)
235
The following table presents, as of December 31, 2023, the expected estimated pre-tax amortization expense related to VOBA
at current foreign currency exchange rates, for the next five years:
For the Years Ending December 31
(in millions of U.S. dollars)
2024
2025
2026
2027
2028
Total
F-46
$
Total amortization of
VOBA
266
227
199
180
163
$
1,035
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
Other intangible assets
Other intangible assets that are subject to amortization principally relate to agency distribution relationships and renewal rights
and other intangible assets that are not subject to amortization principally relate to trademarks. For more information on Other
intangible assets related to the consolidation of Huatai, refer to Note 2.
(in millions of U.S. dollars)
Subject to amortization
Not subject to amortization
Total
2023
3,267 $
3,508
6,775 $
December 31
2022
2,459
2,982
5,441
$
$
Amortization expense related to purchased intangibles was $310 million, $285 million, and $287 million for the years ended
December 31, 2023, 2022, and 2021, respectively. The following table presents, as of December 31, 2023, the expected
estimated pre-tax amortization expense of purchased intangibles, at current foreign currency exchange rates, for the next five
years:
For the Years Ending December 31
(in millions of U.S. dollars)
Total amortization of
purchased intangibles
Amortization of Huatai
UPR intangible asset (1)
Amortization of Huatai
land use rights (2)
Total amortization
2024
2025
2026
2027
2028
Total
$
312 $
30 $
12 $
287
269
250
240
16
7
3
—
12
12
12
13
354
315
288
265
253
$
1,358 $
56 $
61 $
1,475
(1)
(2)
Recognized in Policy acquisition costs in the Consolidated statements of operations.
Recognized in Other (income) expense in the Consolidated statements of operations.
F-47
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
8. Unpaid losses and loss expenses
Chubb establishes reserves for the estimated unpaid ultimate liability for losses and loss expenses under the terms of its policies
and agreements. Reserves include estimates for both claims that have been reported and for IBNR claims, and include
estimates of expenses associated with processing and settling these claims. Reserves are recorded in Unpaid losses and loss
expenses in the Consolidated balance sheets. While we believe that our reserves for unpaid losses and loss expenses at
December 31, 2023, are adequate, new information or trends may lead to future developments in incurred loss and loss
expenses significantly greater or less than the reserves provided. Any such revisions could result in future changes in estimates
of losses or reinsurance recoverable and would be reflected in our results of operations in the period in which the estimates are
changed.
The following table presents a reconciliation of beginning and ending Unpaid losses and loss expenses:
(in millions of U.S. dollars)
Gross unpaid losses and loss expenses, beginning of year
Reinsurance recoverable on unpaid losses (1)
Net unpaid losses and loss expenses, beginning of year
Net losses and loss expenses incurred in respect of losses occurring in:
Current year
Prior years (2)
Total
Net losses and loss expenses paid in respect of losses occurring in:
Current year
Prior years
Total
Consolidation of Huatai Group
Foreign currency revaluation and other
Net unpaid losses and loss expenses, end of year
Reinsurance recoverable on unpaid losses (1)
Year Ended December 31
2023
2022
2021
$
75,747 $
72,330 $
67,192
(17,086)
(16,132)
(14,576)
58,661
56,198
52,616
24,956
23,680
21,986
(856)
(1,108)
(956)
24,100
22,572
21,030
8,248
12,763
21,011
405
83
62,238
17,884
7,331
12,206
19,537
—
(572)
58,661
17,086
6,900
10,048
16,948
—
(500)
56,198
16,132
Gross unpaid losses and loss expenses, end of year
$
80,122 $
75,747 $
72,330
(1) Net of valuation allowance for uncollectible reinsurance.
(2)
Relates to prior period loss reserve development only and excludes prior period development related to reinstatement premiums, expense adjustments, earned premiums,
and A&H long-duration lines totaling $83 million, $232 million, and $30 million for 2023, 2022, and 2021, respectively.
The increase in gross and net unpaid losses and loss expense in 2023 reflects underlying exposure growth and the
consolidation of Huatai, partially offset by favorable prior period development. The increase in gross and net unpaid losses
and loss expense in 2022 is due to an increase in underlying exposure due to premium growth, increased loss severity trends
and net catastrophe losses, partially offset by favorable prior period development, and favorable foreign exchange movement.
The loss development tables under section c) below, present Chubb’s historical incurred and paid claims development by broad
product line through December 31, 2023, net of reinsurance, as well as the cumulative number of reported claims, IBNR
balances, and other supplementary information.
Recent period inflation is higher than the levels underlying our loss development triangles. To account for this, our loss
estimates for a number of product lines include explicit adjustments by accident year for the potential increase in ultimate
claim severity.
F-48
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
The following table presents a reconciliation of the loss development tables to the liability for unpaid losses and loss expenses in
the consolidated balance sheet:
Reconciliation of Reserve Balances to Liability for Unpaid Loss and Loss Expenses
(in millions of U.S. dollars)
Presented in the loss development tables:
North America Commercial P&C Insurance — Workers' Compensation
$
North America Commercial P&C Insurance — Liability
North America Commercial P&C Insurance — Other Casualty
North America Commercial P&C Insurance — Non-Casualty
North America Personal P&C Insurance
Overseas General Insurance — Casualty
Overseas General Insurance — Non-Casualty
Global Reinsurance — Casualty
Global Reinsurance — Non-Casualty
Excluded from the loss development tables:
Other
Net unpaid loss and allocated loss adjustment expense
Ceded unpaid loss and allocated loss adjustment expense:
North America Commercial P&C Insurance — Workers' Compensation
North America Commercial P&C Insurance — Liability
North America Commercial P&C Insurance — Other Casualty
North America Commercial P&C Insurance — Non-Casualty
North America Personal P&C Insurance
Overseas General Insurance — Casualty
Overseas General Insurance — Non-Casualty
Global Reinsurance — Casualty
Global Reinsurance — Non-Casualty
Other
Ceded unpaid loss and allocated loss adjustment expense
Unpaid unallocated loss adjustment expenses
Unpaid losses and loss expenses
$
December 31, 2023
10,159
21,092
2,596
3,203
3,550
8,157
3,515
1,240
411
6,286
60,209
1,190
7,427
1,064
1,673
577
2,527
1,736
80
101
1,781
18,156
1,757
80,122
F-49
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
Business excluded from the loss development tables
“Other” shown in the reconciliation table comprises businesses excluded from the loss development tables:
•
Corporate segment business, which includes run-off liabilities such as asbestos, environmental, and molestation and other
mass tort exposures and which impact accident years older than those shown in the loss development tables;
• North America Agricultural Insurance segment business, which is short-tailed with the majority of the liabilities expected to
be resolved in the ensuing twelve months; and
Certain subsets of our business due to data limitations or unsuitability to the loss development table presentation, including:
•
•
•
Various loss portfolio transfers; by convention, all premium and losses associated with these transactions are
recorded to the policy period of the transaction, even though the accident dates of the claims covered may be a
decade or more in the past. We also underwrite certain high attachment, high limit, multiple-line and excess of
aggregate coverages for large commercial clients. Changes in incurred loss and cash flow patterns are volatile and
sufficiently different from those of typical insureds. This category includes the Alternative Risk Solutions business
within the North America Commercial P&C Insurance segment;
2015 and prior paid history on a subset of previously acquired international businesses, within the Overseas
General Insurance segment, due to limitations on the data prior to the acquisition;
• Huatai P&C business and International A&H lines, where incurred loss development is shorter-tailed than the
majority of the liabilities in the Overseas General segment and reported claims are high frequency and low severity
in nature;
Purchase accounting adjustments related to unpaid losses and loss expenses for Chubb Corp;
•
• Reinsurance recoverable bad debt; and
• Balances with insufficient detail.
a) Description of Reserving Methodologies
Our recorded reserves represent management's best estimate of the provision for unpaid claims as of the balance sheet date.
The process of establishing loss and loss expense reserves can be complex and is subject to considerable uncertainty as it
requires the use of estimates and judgments based on circumstances underlying the insured loss at the date of accrual. The
reserves for our various product lines each require different qualitative and quantitative assumptions and judgments to be made.
Management's best estimate is developed after collaboration with actuarial, underwriting, claims, legal, and finance departments
and culminates with the input of reserve committees. Each business unit reserve committee includes the participation of the
relevant parties from actuarial, finance, claims, and unit senior management and has the responsibility for finalizing,
recommending and approving the estimate to be used as management's best estimate. Reserves are further reviewed by Chubb's
Chief Actuary and senior management. The objective of such a process is to determine a single estimate that we believe
represents a better estimate than any other and which is viewed by management to be the best estimate of ultimate loss
settlements. This estimate is based on a combination of exposure and experience-based actuarial methods (described below)
and other considerations such as claims reviews, reinsurance recovery assumptions and/or input from other knowledgeable
parties such as underwriting. Exposure-based methods are most commonly used on relatively immature origin years (i.e., the
year in which the losses were incurred — “accident year” or “report year”), while experience-based methods provide a view
based on the projection of loss experience that has emerged as of the valuation date. Greater reliance is placed upon experience-
based methods as the pool of emerging loss experience grows and where it is deemed sufficiently credible and reliable as the
basis for the estimate. In comparing the held reserve for any given origin year to the actuarial projections, judgment is required
as to the credibility, uncertainty and inherent limitations of applying actuarial techniques to historical data to project future loss
experience. Examples of factors that impact such judgments include, but are not limited to, the following:
•
•
•
•
•
•
•
•
•
•
•
•
•
•
nature and complexity of underlying coverage provided and net limits of exposure provided;
segmentation of data to provide sufficient homogeneity and credibility for loss projection methods;
extent of credible internal historical loss data and reliance upon industry information as required;
historical variability of actual loss emergence compared with expected loss emergence;
reported and projected loss trends;
extent of emerged loss experience relative to the remaining expected period of loss emergence;
rate monitor information for new and renewal business;
changes in claims handling practice;
inflation;
the legal environment;
facts and circumstances of large claims;
terms and conditions of the contracts sold to our insured parties;
impact of applicable reinsurance recoveries; and
nature and extent of underlying assumptions.
F-50
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
We have actuarial staff within each of our business units who analyze loss reserves (including loss expenses) and regularly
project estimates of ultimate losses and the corresponding indications of the required IBNR reserve. Our reserving approach is a
comprehensive ground-up process using data at a detailed level that reflects the specific types and coverages of the diverse
products written by our various operations. The data presented in this disclosure was prepared on a more aggregated basis and
with a focus on changes in incurred loss estimates over time as well as associated cash flows. We note that data prepared on
this basis may not demonstrate the full spectrum of characteristics that are evident in the more detailed level studied internally.
We perform an actuarial reserve review for each product line at least once a year. For most product lines, one or more standard
actuarial reserving methods may be used to determine estimates of ultimate losses and loss expenses, and from these
estimates, a single actuarial central estimate is selected. The actuarial central estimate is an input to the reserve committee
process described above. For the few product lines that do not lend themselves to standard actuarial reserving methods,
appropriate techniques are applied to produce the actuarial central estimates. For example, run-off asbestos and environmental
liability estimates are better suited to the application of account-specific exposure-based analyses to best evaluate their
associated aggregate reserve levels.
b) Standard actuarial reserving methods
The judgments involved in projecting the ultimate losses include the use and interpretation of various standard actuarial
reserving methods that place reliance on the extrapolation of actual historical data, loss development patterns, industry data,
and other benchmarks as appropriate.
Standard actuarial reserving methods include, but are not limited to, expected loss ratio, paid and reported loss development,
and Bornhuetter-Ferguson methods. A general description of these methods is provided below. In addition to these standard
methods, depending upon the product line characteristics and available data, we may use other recognized actuarial methods
and approaches. Implicit in the standard actuarial methods that we generally utilize is the need for two fundamental
assumptions: first, the pattern by which losses are expected to emerge over time for each origin year, and second, the expected
loss ratio for each origin year.
The expected loss ratio for any particular origin year is selected after consideration of a number of factors, including historical
loss ratios adjusted for rate changes, premium and loss trends, industry benchmarks, the results of policy level loss modeling at
the time of underwriting, and/or other more subjective considerations for the product line (e.g., terms and conditions) and
external environment as noted above. The expected loss ratio for a given origin year is initially established at the start of the
origin year as part of the planning process. This analysis is performed in conjunction with underwriters and management. The
expected loss ratio method arrives at an ultimate loss estimate by multiplying the expected ultimate loss ratio by the
corresponding premium base. This method is most commonly used as the basis for the actuarial central estimate for immature
origin periods on product lines where the actual paid or reported loss experience is not yet deemed sufficiently credible to serve
as the principal basis for the selection of ultimate losses. The expected loss ratio for a given origin year may be modified over
time if the underlying assumptions differ from the original assumptions (e.g., the assessment of prior year loss ratios, loss trend,
rate changes, actual claims, or other information).
Our selected paid and reported development patterns provide a benchmark against which the actual emerging loss experience
can be monitored. Where possible, development patterns are selected based on historical loss emergence by origin year. For
product lines where the historical data is viewed to have low statistical credibility, the selected development patterns also reflect
relevant industry benchmarks and/or experience from similar product lines written elsewhere within Chubb. This most
commonly occurs for relatively new product lines that have limited historical data or for high severity/low frequency portfolios
where our historical experience exhibits considerable volatility and/or lacks credibility. The paid and reported loss development
methods convert the selected loss emergence pattern to a set of multiplicative factors which are then applied to actual paid or
reported losses to arrive at an estimate of ultimate losses for each period. Due to their multiplicative nature, the paid and
reported loss development methods will leverage differences between actual and expected loss emergence. These methods tend
to be utilized for more mature origin periods and for those portfolios where the loss emergence has been relatively consistent
over time.
The Bornhuetter-Ferguson method is a combination of the expected loss ratio method and the loss development method, where
the loss development method is given more weight as the origin year matures. This approach allows a logical transition between
the expected loss ratio method which is generally utilized at earlier maturities and the loss development methods which are
typically utilized at later maturities. We usually apply this method using reported loss data although paid data may also be used.
F-51
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
Short-tail business
Short-tail business generally describes product lines for which losses are typically known and paid shortly after the loss occurs.
This would include, for example, most property, personal accident, and automobile physical damage policies that we write. Due
to the short reporting and development pattern for these product lines, the uncertainty associated with our estimate of ultimate
losses for any particular accident period diminishes relatively quickly as actual loss experience emerges. We typically assign
credibility to methods that incorporate actual loss emergence, such as the paid and reported loss development and Bornhuetter-
Ferguson methods, sooner than would be the case for long-tail lines at a similar stage of development for a given origin year.
The reserving process for short-tail losses arising from catastrophic events typically involves an assessment by the claims
department, in conjunction with underwriters and actuaries, of our exposure and estimated losses immediately following an
event and then subsequent revisions of the estimated losses as our insureds provide updated actual loss information.
The nature and complexity of underlying coverage provided and net limits of exposure provided;
Long-tail business
Long-tail business describes lines of business for which specific losses may not be known/reported for some period and for
which claims can take significant time to settle/close. This includes most casualty lines such as general liability, D&O, and
workers' compensation. There are various factors contributing to the uncertainty and volatility of long-tail business, including the
indirect impact of COVID-19 that has changed loss reporting and development patterns. In addition, uncertain future inflationary
trends, changes in future legal environments, and the potential impact of major claims, such as molestation claims including the
Boy Scouts of America (BSA) agreement-in-principle, added to the uncertainty and volatility in the long-tail business. Other
factors are:
•
• Our historical loss data and experience is sometimes too immature and lacking in credibility to rely upon for reserving
purposes. Where this is the case, in our reserve analysis we may utilize industry loss ratios or industry benchmark
development patterns that we believe reflect the nature and coverage of the underwritten business and its future
development, where available. For such product lines, actual loss experience may differ from industry loss statistics as well
as loss experience for previous underwriting years;
The difficulty in estimating loss trends, claims inflation (e.g., medical and judicial) and underlying economic conditions;
The need for professional judgment to estimate loss development patterns beyond that represented by historical data using
supplemental internal or industry data, extrapolation, or a blend of both;
The need to address shifts in business mix or volume over time when applying historical paid and reported loss
development patterns from older origin years to more recent origin years. For example, changes over time in the processes
and procedures for establishing case reserves can distort reported loss development patterns or changes in ceded
reinsurance structures by origin year can alter the development of paid and reported losses;
Loss reserve analyses typically require loss or other data be grouped by common characteristics in some manner. If data
from two combined lines of business exhibit different characteristics, such as loss payment patterns, the credibility of the
reserve estimate could be affected. Additionally, since casualty lines of business can have significant intricacies in the terms
and conditions afforded to the insured, there is an inherent risk as to the homogeneity of the underlying data used in
performing reserve analyses; and
The applicability of the price change data used to estimate ultimate loss ratios for most recent origin years.
•
•
•
•
•
As described above, various factors are considered when determining appropriate data, assumptions, and methods used to
establish the loss reserve estimates for long-tail product lines. These factors may also vary by origin year for given product lines.
The derivation of loss development patterns from data and the selection of a tail factor to project ultimate losses from actual loss
emergence require considerable judgment, particularly with respect to the extent to which historical loss experience is relied
upon to support changes in key reserving assumptions.
F-52
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
c) Loss Development Tables
The tables were designed to present business with similar risk characteristics which exhibit like development patterns and
generally similar trends, in order to provide insight into the nature, amount, timing and uncertainty of cash flows related to our
claims liabilities.
Each table follows a similar format and reflects the following:
• The incurred loss triangle includes both reported case reserves and IBNR liabilities.
• Both the incurred and paid loss triangles include allocated loss adjustment expense (i.e., defense and investigative costs
particular to individual claims) but exclude unallocated loss adjustment expense (i.e., the costs associated with internal
claims staff and third-party administrators).
• The amounts in both triangles for the years ended December 31, 2014, to December 31, 2022, and average historical
claim duration as of December 31, 2023, are presented as supplementary information.
• All data presented in the triangles is net of reinsurance recoverables.
• The IBNR reserves shown to the right of each incurred loss development exhibit reflect the net IBNR recorded as of
December 31, 2023.
• The tables are presented retrospectively with respect to acquisitions where these are material and doing so is practicable.
Most notably, the Chubb Corp acquisition is presented retrospectively. The unaudited consolidated data is presented solely
for informational purposes and is not necessarily indicative of the consolidated data that might have been observed had the
transactions been completed prior to the date indicated.
Historical dollar amounts are presented in this footnote on a constant-dollar basis, which is achieved by assuming constant
foreign exchange rates for all periods in the loss triangles, translating prior period amounts using the same local currency
exchange rates as the current year end. The impact of this conversion is to show the change between periods exclusive of the
effect of fluctuations in exchange rates, which would otherwise distort the change in incurred loss and cash flow patterns
shown. The change in incurred loss shown will differ from other U.S. GAAP disclosures of incurred prior period reserve
development amounts, which include the effect of fluctuations in exchanges rates.
We provided guidance above on key assumptions that should be considered when reviewing this disclosure and information
relating to how loss reserve estimates are developed. We believe the information provided in the “Loss Development Tables”
section of the disclosure is of limited use for independent analysis or application of standard actuarial estimations.
Cumulative Number of Reported Claims
Reported claim counts, on a cumulative basis, are provided to the far right of each incurred loss development table. In our North
America segments, we generally consider a reported claim to be one claim per coverage per claimant. In our Overseas General
Insurance segment, we generally consider a reported claim to be on a per occurrence basis. Global Reinsurance segment’s
portfolio comprises a mix of proportional and non-proportional treaties. The proportional treaties are reported on a bulk basis
and do not lend themselves to meaningful claim count data. As such, we do not provide claim count information for our Global
Reinsurance segment.
We exclude claims closed without payment. Claims are counted on a direct basis without consideration of ceded reinsurance.
Use of the presented claim counts in analysis of company experience has significant limitations, including:
•
•
•
Claims for certain events and/or product lines, such as portions of our A&H business, are not reported on an individual
basis, but rather in bulk and thus not available for inclusion in this disclosure.
Each segment typically has a mixture of primary and excess experience which has shifted over time.
Captive business, especially in Workers' Compensation and Liability, largely represents fronted business where our net
exposure to loss is minimal; however, since the claim count is based on direct claims, there is a mismatch between direct
claims and net loss dollars, the extent of which varies by accident year.
Reported claim counts include open claims which have case reserves but exclude claims that have been incurred but not
reported. As such the reported claims are not consistent with the incurred losses in the triangle, which include incurred but not
reported losses. One can calculate reported losses by subtracting incurred but not reported losses from incurred losses in the
triangle. Reported claim counts are also inconsistent with losses in the paid loss triangle, since reported counts would include
claims with case reserves but no payments to date.
F-53
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
North America Commercial P&C Insurance — Workers' Compensation — Long-tail
This product line has a broad mix of exposures across industries as well as a mix of policy coverages. Types of coverage include
risk management business predominantly with high deductible policies, loss sensitive business (i.e., retrospectively-rated
policies), business fronted for captives, as well as excess and primary guaranteed cost coverages.
The triangle below shows all loss and allocated expense development for the workers' compensation product line. In our prior
period development disclosure, we exclude any loss development where there is a directly related premium adjustment. For
workers' compensation, changes in the exposure base due to payroll audits will drive changes in ultimate losses. In addition, we
record involuntary pool assumptions (premiums and losses) on a lagged basis. Both of these items will influence the
development in the triangle, particularly the first prior accident year, and are included in the reconciliation table presented on
page F-66.
Net Incurred Loss and Allocated Loss Adjustment Expenses
(in millions of U.S. dollars)
Years Ended December 31
Unaudited
Accident
Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
2014
2018
$ 1,207 $ 1,201 $ 1,217 $ 1,215 $ 1,163 $ 1,100 $ 1,073 $ 1,037 $ 1,007 $
2021
2022
2020
2019
2017
2016
2015
2023
983 $
1,282
1,259
1,276
1,279
1,217
1,154
1,128
1,092
1,057
1,366
1,361
1,383
1,378
1,269
1,206
1,177
1,162
1,412
1,380
1,399
1,393
1,376
1,176
1,121
1,359
1,361
1,380
1,385
1,384
1,221
1,391
1,384
1,400
1,409
1,406
1,367
1,388
1,409
1,408
1,348
1,330
1,372
1,344
1,407
1,371
$ 12,508
286
354
402
435
611
756
708
835
992
As of December 31
2023
Net
IBNR
Reserves
236
Reported
Claims (in
thousands)
45
50
51
50
51
48
31
35
38
33
Net Cumulative Paid Loss and Allocated Loss Adjustment Expenses
(in millions of U.S. dollars)
Years Ended December 31
Unaudited
Accident
Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
2014
113 $
$
2015
295 $
116
2016
410 $
301
122
2017
484 $
418
326
120
2018
532 $
501
452
313
130
2019
566 $
564
529
437
329
143
2020
599 $
606
584
516
451
341
111
2021
617 $
628
621
564
528
467
282
120
2022
634 $
645
653
601
597
575
390
331
131
2023
649
665
683
626
641
640
466
458
332
129
$ 5,289
Net Liabilities for Loss and Allocated Loss Adjustment Expenses
(in millions of U.S. dollars)
Accident years prior to 2014
Accident years 2014 - 2023 from tables above
All Accident years
December 31, 2023
$
$
2,940
7,219
10,159
F-54
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
North America Commercial P&C Insurance — Workers' Compensation — Long-tail (continued)
Supplementary Information: (Favorable)/ Adverse Prior Period Development
(in millions of U.S. dollars)
Accident years prior to 2014
Accident years 2014 - 2023 from tables above
All Accident years
December 31, 2023
$
$
(113)
(191)
(304)
Supplementary Information: Average Annual Percentage Payout of Net Incurred Claims by Age, as of December 31, 2023 (Unaudited)
Age in Years
Percentage
1
2
3
10 %
16 %
10 %
4
7 %
5
5 %
6
3 %
7
3 %
8
2 %
9
10
2 %
2 %
North America Commercial P&C Insurance — Liability — Long-tail
This line consists of primary and excess general liability exposures, medical liability, and professional lines, including directors
and officers (D&O) liability, errors and omissions (E&O) liability, employment practices liability (EPL), fidelity bonds, and
fiduciary liability.
The primary and excess general liability business represents the largest part of these exposures. The former includes both
monoline and commercial package liability. The latter includes a substantial proportion of commercial umbrella, excess and
high excess business, where loss activity can produce significant volatility in the loss triangles at later ages within an accident
year (and sometimes across years) due to the size of the limits afforded and the complex nature of the underlying losses.
This line includes management and professional liability products provided to a wide variety of clients, from national accounts to
small firms along with private and not-for-profit organizations, distributed through brokers, agents, wholesalers, and MGAs.
Many of these coverages, particularly D&O and E&O, are typically written on a claims-made form. While most of the coverages
are underwritten on a primary basis, there are significant amounts of excess exposure with large policy limits.
Net Incurred Loss and Allocated Loss Adjustment Expenses
Years Ended December 31
As of December 31
2023
(in millions of U.S. dollars)
Unaudited
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
$ 3,528 $ 3,578 $ 3,667 $ 3,710 $ 3,649 $ 3,463 $ 3,340 $ 3,192 $ 3,142 $ 3,134 $
Accident
Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
3,552
3,701
3,527
3,810
3,588
3,316
3,967
3,685
3,491
3,368
3,934
3,797
3,573
3,485
3,446
3,727
3,793
3,623
3,688
3,620
4,102
3,701
3,765
3,545
3,820
3,858
3,826
4,315
3,569
3,756
3,434
3,900
4,050
3,919
4,349
4,561
3,613
3,660
3,492
3,915
4,057
3,976
4,441
4,567
4,703
$ 39,558
Net
IBNR
Reserves
237
358
375
603
672
1,135
1,630
2,589
3,371
4,181
Reported
Claims (in
thousands)
24
27
27
26
28
29
24
25
25
26
F-55
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
North America Commercial P&C Insurance — Liability — Long-tail (continued)
Net Cumulative Paid Loss and Allocated Loss Adjustment Expenses
(in millions of U.S. dollars)
Years Ended December 31
Unaudited
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
$
164 $
679 $ 1,248 $ 1,801 $ 2,199 $ 2,439 $ 2,580 $ 2,669 $ 2,753 $ 2,802
138
604
171
1,203
662
161
1,852
1,334
616
189
2,287
1,973
1,160
753
175
2,527
2,332
1,698
1,301
669
152
2,743
2,593
2,000
1,773
1,245
589
174
Accident
Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
Net Liabilities for Loss and Allocated Loss Adjustment Expenses
(in millions of U.S. dollars)
Accident years prior to 2014
Accident years 2014 - 2023 from tables above
All Accident years
Supplementary Information: (Favorable)/ Adverse Prior Period Development
(in millions of U.S. dollars)
Accident years prior to 2014
Accident years 2014 - 2023 from tables above
All Accident years
2,921
2,820
2,322
2,335
1,888
1,148
609
144
3,079
2,982
2,627
2,782
2,387
1,697
1,200
649
197
$ 20,402
December 31, 2023
$
$
1,936
19,156
21,092
December 31, 2023
$
$
47
175
222
Supplementary Information: Average Annual Percentage Payout of Net Incurred Claims by Age, as of December 31, 2023 (Unaudited)
Age in Years
Percentage
1
4 %
2
3
4
5
13 %
15 %
16 %
12 %
6
8 %
7
6 %
8
4 %
9
10
4 %
2 %
F-56
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
North America Commercial P&C Insurance — Other Casualty — Long-tail
This product line consists of the remaining commercial casualty coverages such as automobile liability and aviation as well as
our foreign casualty exposures (mainly auto, general liability and employer responsibility coverages) on U.S.-based multinational
accounts. The paid and reported data are impacted by some catastrophe loss activity.
Net Incurred Loss and Allocated Loss Adjustment Expenses
(in millions of U.S. dollars)
Years Ended December 31
Unaudited
As of December 31
2023
Net IBNR
Reserves
Reported
Claims (in
thousands)
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
$ 594 $ 582 $ 580 $ 595 $ 554 $ 538 $ 538 $ 530 $ 526 $ 530 $
486
469
500
514
457
454
462
457
503
501
527
523
480
479
469
531
565
577
616
604
590
535
563
574
579
575
606
636
686
744
640
633
657
675
710
782
456
473
602
606
756
638
747
801
844
$ 6,453
9
18
20
16
9
40
156
254
367
631
17
15
16
17
17
17
11
13
14
11
Net Cumulative Paid Loss and Allocated Loss Adjustment Expenses
(in millions of U.S. dollars)
Years Ended December 31
Unaudited
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
$
80 $
220 $
317 $
391 $
454 $
473 $
500 $
508 $
513 $
47
137
52
214
145
66
304
246
175
74
370
323
312
169
70
394
374
381
270
189
54
411
398
446
365
318
156
60
423
424
496
472
465
273
176
82
517
431
437
539
532
619
401
293
235
81
Accident
Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
Accident
Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
Net Liabilities for Loss and Allocated Loss Adjustment Expenses
(in millions of U.S. dollars)
Accident years prior to 2014
Accident years 2014 - 2023 from tables above
All Accident years
$ 4,085
December 31, 2023
$
$
228
2,368
2,596
F-57
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
North America Commercial P&C Insurance — Other-Casualty — Long-tail (continued)
Supplementary Information: (Favorable)/ Adverse Prior Period Development
(in millions of U.S. dollars)
Accident years prior to 2014
Accident years 2014 - 2023 from tables above
All Accident years
December 31, 2023
$
$
(6)
99
93
Supplementary Information: Average Annual Percentage Payout of Net Incurred Claims by Age, as of December 31, 2023 (Unaudited)
Age in Years
Percentage
1
2
3
4
5
10 %
18 %
18 %
17 %
15 %
6
7 %
7
6 %
8
2 %
9
1 %
10
1 %
North America Commercial P&C Insurance — Non-Casualty — Short-tail
This product line represents first party commercial product lines that are short-tailed in nature, such as property, inland marine,
ocean marine, surety, and A&H. There is a wide diversity of products, primary and excess coverages, and policy sizes. During
this ten-year period, this product line was impacted by natural catastrophes mainly in the 2017 and 2018 accident years, and
in accident year 2020 by direct COVID.
Net Incurred Loss and Allocated Loss Adjustment Expenses
Years Ended December 31
As of December 31
2023
(in millions of U.S. dollars)
Unaudited
Accident
Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
$ 1,635 $ 1,655 $ 1,573 $ 1,552 $ 1,543 $ 1,544 $ 1,552 $ 1,545 $ 1,544 $ 1,554 $
1,731
1,740
1,645
1,633
1,600
1,585
1,587
1,592
1,589
1,904
1,884
1,794
1,775
1,811
1,824
1,820
1,822
2,699
2,603
2,503
2,520
2,512
2,522
2,508
2,047
2,234
2,169
2,161
2,170
2,160
2,046
2,031
1,954
1,944
1,921
3,140
2,942
2,726
2,685
2,941
2,824
2,628
3,048
2,946
3,072
$ 22,885
2
23
43
11
13
62
158
371
1,351
Net
IBNR
Reserves
—
Reported
Claims (in
thousands)
483
545
650
764
904
1,044
1,126
863
897
756
Net Cumulative Paid Loss and Allocated Loss Adjustment Expenses
(in millions of U.S. dollars)
Years Ended December 31
Unaudited
724
2016
2015
2018
2017
2021
2022
2020
2019
1,339
844
1,484
1,499
977
2023
2014
816 $ 1,368 $ 1,478 $ 1,499 $ 1,525 $ 1,540 $ 1,547 $ 1,552 $ 1,552 $ 1,551
1,583
1,790
2,449
2,137
1,883
2,545
2,322
2,190
1,219
$ 19,669
1,582
1,789
2,430
2,113
1,856
2,466
2,100
1,050
1,583
1,778
2,406
2,068
1,800
2,260
1,085
1,570
1,754
2,392
2,012
1,672
1,390
1,567
1,726
2,301
1,821
1,028
1,552
1,650
2,083
1,025
$
Accident
Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
F-58
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
North America Commercial P&C Insurance — Non-Casualty — Short-tail (continued)
Net Liabilities for Loss and Allocated Loss Adjustment Expenses
(in millions of U.S. dollars)
Accident years prior to 2014
Accident years 2014 - 2023 from tables above
All Accident years
Supplementary Information: (Favorable)/ Adverse Prior Period Development
(in millions of U.S. dollars)
Accident years prior to 2014
Accident years 2014 - 2023 from tables above
All Accident years
December 31, 2023
$
$
(13)
3,216
3,203
December 31, 2023
$
$
(4)
(377)
(381)
Supplementary Information: Average Annual Percentage Payout of Net Incurred Claims by Age, as of December 31, 2023 (Unaudited)
Age in Years
Percentage
1
2
44 %
37 %
3
8 %
4
3 %
5
1 %
6
1 %
7
1 %
8
9
10
— %
— %
— %
North America Personal P&C Insurance — Short-tail
Chubb provides personal lines coverages for high-net-worth individuals and families in North America including homeowners,
automobile, valuable articles (including fine art), umbrella liability, and recreational marine insurance offered through
independent regional agents and brokers. During this ten-year period, this segment was also impacted by natural catastrophes,
mainly in the 2017 and 2018 accident years.
Net Incurred Loss and Allocated Loss Adjustment Expenses
Years Ended December 31
As of December 31
2023
(in millions of U.S. dollars)
Unaudited
Accident
Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
$ 2,198 $ 2,199 $ 2,186 $ 2,139 $ 2,153 $ 2,140 $ 2,135 $ 2,134 $ 2,133 $ 2,130 $
Net IBNR
Reserves
6
2,488
2,543
2,553
2,536
2,556
2,562
2,559
2,561
2,433
2,529
2,538
2,476
2,464
2,458
2,466
3,028
3,062
2,995
2,991
2,992
3,001
3,002
3,030
3,095
3,110
3,131
2,949
2,985
2,922
2,986
2,627
2,978
2,626
3,027
2,877
3,102
2,558
2,467
3,011
3,120
2,957
2,582
2,964
2,955
3,406
$ 28,150
5
10
20
45
48
96
209
414
1,480
Reported
Claims (in
thousands)
144
148
154
163
170
157
123
131
119
93
F-59
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
North America Personal P&C Insurance — Short-tail (continued)
Net Cumulative Paid Loss and Allocated Loss Adjustment Expenses
(in millions of U.S. dollars)
Years Ended December 31
Unaudited
Accident
Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
2016
2015
2014
2017
2020
2021
2019
2022
2018
1,495
2,078
1,449
2,264
2,046
1,694
2023
$ 1,306 $ 1,759 $ 1,919 $ 2,028 $ 2,073 $ 2,100 $ 2,109 $ 2,116 $ 2,119 $ 2,121
2,542
2,440
2,971
3,037
2,823
2,363
2,582
2,278
1,490
$ 24,647
2,535
2,422
2,930
2,971
2,718
2,223
2,368
1,411
2,526
2,391
2,864
2,857
2,611
1,990
1,583
2,501
2,364
2,793
2,699
2,431
1,331
2,472
2,308
2,662
2,542
1,664
2,385
2,205
2,514
1,922
Net Liabilities for Loss and Allocated Loss Adjustment Expenses
(in millions of U.S. dollars)
Accident years prior to 2014
Accident years 2014 - 2023 from tables above
All Accident years
Supplementary Information: (Favorable)/ Adverse Prior Period Development
(in millions of U.S. dollars)
Accident years prior to 2014
Accident years 2014 - 2023 from tables above
All Accident years
December 31, 2023
47
3,503
3,550
December 31, 2023
3
(131)
(128)
$
$
$
$
Supplementary Information: Average Annual Percentage Payout of Net Incurred Claims by Age, as of December 31, 2023 (Unaudited)
Age in Years
Percentage
2
25 %
1
55 %
9
— %
8
— %
5
3 %
3
7 %
4
5 %
7
1 %
6
2 %
10
— %
F-60
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
Overseas General Insurance — Casualty — Long-tail
This product line comprises D&O liability, E&O liability, financial institutions (including crime/fidelity coverages), and non-U.S.
general liability as well as aviation and political risk. Exposures are located around the world, including Europe, Latin America,
and Asia. Approximately 46 percent of Chubb Overseas General business is generated by European accounts, exclusive of
Lloyd's market. There is some U.S. exposure in Casualty from multinational accounts and in financial lines for Lloyd's market.
The financial lines coverages are typically written on a claims-made form, while general liability coverages are typically on an
occurrence basis and comprises a mix of primary and excess businesses.
Net Incurred Loss and Allocated Loss Adjustment Expenses
(in millions of U.S. dollars)
Years Ended December 31
Unaudited
Accident
Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
$ 1,196 $ 1,264 $ 1,271 $ 1,290 $ 1,210 $ 1,129 $ 1,093 $ 1,103 $ 1,106 $ 1,089 $
1,118
1,209
1,239
1,262
1,244
1,186
1,171
1,187
1,186
1,150
1,246
1,311
1,338
1,328
1,337
1,271
1,283
1,140
1,237
1,284
1,331
1,296
1,331
1,296
1,236
1,286
1,346
1,389
1,345
1,323
1,307
1,373
1,395
1,382
1,336
1,684
1,606
1,523
1,535
1,619
1,668
1,691
97
93
151
202
311
765
987
1,760
1,808
1,217
1,908
1,606
$ 14,455
As of December 31
2023
Net
IBNR
Reserves
46
Reported
Claims (in
thousands)
38
40
42
43
44
42
35
36
36
32
Net Cumulative Paid Loss and Allocated Loss Adjustment Expenses
(in millions of U.S. dollars)
2014
105 $
2015
275 $
$
80
2016
444 $
267
120
2017
571 $
465
306
91
2018
681 $
637
505
299
105
2019
761 $
753
648
499
312
118
Accident
Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
Net Liabilities for Loss and Allocated Loss Adjustment Expenses
(in millions of U.S. dollars)
Accident years prior to 2014
Accident years 2014 - 2023 from tables above
All Accident years
Years Ended December 31
Unaudited
2020
823 $
830
766
653
470
316
102
2021
865 $
906
857
812
608
444
273
111
2022
894 $
938
979
940
727
648
429
271
83
2023
934
969
1,003
995
881
729
530
434
284
79
$ 6,838
December 31, 2023
$
$
540
7,617
8,157
F-61
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
Overseas General Insurance — Casualty — Long-tail (continued)
Supplementary Information: (Favorable)/ Adverse Prior Period Development
(in millions of U.S. dollars)
Accident years prior to 2014
Accident years 2014 - 2023 from tables above
All Accident years
December 31, 2023
$
$
(22)
(26)
(48)
Supplementary Information: Average Annual Percentage Payout of Net Incurred Claims by Age, as of December 31, 2023 (Unaudited)
Age in Years
Percentage
1
7 %
2
3
4
13 %
13 %
11 %
5
9 %
6
9 %
7
6 %
8
3 %
9
10
3 %
4 %
Overseas General Insurance — Non-Casualty — Short-tail
This product line is comprised of commercial fire, marine (predominantly cargo), surety, personal automobile (in Latin America,
Asia Pacific and Japan), personal cell phones, personal residential (including high net worth), energy, and construction. In
general, these lines have relatively stable payment and reporting patterns although they are impacted by natural catastrophes
mainly in the 2017, 2018, and 2022 accident years. For the Chubb Overseas General non-casualty book, Europe, exclusive of
Lloyd's market, makes up about one third, Latin America makes up about one quarter, and Asia makes up about one fifth.
Net Incurred Loss and Allocated Loss Adjustment Expenses
Years Ended December 31
As of December 31
2023
(in millions of U.S. dollars)
Unaudited
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
$ 1,764 $ 1,828 $ 1,775 $ 1,763 $ 1,729 $ 1,719 $ 1,712 $ 1,706 $ 1,698 $ 1,693 $
1,855
1,973
1,947
1,916
1,900
1,892
1,874
1,875
1,870
1,959
1,955
1,942
1,921
1,926
1,957
1,955
1,943
2,114
2,157
2,145
2,126
2,151
2,149
2,115
2,068
2,156
2,119
2,093
2,062
2,051
2,100
2,119
2,059
2,047
2,043
2,437
2,301
2,171
2,116
2,524
2,437
2,322
2,800
2,777
2,995
$ 21,925
8
29
(6)
42
(12)
87
60
168
901
Net
IBNR
Reserves
3
Reported
Claims (in
thousands)
533
556
568
577
613
632
534
542
614
594
Accident
Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
F-62
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
Overseas General Insurance — Non-Casualty — Short-tail (continued)
Net Cumulative Paid Loss and Allocated Loss Adjustment Expenses
(in millions of U.S. dollars)
Years Ended December 31
Unaudited
$
Accident
Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
812
2015
2016
2019
2017
2018
2020
2022
2021
1,469
966
1,691
1,592
1,010
2014
2023
721 $ 1,359 $ 1,560 $ 1,619 $ 1,649 $ 1,662 $ 1,677 $ 1,684 $ 1,678 $ 1,680
1,839
1,890
2,091
1,950
1,959
1,908
2,025
2,088
1,119
$ 18,549
1,839
1,887
2,114
1,940
1,926
1,792
1,750
1,168
1,836
1,881
2,055
1,924
1,861
1,646
982
1,819
1,872
2,013
1,858
1,674
1,036
1,790
1,847
1,940
1,664
1,019
1,769
1,779
1,772
960
(in millions of U.S. dollars)
Accident years prior to 2014
Accident years 2014 - 2023 from tables above
All Accident years
Supplementary Information: (Favorable)/ Adverse Prior Period Development
(in millions of U.S. dollars)
Accident years prior to 2014
Accident years 2014 - 2023 from tables above
All Accident years
December 31, 2023
$
$
139
3,376
3,515
December 31, 2023
$
$
(4)
(264)
(268)
Supplementary Information: Average Annual Percentage Payout of Net Incurred Claims by Age, as of December 31, 2023 (Unaudited)
Age in Years
Percentage
1
2
3
45 %
33 %
10 %
4
4 %
5
1 %
6
1 %
7
8
9
10
— %
— %
— %
— %
Global Reinsurance
Chubb analyzes its Global Reinsurance business on a treaty year basis rather than on an accident year basis. Treaty year data
was converted to an accident year basis for the purposes of this disclosure. Mix shifts are an important consideration in these
product line groupings. As proportional business and excess of loss business have different earning and loss reporting and
payment patterns, this change in mix will affect the cash flow patterns across the accident years. In addition, the shift from
excess to proportional business over time will make the cash flow patterns of older and more recent years difficult to compare.
In general, the proportional business will pay out more quickly than the excess of loss business, as such, using older years
development patterns may overstate the ultimate loss estimates in more recent years.
Global Reinsurance — Casualty — Long-tail
This product line includes proportional and excess coverages in general, automobile liability, professional liability, medical
malpractice, and workers' compensation, with exposures located around the world. In general, reinsurance exhibits less stable
development patterns than primary business. In particular, general casualty reinsurance and excess coverages are long-tailed
and can be very volatile.
F-63
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
Global Reinsurance — Casualty — Long-tail (continued)
Net Incurred Loss and Allocated Loss Adjustment Expenses
Years Ended December 31
As of December 31
2023
(in millions of U.S. dollars)
Unaudited
Accident
Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
$ 330 $ 331 $ 336 $ 339 $ 340 $ 344 $ 327 $ 327 $ 326 $ 326 $
281
286
219
296
223
209
297
231
211
239
305
230
216
242
233
301
239
213
249
242
242
305
239
214
245
237
246
278
308
244
214
248
236
237
282
294
307
250
221
255
233
237
286
296
274
$ 2,685
Net
IBNR
Reserves
6
9
11
6
9
20
42
105
155
211
Net Cumulative Paid Loss and Allocated Loss Adjustment Expenses
(in millions of U.S. dollars)
Years Ended December 31
Unaudited
Accident
Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
2014
$
91 $
2015
183 $
89
2016
216 $
158
57
2017
247 $
190
112
46
2018
263 $
215
141
99
40
2019
274 $
230
157
120
94
39
2020
284 $
247
173
138
123
89
41
2021
293 $
264
190
153
146
115
98
35
2022
298 $
273
206
173
168
138
123
86
39
2023
304
281
217
185
194
161
147
119
86
30
$ 1,724
Net Liabilities for Loss and Allocated Loss Adjustment Expenses
(in millions of U.S. dollars)
Accident years prior to 2014
Accident years 2014 - 2023 from tables above
All Accident years
Supplementary Information: (Favorable)/ Adverse Prior Period Development
(in millions of U.S. dollars)
Accident years prior to 2014
Accident years 2014 - 2023 from tables above
All Accident years
December 31, 2023
$
$
279
961
1,240
December 31, 2023
$
$
(16)
22
6
Supplementary Information: Average Annual Percentage Payout of Net Incurred Claims by Age, as of December 31, 2023 (Unaudited)
Age in Years
Percentage
1
2
3
19 %
22 %
11 %
4
9 %
5
7 %
6
7 %
7
5 %
8
3 %
9
2 %
10
2 %
F-64
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
Global Reinsurance — Non-Casualty — Short-tail
This product line includes property, property catastrophe, marine, credit/surety, mortgage, A&H and energy. This product line is
impacted by natural catastrophes, particularly in the 2017, 2018, 2020, 2021, and 2022 accident years. Of the non-
catastrophe book, the mixture of business varies by year with approximately 87 percent of loss on proportional treaties in treaty
year 2014 and after. This percentage has increased over time with the proportion being approximately 77 percent for treaty
years 2014-2017 growing to an average of 93 percent for treaty years 2018 to 2023, with the remainder being written on an
excess of loss basis.
Net Incurred Loss and Allocated Loss Adjustment Expenses
(in millions of U.S. dollars)
Years Ended December 31
Unaudited
As of December 31
2023
Accident
Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
2016
2015
2017
2014
2018
$ 158 $ 174 $ 173 $ 176 $ 174 $ 173 $ 172 $ 170 $ 169 $
158
185
421
278
158
182
395
152
177
2021
2022
2020
2019
144
151
187
451
286
130
156
184
449
288
129
209
154
181
453
284
125
253
340
154
181
455
289
120
277
351
346
2023
169 $
154
181
454
282
116
279
354
311
181
$ 2,481
Net
IBNR
Reserves
1
1
1
7
2
3
22
23
69
109
Net Cumulative Paid Loss and Allocated Loss Adjustment Expenses
(in millions of U.S. dollars)
Years Ended December 31
Unaudited
Accident
Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
2014
$
63 $
2015
124 $
56
2016
146 $
102
56
2017
156 $
130
129
191
2018
161 $
140
156
321
94
2019
163 $
144
166
400
248
35
2020
165 $
148
172
413
264
80
62
2021
165 $
150
175
426
267
94
177
158
2022
166 $
150
176
433
272
102
215
277
74
2023
166
151
177
439
274
104
232
307
195
36
$ 2,081
Net Liabilities for Loss and Allocated Loss Adjustment Expenses
(in millions of U.S. dollars)
Accident years prior to 2014
Accident years 2014 - 2023 from tables above
All Accident years
Supplementary Information: (Favorable)/ Adverse Prior Period Development
(in millions of U.S. dollars)
Accident years prior to 2014
Accident years 2014 - 2023 from tables above
All Accident years
December 31, 2023
$
$
11
400
411
December 31, 2023
$
$
—
(42)
(42)
F-65
Total
(86)
(408)
(494)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
Global Reinsurance — Non-Casualty — Short-tail (continued)
Supplementary Information: Average Annual Percentage Payout of Net Incurred Claims by Age, as of December 31, 2023 (Unaudited)
Age in Years
Percentage
1
2
3
33 %
40 %
14 %
4
5 %
5
3 %
6
2 %
7
1 %
8
9
10
— %
— %
— %
Prior Period Development — Supplementary Information
The following table presents a reconciliation of the loss development triangles above to prior period development:
Components of PPD
Year Ended December 31, 2023
(in millions of U.S. dollars)
(favorable)/unfavorable
Accident
years prior
to 2014
2014 - 2022
accident years
(implied PPD
per loss
triangles)
Other (1)
PPD on loss
reserves
RIPs,
Expense
adjustments,
and earned
premiums
North America Commercial P&C Insurance
Long-tail
Short-tail
North America Personal P&C Insurance
(Short-tail)
Overseas General Insurance
Long-tail
Short-tail
Global Reinsurance
Long-tail
Short-tail
Subtotal
North America Agricultural Insurance
(Short-tail)
Corporate (Long-tail)
Consolidated PPD
$
83 $
(72) $
(187)
$
(176) $
(377)
(4)
(35)
(294)
(76)
(222) (2)
(416)
(592)
$
90
8
98 (3)
(131)
3
(4)
(132)
(2)
(134)
(26)
(264)
(22)
(4)
(290)
(26)
(2)
(58)
(60) (4)
22
(42)
(20)
(16)
—
(16)
1
—
1
(50)
(326)
(376)
7
(42)
(35)
—
—
—
—
7
7
(50)
(326)
(376)
7
(35)
(28)
$
(735) $
(115) $
(285)
$
(1,135) $
103
$
(1,032)
$
$
(24) $
277
$
6
—
(18)
277
(882) $
109
$
(773)
(1) Other includes the impact of foreign exchange.
(2)
Includes favorable development of $88 million related to our Alternative Risk Solutions business (U.S. and Bermuda) and an adjustment to exclude $92 million in
unfavorable development in the workers' compensation line, associated with an increase in exposure for which additional premiums were collected; the remaining difference
relates to a number of other items, none of which are individually material.
(3)
(4)
Includes premium returns associated with our Alternative Risk Solutions business, which is excluded from the triangles.
Includes favorable development of $56 million related to International A&H business; the remaining difference relates to a number of other items, none of which are
individually material.
F-66
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
Prior Period Development
Prior period development (PPD) arises from changes to loss estimates recognized in the current year that relate to loss events
that occurred in previous calendar years and excludes the effect of losses from the development of earned premium from
previous accident years. Long-tail lines include lines such as workers' compensation, general liability, and financial lines; while
short-tail lines include lines such as most property lines, energy, personal accident, and agriculture. The following table
summarizes (favorable) and adverse PPD by segment:
Years Ended December 31
(in millions of U.S. dollars, except for percentages)
2023
North America Commercial P&C Insurance
North America Personal P&C Insurance
North America Agricultural Insurance
Overseas General Insurance
Global Reinsurance
Corporate
Total
2022
North America Commercial P&C Insurance
North America Personal P&C Insurance
North America Agricultural Insurance
Overseas General Insurance
Global Reinsurance
Corporate
Total
2021
North America Commercial P&C Insurance
North America Personal P&C Insurance
North America Agricultural Insurance
Overseas General Insurance
Global Reinsurance
Corporate
Total
Long-tail
Short-tail
Total
% of beginning
net unpaid
reserves (1)
$
(86) $
(408) $
$
$
$
$
—
—
(50)
7
277
(134)
(18)
(326)
(35)
—
148 $
(921) $
(229) $
(333) $
—
—
(65)
(7)
359
(186)
(61)
(383)
29
—
(482) $
(280) $
—
—
(106)
(25)
569
(305)
10
(335)
28
—
(494)
(134)
(18)
(376)
(28)
277
(773)
(562)
(186)
(61)
(448)
22
359
(762)
(305)
10
(441)
3
569
(926)
0.8 %
0.2 %
— %
0.6 %
— %
0.5 %
1.3 %
1.0 %
0.3 %
0.1 %
0.8 %
— %
0.6 %
1.6 %
1.4 %
0.6 %
— %
0.8 %
— %
1.1 %
1.8 %
58 $
(934) $
(876)
$
(44) $
(882) $
(1) Calculated based on the beginning of period consolidated net unpaid losses and loss expenses.
Significant prior period movements by segment, principally driven by reserve reviews completed during each respective period,
are discussed in more detail below. The remaining net development for long-tail lines and short-tail business for each segment
and Corporate comprises numerous favorable and adverse movements across a number of lines and accident years, none of
which is significant individually or in the aggregate.
North America Commercial P&C Insurance.
Net favorable development in 2023 included $387 million in workers' compensation lines, $248 million in commercial property
and marine lines, and $101 million in surety, all mainly driven by lower than expected loss emergence. The favorable
development was partially offset by adverse development of $193 million in commercial excess and umbrella lines and $129
million in commercial auto liability, both driven by higher than expected loss emergence.
Net favorable development in 2022 included $496 million in workers' compensation from lower than expected loss emergence,
updates to loss development factors, and our annual assessment of multi-claimant events, including industrial accidents. The
favorable development was partially offset by net adverse development of $177 million in commercial auto liability, driven by
adverse reported loss experience and explicit recognition of anticipated increases in claim severity trend, $96 million from
commercial umbrella/excess portfolios, driven by higher than expected loss emergence and increases in our claims severity trend
assumptions, and $82 million from medical risk where reported loss activity was higher than expected, driven by claim severity
F-67
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
increases and large loss activity. Net favorable development on our short-tail businesses primarily included $206 million from
property and marine portfolios, where paid and reported loss activity for the most recent accident years was lower than
expected.
Net favorable development of $762 million in 2021 represented 1.4 percent of the beginning consolidated net unpaid losses
and loss expense reserves.
North America Personal P&C Insurance.
Net favorable development in 2023 included $244 million in homeowners and valuables lines, mainly due to lower than
expected loss emergence in accident year 2022, partially offset by net adverse development on reported losses of $145 million
in personal excess liability in recent accident years.
Net favorable development in 2022 primarily included favorable development in the homeowners and valuables lines of
business, driven by lower than expected claims reserve development.
Net favorable development of $305 million in 2021 represented 0.6 percent of the beginning consolidated net unpaid losses
and loss expense reserves.
Overseas General Insurance.
Net favorable development in 2023 included $253 million in property and marine lines, mainly in accident years 2020 through
2022, driven by favorable loss development across all regions, favorable catastrophe development in recent accident years, and
specific case reductions. Net favorable development also included $77 million in professional lines, including cyber, driven by
favorable loss development in the U.K. and Europe regions.
Net favorable development in 2022 included $105 million in A&H lines, driven by favorable loss development in the Asia
Pacific, U.K., and Europe regions. Net favorable development also included $100 million in property lines, driven by favorable
loss development across most regions, favorable catastrophe development in recent accident years, specific case reductions, and
salvage and subrogation recoveries.
Net favorable development of $441 million in 2021 represented 0.8 percent of the beginning consolidated net unpaid losses
and loss expense reserves.
Corporate.
Net adverse development in 2023, 2022, and 2021, included adverse development for asbestos claims of $99 million, $61
million, and $52 million, respectively, and molestation claims of $49 million, $155 million, and $417 million, respectively.
The $417 million adverse development in 2021 was primarily driven by a settlement-in-principle with the BSA regarding
molestation claims. Refer to the Molestation claims section below for further information. Net adverse development for all years
also included adverse development for environmental liabilities and other exposures.
Molestation claims
Chubb's exposure to molestation claims principally arises out of liabilities acquired when it purchased CIGNA's P&C business in
1999, and Chubb Corp in 2016. The vast majority of the current liability relates to exposure from "reviver" legislation in certain
states that allow civil claims relating to molestation to be asserted against policyholders that would otherwise be barred by
statutes of limitations. These exposures are predominantly included in our inactive run-off operations included in Corporate with
an immaterial amount in the North America Commercial P&C segment.
In December 2021, Chubb reached an agreement-in-principle regarding the bankruptcy of the Boy Scouts of America (BSA).
Under this agreement, which remains contingent upon final court approval on appeal, our inactive run-off company, Century
Indemnity Company, and certain active Chubb companies obtained a broad release for all Chubb companies from BSA-related
abuse claims for $800 million. This agreement was approved by the bankruptcy court in the third quarter of 2022. In the first
quarter of 2023, the District Court issued an order approving the Boy Scouts of America (BSA) bankruptcy plan in full. We paid
$800 million per the agreement, with $300 million paid in 2022, and the remaining $500 million paid in 2023.
F-68
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
Asbestos and environmental (A&E)
Chubb's exposure to A&E claims principally arises out of liabilities acquired when it purchased Westchester Specialty in 1998,
CIGNA's P&C business in 1999, and Chubb Corp in 2016. The following table presents a roll-forward of consolidated A&E loss
reserves including allocated loss expense reserves for A&E exposures, and the valuation allowance for uncollectible paid and
unpaid reinsurance recoverables:
(in millions of U.S. dollars)
Balance at December 31, 2020
Incurred activity
Paid activity
Balance at December 31, 2021
Incurred activity
Paid activity
Balance at December 31, 2022
Incurred activity
Paid activity
Asbestos
Environmental
Gross
Net
Gross
Net
Gross
Total
Net
$ 1,351 $
873 $
517 $
379 $ 1,868 $ 1,252
96
64
52
40
148
104 (1)
(221)
(137)
(167)
(117)
(388)
(254)
1,226
87
800
55
402
125
302
77
1,628
1,102
212
132 (1)
(215)
(152)
(115)
(69)
(330)
(221)
1,098
180
703
120
412
88
310
63
1,510
1,013
268
183 (1)
(258)
(169)
(105)
(82)
(363)
(251)
Balance at December 31, 2023
$ 1,020 $
654 $
395 $
291 $ 1,415 $
945
(1)
Excludes unallocated loss expenses and the net activity reflects third-party reinsurance other than the aggregate excess of loss reinsurance provided by National Indemnity
Company (NICO) to Westchester Specialty (see Westchester Specialty section below).
The A&E net loss reserves including allocated loss expense reserves and valuation allowance for uncollectible reinsurance at
December 31, 2023 and 2022, shown in the table above is comprised of:
(in millions of U.S. dollars)
Brandywine operations
Westchester Specialty
Chubb Corp
Other, mainly Overseas General Insurance
Total
2023
$
570 $
89
241
45
December 31
2022
602
98
266
47
$
945 $
1,013
Brandywine Run-off entities – The Restructuring Plan and uncertainties relating to Chubb's ultimate Brandywine exposure
In 1996, the Pennsylvania Insurance Commissioner approved a plan to restructure INA Financial Corporation and its
subsidiaries (the Restructuring) which included the division of Insurance Company of North America (INA) into two separate
corporations:
(1) An active insurance company that retained the INA name and continued to write P&C business; and
(2) An inactive run-off company, now called Century Indemnity Company (Century).
As a result of the division, predominantly all A&E and certain other liabilities of INA were ascribed to Century and extinguished,
as a matter of Pennsylvania law, as liabilities of INA.
As part of the Restructuring, most A&E liabilities of various U.S. affiliates of INA were reinsured to Century. Century and certain
other run-off companies having A&E and other liabilities were contributed to Brandywine Holdings.
The U.S.-based Chubb INA companies assumed two contractual obligations in respect of the Brandywine operations in
connection with the Restructuring: a surplus maintenance obligation in the form of the excess of loss (XOL) agreement and a
dividend retention fund obligation.
F-69
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
XOL Agreement
In 1996, in connection with the Restructuring, a Chubb INA insurance subsidiary provided reinsurance coverage to Century in
the amount of $800 million under an Aggregate Excess of Loss Reinsurance Agreement (XOL Agreement), triggerable if the
statutory capital and surplus of Century falls below $25 million or if Century lacks liquid assets with which to pay claims as they
become due.
Dividend Retention Fund
INA Financial Corporation established and funded a dividend retention fund (the Dividend Retention Fund) consisting of $50
million plus investment earnings. The full balance of the Dividend Retention Fund was contributed to Century as of December
31, 2002. Under the Restructuring Order, while any obligation to maintain the Dividend Retention Fund is in effect, to the
extent dividends are paid by INA Holdings Corporation to its parent, INA Financial Corporation, and to the extent INA Financial
Corporation then pays such dividends to INA Corporation, a portion of those dividends must be withheld to replenish the
principal of the Dividend Retention Fund to $50 million. In 2023 and 2022, $75 million was withheld from such dividends and
deposited into the Dividend Retention Fund as a result of dividends paid up to the INA Corporation. Pursuant to a 2011
amendment to the Restructuring Order, capital contributions from the Dividend Retention Fund to Century are not required until
the XOL Agreement has less than $200 million of capacity remaining on an incurred basis for statutory reporting purposes. The
amount of the required capital contribution shall be the lesser of the amount necessary to restore the XOL Agreement remaining
capacity to $200 million or the Dividend Retention Fund balance. In 2023 and 2022, capital contributions of $75 million and
$106 million were made, respectively, from the Dividend Retention Fund to Century. The Dividend Retention Fund may not be
terminated without prior written approval from the Pennsylvania Insurance Commissioner.
In 2004, Chubb INA contributed $100 million to Century in exchange for a surplus note. After giving effect to the surplus note,
contributions from the Dividend Retention Fund, results from operations and other items impacting statutory surplus, the
statutory surplus of Century at December 31, 2023, was $25 million and $712 million in statutory-basis losses have been
ceded to the XOL Agreement on an inception-to-date basis. The XOL Agreement statutory-basis remaining limit at December 31,
2023, is $88 million. Century reports the amount ceded under the XOL Agreement in accordance with statutory accounting
principles, which differ from U.S. GAAP by, among other things, allowing Century to discount its liabilities, including certain
asbestos related and environmental pollution liabilities and Century's reinsurance payable to active companies. For U.S. GAAP
reporting purposes, intercompany reinsurance recoverables related to the XOL are eliminated upon consolidation.
While Chubb believes it has no legal obligation to fund Century losses above the XOL limit of coverage, Chubb's consolidated
results would nevertheless continue to include any losses above the limit of coverage for so long as the Brandywine companies
remain consolidated subsidiaries of Chubb.
Certain active Chubb companies are primarily liable for asbestos, environmental, and other exposures that they have reinsured
to Century. Accordingly, if Century were to become insolvent and placed into rehabilitation or liquidation, some or all of the
recoverables due to these active Chubb companies from Century could become uncollectible. At December 31, 2023 and
2022, the aggregate reinsurance recoverables owed by Century to certain active Chubb companies were approximately $1.8
billion and $1.9 billion, respectively, on an undiscounted basis. Chubb believes the active company intercompany reinsurance
recoverables, which relate to direct liabilities payable over many years, are not impaired. At December 31, 2023 and 2022,
Century's carried gross reserves (including reserves assumed from the active Chubb companies) were $1.7 billion and $2.1
billion, respectively. Changes in laws and regulations may have an adverse effect on Century's reserves; for example, the
enactment of "reviver" statutes relating to claims of sexual molestation may give rise to additional claims that would have been
barred by the statutes of limitations in effect at the time of the alleged molestation. Should Century's loss reserves experience
adverse development, as a result of such changes or otherwise, in the future and should Century be placed into rehabilitation or
liquidation, the reinsurance recoverables due from Century to certain active Chubb companies would be payable only after the
payment in full of certain expenses and liabilities, including administrative expenses and direct policy liabilities. Thus, the
intercompany reinsurance recoverables would be at risk to the extent of the shortage of assets remaining to pay these
recoverables.
Westchester Specialty – impact of NICO contracts on Chubb’s run-off entities
As part of the Westchester Specialty acquisition in 1998, NICO provided a 75 percent pro-rata share of $1.0 billion of
reinsurance protection on losses and loss adjustment expenses incurred on or before December 31, 1996, in excess of a
retention of $721 million. At December 31, 2023, the remaining unused incurred limit under the Westchester NICO agreement
was $337 million.
F-70
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
9. Future policy benefits
The following tables present a roll-forward of the liability for future policy benefits included in the Life Insurance segment:
Present Value of Expected Net Premiums
For the Year Ended December 31, 2023
(in millions of U.S. dollars)
Balance – beginning of period
Term Life
Whole
Life
A&H
Other
Total
$ 1,806 $ 2,308 $ 10,711 $
42 $
14,867
Beginning balance at original discount rate
1,867
2,361
11,258
Effect of changes in cash flow assumptions
Effect of actual variances from expected experience
Adjusted beginning of period balance
Consolidation of Huatai Group
Issuances
Interest accrual
Net premiums collected (1)
Other (including foreign exchange)
Ending balance at original discount rate
22
(9)
40
88
(820)
(84)
1,880
2,489
10,354
3
1,690
145
190
71
318
1,653
87
531
103
(54)
(534)
1,992
3,945
10,692
43
2
—
45
12
9
2
15,529
(756)
(5)
14,768
1,850
2,170
691
19
64
—
(466)
16,693
(657)
(255)
(585)
(1,457)
(23)
(2,320)
Effect of changes in discount rate assumptions
(402)
5
(260)
Balance – end of period
$ 1,590 $ 3,950 $ 10,432 $
64 $
16,036
(1)
Net premiums collected represent the portion of gross premiums collected from policyholders that is used to fund expected benefit.
Present Value of Expected Future Policy Benefits
For the Year Ended December 31, 2023
(in millions of U.S. dollars)
Balance – beginning of period
Term Life
Whole
Life
A&H
Other
Total
$ 2,321 $ 5,696 $ 15,038 $
269 $ 23,324
Beginning balance at original discount rate
2,447
5,874
15,855
280
24,456
Effect of changes in cash flow assumptions
Effect of actual variances from expected experience
Adjusted beginning of period balance
Consolidation of Huatai Group
Issuances
Interest accrual
Benefits payments
Other (including foreign exchange)
Ending balance at original discount rate
15
(4)
44
98
(858)
4
(795)
(78)
(1)
15
2,458
6,016
14,919
17
3,659
163
190
90
318
1,653
252
672
283
233
9
9
23,676
4,072
2,170
1,023
(238)
(333)
(1,551)
(13)
(2,135)
232
79
(785)
(29)
(503)
2,749
9,991
15,071
492
28,303
Effect of changes in discount rate assumptions
(495)
72
(421)
3
(841)
Balance – end of period
$ 2,254 $ 10,063 $ 14,650 $
495 $ 27,462
F-71
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
Liability for Future Policy Benefits, Life Insurance Segment
December 31, 2023
(in millions of U.S. dollars)
Net liability for future policy benefits
Deferred profit liability
Term Life
Whole
Life
A&H
Other
Total
$
664 $ 6,113 $ 4,218 $
431 $
11,426
267
804
165
17
448
—
1,253
12,679
233
Net liability for future policy benefits, before reinsurance recoverable
931
6,917
4,383
Less: Reinsurance recoverable on future policy benefits
82
45
106
Net liability for future policy benefits, after reinsurance recoverable
$
849 $ 6,872 $ 4,277 $
448 $
12,446
Weighted average duration (years)
10.5
25.8
10.4
15.0
19.4
Present Value of Expected Net Premiums
For the Year Ended December 31, 2022
(in millions of U.S. dollars)
Balance – beginning of period
Beginning balance at original discount rate
Effect of changes in cash flow assumptions
Effect of actual variances from expected experience
Adjusted beginning of period balance
Acquisition of Cigna
Issuances
Interest accrual
Net premiums collected (1)
Other (including foreign exchange)
Ending balance at original discount rate
Term Life
Whole
Life
A&H
Other
Total
$
422 $ 1,343 $ 2,520 $
30 $
4,315
397
1,245
2,323
35
(35)
3
69
(25)
(129)
397
1,317
2,169
1,361
1,082
9,105
169
71
230
55
639
309
28
—
—
28
23
6
1
3,993
13
(95)
3,911
11,571
1,044
436
(185)
(273)
(859)
(15)
(1,332)
54
(50)
(105)
1,867
2,361
11,258
—
43
(101)
15,529
Effect of changes in discount rate assumptions
(61)
(53)
(547)
(1)
(662)
Balance – end of period
$ 1,806 $ 2,308 $ 10,711 $
42
14,867
(1)
Net premiums collected represent the portion of gross premiums collected from policyholders that is used to fund expected benefit.
F-72
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
Present Value of Expected Future Policy Benefits
For the Year Ended December 31, 2022
(in millions of U.S. dollars)
Balance – beginning of period
Beginning balance at original discount rate
Effect of changes in cash flow assumptions
Effect of actual variances from expected experience
Adjusted beginning of period balance
Acquisition of Cigna
Issuances
Interest accrual
Benefits payments
Other (including foreign exchange)
Ending balance at original discount rate
Term Life
Whole
Life
A&H
Other
Total
$
832 $ 4,493 $ 4,935 $
127 $
10,387
775
3,540
4,585
119
9,019
34
(36)
5
72
(37)
(138)
773
3,617
4,410
1,593
2,278
11,441
169
83
230
176
639
401
15
—
134
135
6
4
17
(102)
8,934
15,447
1,044
664
(176)
(248)
(855)
(6)
(1,285)
5
(179)
(181)
7
(348)
2,447
5,874
15,855
280
24,456
Effect of changes in discount rate assumptions
(126)
(178)
(817)
(11)
(1,132)
Balance – end of period
$ 2,321 $ 5,696 $ 15,038 $
269 $
23,324
Liability for Future Policy Benefits, Life Insurance Segment
December 31, 2022
(in millions of U.S. dollars, except for years)
Net liability for future policy benefits
Deferred profit liability
Net liability for future policy benefits, before reinsurance recoverable
Less: Reinsurance recoverable on future policy benefits
Term Life
Whole
Life
A&H
Other
Total
$
515 $ 3,388 $ 4,327 $
227 $
8,457
201
716
93
531
126
3,919
4,453
49
109
11
238
—
869
9,326
251
Net liability for future policy benefits, after reinsurance recoverable
$
623 $ 3,870 $ 4,344 $
238 $
9,075
Weighted average duration (years)
9.2
25.1
10.7
14.0
17.5
F-73
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
Present Value of Expected Net Premiums
For the Year Ended December 31, 2021
(in millions of U.S. dollars)
Balance – beginning of period
Term Life
Whole
Life
A&H
Other
Total
$
371 $ 1,395 $ 2,782 $
35 $
4,583
Beginning balance at original discount rate
322
1,201
2,398
32
3,953
Effect of changes in cash flow assumptions
(4)
(24)
(4)
(1)
Effect of actual variances from expected experience
(82)
2
(89)
Adjusted beginning of period balance
Issuances
Interest accrual
Net premiums collected (1)
Other (including foreign exchange)
Ending balance at original discount rate
Effect of changes in discount rate assumptions
236
183
97
1,179
2,305
229
51
135
164
(107)
(161)
(270)
(12)
(53)
(11)
397
1,245
2,323
25
98
197
—
31
6
—
(5)
(4)
28
2
(33)
(169)
3,751
553
312
(543)
(80)
3,993
322
Balance – end of period
$
422 $ 1,343 $ 2,520 $
30
4,315
(1)
Net premiums collected represent the portion of gross premiums collected from policyholders that is used to fund expected benefit.
Present Value of Expected Future Policy Benefits
For the Year Ended December 31, 2021
(in millions of U.S. dollars)
Balance – beginning of period
Beginning balance at original discount rate
Effect of changes in cash flow assumptions
Effect of actual variances from expected experience
Adjusted beginning of period balance
Issuances
Interest accrual
Benefits payments
Other (including foreign exchange)
Ending balance at original discount rate
Effect of changes in discount rate assumptions
Term Life
Whole
Life
A&H
Other
Total
$
739 $ 4,886 $ 5,351 $
124 $
11,100
630
3,503
4,668
104
8,905
(7)
(24)
(4)
(73)
(2)
(90)
(1)
(1)
(36)
(166)
3,477
4,574
102
8,703
550
183
105
229
152
135
221
(102)
(174)
(337)
39
(144)
(8)
6
2
—
9
775
3,540
4,585
119
57
953
350
8
553
480
(613)
(104)
9,019
1,368
Balance – end of period
$
832 $ 4,493 $ 4,935 $
127 $
10,387
F-74
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
Liability for Future Policy Benefits, Life Insurance Segment
December 31, 2021
(in millions of U.S. dollars, except for years)
Net liability for future policy benefits
Deferred profit liability
Net liability for future policy benefits, before reinsurance recoverable
Less: Reinsurance recoverable on future policy benefits
Term Life
Whole
Life
A&H
Other
Total
$
410 $ 3,150 $ 2,415 $
97 $
6,072
128
538
119
387
94
3,537
2,509
51
40
4
101
—
613
6,685
210
Net liability for future policy benefits, after reinsurance recoverable
$
419 $ 3,486 $ 2,469 $
101 $
6,475
Weighted average duration (years)
10.6
21.5
10.5
26.3
17.1
The following table presents a reconciliation of the roll-forwards above to the Future policy benefits liability presented in the
Consolidated balance sheets.
December 31
December 31
December 31
(in millions of U.S. dollars)
2023
2022
Net liability for future policy benefits, Life Insurance segment
$
11,426 $
8,457 $
Other (1)
Deferred profit liability
1,209
1,253
1,150
869
Liability for future policy benefits, per consolidated balance sheet
13,888
10,476
(1)
Other business principally comprises certain Overseas General Insurance accident and health (A&H) policies and certain Chubb Life Re business.
2021
6,072
1,152
613
7,837
F-75
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
The following table presents the amount of undiscounted and discounted expected gross premiums and expected future policy
benefit payments included in the Life Insurance segment:
(in millions of U.S. dollars)
Term Life
December 31
December 31
December 31
2023
2022
2021
Undiscounted expected future benefit payments
$
4,073 $
3,914 $
Undiscounted expected future gross premiums
Discounted expected future benefit payments
Discounted expected future gross premiums
Whole Life
Undiscounted expected future benefit payments
Undiscounted expected future gross premiums
Discounted expected future benefit payments
Discounted expected future gross premiums
A&H
Undiscounted expected future benefit payments
Undiscounted expected future gross premiums
Discounted expected future benefit payments
Discounted expected future gross premiums
Other
Undiscounted expected future benefit payments
Undiscounted expected future gross premiums
Discounted expected future benefit payments
Discounted expected future gross premiums
7,075
2,254
4,703
23,990
9,469
10,063
7,658
25,118
36,869
14,650
22,150
862
115
495
6,823
2,321
4,555
16,224
6,912
5,696
5,398
25,617
37,765
15,038
22,111
407
115
269
$
103 $
100 $
1,163
1,334
832
1,041
9,898
3,583
4,493
2,656
6,271
9,029
4,935
6,457
114
45
127
38
The following table presents the amount of revenue and interest recognized in the Consolidated statement of operations for the
Life Insurance segment:
(in millions of U.S. dollars)
2023
2022
2021
2023
2022
2021
Gross Premiums or Assessments
For the Years Ended
December 31
Interest Accretion
For the Years Ended
December 31
Life Insurance
Term Life
Whole Life
A&H
Other
Total
F-76
$
641 $
472 $
375 $
19 $
12 $
8
1,259
651
390
2,918
1,875
1,068
28
17
10
165
141
7
121
101
92
3
57
2
$ 4,846 $ 3,015 $ 1,843 $
332 $
228 $
168
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
The following table presents the weighted-average interest rates for the Life Insurance segment:
Life Insurance
Term Life
Whole Life
A&H
Other
Interest Accretion Rate
Current Discount Rate
December 31
2
2022
2
2021
December 31
2023
2022
2021
2.5 %
3.9 %
3.6 %
3.7 %
2.4 %
4.3 %
4.0 %
3.4 %
5.2 %
4.6 %
6.2 %
4.1 %
5.6 %
5.4 %
6.3 %
5.6 %
2.4 %
4.2 %
3.5 %
2.7 %
2023
2.8 %
3.2 %
3.7 %
2.6 %
10. Policyholders' account balances, Separate accounts, and Unearned revenue liabilities
Policyholders' account balances
The following tables present a roll-forward of policyholders' account balances:
(in millions of U.S. dollars)
Balance – beginning of period
Consolidation of Huatai Group
Premiums received
Policy charges (1)
Surrenders and withdrawals
Benefit payments (4)
Interest credited
Other (including foreign exchange)
Balance – end of period
Unearned revenue liability
Policyholders' account liability, per consolidated balance sheet
For the Year Ended December 31, 2023
Universal Life
Annuities (2)
Other (3)
Total
$
1,199 $
— $
1,374 $
2,573
602
268
(132)
(115)
(12)
43
23
2,325
133
—
(19)
(58)
31
(1)
1,087
231
(10)
(192)
(62)
39
35
4,014
632
(142)
(326)
(132)
113
57
$
1,876 $
2,411 $
2,502 $
6,789
673
$
7,462
(1)
(2)
(3)
(4)
Contracts included in the policyholder account balances are generally charged a premium and/or monthly assessments on the basis of the account balance.
Relates to Huatai Life.
Other primarily comprises policyholder account balances related to investment linked products including endowment and investment contracts, none of which bear
significant insurance risk.
Includes benefit payments upon maturity as well as death benefits.
F-77
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
(in millions of U.S. dollars)
Balance – beginning of period
Acquisition of Cigna
Premiums received
Policy charges (1)
Surrenders and withdrawals
Benefit payments (3)
Interest credited
Other (including foreign exchange)
Balance – end of period
Unearned revenue liability
Policyholders' account liability, per consolidated balance sheet
For the Year Ended December 31, 2022
Universal Life
Other (2)
Total
$
875 $
1,388 $
2,263
348
232
(136)
(50)
(6)
27
(91)
7
101
(15)
(84)
(27)
20
355
333
(151)
(134)
(33)
47
(16)
(107)
$
1,199 $
1,374 $
2,573
567
$
3,140
(1)
(2)
(3)
Contracts included in the policyholder account balances are generally charged a premium and/or monthly assessments on the basis of the account balance.
Other primarily comprises policyholder account balances related to investment linked products including endowment and investment contracts, none of which bear
significant insurance risk.
Includes benefit payments upon maturity as well as death benefits.
(in millions of U.S. dollars)
Balance – beginning of period
Premiums received
Policy charges (1)
Surrenders and withdrawals
Benefit payments (3)
Interest credited
Other (including foreign exchange)
Balance – end of period
Unearned revenue liability
Policyholders' account liability, per consolidated balance sheet
For the Year Ended December 31, 2021
Universal Life
Other (2)
Total
$
813 $
1,352 $
2,165
228
(138)
(51)
(17)
27
13
120
(18)
(66)
(26)
22
4
348
(156)
(117)
(43)
49
17
$
875 $
1,388 $
2,263
503
$
2,766
(1)
(2)
(3)
Contracts included in the policyholder account balances are generally charged a premium and/or monthly assessments on the basis of the account balance.
Other primarily comprises policyholder account balances related to investment linked products including endowment and investment contracts, none of which bear
significant insurance risk.
Includes benefit payments upon maturity as well as death benefits.
(in millions of U.S. dollars, except for
percentages)
Universal
Life
Annuities
Weighted-average crediting rate
3.0 %
2.6 %
December 31
2023
Other
1.9 %
Universal
Life
2.5 %
2022
Other
1.7 %
Universal
Life
3.4 %
2021
Other
1.9 %
Net amount at risk (1)
Cash Surrender Value
$ 11,828
$
—
$
559
$ 11,472
$
182
$ 10,749
$
180
$ 1,628
$ 1,526
$ 2,192
$ 1,001
$ 1,257
$
680
$ 1,247
(1)
For those guarantees of benefits that are payable in the event of death, the net amount at risk is defined as the current guaranteed minimum death benefit in excess of the
current account balance at the balance sheet date.
F-78
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
The following tables present the balance of account values by range of guaranteed minimum crediting rates and the related
range of difference, in basis points, between rates being credited to policyholders and the respective guaranteed minimum:
Universal Life
(in millions of U.S. dollars)
Guaranteed minimum crediting rates
Up to 2.00%
2.01% – 4.00%
Greater than 4.00%
Total
December 31, 2023
At Guaranteed
Minimum
1 Basis Point -
50 Basis Points
Above
51 Basis Points
- 150 Basis
Points Above
Greater Than
150 Basis
Points Above
$
475 $
— $
29 $
36 $
82
22
319
—
894
—
19
—
Total
540
1,314
22
$
579 $
319 $
923 $
55 $
1,876
(in millions of U.S. dollars)
Guaranteed minimum crediting rates
Up to 2.00%
2.01% – 4.00%
Greater than 4.00%
Total
December 31, 2022
At Guaranteed
Minimum
1 Basis Point -
50 Basis Points
Above
51 Basis Points
- 150 Basis
Points Above
Greater Than
150 Basis
Points Above
$
451 $
— $
37 $
5 $
77
25
343
—
261
—
—
—
Total
493
681
25
$
553 $
343 $
298 $
5 $
1,199
December 31, 2021
(in millions of U.S. dollars)
Guaranteed minimum crediting rates
Up to 2.00%
2.01% – 4.00%
Greater than 4.00%
Total
At Guaranteed
Minimum
1 Basis Point -
50 Basis Points
Above
51 Basis Points
- 150 Basis
Points Above
Greater Than
150 Basis
Points Above
$
166 $
— $
42 $
4 $
66
36
386
—
175
—
—
—
$
268 $
386 $
217 $
4 $
Total
212
627
36
875
F-79
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
Annuities
At Guaranteed
Minimum
1 Basis Point -
50 Basis Points
Above
51 Basis Points
- 150 Basis
Points Above
Greater Than
150 Basis
Points Above
Total
December 31, 2023
$
$
723 $
— $
1,579 $
— $
2,302
109
—
—
—
109
832 $
— $
1,579 $
— $
2,411
At Guaranteed
Minimum
1 Basis Point -
50 Basis Points
Above
51 Basis Points
- 150 Basis
Points Above
Greater Than
150 Basis
Points Above
Total
December 31, 2023
$
782 $
— $
228 $
546 $
1,556
373
5
540
—
28
—
—
—
941
5
$
1,160 $
540 $
256 $
546 $
2,502
December 31, 2022
At Guaranteed
Minimum
1 Basis Point -
50 Basis Points
Above
51 Basis Points
- 150 Basis
Points Above
Greater Than
150 Basis
Points Above
$
534 $
— $
217 $
196 $
382
4
41
—
—
—
—
—
Total
947
423
4
$
920 $
41 $
217 $
196 $
1,374
December 31, 2021
At Guaranteed
Minimum
1 Basis Point -
50 Basis Points
Above
51 Basis Points
- 150 Basis
Points Above
Greater Than
150 Basis
Points Above
$
525 $
— $
234 $
220 $
171
5
201
—
32
—
—
—
Total
979
404
5
$
701 $
201 $
266 $
220 $
1,388
(in millions of U.S. dollars)
Guaranteed minimum crediting rates
Up to 2.00%
2.01% – 4.00%
Total
Other policyholders' account balances
(in millions of U.S. dollars)
Guaranteed minimum crediting rates
Up to 2.00%
2.01% – 4.00%
Greater than 4.00%
Total
(in millions of U.S. dollars)
Guaranteed minimum crediting rates
Up to 2.00%
2.01% – 4.00%
Greater than 4.00%
Total
(in millions of U.S. dollars)
Guaranteed minimum crediting rates
Up to 2.00%
2.01% – 4.00%
Greater than 4.00%
Total
F-80
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
Separate accounts
Separate account assets represent segregated funds where investment risks are borne by the customers, except to the extent of
certain guarantees made by Chubb. The assets that support variable contracts are measured at fair value and are reported as
Separate account assets and corresponding liabilities are reported within Separate account liabilities on the Consolidated
balance sheets. Policy charges assessed against the policyholders for mortality, administration, and other services are included
in Net premiums earned on the Consolidated statements of operations.
The following table presents the aggregate fair value of Separate account assets, by major security type:
(in millions of U.S. dollars)
Cash and cash equivalents
Mutual funds
Fixed maturities
Total
The following table presents a roll-forward of separate account liabilities:
(in millions of U.S. dollars)
Balance – beginning of period
Acquisition of Cigna
Premiums and deposits
Policy charges
Surrenders and withdrawals
Benefit payments
Investment performance
Other (including foreign exchange)
Balance – end of period
Cash surrender value (1)
December 31
2023
2022
$
65 $
141 $
5,417
91
4,960
89
2021
165
5,296
99
$
5,573 $
5,190 $
5,560
For the Years Ended
December 31
2023
2022
2021
$
5,190 $
5,560 $
4,488
—
995
(138)
(601)
(381)
611
(103)
301
1,453
(127)
(503)
(381)
(848)
(265)
$
$
5,573 $
5,190 $
5,398 $
4,989 $
—
2,086
(128)
(720)
(318)
312
(160)
5,560
5,309
(1)
Cash surrender value represents the amount of the contract holder's account balances distributable at the balance sheet date less certain surrender charges.
Unearned revenue liabilities
Unearned revenue liabilities represent policy charges for services to be provided in future periods. The charges are reflected as
deferred revenue and are generally amortized over the expected life of the contract using the same methodology, factors, and
assumptions used to amortize deferred acquisition costs. Unearned revenue liabilities pertaining to both policyholders' account
balances and separate accounts are recorded in Policyholders' account balances in the Consolidated balance sheets. The
following table presents a roll-forward of unearned revenue liabilities:
(in millions of U.S. dollars)
Balance – beginning of period
Deferred revenue
Amortization
Other (including foreign exchange)
Balance – end of period
For the Years Ended December 31
2023
2022
2021
$
567 $
503 $
134
(67)
39
142
(50)
(28)
$
673 $
567 $
393
144
(38)
4
503
F-81
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
11. Market risk benefits
Our reinsurance programs covering variable annuity guarantees, comprising guaranteed living benefits (GLB) and guaranteed
minimum death benefits (GMDB), meet the definition of Market risk benefits (MRB). The following table presents a roll-forward
of MRB:
(in millions of U.S. dollars)
Balance – beginning of period
Balance, beginning of period, before effect of changes in the instrument-specific credit risk
Interest rate changes
Effect of changes in equity markets
Effect of changes in volatilities
Actual policyholder behavior different from expected behavior
Effect of changes in future expected policyholder behavior
Effect of timing and all other
For the Years Ended December 31
2023
2022
2021
$
800 $
812 $ 1,163
776
26
755
1,079
(568)
(157)
(195)
513
20
18
89
15
27
(13)
40
22
(223)
(65)
42
24
55
Balance, end of period, before effect of changes in the instrument-specific credit risk
$
749 $
776 $
755
Effect of changes in the instrument-specific credit risk
Balance – end of period
Weighted-average age of policyholders (years)
Net amount at risk (1)
22
24
57
$
771 $
800 $
812
74
73
72
$ 1,872 $ 2,508 $ 1,759
(1)
The net amount at risk is defined as the present value of future claim payments assuming policy account values and guaranteed values are fixed at the valuation date, and
reinsurance coverage ends at the earlier of the maturity of the underlying variable annuity policy or the reinsurance treaty. No withdrawals, lapses, and mortality
improvements are assumed in the projection. GLB-related risks contain conservative mortality and annuitization assumptions.
Excluded from the table above are MRB gains (losses) of $(334) million, $106 million, and $(232) million for the years ended
December 31, 2023, 2022, and 2021, respectively, reported in the Consolidated statements of operations, relating to the
market risk benefits' economic hedge and other net cash flows. There is no reinsurance recoverable associated with our liability
for MRB.
In the third quarter of 2023, we completed a review of policyholder behavior related to annuitizations, partial withdrawals,
lapses, and mortality for our variable annuity reinsurance business.
•
As annuitization and partial withdrawal experience continued to emerge, we refined our assumptions for an additional
year of data. The annuitization assumption updates included treaty-based and age-based behavior, as well as a refresh
of our annuitization rates which depend on the value of the guarantees. These refinements resulted in a net increase of
approximately $92 million to the MRB fair value, recognized as a Market risk benefits loss.
• We also refined our lapse and mortality assumptions based on additional emerging experience. The changes had an
insignificant impact on the MRB fair value.
For MRB, Chubb estimates fair value using an internal valuation model which includes a number of factors including interest
rates, equity markets, credit risk, current account value, market volatility, expected annuitization rates and other policyholder
behavior, and changes in policyholder mortality. All reinsurance treaties contain claim limits, which are also factored into the
valuation model.
F-82
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
Valuation
Technique
Significant
Unobservable
Inputs
December 31, 2023
December 31, 2022
December 31, 2021
Ranges
Weighted
Average(1)
Ranges
Weighted
Average(1)
Ranges
Weighted
Average(1)
MRB (1)
Actuarial model
Lapse rate
0.5% – 30.0%
4.0% 0.5% – 30.4%
3.5% 0.5% – 31.5%
(1)
The weighted-average lapse and annuitization rates are determined by weighting each treaty's rates by the MRB contract's fair value.
Annuitization rate
0% – 100%
4.5%
0% – 100%
4.4%
0% – 100%
4.8%
3.6%
The most significant policyholder behavior assumptions include lapse rates for MRBs, and GLB annuitization rates. Assumptions
regarding lapse rates and GLB annuitization rates differ by treaty, but the underlying methodologies to determine rates applied
to each treaty are comparable.
A lapse rate is the percentage of in-force policies surrendered in a given calendar year. All else equal, as lapse rates increase,
ultimate claim payments will decrease. In general, the base lapse function assumes low lapse rates during the surrender charge
period, followed by a "spike" lapse rate in the year immediately following the surrender charge period, and then reverting to an
ultimate lapse rate, typically over a 2-year period. This base rate is adjusted downward for policies with more valuable
guarantees (policies with guaranteed values far in excess of their account values). Partial withdrawals and the impact of older
policyholders with tax-qualified contracts (due to required minimum distributions) are also reflected in our modeling.
The GLB annuitization rate is the percentage of policies for which the policyholder will elect to annuitize using the guaranteed
benefit provided under the GLB. All else equal, as GLB annuitization rates increase, ultimate claim payments will increase,
subject to treaty claim limits. All GLB reinsurance treaties include claim limits to protect Chubb in the event that actual
annuitization behavior is significantly higher than expected. In general, Chubb assumes that GLB annuitization rates will be
higher for policies with more valuable guarantees (policies with guaranteed values far in excess of their account values). Chubb
also assumes that GLB annuitization rates increase as policyholders get older. In addition, it is also assumed that GLB
annuitization rates are higher in the first year immediately following the waiting period (the first year the policies are eligible to
annuitize using the GLB) in comparison to all subsequent years. Chubb does not yet have fully credible annuitization experience
for all clients.
The effect of changes in key market factors on assumed lapse and annuitization rates reflect emerging trends using data
available from cedants. For treaties with limited experience, rates are established by blending the experience with data received
from other ceding companies. The model and related assumptions are regularly re-evaluated by management and enhanced, as
appropriate, based upon additional experience obtained related to policyholder behavior and availability of updated information
such as market conditions, market participant assumptions, and demographics of in-force annuities.
12. Taxation
Under Swiss law through December 31, 2023, a resident company is subject to income tax at the federal, cantonal, and
communal levels that is levied on net worldwide income. Income attributable to permanent establishments or real estate located
abroad is excluded from the Swiss tax base. Furthermore, participation relief (i.e., tax relief) is granted to Chubb Limited at the
federal, cantonal, and communal level for qualifying dividend income. Chubb Limited is subject to an annual cantonal and
communal capital tax on the taxable equity of Chubb Limited in Switzerland.
Chubb has two Swiss operating subsidiaries, an insurance company, Chubb Insurance (Switzerland) Limited and a reinsurance
company, Chubb Reinsurance (Switzerland) Limited. Both are subject to federal, cantonal, and communal income tax and to
annual cantonal and communal capital tax.
Under Bermuda law, Chubb Limited and its Bermuda subsidiaries are not required to pay any taxes on income or capital gains.
However, on December 27, 2023, the Government of Bermuda enacted the Corporate Income Tax Act of 2023 which
established a 15 percent income tax on net taxable income of Bermuda entities effective January 1, 2025. Chubb's Bermuda
subsidiaries will pay taxes on their income beginning in 2025.
Income from Chubb's operations at Lloyd's is subject to United Kingdom (U.K.) corporation income taxes. Lloyd's is required to
pay U.S. income tax on U.S. connected income written by Lloyd's syndicates. Lloyd's has a closing agreement with the Internal
Revenue Service (IRS) whereby the amount of tax due on this business is calculated by Lloyd's and remitted directly to the IRS.
These amounts are then charged to the accounts of Chubb's Corporate Members in proportion to their participation in the
relevant syndicates. Chubb's Corporate Members are subject to this arrangement but, as U.K. domiciled companies, will receive
F-83
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
U.K. corporation tax credits for any U.S. income tax incurred up to the value of the equivalent U.K. corporation income tax
charge on this income.
Chubb Group Holdings and its respective subsidiaries are subject to income taxes imposed by U.S. authorities and file a
consolidated U.S. Federal income tax return. Should Chubb Group Holdings pay a dividend to Chubb Limited, withholding taxes
would apply. Currently, however, no withholding taxes are accrued with respect to such un-remitted earnings as management
has no intention of remitting these earnings. Similarly, no taxes have been provided on the un-remitted earnings of certain
foreign subsidiaries (Chubb Life Insurance Hong Kong and Chubb Life Insurance Korea Company Ltd.) as management has no
intention of remitting these earnings. Finally, we have made a partial reinvestment assertion on historical earnings for LINA Life
Insurance Company of Korea and Huatai Insurance Group Co., Ltd. The cumulative amount that would be subject to
withholding tax, if distributed, as well as the determination of the associated tax liability are not practicable to compute;
however, such amount would be material.
Certain international operations of Chubb are also subject to income taxes imposed by the jurisdictions in which they operate.
Chubb's domestic operations are in Switzerland, the jurisdiction where we are legally organized, incorporated, and registered.
The following table presents pre-tax income and the related provision for income taxes:
(in millions of U.S. dollars)
Pre-tax income:
Switzerland
Outside Switzerland
Total pre-tax income
Provision for income taxes
Current tax expense:
Switzerland
Outside Switzerland
Total current tax expense
Deferred tax expense (benefit):
Switzerland
Outside Switzerland
Total deferred tax expense (benefit)
Provision for income taxes
$
$
$
Year Ended December 31
2023
2022
2021
44 $
234 $
9,482
6,251
9,526 $
6,485 $
349
9,445
9,794
25 $
15 $
1,570
1,595
(63)
(1,021)
(1,084)
1,066
1,081
34
124
158
65
1,294
1,359
(15)
(75)
(90)
$
511 $
1,239 $
1,269
The most significant jurisdictions contributing to the overall taxation of Chubb are calculated using the following rates in 2023:
Switzerland 19.7 percent, U.S. 21.0 percent, U.K. 23.5 percent, and Bermuda 0.0 percent.
The following table presents a reconciliation of the difference between the provision for income taxes and the expected tax
provision at the Swiss statutory income tax rate:
(in millions of U.S. dollars)
Expected tax provision at Swiss statutory tax rate
Permanent differences:
Taxes on earnings subject to rate other than Swiss statutory rate
Bermuda tax law enactment
Net withholding taxes
Other
Year Ended December 31
2023
2022
$
1,872 $
1,274 $
2021
1,929
(389)
(243)
(743)
(1,135)
15
148
—
75
133
—
78
5
Provision for income taxes
$
511 $
1,239 $
1,269
F-84
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
The following table presents the components of net deferred tax assets and liabilities:
(in millions of U.S. dollars)
Deferred tax assets:
Loss reserve discount
Unearned premiums reserve
Foreign tax credits
Loss carry-forwards
Investments
Unrealized depreciation on investments
Depreciation
Other
Total deferred tax assets
Valuation allowance
Deferred tax assets, net of valuation allowance
Deferred tax liabilities:
Deferred policy acquisition costs
Other intangible assets, including VOBA
Un-remitted foreign earnings
Investments
Total deferred tax liabilities
Net deferred tax assets (liabilities)
2023
December 31
2022
$
1,643 $
1,048
678
19
149
—
662
37
147
3,335
716
2,619
675
1,444
176
138
2,433
$
186 $
424
76
104
62
1,387
126
85
3,312
916
2,396
311
2,213
249
—
2,773
(377)
The valuation allowance of $716 million and $916 million at December 31, 2023 and 2022, respectively, reflects
management's assessment, based on available information, that it is more likely than not that a portion of the deferred tax
assets will not be realized due to the inability of certain subsidiaries to generate sufficient taxable income. Adjustments to the
valuation allowance are made when there is a change in management's assessment of the amount of deferred tax assets that
are realizable.
For the year ended December 31, 2023, the tax benefit on certain unrealized losses in our investment portfolio was reduced by
a valuation allowance of $441 million necessary due to limitations on the utilization of these losses. As part of evaluating
whether it was more likely than not that we could realize these losses, we considered realized gains, carryback capacity and
available tax planning strategies.
At December 31, 2023, Chubb has net operating loss carry-forwards of $497 million which, if unused, will expire starting in
2024, and a U.S. life capital loss carry-forward of $25 million which, if unused, will expire starting in 2028.
The following table presents a reconciliation of the beginning and ending amount of gross unrecognized tax benefits:
(in millions of U.S. dollars)
Balance, beginning of year
Additions based on tax positions related to prior years
Reductions for settlements with taxing authorities
Balance, end of year
Year Ended December 31
2022
2023
$
$
67 $
9
(3)
73 $
64
4
(1)
67
At December 31, 2023 and 2022, the gross unrecognized tax benefits of $73 million and $67 million, respectively, can be
reduced by $19 million and $21 million, respectively, associated with foreign tax credits. The net amounts of $54 million and
$46 million at December 31, 2023 and 2022, respectively, if recognized, would favorably affect the effective tax rate. It is
reasonably possible that over the next twelve months, that the amount of unrecognized tax benefits may change further resulting
F-85
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
from the re-evaluation of unrecognized tax benefits arising from examinations by taxing authorities and the lapses of statutes of
limitations.
Chubb recognizes accruals for interest and penalties, if any, related to unrecognized tax benefits in Income tax expense in the
Consolidated statements of operations. Tax-related interest expense and penalties reported in the Consolidated statements of
operations were $7 million, $4 million, and $1 million at December 31, 2023, 2022, and 2021, respectively. Liabilities for
tax-related interest and penalties in our Consolidated balance sheets were $25 million and $18 million at December 31, 2023
and 2022, respectively.
In March 2017, the IRS commenced its field examination of Chubb Group Holdings’ U.S. Federal income tax returns for 2014
and 2015 which is still ongoing. In July 2020, the IRS commenced its field examination of Chubb Group Holdings' U.S. Federal
income tax returns for 2016, 2017 and 2018 which is also still ongoing. No material adjustments have been proposed by the
IRS for any year under examination. As a multinational company, we also have examinations under way in non-US jurisdictions.
With few exceptions, Chubb is no longer subject to income tax examinations for years prior to 2012.
The following table summarizes tax years open for examination by major income tax jurisdiction:
2017 - 2023
2017 - 2023
2012 - 2023
2020 - 2023
2021 - 2023
2016 - 2023
2019 - 2023
2018 - 2023
2016 - 2023
2012 - 2023
2019 - 2023
2015 - 2023
2014 - 2023
At December 31, 2023
Australia
Brazil
Canada
China
France
Germany
Italy
Korea
Mexico
Spain
Switzerland
United Kingdom
United States
F-86
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
13. Debt
(in millions of U.S. dollars)
Repurchase agreements
December 31
December 31
2023
2022
Early Redemption Option
Repurchase agreements (weighted average interest rate of
5.4% in 2023 and 3.9% in 2022)
$
1,824 $
1,419
Repurchase agreements – VIEs (1) (weighted average
interest rate of 4.9% in 2023)
Total repurchase agreements
1,009
—
$
2,833 $
1,419
None
None
Short-term debt
Chubb INA:
$475 million 2.7% senior notes due March 2023
$
— $
475
Make-whole premium plus 10 bps
$700 million 3.35% senior notes due May 2024
€700 million 0.3% senior notes due December 2024
700
760
—
—
Make-whole premium plus 15 bps
Make-whole premium plus 15 bps
Total short-term debt
$
1,460 $
475
Long-term debt
Chubb INA:
$700 million 3.35% senior notes due May 2024
$
— $
€700 million 0.3% senior notes due December 2024
$800 million 3.15% senior notes due March 2025
—
799
699
742
798
Make-whole premium plus 15 bps
Make-whole premium plus 15 bps
Make-whole premium plus 15 bps
$1,500 million 3.35% senior notes due May 2026
1,497
1,496
Make-whole premium plus 20 bps
€575 million 0.875% senior notes due June 2027
€900 million 1.55% senior notes due March 2028
$100 million 8.875% debentures due August 2029
€700 million 0.875% senior notes due December 2029
$1,000 million 1.375% senior notes due September 2030
€575 million 1.4% senior notes due June 2031
$200 million 6.8% debentures due November 2031
$300 million 6.7% senior notes due May 2036
$800 million 6.0% senior notes due May 2037
€900 million 2.5% senior notes due March 2038
$600 million 6.5% senior notes due May 2038
$475 million 4.15% senior notes due March 2043
623
974
100
758
994
621
230
298
918
971
718
471
609
952
100
740
993
606
234
298
927
949
726
471
Make-whole premium plus 20 bps
Make-whole premium plus 15 bps
None
Make-whole premium plus 20 bps
Make-whole premium plus 15 bps
Make-whole premium plus 25 bps
Make-whole premium plus 25 bps
Make-whole premium plus 20 bps
Make-whole premium plus 20 bps
Make-whole premium plus 25 bps
Make-whole premium plus 30 bps
Make-whole premium plus 15 bps
$1,500 million 4.35% senior notes due November 2045
1,486
1,485
Make-whole premium plus 25 bps
$600 million 2.85% senior notes due December 2051
$1,000 million 3.05% senior notes due December 2061
593
984
593
984
Make-whole premium plus 15 bps
Make-whole premium plus 20 bps
Total long-term debt
Trust preferred securities
$
13,035 $
14,402
Chubb INA capital securities due April 2030
$
308 $
308
Redemption prices (2)
(1)
(2)
Refer to Note 1 g) to the Consolidated Financial Statements for additional information on the consolidation of VIEs.
Redemption prices are equal to accrued and unpaid interest to the redemption date plus the greater of (i) 100 percent of the principal amount thereof, or (ii) sum of present
value of scheduled payments of principal and interest on the capital securities from the redemption date to April 1, 2030
F-87
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
a) Repurchase agreements
Chubb has executed repurchase agreements with certain counterparties under which Chubb agreed to sell securities and
repurchase them at a future date for a predetermined price.
On July 1, 2023, Chubb assumed approximately $1.3 billion of repurchase agreements from Huatai Group upon obtaining a
controlling interest and applying consolidation accounting. Certain subsidiaries of Huatai Group are the investment manager of,
and maintain investments in, consolidated investment products that are considered VIEs. Under the consolidation of VIEs, the
underlying assets and liabilities of these sponsored investment products are recorded at 100 percent within the Consolidated
balance sheets, with the relevant amounts attributable to investors other than Chubb reflected as Noncontrolling interests. At
December 31, 2023, approximately $1.0 billion of repurchase agreements were from VIEs. Refer to Note 1 g) to the
Consolidated Financial Statements for additional information.
b) Short-term debt
Short-term debt comprises the current maturities of our long-term debt instruments described below. These short-term debt
instruments were reclassified from long-term debt and are reflected in the table above.
c) Long-term debt
With the exception of the $100 million of 8.875 percent debentures due August 2029, which do not have an early redemption
option, the senior notes in the table above are redeemable at any time at Chubb INA's option subject to a “make-whole”
premium plus additional basis points as defined in the table above. A "make-whole" premium is the present value of the
remaining principal and interest discounted at the applicable U.S. Treasury rate. These debt securities are also redeemable at
par plus accrued and unpaid interest in the event of certain changes in tax law.
The senior notes and debentures do not have the benefit of any sinking fund, are guaranteed on a senior basis by Chubb
Limited, and rank equally with all of Chubb's other senior obligations. They also contain customary limitations on lien provisions
as well as customary events of default provisions which, if breached, could result in the accelerated maturity of such senior
debt.
d) Trust preferred securities
In March 2000, ACE Capital Trust II, a Delaware statutory business trust, publicly issued $300 million of 9.7 percent Capital
Securities (the Capital Securities) due to mature in April 2030. At the same time, Chubb INA purchased $9.2 million of
common securities of ACE Capital Trust II. The sole assets of ACE Capital Trust II consist of $309 million principal amount of
9.7 percent Junior Subordinated Deferrable Interest Debentures (the Subordinated Debentures) issued by Chubb INA due to
mature in April 2030.
Distributions on the Capital Securities are payable semi-annually and may be deferred for up to ten consecutive semi-annual
periods (but no later than April 1, 2030). Any deferred payments would accrue interest compounded semi-annually if Chubb
INA defers interest on the Subordinated Debentures. Interest on the Subordinated Debentures is payable semi-annually. Chubb
INA may defer such interest payments (but no later than April 1, 2030), with such deferred payments accruing interest
compounded semi-annually. The Capital Securities and the ACE Capital Trust II Common Securities will be redeemed upon
repayment of the Subordinated Debentures.
Chubb Limited has guaranteed, on a subordinated basis, Chubb INA's obligations under the Subordinated Debentures, and
distributions and other payments due on the Capital Securities. These guarantees, when taken together with Chubb's obligations
under expense agreements entered into with ACE Capital Trust II, provide a full and unconditional guarantee of amounts due on
the Capital Securities.
F-88
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
14. Commitments, contingencies, and guarantees
a) Derivative instruments
Chubb maintains positions in derivative instruments such as futures, options, swaps, and foreign currency forward contracts for
which the primary purposes are to manage duration and foreign currency exposure, yield enhancement, or to obtain an exposure
to a particular financial market. Chubb also maintains positions in convertible securities that contain embedded derivatives, and
exchange-traded equity futures contracts on equity market indices to limit equity exposure in the market risk benefit (MRB) book
of business. Investment derivative instruments, futures contracts on equities, and derivatives designated as hedges for
accounting purposes are recorded in either Other assets (OA) or Accounts payable, accrued expenses, and other liabilities (AP);
convertible bonds are recorded in Fixed maturities available-for-sale (FM AFS); and convertible equity securities are recorded in
Equity securities (ES) in the Consolidated balance sheets. These are the most numerous and frequent derivative transactions. In
addition, Chubb, from time to time, purchases to be announced mortgage-backed securities (TBAs) as part of its investing
activities.
As a global company, Chubb entities transact business in multiple currencies. Our policy is to generally match assets, liabilities,
and required capital for each individual jurisdiction in local currency, which would include the use of derivatives discussed
below. Some of Chubb's derivatives satisfy hedge accounting requirements, as discussed below. We also consider economic
hedging for planned cross border transactions.
The following table presents the balance sheet location, fair value of derivative instruments in an asset or (liability) position, and
notional value/payment provision of our derivative instruments:
December 31, 2023
December 31, 2022
Consolidated
Balance Sheet
Location
Derivative
Asset
Derivative
(Liability)
Fair Value
Notional
Value/
Payment
Provision
Fair Value
Derivative
Asset
Derivative
(Liability)
Notional
Value/
Payment
Provision
OA / (AP) $
27 $
(94) $ 3,662 $
64 $
(115) $ 4,134
OA / (AP)
FM AFS / ES
27
56
(42)
2,062
—
64
18
30
(24)
1,511
—
37
$
110 $
(136) $ 5,788 $
112 $
(139) $ 5,682
OA / (AP) $
— $
(37) $ 1,157 $
33 $
— $
939
OA / (AP)
—
(5)
217
—
—
—
$
— $
(42) $ 1,374 $
33 $
— $
939
(in millions of U.S. dollars)
Investment and embedded derivatives not
designated as hedging instruments:
Foreign currency forward contracts
Options/Futures contracts on notes and
bonds
Convertible securities (1)
Other derivative instruments:
Futures contracts on equities (2)
Other
Derivatives designated as hedging
instruments:
Cross-currency swaps - fair value hedges
OA / (AP) $
126 $
— $ 1,631 $
17 $
— $ 1,595
Cross-currency swaps - net investment
hedges
(1)
(2)
Includes fair value of embedded derivatives.
Related to MRB book of business.
OA / (AP)
10
(128)
1,619
—
(53)
1,604
$
136 $
(128) $ 3,250 $
17 $
(53) $ 3,199
At December 31, 2023 and 2022, net derivative liabilities of $115 million and $60 million, respectively, included in the table
above were subject to a master netting agreement. The remaining derivatives included in the table above were not subject to a
master netting agreement.
F-89
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
b) Hedge accounting
We designate certain derivatives as fair value hedges and net investment hedges for accounting purposes to hedge for foreign
currency exposure associated with portions of our euro denominated debt and the net investment in certain foreign subsidiaries,
respectively. These derivatives comprise cross-currency swaps, which are agreements under which two counterparties exchange
interest payments and principal denominated in different currencies at a future date. These hedges have been and are expected
to be highly effective.
(i) Cross-currency swaps - fair value hedges
In September 2022, Chubb entered into certain cross-currency swaps designated as fair value hedges. The objective of these
cross-currency swaps is to hedge the foreign currency risk on €1.5 billion, or approximately $1.6 billion at December 31,
2023, of our euro denominated debt by converting cash flows back into the U.S. dollar.
These hedges are carried at fair value, with changes in fair value recorded in Other comprehensive income (OCI). The gains or
losses on the fair value hedges offsetting the foreign currency remeasurement on the hedged euro denominated senior notes are
reclassified from OCI into Net realized gains (losses), and an additional portion is reclassified into Interest expense as follows:
(pre-tax, in millions of U.S. dollars)
Gain recognized in OCI
Net realized gain reclassified from OCI
Interest expense reclassified from OCI
OCI gain (loss) after reclassifications
Year Ended December 31
2023
2022
$
101 $
50
(16)
$
67 $
17
105
(5)
(83)
(ii) Cross-currency swaps - net investment hedges
In September 2022, Chubb entered into certain cross-currency swaps designated as net investment hedges. The objective of
these cross-currency swaps is to hedge the foreign currency exposure in the net investments of certain foreign subsidiaries by
converting cash flows from U.S. dollar to the British pound sterling, Japanese yen, and Swiss franc. The hedged risk is
designated as the foreign currency exposure arising between the functional currency of the foreign subsidiary and the functional
currency of its parent entity. The mark-to-market adjustments for foreign currency changes will remain until the underlying
hedge subsidiary is deconsolidated or if hedge accounting is discontinued.
These net investment hedges are carried at fair value, with changes in fair value recorded in Cumulative translation adjustments
(CTA) within OCI, and a portion is reclassified to Interest expense as follows:
(pre-tax, in millions of U.S. dollars)
Loss recognized in OCI
Interest income reclassified from OCI
OCI loss after reclassifications
Year Ended December 31
2023
2022
$
$
(58) $
13
(71) $
(53)
4
(57)
F-90
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
c) Derivative instruments not designated as hedges
Derivative instruments which are not designated as hedges are carried at fair value with changes in fair value recorded in Net
realized gains (losses) or, for futures contracts on equities related to the MRB book of business, in Market risk benefits gains
(losses) in the Consolidated statements of operations. The following table presents net gains (losses) related to derivative
instrument activity in the Consolidated statements of operations:
(in millions of U.S. dollars)
Investment and embedded derivative instruments:
Foreign currency forward contracts
All other futures contracts, options, and equities
Convertible securities (1)
Total investment and embedded derivative instruments
Other derivative instruments:
Futures contracts on equities (2)
Other
Total other derivative instruments
(1)
(2)
Includes embedded derivatives.
Related to MRB book of business.
2023
Year Ended December 31
2021
2022
$
$
$
$
(50) $
(339) $
(2)
(1)
(53) $
(189)
(10)
(199) $
(252) $
297
(1)
(43) $
187
(11)
176 $
133 $
(62)
(10)
—
(72)
(202)
(8)
(210)
(282)
(i) Foreign currency exposure management
A foreign currency forward contract (forward) is an agreement between participants to exchange specific currencies at a future
date. Chubb uses forwards to minimize the effect of fluctuating foreign currencies as discussed above.
(ii) Duration management and market exposure
Futures
Futures contracts give the holder the right and obligation to participate in market movements, determined by the index or
underlying security on which the futures contract is based. Settlement is made daily in cash by an amount equal to the change
in value of the futures contract times a multiplier that scales the size of the contract. Exchange-traded futures contracts on
money market instruments, notes, and bonds are used in fixed maturity portfolios to more efficiently manage duration, as
substitutes for ownership of the money market instruments, bonds, and notes without significantly increasing the risk in the
portfolio. Investments in futures contracts may be made only to the extent that there are assets under management not
otherwise committed. Exchange-traded equity futures contracts are used to limit exposure to a severe equity market decline,
which would cause an increase in expected claims and, therefore, an increase in market risk benefit reserves.
Options
An option contract conveys to the holder the right, but not the obligation, to purchase or sell a specified amount or value of an
underlying security at a fixed price. Option contracts are used in our investment portfolio as protection against unexpected shifts
in interest rates, which would affect the duration of the fixed maturity portfolio. By using options in the portfolio, the overall
interest rate sensitivity of the portfolio can be reduced. Option contracts may also be used as an alternative to futures contracts
in the synthetic strategy as described above. The price of an option is influenced by the underlying security, level of interest
rates, expected volatility, time to expiration, and supply and demand.
The credit risk associated with the above derivative financial instruments relates to the potential for non-performance by
counterparties. Although non-performance is not anticipated, in order to minimize the risk of loss, management monitors the
creditworthiness of its counterparties and obtains collateral. The performance of exchange-traded instruments is guaranteed by
the exchange on which they trade. For non-exchange-traded instruments, the counterparties are principally banks which must
meet certain criteria according to our investment guidelines.
Other
Included within Other are derivatives intended to reduce potential losses which may arise from certain exposures in our
insurance business. The economic benefit provided by these derivatives is similar to purchased reinsurance. For example, Chubb
may, from time to time, enter into crop derivative contracts to protect underwriting results in the event of a significant decline in
commodity prices.
F-91
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
(iii) Convertible security investments
A convertible security is a debt instrument or preferred stock that can be converted into a predetermined amount of the issuer’s
equity. The convertible option is an embedded derivative within the host instruments which are classified in the investment
portfolio as either available-for-sale or as an equity security. Chubb purchases convertible securities for their total return and not
specifically for the conversion feature.
(iv) TBA
By acquiring TBAs, we make a commitment to purchase a future issuance of mortgage-backed securities. For the period
between purchase of the TBAs and issuance of the underlying security, we account for our position as a derivative in the
Consolidated Financial Statements. Chubb purchases TBAs, from time to time, both for their total return and for the flexibility
they provide related to our mortgage-backed security strategy.
(v) Futures contracts on equities
Under the MRB program, as the assuming entity, Chubb is obligated to provide coverage until the expiration or maturity of the
underlying deferred annuity contracts or the expiry of the reinsurance treaty. We may recognize a loss for changes in fair value
due to adverse changes in the capital markets (e.g., declining interest rates and/or declining U.S. and/or international equity
markets). To mitigate adverse changes in the capital markets, we maintain positions in exchange-traded equity futures
contracts, as noted under section "(ii) Futures" above. These futures increase in fair value when the S&P 500 index decreases
(and decrease in fair value when the S&P 500 index increases). The net impact of gains or losses related to changes in fair
value of the MRB liability and the exchange-traded equity futures are included in Market risk benefits gains (losses) in the
Consolidated statements of operations.
d) Securities lending and secured borrowings
Chubb participates in a securities lending program operated by a third-party banking institution whereby certain assets are
loaned to qualified borrowers and from which we earn an incremental return. The securities lending collateral can only be drawn
down by Chubb in the event that the institution borrowing the securities is in default under the lending agreement. An
indemnification agreement with the lending agent protects us in the event a borrower becomes insolvent or fails to return any of
the securities on loan. The collateral is recorded in Securities lending collateral and the liability is recorded in Securities lending
payable in the Consolidated balance sheets.
The following table presents the carrying value of collateral held under securities lending agreements by investment category and
remaining contractual maturity of the underlying agreements:
(in millions of U.S. dollars)
Collateral held under securities lending agreements:
Cash
U.S. Treasury / Agency
Non-U.S.
Corporate and asset-backed securities
Municipal
Equity securities
Remaining contractual maturity
December 31, 2023
December 31, 2022
Overnight and Continuous
$
555 $
33
621
57
6
27
820
72
604
27
—
—
1,523
1,523
Gross amount of recognized liability for securities lending payable
$
$
1,299 $
1,299 $
At December 31, 2023 and 2022, our repurchase agreement obligations of $2,833 million and $1,419 million, respectively,
were fully collateralized. In contrast to securities lending programs, the use of cash received is not restricted for the repurchase
obligations. The fair value of the underlying securities sold remains in Fixed maturities available-for-sale or Other investments,
and the repurchase agreement obligation is recorded in Repurchase agreements in the Consolidated balance sheets.
F-92
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
The following table presents the carrying value of collateral pledged under repurchase agreements by investment category and
remaining contractual maturity of the underlying agreements:
(in millions of U.S. dollars)
Collateral pledged under repurchase agreements:
Cash
Non-U.S.
U.S. Treasury / Agency
Mortgage-backed securities
Remaining contractual maturity
December 31, 2023
December 31, 2022
Up to 30
Days
30-90
Days
Greater
than 90
Days
Total
Up to 30
Days
30-90
Days
Total
$
— $
33 $
1 $
34 $
12 $
— $
1,355
—
—
—
105
913
—
1,355
—
105
—
—
517
1,430
921
—
101
493
12
—
101
1,414
$ 1,355 $ 1,051 $
518 $ 2,924 $
933 $
594 $ 1,527
Gross amount of recognized liabilities for repurchase
agreements
Difference (1)
$ 2,833
$
91
$ 1,419
$
108
(1)
Per the repurchase agreements, the amount of collateral posted is required to exceed the amount of gross liability.
Potential risks exist in our secured borrowing transactions due to market conditions and counterparty exposure. With collateral
that we pledge, there is a risk that the collateral may not be returned at the expiration of the agreement. If the counterparty fails
to return the collateral, Chubb will have free use of the borrowed funds until our collateral is returned. In addition, we may
encounter the risk that Chubb may not be able to renew outstanding borrowings with a new term or with an existing
counterparty due to market conditions including a decrease in demand as well as more restrictive terms from banks due to
increased regulatory and capital constraints. Should this condition occur, Chubb may seek alternative borrowing sources or
reduce borrowings. Additionally, increased margins and collateral requirements due to market conditions would increase our
restricted assets as we are required to provide additional collateral to support the transaction.
e) Concentrations of credit risk
Our investment portfolio is managed following prudent standards of diversification. Specific provisions limit the allowable
holdings of a single issue and issuer. We believe that there are no significant concentrations of credit risk associated with our
investments. Our three largest corporate exposures by issuer at December 31, 2023, were Bank of America Corp, Morgan
Stanley, and JPMorgan Chase & Co. Our largest exposure by industry at December 31, 2023, was financial services.
We market our insurance and reinsurance worldwide primarily through insurance and reinsurance brokers. We assume a degree
of credit risk associated with brokers with whom we transact business. Marsh & McLennan Companies, Inc. generated or placed
approximately 11 percent, 11 percent, and 12 percent of our gross premiums written for the years ended December 31, 2023,
2022, and 2021, respectively. This entity is a large, well-established company, and there are no indications that it is financially
troubled at December 31, 2023. No other broker or one insured accounted for more than 10 percent of our gross premiums
written for these years.
f) Fixed maturities
At December 31, 2023 and 2022, commitments to purchase fixed income securities over the next several years were
approximately $1.0 billion and $770 million, respectively.
g) Private equities
Private equities in the Consolidated balance sheets are investments in limited partnerships and partially-owned investment
companies with a carrying value of $13.9 billion at December 31, 2023. In connection with these investments, we have
commitments that may require funding of up to $6.2 billion over the next several years. At December 31, 2022, these
investments had a carrying value of $12.0 billion with commitments that could have required funding of up to $7.4 billion.
F-93
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
h) Letters of credit
We have access to capital markets and to credit facilities with letter of credit capacity of $4.0 billion, $3.0 billion of which can
be used for revolving credit. Our existing credit facilities have remaining terms expiring through October 2027. Our LOC usage
was $948 million and $1.4 billion at December 31, 2023 and 2022, respectively.
i) Legal proceedings
Our insurance subsidiaries are subject to claims litigation involving disputed interpretations of policy coverages and, in some
jurisdictions, direct actions by allegedly-injured persons seeking damages from policyholders. These lawsuits, involving claims
on policies issued by our subsidiaries which are typical to the insurance industry in general and in the normal course of
business, are considered in our loss and loss expense reserves. In addition to claims litigation, we are subject to lawsuits and
regulatory actions in the normal course of business that do not arise from or directly relate to claims on insurance policies. This
category of business litigation typically involves, among other things, allegations of underwriting errors or misconduct,
employment claims, regulatory activity, or disputes arising from our business ventures. In the opinion of management, our
ultimate liability for these matters could be, but we believe is not likely to be, material to our consolidated financial condition
and results of operations.
j) Lease commitments
At December 31, 2023 and 2022, the right-of-use asset was $784 million and $607 million, respectively, recorded within
Other assets, and the lease liability was $832 million and $633 million, respectively, recorded within Accounts payable,
accrued expenses, and other liabilities on the Consolidated balance sheets. These leases consist principally of real estate
operating leases that are amortized on a straight-line basis over the term of the lease, which expire at various dates. As of
December 31, 2023, the weighted average remaining lease term and weighted average discount rate for the operating leases
was 11.8 years and 4.6 percent, respectively. Rent expense was $181 million, $161 million, and $149 million for the years
ended December 31, 2023, 2022, and 2021, respectively.
Future minimum lease payments under the operating leases are expected to be as follows:
For the years ending December 31
(in millions of U.S. dollars)
Undiscounted cash flows:
2024
2025
2026
2027
2028
Thereafter
Total undiscounted lease payments
Less: Present value adjustment
Net lease liabilities reported as of December 31, 2023
$
$
$
166
141
117
88
65
618
1,195
363
832
As of December 31, 2023, we entered into a separate lease for office space that is not yet recorded on our Consolidated
balance sheet and is not included in the total obligations referenced above. The lease is expected to commence in December
2024 with an initial term of approximately 23 years. Total cash requirements are estimated at approximately $621 million over
the term of the lease.
F-94
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
15. Shareholders’ equity
a) Common Shares
All of Chubb’s Common Shares are authorized under Swiss corporate law. Though the par value of Common Shares is stated in
Swiss francs, Chubb continues to use U.S. dollars as its reporting currency for preparing the Consolidated Financial Statements.
Under Swiss corporate law, we are generally prohibited from issuing Common Shares below their par value. If there were a need
to raise common equity at a time when the trading price of Chubb's Common Shares is below par value, we would need in
advance to obtain shareholder approval to decrease the par value of the Common Shares. At our May 2023 annual general
meeting, our shareholders approved the reduction of share capital by reducing par value from CHF 24.15 per share to CHF
0.50 per share and thereby increasing capital contribution reserves.
Dividend approval
At our May 2023 annual general meeting, our shareholders approved an annual dividend for the following year of up to $3.44
per share, expected to be paid in four quarterly installments of $0.86 per share after the annual general meeting by way of
distribution from capital contribution reserves, transferred to free reserves for payment. The Board of Directors (Board) will
determine the record and payment dates at which the annual dividend may be paid until the date of the 2024 annual general
meeting, and is authorized to abstain from distributing a dividend at its discretion. The first three quarterly installments each of
$0.86 per share, have been distributed by the Board as expected.
At our May 2022 and 2021 annual general meetings, our shareholders approved annual dividends for the following year of up
to $3.32 per share and $3.20 per share, respectively, which were paid in four quarterly installments of $0.83 per share and
$0.80 per share, respectively, at dates determined by the Board after the annual general meeting by way of a distribution from
capital contribution reserves, transferred to free reserves for payment.
Dividend distributions
Under Swiss corporate law, dividends must be stated in Swiss francs though dividend payments are made by Chubb in U.S.
dollars. We issue dividends without subjecting them to withholding tax by way of distributions from capital contribution reserves
and payment out of free reserves.
The following table presents dividend distributions per Common Share in Swiss francs (CHF) and U.S. dollars (USD):
2023
USD
CHF
CHF
Year Ended December 31
2022
USD
2021
USD
CHF
Total dividend distributions per common share
3.05 $
3.41
3.11 $
3.29
2.88 $
3.18
b) Shares issued, outstanding, authorized, and conditional
2023
Year Ended December 31
2022
2021
Common Shares authorized and issued, beginning of year
446,376,614
474,021,114
477,605,264
Cancellation of treasury shares
(14,925,028)
(27,644,500)
(3,584,150)
Common Shares authorized and issued, end of year
431,451,586
446,376,614
474,021,114
Common Shares in treasury, beginning of year (at cost)
(31,781,758)
(47,448,502)
(26,872,639)
Net shares issued under employee share-based compensation plans
2,500,381
2,947,272
3,484,487
Shares repurchased
Cancellation of treasury shares
Common Shares in treasury, end of year (at cost)
Common Shares outstanding, end of year
(11,825,600)
(14,925,028)
(27,644,500)
14,925,028
27,644,500
3,584,150
(26,181,949)
(31,781,758)
(47,448,502)
405,269,637
414,594,856
426,572,612
Increases in Common Shares in treasury are due to open market repurchases of Common Shares, the surrender of Common
Shares to satisfy tax withholding obligations in connection with the vesting of restricted stock, and the forfeiture of unvested
restricted stock. Decreases in Common Shares in treasury are principally due to grants of restricted stock, exercises of stock
options, purchases under the Employee Stock Purchase Plan (ESPP), and share cancellations. At our May 2023 annual general
F-95
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
meeting, our shareholders approved the cancellation of 14,925,028 shares purchased under our share repurchase programs
during 2022. The capital reduction was subject to publication requirements and became effective in accordance with Swiss law
on May 22, 2023. At our May 2022 annual general meeting, our shareholders approved the cancellation of 13,179,100 shares
purchased under our share repurchase program during the last six months of 2021. The capital reduction by cancellation of
shares was subject to publication requirements and a two-month waiting period in accordance with Swiss law and became
effective on August 4, 2022. At the Chubb Limited Extraordinary General Meeting of Shareholders, held on November 3, 2021,
shareholders approved the cancellation of 14,465,400 shares repurchased under our share repurchase program during the first
six months of 2021. The capital reduction by cancellation of shares was subject to publication requirements and a two-month
waiting period in accordance with Swiss law and became effective on January 17, 2022. At our May 2021 annual general
meeting, our shareholders approved the cancellation of 3,584,150 shares purchased under our share repurchase program
during 2020. The capital reduction by cancellation of shares was subject to publication requirements and a two-month waiting
period in accordance with Swiss law and became effective on August 4, 2021.
Authorized share capital for general purposes under Swiss law
In accordance with Swiss law, the Board has shareholder-approved authority as set forth in the Articles of Association to
increase Chubb's share capital from time to time until May 19, 2024, by the issuance for general purposes of up to
200,000,000 fully paid up Common Shares, with a par value equal to the par value of Chubb's Common Shares as set forth in
the Articles of Association at the time of any such issuance. Any such increases would be subject to Swiss rules and procedure.
Conditional share capital for bonds and similar debt instruments
Chubb's share capital may be increased through the issuance of a maximum of 33,000,000 fully paid up Common Shares (with
a par value of CHF 0.50 as of December 31, 2023) through the exercise of conversion and/or option or warrant rights granted
in connection with bonds, notes, or similar instruments, issued or to be issued by Chubb, including convertible debt
instruments.
Conditional share capital for employee benefit plans
Chubb's share capital may be increased through the issuance of a maximum of 25,410,929 fully paid up Common Shares (with
a par value of CHF 0.50 as of December 31, 2023) in connection with the exercise of option rights granted to any employee of
Chubb, director or other person providing services to Chubb.
c) Chubb Limited securities repurchases
From time to time, we repurchase shares as part of our capital management program and to partially offset potential dilution
from the exercise of stock options and the granting of restricted stock under share-based compensation plans. The Board has
authorized share repurchase programs as follows:
•
•
$1.5 billion of Chubb Common Shares from November 19, 2020 through December 31, 2021;
$1.0 billion increase to the November 2020 share repurchase program to a total of $2.5 billion in February 2021, effective
through December 31, 2021;
• One-time incremental share repurchase program of $5.0 billion of Chubb Common Shares from July 19, 2021 through
June 30, 2022;
$2.5 billion of Chubb Common Shares from May 19, 2022 through June 30, 2023; and
$5.0 billion of Chubb Common Shares effective July 1, 2023 with no expiration date.
•
•
Share repurchases may be in the open market, in privately negotiated transactions, block trades, accelerated repurchases and
through option or other forward transactions. The following table presents repurchases of Chubb's Common Shares conducted in
a series of open market transactions under the Board authorizations:
(in millions of U.S. dollars, except share data)
Number of shares repurchased
Cost of shares repurchased
Year Ended December 31
January 1, 2024 through
2023
2022
2021
February 22, 2024
11,825,600
14,925,028
27,644,500
$
2,478 $
3,014 $
4,861 $
269,450
67
d) General restrictions
The holders of the Common Shares are entitled to receive dividends as approved by the shareholders. Holders of Common
Shares are allowed one vote per share provided that, if the controlled shares of any shareholder constitute ten percent or more
of the outstanding Common Shares of Chubb, only a fraction of the vote will be allowed so as not to exceed ten percent in
F-96
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
aggregate. Entry of acquirers of Common Shares as shareholders with voting rights in the share register may be refused if it
would confer voting rights with respect to ten percent or more of the registered share capital recorded in the commercial
register.
e) Accumulated other comprehensive income (loss)
The following table presents changes in accumulated other comprehensive income (loss):
(in millions of U.S. dollars)
Accumulated other comprehensive income (loss) (AOCI)
Net unrealized appreciation (depreciation) on investments
As Adjusted
Year Ended December 31
2023
2022
2021
Balance – beginning of year, net of tax
$
(7,279) $
2,256 $
4,673
Change in year, before reclassification from AOCI (before tax)
Amounts reclassified from AOCI (before tax)
Change in year, before tax
Income tax (expense) benefit
Total other comprehensive income (loss)
Noncontrolling interests, net of tax
Balance – end of year, net of tax
Current discount rate on liability for future policy benefits
Balance – beginning of year, net of tax
Cumulative effect of adoption of accounting guidance
Balance – beginning of year, net of tax, as adjusted
Change in year, before tax
Income tax (expense) benefit
Total other comprehensive income
Noncontrolling interests, net of tax
Balance – end of year, net of tax
Instrument-specific credit risk on market risk benefits
Balance – beginning of year, net of tax
Cumulative effect of adoption of accounting guidance
Balance – beginning of year, net of tax, as adjusted
Change in year, before and net of tax
Total other comprehensive income
Noncontrolling interests, net of tax
Balance – end of year, net of tax
Cumulative foreign currency translation adjustment
Balance – beginning of year, net of tax
Cumulative effect of adoption of accounting guidance
Balance – beginning of year, net of tax, as adjusted
Change in year, before reclassification from AOCI (before tax)
Amounts reclassified from AOCI (before tax)
Change in year, before tax
Income tax benefit
2,948
500
3,448
(11,627)
(2,935)
1,049
(3)
(10,578)
(2,938)
(328)
1,043
521
3,120
18
(9,535)
(2,417)
—
—
(4,177)
(7,279)
2,256
(75)
(1,399)
—
—
—
(75)
(1,399)
(1,725)
(1,725)
84
16
100
(26)
51
(24)
—
(24)
2
2
—
1,480
(156)
1,324
—
387
(61)
326
—
(75)
(1,399)
(57)
—
(57)
33
33
—
—
(84)
(84)
27
27
—
(22)
(24)
(57)
(2,966)
(2,114)
(1,637)
—
—
7
(2,966)
(2,114)
(1,630)
—
(13)
(13)
27
(907)
(4)
(911)
59
(505)
—
(505)
21
F-97
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
(in millions of U.S. dollars)
Accumulated other comprehensive income (loss) (AOCI) - continued
Total other comprehensive income (loss)
Noncontrolling interests, net of tax
Balance – end of year, net of tax
Fair value hedging instruments
Balance – beginning of year, net of tax
Change in year, before reclassification from AOCI (before tax)
Amounts reclassified from AOCI (before tax)
Change in year, before tax
Income tax (expense) benefit
Total other comprehensive income (loss)
Noncontrolling interests, net of tax
Balance – end of year, net of tax
Postretirement benefit liability adjustment
Balance – beginning of year, net of tax
Change in year, before tax
Income tax (expense) benefit
Total other comprehensive income (loss)
Noncontrolling interests, net of tax
Balance – end of year, net of tax
Accumulated other comprehensive loss
As Adjusted
Year Ended December 31
2023
2022
2021
14
(7)
(852)
—
(484)
—
(2,945)
(2,966)
(2,114)
(66)
101
(34)
67
(14)
53
—
(13)
225
90
(18)
72
—
297
—
17
(100)
(83)
17
(66)
—
(66)
240
(17)
2
(15)
—
225
—
—
—
—
—
—
—
—
(167)
522
(115)
407
—
240
$
(6,809) $
(10,185) $
(1,074)
The following table presents reclassifications from accumulated other comprehensive income (loss) to the consolidated
statements of operations:
(in millions of U.S. dollars)
Fixed maturities available-for-sale
Income tax benefit
Cumulative foreign currency translation adjustment
Cross-currency swaps
Income tax expense
Net gains (losses) of fair value hedging instruments
Cross-currency swaps
Cross-currency swaps
Income tax expense
Total amounts reclassified from AOCI
F-98
Year Ended December 31
2023
2022
2021
Consolidated Statement of
Operations Location
(500) $
(1,049) $
3 Net realized gains (losses)
62
170
6
Income tax expense
(438) $
(879) $
9 Net income
13 $
(3)
10 $
4 $
(1)
3 $
—
Interest expense
—
Income tax expense
— Net income
50 $
105 $
— Net realized gains (losses)
(16)
(7)
(5)
(21)
—
Interest expense
—
Income tax expense
27 $
79 $
— Net income
(401) $
(797) $
9
$
$
$
$
$
$
$
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
16. Share-based compensation
Chubb has share-based compensation plans which currently provide the Board the ability to grant awards of stock options,
restricted stock, and restricted stock units to its employees and members of the Board.
In May 2021, our shareholders approved the Chubb Limited 2016 Long-Term Incentive Plan, as amended and restated (the
Amended 2016 LTIP). Under the Amended 2016 LTIP, Common Shares of Chubb are authorized to be issued pursuant to
awards, including stock options, stock appreciation rights, performance shares, performance units, restricted stock, and
restricted stock units.
Chubb principally issues restricted stock grants and stock options on a graded vesting schedule, with equal percentages of the
award subject to vesting over a number of years (typically three or four). Chubb recognizes compensation cost for vesting of
restricted stock and stock option grants with only service conditions on a straight-line basis over the requisite service period for
each separately vesting portion of the award as if the award were, in-substance, multiple awards. We incorporate an estimate of
future forfeitures in determining compensation cost for both grants of restricted stock and stock options.
In addition, Chubb grants performance-based restricted stock to certain executives that vest based on certain performance
criteria as compared to a defined group of peer companies. Performance-based stock awards comprise target awards and
premium awards that cliff vest at the end of a 3-year performance period based on both Chubb tangible book value (Chubb
shareholders' equity less goodwill and intangible assets attributable to Chubb, net of tax) per share growth and P&C combined
ratio compared to our peer group. Premium awards are subject to an additional vesting provision based on total shareholder
return (TSR) compared to our peer group. Shares representing target awards and premium awards are issued when the awards
are approved and are subject to forfeiture if applicable performance criteria are not met at the end of the 3-year performance
period.
Under the Amended 2016 LTIP, 32,900,000 Common Shares are authorized to be issued (which includes all shares available
for delivery since the establishment of the Chubb Limited 2016 Long-Term Incentive Plan in 2016). This is in addition to any
shares subject to awards outstanding under the ACE Limited 2004 Long-Term Incentive Plan (2004 LTIP) immediately prior to
the effective date of the Amended 2016 LTIP that are forfeited, expired or canceled after such effective date without delivery of
shares (or which result in forfeiture of shares back to Chubb). At December 31, 2023, a total of 12,533,303 shares remain
available for future issuance under the Amended 2016 LTIP, which includes shares forfeited, expired or canceled relating to
grants under the 2004 LTIP.
Under the Employee Stock Purchase Plan (ESPP), 6,500,000 shares are authorized to be issued. At December 31, 2023, a
total of 509,568 shares remain available for issuance under the ESPP.
Chubb generally issues Common Shares for the exercise of stock options, restricted stock, and purchases under the ESPP from
Common Shares in treasury.
The following table presents pre-tax and after-tax share-based compensation expense:
(in millions of U.S. dollars)
Stock options and shares issued under ESPP:
Pre-tax
After-tax (1)
Restricted stock:
Pre-tax
After-tax (1)
Year Ended December 31
2023
2022
2021
$
$
$
$
71 $
56 $
60 $
38 $
253 $
202 $
230 $
179 $
55
36
210
164
(1)
The windfall tax benefit recorded to Income tax expense in the Consolidated statement of operations was $19 million, $29 million, and $19 million for the years ended
December 31, 2023, 2022, and 2021, respectively.
Unrecognized compensation expense related to the unvested portion of Chubb's employee share-based awards of restricted
stock, restricted stock units, and stock options was $350 million at December 31, 2023 and is expected to be recognized over
a weighted-average period of approximately 1.5 years.
F-99
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
Stock options
Both incentive and non-qualified stock options are principally granted at an option price per share equal to the grant date fair
value of Chubb's Common Shares. Stock options are generally granted with a 3-year vesting period and a 10-year term. Stock
options vest in equal annual installments over the respective vesting period, which is also the requisite service period.
Chubb's 2023 share-based compensation expense includes a portion of the cost related to the 2020 through 2023 stock option
grants. Stock option fair value was estimated on the grant date using the Black-Scholes option-pricing model that uses the
weighted-average assumptions noted below:
Dividend yield
Expected volatility
Risk-free interest rate
Expected life
2023
1.7 %
23.0 %
4.1 %
Year Ended December 31
2022
1.7 %
20.1 %
1.9 %
2021
1.9 %
26.0 %
1.0 %
5.7 years
5.8 years
5.8 years
The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. The expected life (estimated
period of time from grant to exercise date) is estimated using the historical exercise behavior of employees. The expected
volatility is calculated as a blend of (a) historical volatility based on daily closing prices over a period equal to the expected life
assumption and (b) implied volatility derived from Chubb's publicly traded options.
The following table presents a roll-forward of Chubb's stock options:
(Intrinsic Value in millions of U.S. dollars)
Number of Options
Weighted-Average
Exercise Price
Weighted-Average
Fair Value
Total Intrinsic
Value
Options outstanding, December 31, 2020
11,478,183 $
125.09
Granted
Exercised
Forfeited and expired
Options outstanding, December 31, 2021
Granted
Exercised
Forfeited and expired
Options outstanding, December 31, 2022
Granted
Exercised
Forfeited and expired
Options outstanding, December 31, 2023
Options exercisable, December 31, 2023
1,805,234 $
164.89 $
33.05
(2,284,795) $
(236,135) $
10,762,487 $
112.12
150.16
133.94
1,731,904 $
198.36 $
35.46
(1,878,147) $
(205,966) $
10,410,278 $
117.83
171.45
146.81
1,540,002 $
208.60 $
51.32
(1,249,350) $
(220,046) $
10,480,884 $
7,497,652 $
127.45
191.57
157.24
141.08
$
140
$
163
$
$
$
107
721
637
The weighted-average remaining contractual term was 5.6 years for stock options outstanding and 4.4 years for stock options
exercisable at December 31, 2023. Cash received from the exercise of stock options for the year ended December 31, 2023
was $158 million.
Restricted stock and restricted stock units
Grants of restricted stock and restricted stock units awarded under the Amended 2016 LTIP typically have a 4-year vesting
period, subject to vesting as to one-quarter of the award each anniversary of grant. Restricted stock and restricted stock units
are principally granted at market close price on the day of grant. Each restricted stock unit represents our obligation to deliver to
the holder one Common Share upon vesting.
F-100
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
Chubb also grants restricted stock awards to non-management directors which vest at the following year's annual general
meeting.
Chubb's 2023 share-based compensation expense includes a portion of the cost related to the restricted stock granted in the
years 2019 through 2023.
The following table presents a roll-forward of our restricted stock awards. Included in the roll-forward below are 12,994
restricted stock awards, 13,440 restricted stock awards, and 15,586 restricted stock awards that were granted to non-
management directors during the years ended December 31, 2023, 2022, and 2021, respectively:
Unvested restricted stock, December 31, 2020
Granted
Vested
Forfeited
Unvested restricted stock, December 31, 2021
Granted
Vested
Forfeited
Unvested restricted stock, December 31, 2022
Granted
Vested
Forfeited
Unvested restricted stock, December 31, 2023
Service-based
Restricted Stock Awards
and Restricted Stock Units
Performance-based
Restricted Stock Awards
and Restricted Stock Units
Weighted-Average
Grant-Date Fair
Number of Shares
Value Number of Shares
Weighted-Average
Grant-Date Fair
Value
3,263,295 $
1,288,042 $
(1,283,185) $
(216,341) $
3,051,811 $
1,193,016 $
(1,191,452) $
(199,505) $
2,853,870 $
1,166,706 $
(1,142,911) $
(203,850) $
2,673,815 $
142.32
165.32
140.62
150.19
152.19
199.18
148.18
168.12
172.39
208.07
161.88
186.58
191.35
572,318 $
294,315 $
(169,442) $
— $
697,191 $
296,944 $
(199,343) $
— $
794,792 $
407,825 $
(203,533) $
— $
142.38
164.75
143.07
—
151.74
199.09
133.90
—
173.83
208.60
150.11
—
999,084 $
192.85
Prior to 2009, legacy ACE granted restricted stock units with a 1-year vesting period to non-management directors. Delivery of
Common Shares on account of these restricted stock units to non-management directors is deferred until after the date of the
non-management directors' termination from the Board. Legacy Chubb Corp historically allowed directors and certain key
employees of Chubb Corp and its subsidiaries to defer a portion of their compensation earned with respect to services performed
in the form of deferred stock units. In addition, legacy Chubb Corp provided supplemental retirement benefits for certain
employees through its Defined Contribution Excess Benefit Plan in the form of deferred shares of stock. The minimum vesting
period under these legacy Chubb Corp deferred plans was 1-year and the maximum was 3-years. Employees and directors had
the option to elect to receive their awards at a future specified date or upon their termination of service with Chubb. At
December 31, 2023, there were 100,965 deferred restricted stock units.
ESPP
The ESPP gives participating employees the right to purchase Common Shares through payroll deductions during consecutive
subscription periods at a purchase price of 85 percent of the fair value of a Common Share on the exercise date (Purchase
Price). Annual purchases by participants are limited to the number of whole shares that can be purchased by an amount equal
to ten percent of the participant's compensation or $25,000, whichever is less. The ESPP has two six-month subscription
periods each year, the first of which runs between January 1 and June 30 and the second of which runs between July 1 and
December 31. The amounts collected from participants during a subscription period are used on the exercise date to purchase
full shares of Common Shares. An exercise date is generally the last trading day of a subscription period. The number of shares
purchased is equal to the total amount, at the exercise date, collected from the participants through payroll deductions for that
subscription period, divided by the Purchase Price, rounded down to the next full share. Participants may withdraw from an
offering before the exercise date and obtain a refund of amounts withheld through payroll deductions. Pursuant to the provisions
F-101
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
of the ESPP, during the years ended December 31, 2023, 2022, and 2021, employees paid $54 million, $48 million, and
$47 million to purchase 305,604 shares, 271,650 shares, and 315,405 shares, respectively.
17. Postretirement benefits
Chubb provides postretirement benefits to eligible employees and their dependents through various defined contribution plans
sponsored by Chubb. In addition, for certain employees, Chubb sponsors other postretirement benefit plans, and prior to 2020,
Chubb sponsored defined benefit pension plans.
Defined contribution plans (including 401(k))
Under these plans, employees' contributions may be supplemented by Chubb matching contributions based on the level of
employee contribution. These contributions are invested at the election of each employee in one or more of several investment
portfolios offered by a third-party investment advisor. Expenses for these plans totaled $283 million, $230 million, and
$214 million for the years ended December 31, 2023, 2022, and 2021, respectively.
Defined benefit pension plans
We maintain non-contributory defined benefit pension plans that cover certain employees located in the U.S., U.K., Canada,
and various other statutorily required countries. We account for pension benefits using the accrual method. Benefits under these
plans are based on employees' years of service and compensation during final years of service. All underlying plans are subject
to periodic actuarial valuations by qualified actuarial firms using actuarial models to calculate the expense and liability for each
plan. We use December 31 as the measurement date for our defined benefit pension plans.
Under the Chubb Corp plans, prior to 2001, benefits were generally based on an employee’s years of service and average
compensation during the last five years of employment. Effective January 1, 2001, the formula for providing pension benefits
was changed from the final average pay formula to a cash balance formula. Under the cash balance formula, a notional account
is established for each employee, which is credited semi-annually with an amount equal to a percentage of eligible
compensation based on age and years of service plus interest based on the account balance. Chubb Corp employees hired prior
to 2001 will generally be eligible to receive vested benefits based on the higher of the final average pay or cash balance
formulas.
Other postretirement benefit plans
Our assumption of Chubb Corp's other postretirement benefit plans, principally healthcare and life insurance, covers retired
employees, their beneficiaries, and covered dependents. Healthcare coverage is contributory. Retiree contributions vary based
upon the retiree’s age, type of coverage, and years of service requirements. Life insurance coverage is non-contributory. Chubb
funds a portion of the healthcare benefits obligation where such funding can be accomplished on a tax-effective basis. Benefits
are paid as covered expenses are incurred. We use December 31 as the measurement date for our postretirement benefit plans.
Amendments to U.S. qualified and excess pension plans and U.S. retiree healthcare plan
In 2016, we harmonized and amended several of our U.S. retirement programs to create a unified retirement savings program.
In 2020, we transitioned from a traditional defined benefit pension program that had been in effect for certain employees to a
defined contribution program. Additionally, after 2025, we plan to eliminate a subsidized U.S. retiree healthcare and life
insurance plan that is currently in place for certain employees. Both amendments required a remeasurement of the plan assets
and benefit obligations with updated assumptions, including discount rates and the expected return on assets. The amendment
of the retiree healthcare plan resulted in a reduction in the obligation of $383 million, of which $410 million was amortized as
a reduction to expense as it relates to benefits already accrued. As of June 2021, the amendment of the retiree healthcare plan
was fully amortized. For the year ended December 31, 2021, $26 million was amortized as a reduction to expense.
F-102
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
Obligations and funded status
The funded status of the pension and other postretirement benefit plans as well as the amounts recognized in the Consolidated
balance sheets and Accumulated other comprehensive income (loss) at December 31, 2023 and 2022 was as follows:
(in millions of U.S. dollars)
U.S. Plans
Pension Benefit Plans
Other Postretirement
Benefit Plans
2022
2023
2022
U.S. Plans
Non-U.S.
Plans
2023
Non-U.S.
Plans
Benefit obligation, beginning of year
$
2,781 $
697 $
3,732 $
1,122
$
43 $
Service cost
Interest cost
Actuarial loss (gain)
Benefits paid
Curtailments
Settlements
Foreign currency revaluation and other
Benefit obligation, end of year
Plan assets at fair value, beginning of year
Actual return on plan assets
Employer contributions
Benefits paid
Settlements
Foreign currency revaluation and other
Plan assets at fair value, end of year
Funded status at end of year
$
$
$
$
—
138
82
7
36
29
(168)
(38)
—
—
—
—
(5)
17
—
85
(890)
(146)
—
—
—
2,833 $
743 $
2,781 $
4
23
(391)
(28)
—
—
(33)
697
3,316 $
938 $
4,151 $
1,318
$
$
417
24
57
15
(692)
(285)
3
(168)
(38)
(146)
—
—
(8)
22
—
—
3,589 $
986 $
3,316 $
756 $
243 $
535 $
8
(28)
—
(75)
938
241
$
$
—
2
2
(12)
—
—
1
36 $
81 $
4
1
(17)
—
—
69 $
33 $
Amounts recognized in the Consolidated balance sheets:
Assets
Liabilities
Total
$
$
801 $
300 $
601 $
290
$
54 $
(45)
(57)
(66)
(49)
(21)
756 $
243 $
535 $
241
$
33 $
Amounts recognized in Accumulated other comprehensive
income (loss), pre-tax, not yet recognized in net periodic cost (benefit):
Net actuarial loss (gain)
Prior service cost (benefit)
Total
$
(404) $
29 $
(290) $
—
8
—
7
8
$
(10) $
(4)
$
(404) $
37 $
(290) $
15
$
(14) $
62
1
1
(4)
(16)
—
—
(1)
43
119
(2)
1
(37)
—
—
81
38
56
(18)
38
(12)
(4)
(16)
For the U.S. pension plans, the $82 million actuarial loss and $890 million actuarial gain experienced in 2023 and 2022,
respectively, were principally driven by the change in discount rates. In addition, for the non-U.S. pension plans, the $29
million actuarial loss and $391 million actuarial gain experienced in 2023 and 2022, respectively, were principally driven by
the change in discount rates.
The accumulated benefit obligation for the pension benefit plans was $3.5 billion and $3.4 billion at December 31, 2023 and
2022, respectively. The accumulated benefit obligation is the present value of pension benefits earned as of the measurement
date based on employee service and compensation prior to that date. It differs from the pension (projected) benefit obligation in
the table above in that the accumulated benefit obligation includes no assumptions regarding future compensation levels.
F-103
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
Chubb’s funding policy is to contribute amounts that meet regulatory requirements plus additional amounts determined based
on actuarial valuations, market conditions and other factors. All benefit plans satisfy minimum funding requirements of the
Employee Retirement Income Security Act of 1974 (ERISA).
The following table provides information on pension plans where the benefit obligation is in excess of plan assets at December
31, 2023 and 2022:
(in millions of U.S. dollars)
Plans with projected benefit obligation in excess of plan assets:
Projected benefit obligation
Fair value of plan assets
Net funded status
Plans with accumulated benefit obligation in excess of plan assets:
Accumulated benefit obligation
Fair value of plan assets
2023
U.S. Plans
Non-U.S.
Plans
U.S. Plans
$
$
$
$
45 $
101 $
66 $
—
44
—
(45) $
(57) $
(66) $
45 $
— $
73 $
40 $
66 $
— $
2022
Non-U.S.
Plans
87
38
(49)
61
30
For other postretirement benefit plans with an accumulated benefit obligation in excess of plan assets, the accumulated benefit
obligation was $21 million and $18 million at December 31, 2023 and 2022, respectively. These plans have no plan assets.
At December 31, 2023, we estimate that we will contribute $15 million to the pension plans and $1 million to the other
postretirement benefits plan in 2024. The estimate is subject to change due to contribution decisions that are affected by
various factors including our liquidity, market performance, and management discretion.
At December 31, 2023, our estimated expected future benefit payments are as follows:
For the years ending December 31
(in millions of U.S. dollars)
2024
2025
2026
2027
2028
2029-2033
Pension Benefit Plans
U.S.
Plans
Non-U.S.
Plans
Other
Postretirement
Benefit Plans
$
175 $
38 $
11
181
185
188
191
976
36
35
37
39
233
6
1
1
1
6
F-104
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
The weighted-average assumptions used to determine the projected benefit obligation were as follows:
December 31, 2023
Discount rate
Rate of compensation increase (1)
Interest crediting rate
December 31, 2022
Discount rate
Rate of compensation increase (1)
Interest crediting rate
Pension Benefit Plans
U.S.
Plans
Non-U.S.
Plans
Other
Postretirement
Benefit Plans
4.98 %
N/A
4.55 %
5.22 %
N/A
4.32 %
5.03 %
3.73 %
6.01 %
N/A
5.27 %
3.98 %
5.83 %
N/A
(1) For the U.S. Pension Plans, benefit accruals were frozen as of December 31, 2019.
The projected benefit cash flows were discounted using the corresponding spot rates derived from a yield curve, which resulted
in a single discount rate that would produce the same liability at the respective measurement dates. The same process was
applied to service cost cash flows to determine the discount rate associated with the service cost. In general, the discount rates
for the non-U.S. plans were developed using a similar methodology by using country-specific yield curves.
The components of net pension and other postretirement benefit costs (benefits) reflected in Net income and other changes in
plan assets and benefit obligations recognized in other comprehensive income (loss) were as follows:
Year Ended December 31
(in millions of U.S. dollars)
Costs reflected in Net income, pre-tax:
Service cost
Non-service cost (benefit):
Pension Benefit Plans
U.S. Plans
Non-U.S. Plans
Other Postretirement
Benefit Plans
2023
2022
2021
2023
2022
2021
2023
2022
2021
$ — $ — $ — $
7 $
4 $
4 $ — $
1 $
1
Interest cost
Expected return on plan assets
Amortization of net actuarial (gain) loss
Amortization of prior service cost (benefit)
Curtailments
Settlements
138
85
70
36
23
19
2
1
(225)
(283)
(255)
(51)
(43)
(44)
(3)
(1)
—
—
—
—
—
4
(1) —
1
(1)
—
—
—
—
1
—
—
—
—
(26)
—
—
—
—
—
—
—
—
3
—
3
4
—
—
—
—
—
—
Total non-service cost (benefit)
Net periodic benefit cost (benefit)
Changes in plan assets and benefit
obligations recognized in other
comprehensive income (loss)
Net actuarial loss (gain)
Prior service cost (benefit)
Amortization of net actuarial gain (loss)
Amortization of prior service benefit
Curtailments
Settlements
Total decrease (increase) in other
comprehensive income (loss), pre-tax
(84)
(198)
(182)
(10)
(20)
(21)
(2) —
(26)
$
(84) $ (198) $ (182) $
(3) $
(16) $
(17) $
(2) $
1 $
(25)
$ (111) $ 85 $ (450) $ 22 $
(67) $
(86) $
2 $
(1) $
(5)
—
—
—
—
—
—
—
—
—
—
—
—
—
(4)
1
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(3) —
(3)
(1) —
—
—
—
—
—
26
—
—
$ (114) $ 85 $ (453) $ 21 $
(67) $
(90) $
3 $
(1) $
21
F-105
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
The line items in which the service cost and non-service cost (benefit) components of net periodic benefit cost (benefit) are
included in the Consolidated statements of operations were as follows:
Year Ended December 31
(in millions of U.S. dollars)
Service cost:
Losses and loss expenses
Administrative expenses
Total service cost
Non-service cost (benefit):
Losses and loss expenses
Administrative expenses
Total non-service cost (benefit)
Net periodic benefit cost (benefit)
Pension Benefit Plans Other Postretirement Benefit Plans
2023
2022
2021
2023
2022
2021
$
— $
— $
— $
— $
— $
7
7
4
4
4
4
—
—
(9)
(20)
(18)
—
(85)
(198)
(185)
(94)
(218)
(203)
(2)
(2)
1
1
—
—
—
$
(87) $
(214) $
(199) $
(2) $
1 $
—
1
1
(3)
(23)
(26)
(25)
The weighted-average assumptions used to determine the net periodic pension and other postretirement benefit costs were as
follows:
Pension Benefit Plans
U.S.
Plans
Non-U.S.
Plans
Other
Postretirement
Benefit Plans
N/A
5.13 %
N/A
7.00 %
4.32 %
N/A
2.34 %
N/A
7.00 %
4.10 %
N/A
1.81 %
N/A
7.00 %
4.10 %
6.57 %
5.28 %
3.98 %
5.42 %
N/A
7.23 %
2.13 %
3.63 %
3.44 %
N/A
5.58 %
1.57 %
3.24 %
3.37 %
N/A
5.67 %
5.84 %
N/A
4.00 %
N/A
3.22 %
1.89 %
N/A
1.00 %
N/A
2.53 %
1.23 %
N/A
1.00 %
N/A
Year Ended December 31
2023
Discount rate in effect for determining service cost
Discount rate in effect for determining interest cost
Rate of compensation increase
Expected long-term rate of return on plan assets
Interest crediting rate
2022
Discount rate in effect for determining service cost
Discount rate in effect for determining interest cost
Rate of compensation increase
Expected long-term rate of return on plan assets
Interest crediting rate
2021
Discount rate in effect for determining service cost
Discount rate in effect for determining interest cost
Rate of compensation increase
Expected long-term rate of return on plan assets
Interest crediting rate
F-106
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
The weighted-average healthcare cost trend rate assumptions used to measure the expected cost of healthcare benefits were as
follows:
Healthcare cost trend rate
Rate to which the cost trend rate is assumed to decline
(the ultimate trend rate)
U.S. Plans
Non-U.S. Plans
2023
2022
2021
2023
2022
2021
5.57 %
5.72 %
5.59 %
5.08 %
5.28 %
5.26 %
4.00 %
4.00 %
4.50 %
4.08 %
4.04 %
4.00 %
Year that the rate reaches the ultimate trend rate
2046
2046
2038
2040
2040
2040
Plan Assets
The long-term objective of the pension plan is to provide sufficient funding to cover expected benefit obligations, while assuming
a prudent level of portfolio risk. The assets of the pension plan are invested, either directly or through pooled funds, in a
diversified portfolio of predominately equity securities and fixed maturities. We seek to obtain a rate of return that over time
equals or exceeds the returns of the broad markets in which the plan assets are invested. The target allocation of U.S. plan
assets is 55 percent to 65 percent invested in equity securities (including certain other investments measured using NAV), with
the remainder primarily invested in fixed maturities. The target allocation of non-U.S. plans varies by country, but the plan
assets are principally invested in fixed maturities. We rebalance our pension assets to the target allocation as market conditions
permit. We determined the expected long-term rate of return assumption for each asset class based on an analysis of the
historical returns and the expectations for future returns. The expected long-term rate of return for the portfolio is a weighted
aggregation of the expected returns for each asset class.
In order to minimize risk, the Plan maintains a listing of permissible and prohibited investments. In addition, the Plan has
certain concentration limits and investment quality requirements imposed on permissible investments options. Investment risk is
measured and monitored on an ongoing basis.
The following tables present the fair values of the pension plan assets, by valuation hierarchy. For additional information on how
we classify these assets within the valuation hierarchy, refer to Note 4 to the Consolidated Financial Statements.
December 31, 2023
(in millions of U.S. dollars)
U.S. Plans:
Short-term investments
U.S. Treasury / Agency
Non-U.S. and corporate bonds
Municipal
Equity securities
Investment derivative instruments
Total U.S. Plan assets (1)
Non-U.S. Plans:
Short-term investments
Non-U.S. and corporate bonds
Equity securities
Total Non-U.S. Plan assets (1)
Level 1
Level 2
Level 3
Total
Pension Benefit Plans
$
45 $
— $
— $
470
—
—
1,466
5
86
637
6
—
—
—
—
—
—
—
45
556
637
6
1,466
5
$
$
$
1,986 $
729 $
— $
2,715
7 $
— $
— $
—
63
457
211
—
4
70 $
668 $
4 $
7
457
278
742
(1)
Excluded from the table above are $634 million and $227 million of other investments related to the U.S. Plans and Non-U.S. Plans, respectively, private equities of $224
million and $17 million in U.S. Plans and Non-U.S. Plans, respectively, measured using NAV as a practical expedient, and $16 million in cash and accrued income related
to the U.S. Plans.
F-107
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
December 31, 2022
(in millions of U.S. dollars)
U.S. Plans:
Short-term investments
U.S. Treasury / Agency
Non-U.S. and corporate bonds
Municipal
Equity securities
Investment derivative instruments
Total U.S. Plan assets (1)
Non-U.S. Plans:
Short-term investments
Non-U.S. and corporate bonds
Equity securities
Total Non-U.S. Plan assets (1)
$
$
Level 1
Level 2
Level 3
Total
Pension Benefit Plans
$
42 $
— $
— $
431
—
—
1,321
4
110
627
5
—
—
—
—
—
—
—
42
541
627
5
1,321
4
1,798 $
742 $
— $
2,540
10 $
— $
— $
—
107
454
146
—
4
$
117 $
600 $
4 $
10
454
257
721
(1)
Excluded from the table above are $538 million and $201 million of other investments related to the U.S. Plans and Non-U.S. Plans, respectively, private equities of
$233 million and $16 million in U.S. Plans and Non-U.S. Plans, respectively, measured using NAV as a practical expedient, and $5 million in cash and accrued income
related to the U.S. Plans.
At December 31, 2023, the other postretirement benefit plan had $69 million of plan assets, of which $34 million of fixed
maturities were categorized as Level 2, and $35 million of other investments were measured using NAV as a practical
expedient. At December 31, 2022, the other postretirement benefit plan had $81 million of plan assets, of which $50 million
of fixed maturities were categorized as Level 2, and $31 million of other investments were measured using NAV as a practical
expedient.
18. Other income and expense
As Adjusted
Year Ended December 31
(in millions of U.S. dollars)
2023
2022
Equity in net income (loss) of partially-owned entities
$
867 $
Gains (losses) from fair value changes in separate account assets (1)
Asset management and performance fee revenue
Asset management and performance fee expense
Federal excise and capital taxes
Other
Total
1 $
(42)
—
—
(21)
(27)
2021
2,435
(8)
—
—
(19)
(41)
(45)
136
(75)
(24)
(23)
$
836 $
(89) $
2,367
(1)
Related to gains (losses) from fair value changes in separate account assets that do not qualify for separate account reporting under U.S. GAAP.
Equity in net income of partially-owned entities includes our share of net income or loss, both underlying operating income and
mark-to-market movement, related to partially-owned investment companies (private equity) where we own more than three
percent and partially-owned insurance companies. This line item includes mark-to-market gains (losses) on private equities of
$434 million, $(219) million, and $2,004 million for the years ended December 31, 2023, 2022, and 2021, respectively.
In addition, this line item includes net income attributable to our investment in Huatai under the equity method of accounting
comprising income (expense) of $36 million through June 30, 2023, and $(11) million and $235 million for the years ended
December 31, 2022 and 2021, respectively. Effective July 1, 2023, we discontinued the equity method of accounting and
include the results of operations of Huatai in our consolidated results.
Also included in Other income and expense are gains (losses) from fair value changes in separate account assets that do not
qualify for separate account reporting under U.S. GAAP. The offsetting movement in the separate account liabilities is included
in Policy benefits in the Consolidated statements of operations.
F-108
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
Asset management and performance fee revenue and expense primarily relate to the management of third-party assets by
Huatai's asset management business, which is unrelated to Huatai Group's core insurance operations. These revenues and
expenses are recognized in the period in which the services are performed, and for certain asset performance fees, to the extent
it is probable that a significant reversal will not occur.
Certain federal excise and capital taxes incurred as a result of capital management initiatives are included in Other income and
expense as these are considered capital transactions and are excluded from underwriting results. Bad debt expense for
uncollectible premiums is also included in Other income and expense.
19. Segment information
Chubb operates through six business segments: North America Commercial P&C Insurance, North America Personal P&C
Insurance, North America Agricultural Insurance, Overseas General Insurance, Global Reinsurance, and Life Insurance. These
segments distribute their products through various forms of brokers, agencies, and direct marketing programs. All business
segments have established relationships with reinsurance intermediaries. Effective July 1, 2023, the results of Huatai’s life and
asset management businesses, included within the Life Insurance segment, and the results of Huatai’s P&C insurance business,
included within Overseas General Insurance, are presented gross within Underwriting income (loss), Net investment income
(loss), and Other income (expense) as required under consolidation accounting. Huatai’s results prior to July 1, 2023 were
included net within Other (income) expense based on our ownership interest as required under equity method accounting.
Effective July 1, 2022, the results of the acquired Cigna's business in Asia are included in our Life Insurance segment and, to a
lesser extent, Overseas General Insurance segment according to the nature of the business written. Results for the years ended
December 31, 2022 and 2021 are adjusted to reflect the adoption of LDTI. Refer to Note 1 x) for additional information.
•
•
•
•
•
The North America Commercial P&C Insurance segment comprises operations that provide P&C and A&H insurance and
services to large, middle market, and small commercial businesses in the U.S., Canada, and Bermuda. This segment
includes our retail divisions: Major Accounts; Commercial Insurance, including Small Commercial Insurance; Chubb
Bermuda, our high excess business; and Westchester, our wholesale and specialty division. These divisions write a variety
of coverages, including property, casualty, workers’ compensation, package policies, risk management, financial lines,
marine, construction, environmental, medical risk, cyber risk, surety, excess casualty, and A&H insurance.
The North America Personal P&C Insurance segment comprises the business written by Chubb Personal Risk Services
division, which includes high net worth personal lines business, with operations in the U.S. and Canada. This segment
provides affluent and high net worth individuals and families with homeowners, high value automobile and collector cars,
valuable articles (including fine arts), personal and excess liability, travel insurance, and recreational marine insurance and
services.
The North America Agricultural Insurance segment includes the business written by Rain and Hail Insurance Service, Inc. in
the U.S. and Canada, which provides comprehensive multiple peril crop insurance (MPCI) and crop-hail insurance, and
Chubb Agribusiness, which offers farm and ranch property as well as specialty P&C coverages, including commercial
agriculture products.
The Overseas General Insurance segment includes the business written by two Chubb divisions that provides both
commercial and consumer P&C insurance and services in the 51 countries and territories outside of North America where
the company operates. Chubb International, our retail division, provides commercial P&C, A&H and traditional and specialty
personal lines for large corporations, middle markets and small customers through retail brokers, agents and other channels
locally around the world. CGM provides commercial P&C excess and surplus lines wholesale business primarily through
wholesale brokers in the London market and through Lloyd’s. These divisions write a variety of coverages, including
traditional commercial P&C, specialty categories such as financial lines, marine, energy, aviation, political risk and
construction, as well as group A&H and traditional and specialty personal lines.
The Global Reinsurance segment includes the reinsurance business written by Chubb Tempest Re, comprising Chubb
Tempest Re Bermuda, Chubb Tempest Re USA, Chubb Tempest Re International, and Chubb Tempest Re Canada. Chubb
Tempest Re provides a broad range of traditional and specialty reinsurance coverages to a diverse array of primary P&C
companies, including small, mid-sized, and multinational ceding companies.
F-109
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
•
The Life Insurance segment includes our international life operations (Chubb Life), which includes individual life and group
benefit insurance primarily in Asia and Latin America. The Life Insurance segment also includes Chubb Tempest Life Re
(Chubb Life Re), and the North American supplemental A&H and life insurance business of Combined Insurance.
Corporate primarily includes the results of all run-off A&E exposures, run-off Brandywine business, Westchester specialty
operations for 1996 and prior years, and certain other run-off exposures, including molestation claims. In addition, Corporate
includes the results of our non-insurance companies including Chubb Limited, Chubb Group Management and Holdings Ltd.,
and Chubb INA Holdings Inc. Effective July 1, 2023, the results of Huatai Group’s non-insurance operations, comprising real
estate and holding company activity, are included in Corporate. Our exposure to A&E and molestation claims principally arises
out of liabilities acquired when we purchased Westchester Specialty in 1998, CIGNA’s P&C business in 1999, and Chubb Corp
in 2016.
Management uses Underwriting income (loss) as the basis for segment performance. Chubb calculates Underwriting income
(loss) by subtracting Losses and loss expenses, Policy benefits, Policy acquisition costs, and Administrative expenses from Net
premiums earned. Segment income (loss) includes Underwriting income (loss), Net investment income (loss), and other
operating income and expense items such as each segment's share of the operating income (loss) related to partially-owned
entities and miscellaneous income and expense items for which the segments are held accountable. Our main measure of
segment performance is Segment income (loss), which also includes Amortization of purchased intangibles acquired by the
segment. We determined that this definition of Segment income (loss) is appropriate and aligns with how the business is
managed. We continue to evaluate our segments as our business continues to evolve and may further refine our segments and
Segment income (loss) measures.
Revenue and expenses managed at the corporate level, including Net realized gains (losses), Market risk benefit gains (losses),
Interest expense, Cigna integration expenses, Income tax expense, and Net income (loss) attributable to noncontrolling interests
are reported within Corporate. Cigna integration expenses are one-time costs that are directly attributable to third-party
consulting fees, employee-related retention costs, and other professional and legal fees primarily related to the acquisition of
Cigna's business in Asia. These items are not allocated to the segment level as they are one-time in nature and are not related to
the ongoing business activities of the segment. The Chief Executive Officer does not manage segment results or allocate
resources to segments when considering these costs, and therefore are excluded from our definition of Segment income (loss).
Certain items are presented in a different manner for segment reporting purposes than in the Consolidated Financial Statements.
These items are reconciled to the consolidated presentation in the Segment measure reclass column below and include:
• Losses and loss expenses include 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 losses and loss expenses.
• Policy benefits include fair value changes on separate accounts that do not qualify for separate accounting under U.S. GAAP.
These gains and losses have been reclassified from Other (income) expense. We view gains and losses from fair value
changes in both separate account assets and liabilities as part of the results of our underwriting operations, and therefore
these gains and losses are reclassified to Policy benefits.
• Net investment income includes investment income reclassified from Other (income) expense related to partially-owned
investment companies (private equity partnerships) where our ownership interest is in excess of three percent. We view
investment income from these equity-method private equity partnerships as Net investment income for segment reporting
purposes.
F-110
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
The following tables present the Statement of Operations by segment:
North
America
For the Year Ended
Commercial
December 31, 2023
P&C
(in millions of U.S. dollars)
Insurance
Net premiums written
Net premiums earned
Losses and loss expenses
Policy benefits
Policy acquisition costs
Administrative expenses
Underwriting income (loss)
Net investment income
Other (income) expense
11,256
18,416
2,515
3,017
3,395
1,250
22
—
Amortization expense of
purchased intangibles
—
North
America
Personal
P&C
Insurance
North
America
Agricultural
Insurance
Overseas
General
Insurance
Global
Reinsurance
Life
Insurance
Corporate
Segment
Measure
Reclass
Chubb
Consolidated
$ 19,237 $ 5,878 $ 3,188 $ 12,575 $ 1,018 $ 5,465 $ — $ — $ 47,361
5,536
3,169
12,231
962
5,398
3,511
2,874
5,643
426
114
—
—
457
—
3,216
1,128
150
3,113
264
1,089
(1) 1,219
146
1,799
895
37
235
208
771
208
756
—
281
—
—
402
(683)
—
45,712
(5) 24,100
(45)
3,628
—
—
50
8,259
4,007
5,718
25
(385)
4,937
(25)
(2)
(115)
(380)
(340)
(836)
70
—
30
176
—
310
329
568
358
3
9
63
1
25
Segment income (loss)
Net realized gains (losses)
$ 6,390 $ 914 $
Market risk benefits gains
(losses)
Interest expense
Cigna integration expenses
Income tax expense
Net income (loss)
Net loss attributable to
noncontrolling interests
Net income (loss)
attributable to Chubb
183 $ 2,649 $
445 $ 1,049 $
(454) $
5 $ 11,181
(602)
(5)
(607)
(307)
672
69
511
—
—
—
—
(307)
672
69
511
$ (2,615) $ — $ 9,015
(13)
—
(13)
$ (2,602) $ — $ 9,028
F-111
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
36
1
26
North
America
For the Year Ended
Commercial
December 31, 2022
P&C
(in millions of U.S. dollars)
Insurance
Net premiums written
Net premiums earned
Losses and loss expenses
Policy benefits
Policy acquisition costs
Administrative expenses
Underwriting income (loss)
Net investment income
Other (income) expense
17,107
10,828
2,313
1,113
2,853
2,247
17
—
North
America
Personal
P&C
Insurance
North
America
Agricultural
Insurance
Overseas
General
Insurance
Global
Reinsurance
Life
Insurance
Corporate
Segment
Measure
Reclass
Chubb
Consolidated
$ 17,889 $ 5,313 $ 2,907 $ 11,060 $
943 $ 3,608 $ — $ — $ 41,720
5,180
2,838
10,803
922
3,510
3,186
2,557
4,894
670
85
—
—
358
—
1,998
1,057
126
2,818
(10) 1,070
165
1,663
(24)
240
36
785
510
132
509
626
2
281
1
291
646
283
4
—
363
—
—
385
(748)
—
40,360
(11)
22,572
(42)
2,314
—
—
53
7,339
3,395
4,740
—
(240)
3,742
(30)
292
(198)
89
Amortization expense of
purchased intangibles
Segment income (loss)
Net realized gains (losses)
Market risk benefits gains
(losses)
Interest expense
Cigna integration expenses
Income tax expense
Net income (loss)
—
10
57
—
10
182
—
285
$ 5,083 $ 915 $
174 $ 2,230 $
256 $ 661 $ (1,222) $
11 $
8,108
(1,074)
(11)
(1,085)
80
570
48
1,239
—
—
—
—
80
570
48
1,239
$ (4,073) $ — $
5,246
North
America
Personal
P&C
Insurance
North
America
Agricultural
Insurance
Overseas
General
Insurance
Global
Reinsurance
Life
Insurance
Corporate
Segment
Measure
Reclass
Chubb
Consolidated
North
America
For the Year Ended
Commercial
December 31, 2021
P&C
(in millions of U.S. dollars)
Insurance
Net premiums written
Net premiums earned
Losses and loss expenses
Policy benefits
Policy acquisition costs
Administrative expenses
Underwriting income (loss)
Net investment income
Other (income) expense
10,015
15,461
2,082
1,052
2,312
2,078
31
—
Amortization expense of
purchased intangibles
Segment income
Net realized gains (losses)
Market risk benefits gains
(losses)
Interest expense
Income tax expense
Net income
$ 16,415 $ 5,002 $ 2,388 $ 10,713 $
873 $ 2,436 $ — $ — $ 37,827
4,915
2,338
10,441
798
2,339
2,924
1,962
4,783
632
150
—
—
360
—
1,388
1,001
124
2,799
(3) 1,078
200
35
552
332
—
572
—
—
365
276
714
249
(2)
—
10
255
1,421
(69)
(83)
(937)
28
1
26
597
—
331
—
407
(55)
(179)
3,456
(108) (2,118)
(171)
(2,367)
48
—
5
198
—
287
—
36,292
(8)
21,030
(8)
1,740
—
—
16
6,758
3,135
3,629
$ 4,359 $ 955 $
256 $ 1,970 $
262 $ 427 $ 928 $
8 $
9,165
1,038
(8)
1,030
91
492
1,269
—
—
—
91
492
1,269
$ 296 $ — $
8,525
Underwriting assets are reviewed in total by management for purposes of decision-making. Other than certain insurance related
balances, Goodwill and Other intangible assets, Chubb does not allocate assets to its segments.
F-112
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
The following table presents net premiums earned for each segment by line of business:
(in millions of U.S. dollars)
North America Commercial P&C Insurance
Property & other short-tail lines
Casualty & all other
A&H
Total North America Commercial P&C Insurance
North America Personal P&C Insurance
Personal automobile
Personal homeowners
Personal other
Total North America Personal P&C Insurance
North America Agricultural Insurance
Overseas General Insurance
Property & other short-tail lines
Casualty & all other
Personal lines
A&H
Total Overseas General Insurance
Global Reinsurance
Property
Property catastrophe
Casualty & all other
Total Global Reinsurance
Life Insurance
Life
A&H
Total Life Insurance
Total net premiums earned
For the Year Ended December 31
2023
2022
2021
$
3,985 $
3,383 $
2,942
13,764
13,056
11,905
667
668
614
18,416
17,107
15,461
859
3,833
844
5,536
3,169
3,831
3,526
2,405
2,469
811
3,557
812
5,180
2,838
3,382
3,232
2,020
2,169
781
3,384
750
4,915
2,338
3,105
3,114
2,109
2,113
12,231
10,803
10,441
331
159
472
962
2,301
3,097
5,398
211
208
503
922
1,455
2,055
3,510
151
190
457
798
1,257
1,082
2,339
$
45,712 $
40,360 $
36,292
The following table presents net premiums earned by geographic region. Allocations have been made on the basis of location of
risk:
2023
2022
2021
(1)
(2)
Europe includes Middle East and Africa regions.
2023 includes the consolidated results of Huatai Group effective July 1, 2023.
North America
Europe (1)
Asia Pacific /
Japan (2)
Latin America
65 %
69 %
70 %
11 %
11 %
12 %
18 %
14 %
12 %
6 %
6 %
6 %
F-113
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
20. Earnings per share
(in millions of U.S. dollars, except share and per share data)
2023
2022
2021
As Adjusted
Year Ended December 31
Numerator:
Net income
Net loss attributable to noncontrolling interests
Net income attributable to Chubb
Denominator:
Denominator for basic earnings per share attributable to Chubb:
$
$
9,015 $
5,246 $
8,525
(13)
—
—
9,028 $
5,246 $
8,525
Weighted-average shares outstanding
410,845,263
419,779,847
439,968,422
Denominator for diluted earnings per share attributable to Chubb:
Share-based compensation plans
3,357,305
3,747,597
3,228,856
Weighted-average shares outstanding and assumed
conversions
Basic earnings per share attributable to Chubb
Diluted earnings per share attributable to Chubb
Potential anti-dilutive share conversions
414,202,568
423,527,444
443,197,278
$
$
21.97 $
12.50 $
21.80 $
12.39 $
19.38
19.24
2,385,099
1,467,840
1,532,066
Excluded from weighted-average shares outstanding and assumed conversions is the impact of securities that would have been
anti-dilutive during the respective years. These securities consisted of stock options in which the underlying exercise prices were
greater than the average market prices of our Common Shares. Refer to Note 16 for additional information on stock options.
21. Related party transactions
ABR Re
At December 31, 2023, we owned 18.7 percent of the common equity of ABR Reinsurance Capital Holdings Ltd. and warrants
to acquire 0.5 percent of additional equity. ABR Reinsurance Capital Holdings Ltd., is the parent company of ABR Reinsurance
Ltd. (ABR Re), an independent reinsurance company. Through long-term arrangements, Chubb will be the sole source of
reinsurance risks ceded to ABR Re, and BlackRock, Inc. serves as an investment management service provider. As an investor,
Chubb is expected to benefit from underwriting profit generated by ABR Re’s reinsuring a wide range of Chubb’s primary
insurance business and the income and capital appreciation BlackRock, Inc. seeks to deliver through its investment
management services. In addition, Chubb has an arrangement with BlackRock, Inc. under which both Chubb and BlackRock,
Inc. will be entitled to an equal share of the aggregate amount of certain fees, including underwriting and investment
management performance related fees, in connection with their respective reinsurance and investment management
arrangements with ABR Re. In connection with this arrangement with BlackRock, Inc., we recorded income of $8 million, $7
million, and $11 million in 2023, 2022, and 2021, respectively, which is recorded in Other (income) expense on the
Consolidated statements of operations.
ABR Re is a variable interest entity; however, Chubb is not the primary beneficiary and does not consolidate ABR Re because
Chubb does not have the power to control and direct ABR Re’s most significant activities, including investing and underwriting.
Our ownership interest is accounted for under the equity method of accounting. Chubb cedes premiums to ABR Re and
recognizes the associated commissions.
F-114
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
Transactions generated under ABR Re agreements were as follows:
(in millions of U.S. dollars)
Consolidated statements of operations
Ceded premiums written
Commissions received
Consolidated balance sheets
Reinsurance recoverable on losses and loss expenses
Ceded reinsurance premium payable
Year Ended December 31
2023
2022
2021
441 $
119 $
507 $
138 $
442
133
1,241 $
1,050
40 $
110
$
$
$
$
Aquiline Capital Partners LLC
Chubb invests in private investment funds managed by Aquiline Capital Partners LLC (collectively, Aquiline Funds), of which its
chief executive officer is related to a member of our senior management team. We have more than a three percent ownership
interest in these funds and therefore account for them under the equity method of accounting. At December 31, 2023, Chubb
has approximately $182 million of future contribution commitments to Aquiline Funds. Transactions generated from
investments in Aquiline Funds are as follows:
(in millions of U.S. dollars)
Consolidated statements of operations
Other income (expense)
Consolidated balance sheets
Private equities
Year Ended December 31
2023
2022
2021
36 $
8 $
68
368 $
271
$
$
Starr Indemnity & Liability Company and its affiliates (collectively, Starr)
We had previously entered into agency, claims services, and underwriting services with Starr, the Chairman of which is related
to a member of our senior management team. The Board has reviewed and approved these arrangements with Starr. A number
of our agreements with Starr were terminated effective as of April 2023. However, Starr continues to provide certain services to
Chubb, including claims administration, in respect of insurance policies placed prior to the termination, pursuant to the terms of
the applicable agreements. Under the agency agreement, we secured the ability to sell our insurance policies through Starr as
one of our non-exclusive agents for writing policies, contracts, binders, or agreements of insurance or reinsurance. Under the
claims services agreements, Starr adjusts the claims under policies and arranged for third party treaty and facultative
agreements covering such policies. Under the underwriting services agreements, Starr was the underwriter of insurance policies
on our behalf and we agreed to reinsure such policies to Starr under quota share reinsurance agreements. Transactions
generated under Starr agreements were as follows:
(in millions of U.S. dollars)
Consolidated statement of operations
Gross premiums written
Ceded premiums written
Commissions paid
Commissions received
Losses and loss expenses
Consolidated balance sheets
Reinsurance recoverable on losses and loss expenses
Ceded reinsurance premium payable
Year Ended December 31
2023
2022
2021
216 $
115 $
38 $
26 $
618 $
353 $
122 $
79 $
180 $
225 $
592
321
114
73
157
503 $
44 $
541
96
$
$
$
$
$
$
$
F-115
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Chubb Limited and Subsidiaries
22. Statutory financial information
Our subsidiaries file financial statements prepared in accordance with statutory accounting practices prescribed or permitted by
insurance regulators. Statutory accounting differs from U.S. GAAP in the reporting of certain reinsurance contracts, investments,
subsidiaries, acquisition expenses, fixed assets, deferred income taxes, and certain other items. Some jurisdictions impose
complex regulatory requirements on insurance companies while other jurisdictions impose fewer requirements. In some
jurisdictions, we must obtain licenses issued by governmental authorities to conduct local insurance business. These licenses
may be subject to reserves and minimum capital and solvency tests. Jurisdictions may impose fines, censure, and/or criminal
sanctions for violation of regulatory requirements. The 2023 amounts below are based on estimates.
Chubb's insurance and reinsurance subsidiaries are subject to insurance laws and regulations in the jurisdictions in which they
operate. These regulations include restrictions that limit the amount of dividends or other distributions, such as loans or cash
advances, available to shareholders without prior approval of the local insurance regulatory authorities. The amount of dividends
available to be paid in 2024 without prior approval totals $7.4 billion.
The statutory capital and surplus of our insurance subsidiaries met regulatory requirements for 2023, 2022, and 2021. The
minimum amounts of statutory capital and surplus necessary to satisfy regulatory requirements was $41.0 billion and
$36.9 billion for December 31, 2023 and 2022, respectively. These minimum regulatory capital requirements were
significantly lower than the corresponding amounts required by the rating agencies which review Chubb’s insurance and
reinsurance subsidiaries.
The following tables present the combined statutory capital and surplus and statutory net income (loss) of our Property and
casualty and Life subsidiaries:
(in millions of U.S. dollars)
Statutory capital and surplus
Property and casualty
Life
(in millions of U.S. dollars)
Statutory net income (loss)
Property and casualty
Life
December 31
2022
2023
$
$
45,271 $
40,824
7,278 $
4,834
2023
Year Ended December 31
2021
2022
$
$
8,699 $
4,028 $
7,983
459 $
1,425 $
424
Several insurance subsidiaries follow accounting practices prescribed or permitted by the jurisdiction of domicile that differ from
the applicable local statutory practice. The application of prescribed or permitted accounting practices does not have a material
impact on Chubb's statutory surplus and income. As prescribed by the Restructuring discussed previously in Note 8, certain of
our U.S. subsidiaries discount certain A&E liabilities, which increased statutory capital and surplus by approximately $115
million and $120 million at December 31, 2023 and 2022, respectively.
Federal Insurance Company (Federal), a direct subsidiary of Chubb INA Holdings Inc., has a permitted practice granted by the
Indiana Department of Insurance that relates to its investment in a foreign affiliate. Under Statement of Statutory Accounting
Principles No. 97, Investments in Subsidiary, Controlled and Affiliated Entities, in order for a reporting entity to admit its
investments in foreign subsidiaries and affiliates, audited financial statements of the subsidiary or affiliate must be obtained to
support the carrying value. Such financial statements must be prepared in accordance with U.S. GAAP, or alternatively, in
accordance with the local statutory requirements in the subsidiary’s or affiliate’s country of domicile, with an audited footnote
reconciliation of net income and shareholder’s equity as reported to a U.S. GAAP basis. With the explicit permission of the
Indiana Department of Insurance, Federal obtains audited financial statements for its admitted foreign affiliate, which had an
aggregate carrying value of approximately $71 million and $79 million at December 31, 2023 and 2022, respectively,
prepared in accordance with their respective local statutory requirements and supplemented with a separate unaudited
reconciliation of shareholder’s equity as reported to a U.S. GAAP basis.
F-116
SCHEDULE I
Chubb Limited and Subsidiaries
SUMMARY OF INVESTMENTS – OTHER THAN INVESTMENTS IN RELATED PARTIES
December 31, 2023
(in millions of U.S. dollars)
Short-term investments
Fixed maturities available-for-sale
U.S. Treasury / Agency
Non-U.S.
Corporate and asset-backed securities
Mortgage-backed securities
Municipal
Total fixed maturities available-for-sale
Private debt held-for-investment
Equity securities
Industrial, miscellaneous, and all other
Private equities (2)
Other investments
Cost or
Amortized Cost,
Net (1)
Fair Value
Amount at Which
Shown in the
Balance Sheet
$
4,551 $
4,551 $
4,551
3,721
35,869
44,591
23,717
3,074
3,590
35,164
42,830
22,058
2,929
3,590
35,164
42,830
22,058
2,929
110,972
106,571
106,571
2,553
2,560
2,553
3,455
13,710
5,527
3,455
13,710
5,527
3,455
13,710
5,527
Total investments - other than investments in related parties
$
140,768 $
136,374 $
136,367
(1) Net of valuation allowance for expected credit losses.
(2)
Excludes $368 million of related party investments.
F-117
SCHEDULE II
Chubb Limited and Subsidiaries
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
BALANCE SHEETS (Parent Company Only)
(in millions of U.S. dollars)
Assets
As Adjusted
December 31
December 31
2023
2022
Investments in subsidiaries and affiliates on equity basis
$
59,952 $
Total investments
Cash
Due from subsidiaries and affiliates, net
Other assets
Total assets
Liabilities
Affiliated notional cash pooling programs
Accounts payable, accrued expenses, and other liabilities
Total liabilities
Shareholders' equity
Common Shares
Common Shares in treasury
Additional paid-in capital
Retained earnings
Accumulated other comprehensive income (loss)
Total Chubb shareholders' equity
Total liabilities and shareholders' equity
59,952
77
717
12
50,372
50,372
40
959
16
$
$
60,758 $
51,387
594 $
657
1,251
241
(4,400)
15,665
54,810
252
616
868
10,346
(5,113)
7,166
48,305
(6,809)
(10,185)
59,507
$
60,758 $
50,519
51,387
The condensed financial information should be read in conjunction with the Consolidated Financial Statements and notes thereto.
F-118
SCHEDULE II (continued)
Chubb Limited and Subsidiaries
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
STATEMENTS OF OPERATIONS (Parent Company Only)
For the years ended December 31, 2023, 2022, and 2021
(in millions of U.S. dollars)
Revenues
Net investment income (loss) (1)
Equity in net income of subsidiaries and affiliates
Total revenues
Expenses
Administrative and other (income) expense
Cigna integration expenses
Income tax (benefit) expense
Total expenses
Net income attributable to Chubb
Comprehensive income (loss) attributable to Chubb
(1) Includes net investment income, interest income, and net realized gains (losses).
2023
2022
As Adjusted
2021
$
(21) $
83 $
9,065
9,044
72
—
(56)
16
5,256
5,339
65
10
18
93
$
$
9,028 $
5,246 $
12,404 $
(3,865) $
96
8,500
8,596
56
—
15
71
8,525
6,384
As Adjusted
2021
4,167
—
—
(1,401)
(4,861)
2,003
8
The condensed financial information should be read in conjunction with the Consolidated Financial Statements and notes thereto.
STATEMENTS OF CASH FLOWS (Parent Company Only)
For the years ended December 31, 2023, 2022, and 2021
(in millions of U.S. dollars)
Net cash flows from operating activities (1)
Cash flows from investing activities
Capital contribution
Net cash flows used for investing activities
Cash flows from financing activities
Dividends paid on Common Shares
Common Shares repurchased
Repayment of intercompany loans
Net proceeds from affiliated notional cash pooling programs (2)
Net cash flows used for financing activities
Effect of foreign currency rate changes on cash
Net increase (decrease) in cash
Cash – beginning of year
Cash – end of year
2023
2022
$
3,273 $
7,831 $
—
—
(1,394)
(2,411)
231
342
(4,046)
(4,046)
(1,375)
(2,894)
279
245
(3,232)
(3,745)
(4,251)
(4)
37
40
77 $
(1)
39
1
40 $
1
(83)
84
1
$
(1) Includes cash dividends received from subsidiaries of $3.3 billion, $7.7 billion, and $3.7 billion in 2023, 2022, and 2021, respectively.
(2) Chubb maintains two notional multicurrency cash pools (Pools) with a third-party bank. Refer to Note 1 i) for additional information.
The condensed financial information should be read in conjunction with the Consolidated Financial Statements and notes thereto.
F-119
SCHEDULE IV
Chubb Limited and Subsidiaries
SUPPLEMENTAL INFORMATION CONCERNING REINSURANCE
Premiums Earned
For the years ended December 31, 2023, 2022, and
2021
(in millions of U.S. dollars, except for percentages)
Direct Amount
Ceded To Other
Companies
Assumed
From Other
Companies
Net Amount
Percentage
of Amount
Assumed to
Net
2023
Life insurance face amount in force
$
248,973 $
55,665 $
5,408 $
198,716
3 %
2 %
3 %
9 %
4 %
12 %
2 %
4 %
11 %
Premiums:
Property and casualty
Accident and health
Life
Total
2022 - As Adjusted
$
42,598 $
9,549 $
4,129 $
37,178
11 %
6,580
2,404
446
164
99
61
6,233
2,301
$
51,582 $
10,159 $
4,289 $
45,712
Life insurance face amount in force
$
215,759 $
50,105 $
7,242 $
172,896
Premiums:
Property and casualty
Accident and health
Life
Total
2021 - As Adjusted
$
39,449 $
9,678 $
4,242 $
34,013
5,206
1,505
411
106
97
56
4,892
1,455
$
46,160 $
10,195 $
4,395 $
40,360
Life insurance face amount in force
$
139,856 $
34,545 $
7,680 $
112,991
7 %
Premiums:
Property and casualty
Accident and health
Life
Total
$
35,767 $
7,982 $
3,441 $
31,226
4,062
1,287
362
89
109
59
3,809
1,257
$
41,116 $
8,433 $
3,609 $
36,292
11 %
3 %
5 %
10 %
F-120
SCHEDULE VI
Chubb Limited and Subsidiaries
SUPPLEMENTARY INFORMATION CONCERNING PROPERTY AND CASUALTY OPERATIONS
As of and for the years ended December 31, 2023, 2022, and 2021
(in millions of U.S. dollars)
Net
Reserves
for Unpaid
Losses
and Loss
Expenses
Deferred
Policy
Acquisition
Costs
Unearned
Premiums
Net
Premiums
Earned
Net
Investment
Income
Net Losses and Loss
Expenses Incurred
Related to
Current
Year
Prior Year
Amortization
of Deferred
Policy
Acquisition
Costs
Net Paid
Losses
and Loss
Expenses
Net
Premiums
Written
2023
$ 3,346 $ 62,238 $ 22,051 $ 40,314 $ 4,181 $ 24,956 $
(856) $
7,391 $ 21,011 $ 41,896
2022 - As Adjusted $ 2,877 $ 58,661 $ 19,713 $ 36,850 $ 3,233 $ 23,680 $ (1,108) $
6,480 $ 19,537 $ 38,112
2021 - As Adjusted $ 2,718 $ 56,198 $ 18,496 $ 33,953 $ 3,049 $ 21,986 $
(956) $
5,945 $ 16,948 $ 35,391
F-121
REPORT OF THE STATUTORY AUDITOR TO THE GENERAL MEETING OF CHUBB LIMITED, ZURICH ON
THE (US GAAP) CONSOLIDATED FINANCIAL STATEMENTS
Report of the statutory auditor on the consolidated financial statements
Opinion
We have audited the accompanying consolidated financial statements of Chubb Limited and its subsidiaries (the "Company"),
which comprise the consolidated balance sheets as of December 31, 2023 and 2022, and the related consolidated statements
of operations and comprehensive income, consolidated statements of shareholders’ equity and consolidated statements of cash
flows for each of the three years in the period ended December 31, 2023, and the related notes, including a summary of
significant accounting policies (collectively referred to as the "consolidated financial statements").
In our opinion, the accompanying consolidated financial statements (pages F-7 to F-116) present fairly, in all material respects,
the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 2023 in accordance with accounting principles generally accepted
in the United States of America (US GAAP) and comply with Swiss law.
Basis for opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of America (US GAAS),
Swiss law and Swiss Standards on Auditing (SA-CH). Our responsibilities under those provisions and standards are further
described in the Auditor's responsibilities for the audit of the consolidated financial statements section of our report. We are
independent of the Company in accordance with the provisions of Swiss law and the requirements of the Swiss audit profession,
as well as the independence and other ethical requirements relating to our audit, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Key audit matters
Key audit matters are those matters that were communicated with those charged with governance and, in our professional
judgement, were of most significance in our audit of the consolidated financial statements of the current period. These matters
were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
F-122
REPORT OF THE STATUTORY AUDITOR TO THE GENERAL MEETING OF CHUBB LIMITED, ZURICH ON
THE (US GAAP) CONSOLIDATED FINANCIAL STATEMENTS (continued)
Valuation of Unpaid Losses and Loss Expenses, Net of Reinsurance
Key audit matter
How our audit addressed the key audit matter
Addressing the matter involved performing procedures and
evaluating audit evidence in connection with forming our
overall opinion on the consolidated financial statements.
These procedures included testing the effectiveness of controls
relating to the Company’s valuation of unpaid losses and loss
expenses, net of reinsurance, including controls over the
selection of actuarial reserving methods and development of
significant assumptions. These procedures also included,
among others, the involvement of professionals with
specialized skill and knowledge to assist in performing one or
a combination of procedures, including (i) independently
estimating reserves on a sample basis using actual historical
data and loss development patterns, as well as industry data
and other benchmarks, to develop an independent estimate
and comparing the independent estimate to management’s
actuarially determined reserves and (ii) evaluating the
appropriateness of management’s actuarial reserving methods
and the reasonableness of the aforementioned assumptions,
as well as assessing qualitative adjustments to carried reserves
and the consistency of management’s approach period-over-
period. Performing these procedures involved testing the
completeness and accuracy of data provided by management.
As described in Note 8 to the consolidated financial
statements, as of December 31, 2023, the Company's liability
for unpaid losses and loss expenses, net of reinsurance, was
$62.2 billion. The majority of the Company's net unpaid losses
and loss expenses arise from the Company's long-tail casualty
business (such as general liability and professional liability),
U.S. sourced workers' compensation, asbestos-related,
environmental pollution and other exposures with high
estimation uncertainty. The process of establishing loss and
loss expense reserves requires the use of estimates and
judgments based on circumstances underlying the insured loss
at the date of accrual. The judgments involved in projecting
the ultimate losses include the use and interpretation of
various standard actuarial reserving methods that place
reliance on the extrapolation of actual historical data, loss
development patterns, industry data, and other benchmarks as
appropriate. The reserves for the various product lines each
require different qualitative and quantitative assumptions and
judgments, including changes in business mix or volume,
changes in ceded reinsurance structures, changes in claims
handling practices, reported and projected loss trends,
inflation, the legal environment, and the terms and conditions
of the contracts sold to the Company's insured parties.
The principal considerations for our determination that
performing procedures relating to the valuation of unpaid
losses and loss expenses, net of reinsurance, from the long-tail
and other exposures as described above, is a key audit matter
are (i) the significant judgment by management in determining
the reserve liability, which in turn led to a high degree of
auditor subjectivity and judgment in performing procedures
relating to the valuation; (ii) the significant audit effort and
judgment in evaluating the audit evidence relating to the
actuarial reserving methods and assumptions related to
extrapolation of actual historical data, loss development
patterns, industry data, other benchmarks, and the impact of
qualitative and quantitative subjective assumptions and
judgments; and (iii) the audit effort involved the use of
professionals with specialized skill and knowledge.
Other matter
Accounting principles generally accepted in the United States of America (US GAAP) requires that the supplementary
information based on the requirements of ASU 2015-09, Disclosures about Short-Duration Contracts, on pages F-52 to F-63 be
presented to supplement the consolidated financial statements. Such information is the responsibility of management and,
although not part of the consolidated financial statements, is required by the Financial Accounting Standards Board, which
considers it an essential part of financial reporting for placing the consolidated financial statements in an appropriate
operational, economic, or historical context. We have applied certain limited procedures to the required supplementary
information in accordance with auditing standards generally accepted in the United States of America (US GAAS), which
consisted of inquiries of management about the methods of preparing the information and comparing the information for
consistency with management's responses to our inquiries, the consolidated financial statements and other knowledge we
obtained during our audit of the consolidated financial statements. We do not express an opinion or provide any assurance on
the supplementary information because the limited procedures do not provide us with sufficient evidence to express an opinion
or provide any assurance.
Responsibilities of the Board of Directors for the consolidated financial statements
The Board of Directors is responsible for the preparation and fair presentation of the consolidated financial statements in
accordance with US GAAP and the provisions of Swiss law, and for the design, implementation, and maintenance of internal
control relevant to the preparation and fair presentation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
F-123
REPORT OF THE STATUTORY AUDITOR TO THE GENERAL MEETING OF CHUBB LIMITED, ZURICH ON
THE (US GAAP) CONSOLIDATED FINANCIAL STATEMENTS (continued)
In preparing the consolidated financial statements, the Board of Directors is required to evaluate whether there are conditions or
events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for
one year after the date the consolidated financial statements are available to be issued; to disclose, as applicable, matters
related to going concern; and to use the going concern basis of accounting unless the Board of Directors either intends to
liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Auditor's responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that
an audit conducted in accordance with US GAAS, Swiss law and SA-CH will always detect a material misstatement when it
exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are
considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment
made by a reasonable user based on the consolidated financial statements.
In performing an audit in accordance with US GAAS, Swiss law and SA-CH, we:
•
•
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or
error, design and perform audit procedures responsive to those risks. Such procedures include examining, on a test
basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal
control. Accordingly, no such opinion is expressed.
•
•
•
Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates
made, as well as evaluate the overall presentation of the consolidated financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial
doubt about the Company's ability to continue as a going concern for a reasonable period of time.
Conclude on the appropriateness of the Board of Directors' use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial
statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company
to cease to continue as a going concern.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Company to express an opinion on the consolidated financial statements. We are responsible for the
direction, supervision, and performance of the Company audit. We remain solely responsible for our audit opinion.
We are required to communicate with the Board of Directors regarding, among other matters, the planned scope and timing of
the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
We also provide the Board of Directors or its relevant committee with a statement that we have complied with relevant ethical
requirements regarding independence, and communicate with them regarding all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards
applied.
From the matters communicated with the Board of Directors or its relevant committee, we determine those matters that were of
most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit
F-124
REPORT OF THE STATUTORY AUDITOR TO THE GENERAL MEETING OF CHUBB LIMITED, ZURICH ON
THE (US GAAP) CONSOLIDATED FINANCIAL STATEMENTS (continued)
matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter
or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the
adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
Other information
The Board of Directors is responsible for the other information. The other information comprises the information included in the
annual report, but does not include the consolidated financial statements, the Swiss statutory financial statements of Chubb
Limited, the Swiss statutory compensation report of Chubb Limited and our auditor's reports thereon. The annual report is
expected to be made available to us after the date of this auditor's report.
Our opinion on the consolidated financial statements does not cover the other information and we will not express any form of
assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information when it
becomes available and, in doing so, consider whether the other information is materially inconsistent with the consolidated
financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
Report on other legal and regulatory requirements
In accordance with article 728a para. 1 item 3 CO and PS-CH 890, we confirm the existence of an internal control system that
has been designed, pursuant to the instructions of the Board of Directors, for the preparation of consolidated financial
statements.
We recommend that the consolidated financial statements submitted to you be approved.
PricewaterhouseCoopers AG
/s/ Peter Eberli
Peter Eberli
Licensed Audit expert
Auditor in charge
Zurich, February 23, 2024
/s/ Beat Walter
Beat Walter
Licensed Audit expert
F-125
CHUBB LIMITED
SWISS STATUTORY FINANCIAL STATEMENTS
December 31, 2023
S-1
SWISS STATUTORY BALANCE SHEET (Unconsolidated)
Chubb Limited
(in millions of Swiss francs)
Assets
Cash and cash equivalents
Prepaid expenses and other assets
Receivable from subsidiaries
Total current assets
Investments in subsidiaries
Loans to subsidiaries
Other assets
Total non-current assets
Total assets
Liabilities
Accounts payable
Payable to subsidiaries
Capital distribution payable
Deferred unrealized exchange gain
Total short-term liabilities
Total liabilities
Shareholders' equity
Share capital
Statutory capital reserves:
Capital contribution reserves
Reserve for dividends from capital contributions
Reserves for treasury shares
Treasury shares
Statutory retained earnings:
Retained earnings
Profit for the year
Total shareholders' equity
Total liabilities and shareholders' equity
The accompanying notes form an integral part of these statutory financial statements
December 31
December 31
2023
2022
65
7
414
486
38,440
302
6
38,748
39,234
543
752
302
167
1,764
1,764
37
11
49
97
38,184
1,495
7
39,686
39,783
388
1,289
326
32
2,035
2,035
216
10,780
15,756
1,268
1,901
6,858
1,213
2,224
(2,086)
(2,879)
17,357
3,058
37,470
39,234
11,904
7,648
37,748
39,783
S-2
SWISS STATUTORY STATEMENT OF INCOME (Unconsolidated)
Chubb Limited
For the years ended December 31, 2023 and December 31, 2022
(in millions of Swiss francs)
Dividend income
Interest income from subsidiaries
Debt guarantee fee income
Other income
Administrative and other expenses
Foreign exchange gains/(losses)
Operating results
Interest income (expense) third-party only
Earnings before taxes
Tax (expense) benefit
Profit for the year
The accompanying notes form an integral part of these statutory financial statements
2023
2022
3,147
7,661
5
37
7
(111)
—
3,085
(29)
3,056
2
3,058
53
43
7
(125)
16
7,655
(1)
7,654
(6)
7,648
S-3
NOTES TO SWISS STATUTORY FINANCIAL STATEMENTS
Chubb Limited
1. Basis of presentation
Chubb Limited (Chubb), domiciled in Zurich, Switzerland, is the holding company of Chubb Group (Group) with a listing on the
New York Stock Exchange (NYSE). Chubb's principal activity is the holding of subsidiaries. Revenues consist mainly of dividend
income, fees for the guarantee of certain outstanding debt, and interest income. The accompanying financial statements comply
with Swiss law. The financial statements present the financial position of the holding company on a standalone basis and do not
represent the consolidated financial position of the holding company and its subsidiaries.
The financial statements have been prepared in accordance with the provisions of commercial accounting as set out in the
Swiss Code of Obligations (Art. 957 to 963b CO, effective since January 1, 2023).
All amounts in the notes are shown in millions of Swiss francs unless otherwise stated.
2. Significant accounting policies
a) Cash and cash equivalents
Cash and cash equivalents includes cash on hand and deposits with an original maturity of three months or less at time of
purchase.
Chubb and certain of its subsidiaries (participating entities) have agreements with a third-party bank provider which
implemented two international multi-currency notional cash pooling programs. In each program, participating entities establish
deposit accounts in different currencies with the bank provider and each day the credit or debit balances in every account are
notionally translated into a single currency (U.S. dollars) and then notionally pooled. Participants of the notional pool either pay
or receive interest from the third-party bank provider. The bank extends overdraft credit to any participating entity as needed,
provided that the overall notionally-pooled balance of all accounts in each pool at the end of each day is at least zero. Actual
cash balances are not physically converted and are not commingled between legal entities. Any overdraft balances incurred
under this program by a participating entity would be guaranteed by Chubb up to CHF 252 million ($300 million) in the
aggregate. Our syndicated letter of credit facility allows for same day drawings to fund a net pool overdraft should participating
entities withdraw contributed funds from the pool.
b) Investments in subsidiaries
Investments in subsidiaries are equity interests, which are held on a long-term basis for the purpose of the holding company's
business activities. They are carried at a value no higher than their cost less adjustments for impairment. An impairment
analysis of the investments in subsidiaries is performed on an annual basis.
c) Translation of foreign currencies
The financial statements are translated from U.S. dollars into Swiss francs using the following exchange rates:
• Investments in subsidiaries at historical exchange rates;
• Other assets and liabilities at period end exchange rates;
• Treasury shares and shareholders' equity at historical exchange rates; and
• Revenues and expenses at average exchange rates (where approximatively accurate), otherwise at transaction date exchange
rates
Exchange losses are recorded in the statement of income, and unrealized exchange gains are recorded in the balance sheet and
are deferred until realized.
d) Dividend income
Chubb receives dividend income from its direct subsidiaries, which is recognized in the statement of income in the year the
dividends are declared by the subsidiary.
e) Interest income (expense) from subsidiaries
Chubb receives interest income from loans issued to its subsidiaries, which is reflected within operating results in the statement
of income. Additionally, Chubb either collects or pays interest related to a reciprocal line of credit with one of its subsidiaries.
f) Debt guarantee fee income
Chubb receives a fee for Chubb's guarantee of the debt issued by one of its subsidiaries.
S-4
NOTES TO SWISS STATUTORY FINANCIAL STATEMENTS (continued)
Chubb Limited
g) Other Income
Chubb has entered into an arrangement with BlackRock, Inc. under which both Chubb and BlackRock, Inc. are entitled to an
equal share of the aggregate amount of certain fees, including underwriting and investment management performance-related
fees, in connection with their respective reinsurance and investment management arrangements with ABR Re, an independent
reinsurance company. The fees received by Chubb were CHF 7.1 million ($8.0 million) and CHF 6.8 million ($7.1 million) for
the years ended December 31, 2023 and 2022, respectively.
3. Commitments, contingencies, and guarantees
a) Letters of credit (LOC)
Chubb has access to capital markets and credit facilities with a letter of credit capacity of CHF 3.4 billion ($4.0 billion), CHF
2.5 billion ($3.0 billion) of which can be used for revolving credit. Chubb's LOC usage was CHF 0.8 billion ($0.9 billion) and
CHF 1.3 billion ($1.4 billion) for the years ended December 31, 2023 and 2022, respectively.
The letter of credit facility requires that Chubb maintains certain financial covenants, all of which were met at December 31,
2023 and 2022.
b) Lease commitments
Chubb leases property under an operating lease, which expires September 2025, with the option to extend the lease for an
additional period of one or five years. The following table presents future annual minimum lease payments as of December 31,
2023:
Year ending December 31
(in millions of Swiss francs)
2024
2025
Thereafter
Total minimum future lease commitments
1.5
1.1
—
2.6
At December 31, 2022, the total minimum future lease commitment was CHF 1.1 million.
c) Guarantee of debt
Chubb fully and unconditionally guarantees certain subsidiary debt, which totaled CHF 12.5 billion ($14.8 billion) and CHF
14.1 billion ($15.2 billion) at December 31, 2023 and 2022, respectively, in exchange for fee income.
S-5
NOTES TO SWISS STATUTORY FINANCIAL STATEMENTS (continued)
Chubb Limited
4. Significant investments
a) Share capital
The following table presents information regarding share capital held of subsidiaries at December 31, 2023 and 2022.
Amounts are expressed in whole U.S. dollars, Swiss francs, or Korean won. In addition, the table shows the shareholdings as a
percentage of total share capital of the subsidiary, which is equal to the voting rights.
Holdings as of December 31, 2023 and 2022:
Year
Country
Chubb Group Holdings, Inc.
Chubb INA Holdings, Inc.
2023
2022
2023
2022
U.S.A.
U.S.A.
U.S.A.
U.S.A.
Chubb Insurance (Switzerland) Limited
2023 Switzerland
Chubb Reinsurance (Switzerland) Limited
2023 Switzerland
2022
Switzerland
Chubb Group Management and Holdings Ltd.
LINA Life Insurance Co. of Korea (1)
2022
Switzerland
2023
2022
2023
2022
Bermuda
Bermuda
Korea
Korea
(1)
Share capital was CHF 25.9 million at the time of acquisition, July 1, 2022.
Percentage
of
Possession
& Voting
100 %
100 %
20 %
20 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
Currency
Share Capital
Purpose
USD
USD
USD
USD
11
11
1
1
Holding company
Holding company
Holding company
Holding company
CHF 100,000,000
Insurance company
CHF 100,000,000
Insurance company
CHF
44,000,000 Reinsurance company
CHF
44,000,000
Reinsurance company
USD
USD
100
100
Holding company
Holding company
KRW 34,860,000,000
Insurance company
KRW 34,860,000,000
Insurance company
b) Investments in subsidiaries
The following table presents information regarding investments in subsidiaries at December 31, 2023 and 2022. Investments in
subsidiaries increased in 2023 due to a capital contribution to Chubb Group Management Holdings Ltd. of CHF 0.3 billion
($0.3 billion). In 2022, on July 1, Chubb and its subsidiaries completed the acquisition of the life and non-life insurance
companies that house the personal accident, supplemental health, and life insurance business of Cigna in six Asian markets,
inclusive of the LINA Life Insurance Co. of Korea, a direct subsidiary of Chubb Limited, for CHF 3.8 billion ($3.9 billion).
(in millions of Swiss francs)
Chubb Group Holdings, Inc.
Chubb INA Holdings, Inc.
Chubb Group Management Holdings Ltd.
Chubb Insurance (Switzerland) Limited
Chubb Reinsurance (Switzerland) Limited
LINA Life Insurance Co. of Korea
Balance - end of year
2023
17,004
2,062
15,184
185
242
3,763
38,440
2022
17,004
2,062
14,928
185
242
3,763
38,184
S-6
NOTES TO SWISS STATUTORY FINANCIAL STATEMENTS (continued)
Chubb Limited
5. Common Share ownership of the Board of Directors and Group Executives
a) Board of Directors
The following table presents information, at December 31, 2023 and 2022, with respect to the ownership of Common Shares
by each member of the Board of Directors (Board). Unless otherwise indicated, the named individual has sole voting and
investment power over the Common Shares listed in the Common Shares Beneficially Owned column. Common Share
ownership of Evan G. Greenberg, the Chairman of the Board, is included in Note 5 b) below.
Name of Beneficial Owner
Michael G. Atieh (3)
Kathy Bonanno
Nancy K. Buese
Sheila P. Burke
Mary A. Cirillo
Michael P. Connors
Michael L. Corbat
Robert J. Hugin (4)
Robert W. Scully (5)
Theodore E. Shasta
David H. Sidwell
Olivier Steimer
Luis Tellez
Frances F. Townsend
Total
Number of
Common
Shares
Beneficially
Owned
508
1,159
699
—
12
—
6,755
6,056
—
27,537
15,790
15,091
—
—
16,681
15,087
42,886
44,337
13,556
14,556
12,661
11,962
21,158
20,276
—
812
2,801
2,102
Year
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Number of
Restricted
Stock
Units (1)
38,042
37,422
—
—
—
—
40,172
39,987
—
15,582
—
—
—
—
—
—
—
—
—
—
—
—
3,837
3,775
—
—
—
—
Number of
Restricted
Common
Stock (2)
955
932
955
932
955
—
955
932
—
1,692
955
932
955
—
1,634
1,594
1,810
1,766
955
932
955
932
955
932
—
932
955
932
2023
133,507
2022
158,975
82,051
96,766
12,994
13,440
(1)
Represents Common Shares that will be issued to the director upon his or her separation from the Board. These Common Shares relate to stock units granted as director's
compensation prior to 2008 and associated dividend reinvestment accruals.
For Ms. Burke includes deferred stock units and market value units granted to her while a director of The Chubb Corporation prior to the acquisition of the Chubb Corporation
by the Company. Such units will settle following separation from service. The number of vested market value units for Ms. Burke was 11,335 at December 31, 2023. The
market value units include dividend reinvestment accruals for 2023 valued at $37,916.
(2)
Represents Common Shares with respect to which the individual has the power to vote (but not to dispose of).
(3)
Common Shares beneficially owned includes 247 shares held by a family foundation. Mr. Atieh has no pecuniary interest in these shares.
(4)
Common Shares beneficially owned includes 335 shares held by Mr. Hugin's sons, of which Mr. Hugin disclaims beneficial ownership.
(5)
Common Shares beneficially owned includes 23,765 shares held by a family foundation, of which Mr. Scully disclaims beneficial ownership.
S-7
NOTES TO SWISS STATUTORY FINANCIAL STATEMENTS (continued)
Chubb Limited
b) Group Executives
The following table presents information, at December 31, 2023 and 2022, with respect to the beneficial ownership of
Common Shares by each of the following Group Executives. Unless otherwise indicated, the named individual has sole voting
and investment power over the Common Shares listed in the Common Shares Beneficially Owned column.
Name of Beneficial Owner
Evan G. Greenberg (3) (4)
Peter C. Enns
John W. Keogh (5)
Joseph F. Wayland
Total
Number of
Common
Shares
Beneficially
Owned
Number of
Common
Shares
Subject to
Options (1)
Weighted
Average
Option
Exercise Price
in CHF
Year
2023
762,153
783,524
2022
720,351
730,287
2023
2022
6,698
4,662
18,104
14,084
2023
147,984
249,542
2022
165,166
228,345
2023
42,289
2022
40,847
98,541
97,370
2023
959,124
1,149,711
2022
931,026
1,070,086
121.97
126.40
158.88
162.75
128.61
132.75
127.79
129.56
Option
Exercise
Years
3.83
4.55
7.66
8.51
4.51
5.18
4.44
4.87
Number of
Restricted
Common
Stock (2)
194,819
170,383
33,522
25,020
85,788
73,621
25,799
21,002
339,928
290,026
(1)
Represents Common Shares that the individual has the right to acquire within 60 days of December 31, 2023 and 2022, through option exercises, both vested and unvested.
(2)
(3)
Represents Common Shares with respect to which the individual has the power to vote (but not to dispose of).
Mr. Greenberg shares with other persons the power to vote and/or dispose of 41,700 and 41,564 of the Common Shares listed at December 31, 2023 and 2022,
respectively. The amount included in the table for Mr. Greenberg also contains 446,627 and 444,738 additional pledged Common shares that are owned by trusts or entities
in which adult family members of Mr. Greenberg are beneficiaries at December 31, 2023 and 2022, respectively.
(4)
Mr. Greenberg pledged 240,000 Common Shares Beneficially Owned in connection with a margin account at December 31, 2023 and 2022.
(5)
Mr. Keogh shares with other persons the power to vote and/or dispose of 19,261 and 13,675 of the Common Shares listed at December 31, 2023 and 2022, respectively.
6. Shareholders' equity
The following table presents issued, authorized, and conditional share capital, at December 31, 2023 and 2022. Treasury
shares held by Chubb which are issued, but not outstanding totaled 11,135,600 and 14,925,028 shares for the years ended
December 31, 2023 and 2022, respectively. In addition to the treasury shares held by Chubb, subsidiaries of Chubb held
14,356,349 treasury shares at a cost of CHF 1.9 billion ($2.0 billion) and 16,856,730 treasury shares at a cost of CHF 2.2
billion ($2.3 billion), for the years ended December 31, 2023 and 2022, respectively.
Shares Issued
Authorized share capital for general purposes
Conditional share capital for bonds and similar debt instruments
Conditional share capital for employee benefit plans
Year ended December 31
2023
2022
431,451,586
446,376,614
200,000,000
200,000,000
33,000,000
33,000,000
25,410,929
25,410,929
S-8
NOTES TO SWISS STATUTORY FINANCIAL STATEMENTS (continued)
Chubb Limited
a) Shares authorized and issued
All Common Shares are authorized under Swiss Corporate law. At our May 2023 annual general meeting, our shareholders
approved the reduction of share capital by reducing par value from CHF 24.15 per share to CHF 0.50 per share and thereby
increasing capital contribution reserves. Chubb's share capital consisted of 431,451,586 and 446,376,614 Common Shares,
with a par value of CHF 0.50 per share and CHF 24.15 per share for the period ended December 31, 2023 and 2022,
respectively. The Board has shareholder-approved authority as set forth in the Articles of Association to increase for general
purposes Chubb's share capital from time to time until May 19, 2024, by the issuance of up to 200,000,000 fully paid up
Common Shares with a par value equal to the par value of Chubb's Common Shares as set forth in the Articles of Association at
the time of any such issuance.
b) Conditional share capital
(i) Conditional share capital for bonds and similar debt instruments
At December 31, 2023 and 2022, the share capital of Chubb was authorized to be increased through the issuance of a
maximum of 33,000,000 fully paid up shares each with a par value of CHF 0.50 per share and CHF 24.15 per share,
respectively through the exercise of conversion and/or option or warrant rights granted in connection with bonds, notes, or
similar instruments, issued or to be issued by Chubb, including convertible debt instruments.
(ii) Conditional share capital for employee benefit plans
At December 31, 2023 and 2022, the share capital of Chubb was authorized to be increased through the issuance of a
maximum of 25,410,929 fully paid up shares each with a par value of CHF 0.50 per share and CHF 24.15 per share,
respectively in connection with the exercise of option rights granted to any employee of Chubb or a subsidiary, and any
consultant, director, or other person providing services to Chubb or a subsidiary.
c) Capital contribution reserves
At our May 2023 annual general meeting, our shareholders approved the reduction of share capital by reducing par value from
CHF 24.15 per share to CHF 0.50 per share and thereby increasing capital contribution reserves.
At our May 2023 annual general meeting, our shareholders approved an annual dividend for the following year of up to $3.44
per share, expected to be paid in four quarterly installments of $0.86 per share after the annual general meeting by way of
distribution from capital contribution reserves, transferred to free reserves for payment. The Board will determine the record and
payment dates at which the annual dividend may be paid until the date of the 2024 annual general meeting, and is authorized
to abstain from distributing a dividend at its discretion. The first three quarterly installments each of $0.86 per share have been
distributed by the Board as expected.
At our May 2022 annual general meeting, our shareholders approved an annual dividend for the following year of up to $3.32
per share, which were paid in four quarterly installments of $0.83 per share after the annual general meeting by way of
distribution from capital contribution reserves, transferred to free reserves for payment.
The following table presents dividend distributions per Common Share in Swiss francs (CHF) and U.S. dollars (USD) for the
years ended December 31, 2023 and 2022:
Dividends - distributed from Capital contribution reserves
Total dividend distributions per common share
CHF
3.05 $
3.05 $
2023
USD
3.41
3.41
CHF
3.11 $
3.11 $
2022
USD
3.29
3.29
S-9
NOTES TO SWISS STATUTORY FINANCIAL STATEMENTS (continued)
Chubb Limited
d) Treasury Shares - Owned by Chubb
Treasury shares held by Chubb are carried at cost. At our May 2023 annual general meeting, our shareholders approved the
cancellation of 14,925,028 shares purchased under our share repurchase programs during 2022. The capital reduction was
subject to publication requirements and became effective in accordance with Swiss law on May 22, 2023. At our May 2022
annual general meeting, our shareholders approved the cancellation of 13,179,100 shares purchased under our share
repurchase program during the last six months of 2021. The capital reduction by cancellation of shares was subject to
publication requirements and a two-month waiting period in accordance with Swiss law and became effective on August 4,
2022. At the Chubb Limited Extraordinary General Meeting of Shareholders, held on November 3, 2021, shareholders
approved the cancellation of 14,465,400 shares repurchased under our share repurchase program during the first six months of
2021. The capital reduction by cancellation of shares was subject to publication requirements and a two-month waiting period
in accordance with Swiss law and became effective on January 17, 2022.
The following table presents a roll-forward of treasury shares held by Chubb for the years ended December 31, 2023 and 2022:
(in millions of Swiss francs, except for share data)
Balance – beginning of year
Repurchase of shares
Cancellation of shares
Number of
Shares
2023
Cost
Number of
Shares
14,925,028
2,879
27,644,500
11,135,600
2,086
14,925,028
2022
Cost
4,445
2,879
(14,925,028)
(2,879) (27,644,500)
(4,445)
Redeemed under share-based compensation plans
—
—
—
Balance – end of year
11,135,600
2,086
14,925,028
—
2,879
e) Treasury Shares - Reserve for Treasury Shares
Treasury shares held by Chubb subsidiaries are carried at cost. The following table presents a roll-forward of treasury shares
held by Chubb subsidiaries for the years ended December 31, 2023 and 2022:
(in millions of Swiss francs, except for share data)
Balance – beginning of year
Number of
Shares
2023
Cost
Number of
Shares
16,856,730
2,224
19,804,002
Additions related to share-based compensation plans
662,869
121
709,528
Redeemed under share-based compensation plans
(3,163,250)
(444) (3,656,800)
2022
Cost
2,599
138
(513)
Balance – end of year
14,356,349
1,901
16,856,730
2,224
Increases in treasury shares held by Chubb and its subsidiaries are due to the surrender of Common Shares to satisfy tax
withholding obligations in connection with the vesting of restricted stock and the forfeiture of unvested restricted stock.
Decreases in treasury shares are principally due to grants of restricted stock, exercises of stock options, and purchases under the
Employee Stock Purchase Plan (ESPP).
f) Movements in Statutory Retained earnings
(in millions of Swiss francs)
Balance – beginning of year
Attribution to / release reserve for treasury shares
Cancellation of treasury shares
Profit for the year
Balance – end of year
Year ended December 31
2023
2022
19,552
15,307
323
374
(2,518)
(3,777)
3,058
20,415
7,648
19,552
S-10
NOTES TO SWISS STATUTORY FINANCIAL STATEMENTS (continued)
Chubb Limited
g) Chubb securities repurchase authorization
From time to time, Chubb repurchases shares as part of our capital management program and to partially offset potential
dilution from the exercise of stock options and the granting of restricted stock under share-based compensation plans. Our
Board has authorized share repurchase programs as follows:
• One-time incremental share repurchase program of $5.0 billion of Chubb Common Shares from July 19, 2021 through
June 30, 2022;
$2.5 billion of Chubb Common Shares from May 19, 2022 through June 30, 2023; and
$5.0 billion of Chubb Common Shares effective July 1, 2023 with no expiration date.
•
•
Share repurchases may be in the open market, in privately negotiated transactions, block trades, accelerated repurchases and/or
through option or other forward transactions.
The following table presents repurchases of Chubb's Common Shares conducted in a series of open market transactions under
the Board authorizations:
(in millions of Swiss francs, except for share data)
Number of shares repurchased
Cost of shares repurchased
Year ended December 31
2023
2022
11,135,600
14,925,028
2,086
2,879
h) General restrictions
Holders of Common Shares are entitled to receive dividends as proposed by the Board and approved by the shareholders.
Holders of Common Shares are allowed one vote per share provided that, if the controlled shares of any shareholder constitute
ten percent or more of the outstanding Common Shares of Chubb, only a fraction of the vote will be allowed so as not to exceed
ten percent. Entry of acquirers of Common Shares as shareholders with voting rights in the share register may be refused if it
would confer voting rights with respect to ten percent or more of the registered share capital recorded in the commercial
register.
7. Significant shareholders
The following table presents information regarding each person, including corporate groups, known to Chubb to own beneficially
or of record more than five percent of Chubb's outstanding Common Shares at December 31, 2023 and 2022.
Name of Beneficial Owner
The Vanguard Group
BlackRock, Inc.
T. Rowe Price Associates, Inc.
8. Other disclosures required by Swiss law
2023
2022
Number of Shares
Beneficially
Owned
Percent of
Class
Number of Shares
Beneficially Owned
Percent of
Class
38,930,986
9.54 %
38,144,673
29,507,346
7.20 %
28,694,321
21,675,760
5.30 %
24,611,406
9.19 %
6.90 %
5.90 %
t
a) Expenses
Total personnel expenses amounted to CHF 8.0 million ($9.5 million) and CHF 11.1 million ($11.7 million) for the years ended
December 31, 2023 and 2022, respectively. The number of full-time positions on an annual average was no more than 50 for
years ended December 31, 2023 and 2022.
Total amortization expense related to tangible property amounted to CHF 0.3 million ($0.4 million) and CHF 0.5 million ($0.5
million) for the years ended December 31, 2023 and 2022, respectively.
S-11
NOTES TO SWISS STATUTORY FINANCIAL STATEMENTS (continued)
Chubb Limited
b) Fees paid to auditors
Fees paid to auditors by Chubb Limited totaled CHF 4.0 million ($4.8 million) and CHF 5.2 million ($5.4 million) for the years
ended December 31, 2023 and 2022, respectively. An allocation of audit fees for professional services rendered in connection
with the integrated audit of our consolidated financial statements and internal controls over financial reporting and audit fees for
the standalone Swiss statutory financial statements totaled CHF 3.5 million ($4.2 million) and CHF 4.8 million ($5.0 million)
for the years ended December 31, 2023 and 2022, respectively. Tax fees totaled CHF 0.5 million ($0.6 million) and CHF 0.4
million ($0.4 million) for the years ended December 31, 2023 and 2022, respectively.
c) Loans to subsidiaries
The following table presents information regarding loans to subsidiaries at December 31, 2023 and 2022:
(in millions of Swiss francs)
Loans to Chubb Group Holdings, Inc.
Loans to Chubb INA International Holdings Ltd., Agencia en Chile
Total loans to subsidiaries
2023
108
194
302
d) Receivable from subsidiaries
The following table presents information regarding receivables from subsidiaries at December 31, 2023 and 2022:
(in millions of Swiss francs)
Receivable from Chubb Group Holdings, Inc.
Receivable from Chubb INA Holdings, Inc.
Receivable from Chubb Group Management and Holdings, Ltd.
Receivable from Chubb Insurance (Switzerland) Ltd.
Receivable from LINA Life Insurance Co. of Korea
Total receivable from subsidiaries
2023
37
370
4
2
1
414
e) Payable to subsidiaries
The following table presents information regarding payables to subsidiaries at December 31, 2023 and 2022:
(in millions of Swiss francs)
Payable to Chubb Group Holdings, Inc.
Payable to Chubb INA Holdings, Inc.
Payable to Chubb Group Management and Holdings, Ltd.
Payable to Chubb Insurance (Switzerland) Ltd.
Payable to Chubb Reinsurance (Switzerland) Ltd.
Total payable to subsidiaries
2023
565
—
102
—
85
752
2022
1,230
265
1,495
2022
48
—
1
—
—
49
2022
538
542
203
6
—
1,289
S-12
PROPOSED APPROPRIATION OF AVAILABLE EARNINGS
Chubb Limited
Proposed appropriation of available earnings
Our Board of Directors (Board) proposes to the Annual General Meeting that the Company's disposable profit (including the net
income and the other items as shown below) be carried forward. The following table shows the appropriation of available
earnings as proposed by the Board for the year ended December 31, 2023.
(in millions of Swiss francs)
Balance brought forward
Profit for the year
Cancellation of treasury shares
Attribution to reserve for treasury shares
Balance carried forward
2023
19,552
3,058
(2,518)
323
20,415
2022
15,307
7,648
(3,777)
374
19,552
In order to pay dividends, our Board proposes that an aggregate amount equal to CHF 2.3 billion be released from the capital
contribution reserves account in 2024 and allocated to a segregated reserve for dividends account (the "Dividend Reserve"). The
Board proposes to distribute a dividend to the shareholders up to an aggregate amount totaling $3.64 per Common Share from,
and limited at a maximum to the amount of, the Dividend Reserve in one or more installments, in such amounts and on such
record and payment dates as determined by the Board in its discretion. If the Board deems it advisable for the Company, the
Board shall be authorized to abstain (in whole or in part) from distributing a dividend in its discretion. The authorization of the
Board to distribute the installments from the Dividend Reserve will expire on the date of the 2025 annual general meeting, on
which date any balance remaining in the Dividend Reserve will be automatically reallocated to the capital contribution reserves
account.
If the Annual General Meeting approves this proposal, our Board currently intends to distribute the dividend in four equal
installments of $0.91 each, on record dates at about the end of June, September, December and March, respectively, with
payment dates about 21 days thereafter.
At December 31, 2023, 405,269,637 of the Company's Common Shares were eligible for dividends.
At the 2023 annual general meeting, the Company’s shareholders approved an aggregate annual dividend by way of a
distribution from Capital contribution reserves, transferred to free reserves at the time of payment in 2023 totaling $3.44 per
Common Share. The annual dividend was payable in four installments, each denominated in CHF but adjusted appropriately so
that the U.S. dollar value of the installment remained at $0.86. The installments were subject to a dividend cap expressed in
CHF which was not reached for 2023.
S-13
REPORT OF THE STATUTORY AUDITOR TO THE GENERAL MEETING OF CHUBB LIMITED, ZURICH ON THE
(SWISS STATUTORY) FINANCIAL STATEMENTS
Report on the audit of the financial statements
Opinion
We have audited the Swiss statutory financial statements of Chubb Limited (the Company), which comprise the Swiss statutory
balance sheet as at December 31, 2023, and the Swiss statutory statement of income for the year then ended, and notes to
Swiss statutory financial statements, including significant accounting policies.
In our opinion, the accompanying financial statements comply with Swiss law and the Company's articles of association.
Basis for opinion
We conducted our audit in accordance with Swiss law and Swiss Standards on Auditing (SA-CH). Our responsibilities under
those provisions and standards are further described in the 'Auditor's responsibilities for the audit of the financial statements'
section of our report. We are independent of the Company in accordance with the provisions of Swiss law and the requirements
of the Swiss audit profession, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our audit approach
Overview
Overall materiality: CHF 280 million
Materiality
We tailored the scope of our audit in order to perform sufficient work to enable
us to provide an opinion on the financial statements as a whole, taking into
account the structure of the Company, the accounting processes and controls,
and the industry in which the Company operates.
Audit scope
As key audit matter the following area of focus has been identified:
•
Investments in subsidiaries
Key audit
matters
Materiality
The scope of our audit was influenced by our application of materiality. Our audit opinion aims to provide reasonable assurance
that the financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are
considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial statements.
S-14
REPORT OF THE STATUTORY AUDITOR TO THE GENERAL MEETING OF CHUBB LIMITED, ZURICH ON THE
(SWISS STATUTORY) FINANCIAL STATEMENTS (continued)
Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall
materiality for the financial statements as a whole as set out in the table below. These, together with qualitative considerations,
helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the
effect of misstatements, both individually and in aggregate, on the financial statements as a whole.
Overall materiality
CHF 280 million
Benchmark applied
Net Assets
Rationale for the materiality
benchmark applied
We chose Net Assets as the benchmark because, in our view, it is the benchmark which
best reflects the purpose of the Company, that is to hold investments in affiliates, but not
to conduct its own operations.
We agreed with the Audit Committee that we would report to them misstatements above CHF 14 million identified during our
audit as well as any misstatements below that amount which, in our view, warranted reporting for qualitative reasons.
Audit scope
We designed our audit by determining materiality and assessing the risks of material misstatement in the financial statements.
In particular, we considered where subjective judgements were made; for example, in respect of significant accounting estimates
that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also
addressed the risk of management override of internal controls, including among other matters consideration of whether there
was evidence of bias that represented a risk of material misstatement due to fraud.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the current period. These matters were addressed in the context of our audit of the financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
S-15
REPORT OF THE STATUTORY AUDITOR TO THE GENERAL MEETING OF CHUBB LIMITED, ZURICH ON THE
(SWISS STATUTORY) FINANCIAL STATEMENTS (continued)
Investments in subsidiaries
Key audit matter
How our audit addressed the key audit matter
As set out in the balance sheet and at footnote 4, the
Company owns six direct subsidiaries as at December 31,
2023 with a total book value of CHF 38.4 billion,
representing 98% of the Company’s total assets.
We obtained an understanding of management's process and
controls and assessed and tested the design and operating
effectiveness of a selected key control over the recoverability of
the carrying value of investments in subsidiaries.
We focused on investments in subsidiaries due to the size of
this area relative to the total assets, and the fact that there is
judgment involved in assessing whether the carrying values of
the investments in subsidiaries were impaired.
The Swiss accounting law generally requires an individual
impairment assessment at the investment or unit of account
level.
Tje
In relation to the particular matters set out opposite, our
testing procedures included the following:
• We tested the Company’s impairment analyses performed
for the six direct subsidiaries. The assessment of potential
impairment indicators included as a first step the
comparison of the recorded Swiss statutory carrying value
with the net asset value of each subsidiary. In case the
net asset value was smaller than the carrying value, a
more detailed assessment was performed, to assess
whether there was any potential need for impairment.
• Where a more detailed assessment was triggered, we
challenged management on the recoverable amount and
tested alternative evidence such as recent external
valuation reports and other documents provided by
management.
Based on the work performed we consider management's
impairment analyses including the assumptions used to
support the carrying value of investments in subsidiaries as
reasonable.
Other information
The Board of Directors is responsible for the other information. The other information comprises the information included in the
annual report, but does not include the Swiss statutory financial statements, the consolidated financial statements, the Swiss
statutory compensation report and our auditor's reports thereon. The annual report is expected to be made available to us after
the date of this auditor's report.
Our opinion on the Swiss statutory financial statements does not cover the other information and we will not express any form of
assurance conclusion thereon.
In connection with our audit of the Swiss statutory financial statements, our responsibility is to read the other information when
it becomes available and, in doing so, consider whether the other information is materially inconsistent with the Swiss statutory
financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
S-16
REPORT OF THE STATUTORY AUDITOR TO THE GENERAL MEETING OF CHUBB LIMITED, ZURICH ON THE
(SWISS STATUTORY) FINANCIAL STATEMENTS (continued)
Board of Directors' responsibilities for the financial statements
The Board of Directors is responsible for the preparation of financial statements in accordance with the provisions of Swiss law
and the Company's articles of association, and for such internal control as the Board of Directors determines is necessary to
enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of Directors is responsible for assessing the Company's ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting
unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but
to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit conducted in accordance with Swiss law and SA-CH will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on EXPERTsuisse's website: http://
www.expertsuisse.ch/en/audit-report. This description forms an integral part of our report.
Report on other legal and regulatory requirements
In accordance with article 728a para. 1 item 3 CO and PS-CH 890, we confirm the existence of an internal control system that
has been designed, pursuant to the instructions of the Board of Directors, for the preparation of the financial statements.
We further confirm that the proposed appropriation of available earnings complies with Swiss law and the Company’s articles of
association. We recommend that the financial statements submitted to you be approved.
PricewaterhouseCoopers AG
/s/ Peter Eberli
Peter Eberli
Licensed audit expert
Auditor in charge
Zurich, February 26, 2024
/s/ Beat Walter
Beat Walter
Licensed audit expert
S-17
CHUBB LIMITED
SWISS STATUTORY COMPENSATION REPORT
December 31, 2023
SC-1
SWISS STATUTORY COMPENSATION REPORT
A. General
Under Art. 734 et seq. of the Swiss Code of Obligations (the “Code”) and our Articles of Association, we are required to prepare
a separate Swiss Statutory Compensation Report each year that contains specific items in a presentation format determined by
the Code. This compensation report covers compensation for our Board of Directors and Executive Management for the 2023
financial year.
Our Executive Management (as defined under Swiss law) is appointed by our Board. For each of 2023 and 2022, our Executive
Management consisted of Evan G. Greenberg, Chairman and Chief Executive Officer; Peter C. Enns, Chief Financial Officer; John
W. Keogh, President and Chief Operating Officer; and Joseph F. Wayland, General Counsel and Secretary.
For more detailed information about compensation for our Board of Directors and Executive Management, please review our
Proxy Statement in connection with our 2024 annual general meeting of shareholders. You may access this report on the
Investor Information section of our website at investors.chubb.com/governance/general-meeting-of-shareholders/default.aspx or
by contacting Investor Relations by telephone, email or mail at:
Telephone:
+1 (212) 827-4445
Email:
Mail:
investorrelations@chubb.com
Investor Relations, Chubb Limited, 1133 Avenue of the Americas, 11th Floor, New York, New York 10036
References in this report to “we,” “our” or “Chubb” are to Chubb Limited.
B. Compensation of the Board of Directors and Executive Management
Basis of Presentation
The following information sets forth the compensation for the years ended December 31, 2023 and 2022, of the members of
the Board and Executive Management for all of the functions that they have performed for Chubb. Compensation of the Board is
paid by Chubb. Compensation of Executive Management is paid by Chubb and the Chubb group entities where they are
employed. Compensation is paid as a combination of both U.S. dollars, our functional currency, with translation of certain
amounts to whole Swiss francs. Where presented, 2023 and 2022 Swiss franc compensation figures have been translated at
the average exchange rates. Swiss franc-equivalent total compensation of the Board and Executive Management is included in
Tables 1 and 2 below. The average exchange rate we used for U.S. dollars into Swiss francs was 0.89880159 for 2023 and
0.95497047 for 2022.
This report is established in accordance with the provisions of the Code.
Compensation of the Board of Directors
Our directors receive compensation in accordance with our Outside Directors Compensation Parameters. No changes were made
to our Outside Director Compensation Parameters in 2023. The Board made changes to the Outside Directors Compensation
Parameters effective at the May 2022 annual general meeting, increasing the annual cash retainer from $125,000 (CHF
119,371 in 2022) to $135,000 (CHF 128,921 in 2022; CHF 121,338 in 2023) and annual equity retainer from $180,000
(CHF 171,894) to $190,000 (CHF 181,444 in 2022; CHF 170,772 in 2023). The compensation for the Board for the
financial year 2022 set forth in Table 1 is therefore composed of compensation under the prior parameters from January 1 to
the date of our 2022 annual general meeting, and compensation under the revised parameters from such date through the end
of 2022.
The equity retainer noted above is in the form of restricted stock awards, based on the fair value of Chubb's Common Shares as
of the date of the award. Restricted stock awards vest at the following year's annual general meeting. The cash retainer is paid
to non-employee directors quarterly, although directors may elect to receive up to all of their compensation, other than
compensation for special meetings, in the form of restricted stock awards.
SC-2
SWISS STATUTORY COMPENSATION REPORT (continued)
The Lead Director received a fee of $50,000 (CHF 44,940) in 2023, which was unchanged from 2022. Committee chair fees
for 2023, also unchanged from 2022, were received as follows:
Audit Committee - $35,000 (CHF 31,458)
Compensation Committee - $25,000 (CHF 22,470)
Nominating & Governance Committee - $20,000 (CHF 17,976)
Risk & Finance Committee - $25,000 (CHF 22,470)
Directors are not paid fees for attending regular Board or committee meetings, but, at the discretion of the Chairman of the
Board and the Lead Director, Chubb may pay an additional $2,000 (CHF 1,798) fee for each special meeting attended by
telephone and $3,000 (CHF 2,696) for each special meeting attended in person. Meeting fees were not paid in either 2023 or
2022.
Chubb’s Corporate Governance Guidelines specify director equity ownership requirements. Chubb awards non-employee
directors restricted stock awards and mandates minimum equity ownership. In February 2023 the Board increased the
minimum equity ownership going forward from $600,000 to $700,000 (CHF 539,281 to CHF 629,161). Each director has
until the fifth anniversary of his or her initial election to the Board to achieve this minimum. The previously granted restricted
stock awards (whether or not vested) are counted toward achieving this minimum.
Once a director has achieved the minimum equity ownership, this requirement will remain satisfied going forward as long as he
or she retains the number of shares valued at the minimum amount based on the New York Stock Exchange closing price for
Chubb’s Common Shares as of the date the minimum threshold is initially met. Any vested shares held by a director in excess of
the minimum share equivalent specified above may be sold at the director's discretion after consultation with Chubb’s General
Counsel and in accordance with the requirements of Chubb's insider trading policy.
No non-market standard compensation was paid to former directors nor did any former director receive any benefits in kind or
waivers of claims during the years ended December 31, 2023 and 2022. Mr. Luis Téllez, a former director of the Company,
retired from the Board effective May 17, 2023, the date of the 2023 annual general meeting. In August 2023, following his
retirement from the Board, Mr. Téllez entered into a consulting agreement with a Mexican subsidiary of Chubb to provide
consulting services relating to Chubb's Mexico business. For such services, Mr. Téllez receives an annual consulting fee of
$150,000 (CHF 134,820), of which $48,606 (CHF 43,687) was paid in 2023. Such compensation is customary and market
standard for the consulting services provided. Neither the entrance into the agreement nor the services and compensation
provided thereunder are related to or in connection with Mr. Téllez's former role as a director or his retirement from the Board,
which predated the entrance into the consulting arrangement, and therefore such compensation is not included in Table 1.
During the years ended December 31, 2023 and 2022, no current directors received benefits in kind or waivers of claims and
no compensation had been paid to any related party of current or former directors, except as noted below with respect to our
director charitable contributions program. Additionally, no related party of current or former directors received any benefits in
kind or waivers of claims during 2023 or 2022. At each of December 31, 2023 and 2022, no current or former directors or
any related party of current or former directors had outstanding loans or credits from Chubb.
Chubb has a matching charitable contributions program for directors under which Chubb will match director charitable
contributions to eligible registered charities up to a maximum, which was $40,000 (CHF 35,952 in 2023; CHF 38,199 in
2022) per year for both 2023 and 2022. For Swiss law purposes, some of these matching contributions during the years ended
December 31, 2023 and 2022 qualified as related party transactions because our directors or members of their immediate
family were directors or officers of the organization. Chubb matched a total of $83,000 (CHF 74,601) in contributions to ten
organizations in 2023 and $70,000 (CHF 66,848) in contributions to six organizations in 2022.
The following Table 1 presents information concerning director compensation paid or, in the case of restricted stock awards,
earned in the years ended December 31, 2023 and 2022. Although Evan G. Greenberg is Chairman of the Board, Mr.
Greenberg receives no compensation in respect of these duties. Details of Mr. Greenberg's compensation in his capacity as a
member of Executive Management are included in Table 2 below.
SC-3
SWISS STATUTORY COMPENSATION REPORT (continued)
Table 1 — audited
Name
Year
Board Function
Fees
Earned or Paid
Stock Awards (1)
All Other (2)
Total in USD
Total in CHF
Michael G. Atieh
Kathy Bonanno
Nancy K. Buese (3)
Sheila P. Burke
Mary Cirillo
Michael P. Connors
Michael L. Corbat (3)
Robert J. Hugin
Robert W. Scully
2023
2022
2023
2022
2023
2023
2022
2023
2022
2023
2022
2023
2023
2022
2023
2022
Eugene B. Shanks, Jr. 2023
Theodore E. Shasta
2022
2023
2022
David H. Sidwell
2023
Olivier Steimer
Luis Téllez
2022
2023
2022
2023
2022
Frances F. Townsend
2023
Total
2022
2023
2022
Member $
135,000 $
190,000 $
— $
325,000
CHF 292,111
Member $
132,500 $
186,250 $
— $
318,750
CHF 304,397
Member
Member
Member
Member
Member
Member (Retired)
Member
Chair - Nominating &
Governance
Lead Director
Lead Director
Member
Member
Member
Member
Chair - Audit
Member
Chair - Audit
Retired
Member (Retired)
Member
Member
Member
Chair - Nominating &
Governance
Member
Member
Chair - Risk & Finance
Member
Chair - Risk & Finance
Member (Retired)
Member
Member
Chair - Compensation
Member
Chair - Compensation
135,000
101,250
101,250
135,000
132,500
—
—
185,000
182,500
101,250
—
—
—
—
—
31,250
135,000
132,500
190,000
118,750
118,750
190,000
186,250
129,375
337,500
190,000
186,250
118,750
325,000
317,500
360,000
352,500
—
67,500
190,000
186,250
150,000
190,000
132,500
186,250
160,000
190,000
157,500
186,250
33,750
132,500
71,250
186,250
160,000
190,000
157,500
186,250
—
—
—
—
—
2,765
325,000
220,000
220,000
325,000
318,750
132,140
292,111
210,094
197,736
292,111
304,397
118,768
—
—
—
—
—
—
—
—
—
4,393
—
—
—
—
—
—
—
—
—
—
337,500
322,303
375,000
368,750
220,000
325,000
317,500
337,051
352,145
197,736
292,111
303,203
360,000
323,569
352,500
336,627
—
103,143
325,000
318,750
—
98,499
292,111
304,397
340,000
305,593
318,750
304,397
350,000
314,581
343,750
328,271
105,000
318,750
94,374
304,397
350,000
314,581
343,750
328,271
$ 1,431,250 $
2,643,125 $
2,765 $ 4,077,140
CHF 3,664,544
$ 1,292,500 $
2,683,750 $
4,393 $ 3,980,643
CHF 3,801,398
(1) The Stock Awards column reflects restricted stock awards earned during 2023 and 2022. These stock awards were granted at fair value in May 2023, May 2022 and May
2021, respectively, at the annual general meetings and vest at the subsequent year's annual general meeting.
(2) The All Other column includes retirement gifts for retiring directors.
(3)
Prior to their election to the Board in May 2023, Ms. Nancy Buese and Mr. Michael Corbat each served as a consultant to the Board. For such service, which terminated prior
to their election to the Board, Ms. Buese and Mr. Corbat each received consultant fees in 2023 of $50,000 (CHF 44,940), none of which related to service as a director and
are therefore not included in Table 1.
SC-4
SWISS STATUTORY COMPENSATION REPORT (continued)
Compensation of Executive Management
The following table presents information concerning Executive Management’s 2023 and 2022 compensation.
Table 2 — audited
Name and
Principal Position
Evan G. Greenberg
Chairman and
Chief Executive
Officer, Chubb
Limited (highest
paid executive)
All Other Executive
Management
Year
Salary
Bonus
Stock
Awards (1)
All Other
Compensation (2)
Total in USD
Total in CHF
2023
$ 1,550,000 $ 9,000,000 $ 17,350,017 $
1,461,311 $ 29,361,328
CHF 26,390,008
2022
$ 1,400,000 $ 7,700,000 $ 15,650,006 $
1,404,637 $ 26,154,643
CHF 24,976,912
2023
$ 2,922,308 $ 6,224,000 $ 13,725,427 $
1,014,493 $ 23,886,228
CHF 21,468,980
2022
$ 2,806,924 $ 5,669,000 $ 12,300,487 $
939,787 $ 21,716,198
CHF 20,738,328
Total
2023
$ 4,472,308 $ 15,224,000 $ 31,075,444 $
2,475,804 $ 53,247,556
CHF 47,858,988
2022
$ 4,206,924 $ 13,369,000 $ 27,950,493 $
2,344,424 $ 47,870,841
CHF 45,715,240
(1)
The Stock Awards column discloses the fair value of the stock awards granted on February 26, 2024 for 2023 and February 23, 2023 for 2022, respectively. In comparison,
the Summary Compensation Table in the Company’s annual proxy statement (unaudited) only discloses equity grants for a particular fiscal year based on the grants made
during that fiscal year. This column includes performance-based and time-based restricted stock awards. For 2022, this column also includes the fair value of an off-cycle
award granted to a member of Executive Management during 2022.
(2)
All Other Compensation column includes perquisites and other personal benefits, consisting of the following:
• For Mr. Greenberg, contributions to retirement plans of $1,110,000 (CHF 997,670) for 2023 and $1,068,000 (CHF 1,019,908) for 2022, personal use of
corporate aircraft and chartered helicopter of $298,363 (CHF 268,169) for 2023 and $302,815 (CHF 289,179) for 2022, and miscellaneous other benefits of
$52,948 (CHF 47,590) for 2023 and $33,822 (CHF 32,299) for 2022, including executive medical coverage and matching contributions made under our matching
charitable contributions program. In August 2022, Mr. Greenberg entered into an Aircraft Time Sharing Agreement with the Company that allows him to reimburse
Chubb for his personal use of corporate aircraft based on the incremental cost of each flight to Chubb, provided that the amount does not exceed the maximum
allowed under U.S. Federal Aviation Administration (FAA) regulations. Such reimbursed amounts are not perquisites and are not included in the table above. The
Board requires Mr. Greenberg to use corporate aircraft for all travel whenever practicable for security reasons and in light of the international nature of the Company’s
business.
• For the other members of Executive Management, contributions to retirement plans, personal use of corporate aircraft and corporate apartment, and miscellaneous
other benefits, including, as applicable, club memberships, financial planning, executive medical coverage, matching contributions made under our matching
charitable contributions program, car allowance or car lease and car maintenance allowance.
• Personal use of the corporate aircraft was limited to space available on normally scheduled management business flights.
• Other personal benefits including housing allowance.
• Contributions to retirement plans for 2023 and 2022 totaled $1,778,396 (CHF 1,598,425) and $1,710,889 (CHF 1,633,848), respectively. These consist of
discretionary and non-discretionary employer contributions. The discretionary employer contributions for 2023 have been calculated and are expected to be paid in
April 2024.
No former member of Executive Management or any related party of current or former Executive Management received non-
market standard compensation from Chubb during each of the years ended December 31, 2023 and 2022. No current or
former member of Executive Management or any related party thereto received benefits in kind or waivers of claims during 2023
and 2022 other than as described in the footnotes to Table 2.
At each of December 31, 2023 and 2022, no current or former member of Executive Management or any related party of a
current or former member of Executive Management had outstanding loans or credits from Chubb.
SC-5
SWISS STATUTORY COMPENSATION REPORT (continued)
C. Common Share Ownership of the Board of Directors and Executive Management
a) Board of Directors
The following table is audited and presents information, at December 31, 2023 and 2022, with respect to the ownership of
Common Shares by each member of the Board of Directors. Unless otherwise indicated, the named individual has sole voting
and investment power over the Common Shares listed in the Common Shares Beneficially Owned column. None of the members
of our Board of Directors listed below holds options to acquire Common Shares. Common Share ownership of Evan G.
Greenberg, the Chairman of the Board, is included in b) below.
Name of Beneficial Owner
Michael G. Atieh (3)
Kathy Bonanno
Nancy K. Buese
Sheila P. Burke
Mary A. Cirillo
Michael P. Connors
Michael L. Corbat
Robert J. Hugin (4)
Robert W. Scully (5)
Theodore E. Shasta
David H. Sidwell
Olivier Steimer
Luis Tellez
Frances F. Townsend
Total
Number of
Common
Shares
Beneficially
Owned
508
1,159
699
—
12
—
6,755
6,056
—
27,537
15,790
15,091
—
—
16,681
15,087
42,886
44,337
13,556
14,556
12,661
11,962
21,158
20,276
—
812
2,801
2,102
Year
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Number of
Restricted
Stock
Units (1)
38,042
37,422
—
—
—
—
40,172
39,987
—
15,582
—
—
—
—
—
—
—
—
—
—
—
—
3,837
3,775
—
—
—
—
Number of
Restricted
Common
Shares (2)
955
932
955
932
955
—
955
932
—
1,692
955
932
955
—
1,634
1,594
1,810
1,766
955
932
955
932
955
932
—
932
955
932
2023
133,507
2022
158,975
82,051
96,766
12,994
13,440
(1)
Represents Common Shares that will be issued to the director upon his or her separation from the Board. These Common Shares relate to stock units granted as director's
compensation prior to 2008 and associated dividend reinvestment accruals.
For Ms. Burke includes deferred stock units and market value units granted to her while a director of The Chubb Corporation prior to the acquisition of the Chubb Corporation
by the Company. Such units will settle following separation from service. The number of vested market value units for Ms. Burke was 11,335 at December 31, 2023. The
market value units include dividend reinvestment accruals for 2023 valued at $37,916.
(2)
Represents Common Shares with respect to which the individual has the power to vote (but not to dispose of).
(3)
Common Shares beneficially owned includes 247 shares held by a family foundation. Mr. Atieh has no pecuniary interest in these shares.
(4)
Common Shares beneficially owned includes 335 shares held by Mr. Hugin's sons, of which Mr. Hugin disclaims beneficial ownership.
(5)
Common Shares beneficially owned includes 23,765 shares held by a family foundation, of which Mr. Scully disclaims beneficial ownership.
SC-6
SWISS STATUTORY COMPENSATION REPORT (continued)
b) Executive Management
The following table is audited and presents information, at December 31, 2023 and 2022, with respect to the beneficial
ownership of Common Shares by each of the following members of Executive Management. Unless otherwise indicated, the
named individual has sole voting and investment power over the Common Shares listed in the Common Shares Beneficially
Owned column.
Name of Beneficial Owner
Evan G. Greenberg (3) (4)
Peter C. Enns
John W. Keogh (5)
Joseph F. Wayland
Total
Number of
Common
Shares
Beneficially
Owned
Number of
Common
Shares
Subject to
Options (1)
Weighted
Average
Option
Exercise Price
in CHF
Year
2023
762,153
783,524
2022
720,351
730,287
2023
2022
6,698
4,662
18,104
14,084
2023
147,984
249,542
2022
165,166
228,345
2023
42,289
2022
40,847
98,541
97,370
2023
959,124
1,149,711
2022
931,026
1,070,086
121.97
126.40
158.88
162.75
128.61
132.75
127.79
129.56
Option
Exercise
Years
3.83
4.55
7.66
8.51
4.51
5.18
4.44
4.87
Number of
Restricted
Common
Shares (2)
194,819
170,383
33,522
25,020
85,788
73,621
25,799
21,002
339,928
290,026
(1)
Represents Common Shares that the individual has the right to acquire within 60 days of December 31, 2023 and 2022, through option exercises, both vested and unvested.
(2)
(3)
Represents Common Shares with respect to which the individual has the power to vote (but not to dispose of).
Mr. Greenberg shares with other persons the power to vote and/or dispose of 41,700 and 41,564 of the Common Shares listed at December 31, 2023 and 2022,
respectively. The amount included in the table for Mr. Greenberg also contains 446,627 and 444,738 additional pledged Common Shares that are owned by trusts or entities
in which adult family members of Mr. Greenberg are beneficiaries at December 31, 2023 and 2022, respectively.
(4)
Mr. Greenberg pledged 240,000 Common Shares Beneficially Owned in connection with a margin account at December 31, 2023 and 2022.
(5)
Mr. Keogh shares with other persons the power to vote and/or dispose of 19,261 and 13,675 of the Common Shares listed at December 31, 2023 and 2022, respectively.
D. Biographies of the Board of Directors and Executive Management
The following includes the biographies of our (i) Board of Directors as set forth in Chubb’s proxy statement relating to its 2024
annual general meeting; and (ii) Executive Management as set forth in Chubb’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2023, as well as the disclosures on activities of our Board of Directors and Executive Management in
comparable positions in undertakings with an economic (i.e., commercial) purpose as required by Art. 734e of the Code. The
information pursuant to Art. 734e of the Code is audited.
a) Board of Directors
Evan G. Greenberg
Chairman and
Chief Executive Officer,
Chubb Limited
Age: 69
Years of Service: 22 (since 2002)
Committee Memberships:
Executive (Chairman)
Evan G. Greenberg was elected as our Chairman of the Board in May 2007. Our Board appointed
Mr. Greenberg as our President and Chief Executive Officer in May 2004 and as our President and
Chief Operating Officer in June 2003. In April 2002, Mr. Greenberg was appointed to the position
of Chief Executive Officer of ACE Overseas General. Mr. Greenberg joined the Company as Vice
Chairman, ACE Limited, and Chief Executive Officer of ACE Tempest Re in November 2001. Prior
to joining the Company, Mr. Greenberg was most recently President and Chief Operating Officer of
American International Group, Inc. (AIG) from 1997 until 2000. From 1975 until 1997, Mr.
Greenberg held a variety of senior management positions at AIG, including President and Chief
Executive Officer of AIU, AIG’s foreign general insurance organization.
Other current mandates as a member of the board of directors, executive management or advisory
board in undertakings with an economic purpose not listed above: none
SC-7
SWISS STATUTORY COMPENSATION REPORT (continued)
Michael P. Connors is the founder, Chairman of the Board and Chief Executive Officer of
Information Services Group, Inc. (technology insights, market intelligence and advisory services
company) (listed company). Mr. Connors served as a member of the Executive Board of VNU N.V.
(worldwide media and marketing information company) following the merger of ACNielsen into VNU
in 2001 until 2005, and he served as Chairman and Chief Executive Officer of VNU Media
Measurement & Information Group and Chairman of VNU World Directories until 2005. He
previously was Vice Chairman of the Board of ACNielsen (global marketing research firm) from its
spin-off from the Dun & Bradstreet Corporation in 1996 until 2001, was Senior Vice President of
American Express Travel Related Services from 1989 to 1995, and before that was a Corporate
Vice President of Sprint Corporation (telecommunications provider). Mr. Connors was during the
past five years a member of the Board of Directors of Eastman Chemical Company.
Other current mandates as a member of the board of directors, executive management or advisory
board in undertakings with an economic purpose not listed above: none
Michael G. Atieh served as Executive Vice President and Chief Financial and Business Officer of
Ophthotech Corporation (biopharmaceutical company) from September 2014 until March 2016.
From February 2009 until its acquisition in February 2012, Mr. Atieh was Executive Chairman of
Eyetech Inc. (private specialty pharmaceutical company). He served as Executive Vice President
and Chief Financial Officer of OSI Pharmaceuticals from June 2005 until December 2008. Mr.
Atieh is currently a director and Chairman of the Audit Committee of Immatics N.V. (clinical stage
biopharmaceutical company) (listed company).
Mr. Atieh served as a director and Chairman of the Audit Committee of Oyster Point Pharma, Inc.
from October 2020 to January 2023. He also served as a member of the Board of Directors of
electroCore, Inc. (medical technology company) from June 2018 to June 2022, a member of the
Board of Directors of Theravance Biopharma, Inc. from June 2014 to April 2015, and as a member
of the Board of Directors and Chairman of the Audit Committee of OSI Pharmaceuticals, Inc. from
June 2003 to May 2005. Previously, Mr. Atieh served at Dendrite International, Inc. (software
provider) as Group President from January 2002 to February 2004 and as Senior Vice President
and Chief Financial Officer from October 2000 to December 2001. He also served as Vice
President of U.S. Human Health, a division of Merck & Co., Inc., from January 1999 to September
2000, as Senior Vice President — Merck-Medco Managed Care, L.L.C., an indirect wholly-owned
subsidiary of Merck, from April 1994 to December 1998, as Vice President — Public Affairs of
Merck from January 1994 to April 1994 and as Treasurer of Merck from April 1990 to December
1993.
Other current mandates as a member of the board of directors, executive management or advisory
board in undertakings with an economic purpose not listed above: Chairman, HMS Enterprises, Inc.
(non-listed company)
Kathy Bonanno has served since August 2020 as Business Finance Officer of Google Cloud (cloud
computing services) (business segment of listed company Alphabet Inc.). Prior to that, from April
2014 until July 2020, Ms. Bonanno held a variety of senior finance positions with Palo Alto
Networks (cybersecurity), including Chief Financial Officer from November 2017 until July 2020,
Senior Vice President, Finance, from November 2016 to November 2017, and Vice President,
Finance, from April 2014 until November 2016. In her 30 years of business experience she also
held a variety of senior finance roles at Symantec Corporation (cybersecurity) from July 2006 to
March 2014, and was employed in a variety of roles, including Managing Director Investor
Relations, at American Airlines from September 1987 to June 2006.
Other current mandates as a member of the board of directors, executive management or advisory
board in undertakings with an economic purpose not listed above: none
Nancy K. Buese has served since November 2022 as Chief Financial Officer of Baker Hughes
Company (supplier of products and services to the energy industry) (public company). Prior to that,
Ms. Buese served as Executive Vice President and Chief Financial Officer of Newmont Corporation
(precious metals and mining) from October 2016 to November 2022. Before her role at Newmont,
Ms. Buese was Executive Vice President and Chief Financial Officer of MPLX (energy company), and
prior to MPLX’s acquisition of MarkWest Energy Partners, L.P. in 2015, Ms. Buese served as
Executive Vice President and Chief Financial Officer of MarkWest for 11 years. Ms. Buese is a
certified public accountant and a former partner with Ernst & Young. Ms. Buese was a director of
The Williams Companies, Inc., from 2018 to February 2023, serving on the Compensation &
Management Development and Environmental, Health & Safety Committees at the time of her
departure from the board, and from 2009 to 2017 served as a director and chaired the audit
committee of UMB Financial Corporation.
Other current mandates as a member of the board of directors, executive management or advisory
board in undertakings with an economic purpose not listed above: Member of the Board of
Directors, HMH (non-listed company, 50% owned by Baker Hughes)
Michael P. Connors
Chairman and
Chief Executive Officer,
Information Services Group, Inc.
Independent Lead Director, Chubb Limited
Age: 68
Years of Service: 13 (since 2011)
Committee Memberships:
Compensation,
Nominating & Governance,
Executive
Michael G. Atieh
Retired Chief Financial and
Business Officer,
Ophthotech Corporation
Age: 70
Years of Service: 33 (since 1991)
Committee Memberships:
Risk & Finance
Kathy Bonanno
Business Finance Officer,
Google Cloud
Age: 61
Years of Service: 2 (since 2022)
Committee Memberships:
Audit
Nancy K. Buese
Chief Financial Officer,
Baker Hughes
Age: 54
Years of Service: 1 (since 2023)
Committee Memberships:
Audit
SC-8
SWISS STATUTORY COMPENSATION REPORT (continued)
Sheila P. Burke
Faculty Research Fellow, John F.
Kennedy School of Government,
Harvard University
Age: 73
Years of Service: 8 (since 2016)
Committee Memberships:
Risk & Finance
Michael L. Corbat
Former Chief Executive Officer,
Citigroup Inc.
Age: 63
Years of Service: 1 (since 2023)
Committee Membership:
Risk & Finance
Robert J. Hugin
Former Chairman and
Chief Executive Officer,
Celgene Corporation
Age: 69
Years of Service: 4 (since 2020)
Committee Memberships:
Risk & Finance
Robert W. Scully
Retired Co-President,
Morgan Stanley
Age: 74
Years of Service: 10 (since 2014)
Committee Memberships:
Audit (Chair), Executive
Sheila P. Burke is a Faculty Research Fellow at the Malcolm Wiener Center for Social Policy, and
has been a Member of Faculty at the John F. Kennedy School of Government, Harvard University,
since 2007. She has been a Senior Public Policy Advisor at Baker, Donelson, Bearman, Caldwell &
Berkowitz since 2009 (law firm) (non-listed company).
From 1997 to 2016, Ms. Burke was a member of the board of directors of The Chubb Corporation
(Chubb Corp.) and joined our Board at the time of its merger with the Company. From 2004 to
2007, Ms. Burke served as Deputy Secretary and Chief Operating Officer of the Smithsonian
Institution. Ms. Burke previously was Under Secretary for American Museums and National
Programs, Smithsonian Institution, from June 2000 to December 2003. She was Executive Dean
and Lecturer in Public Policy of the John F. Kennedy School of Government, Harvard University,
from November 1996 until June 2000. Ms. Burke served as Chief of Staff to the Majority Leader of
the U.S. Senate from 1985 to 1996. Ms. Burke was also previously a member of the board of
directors of health insurance provider WellPoint, Inc. (now Elevance Health Inc.).
Other current mandates as a member of the board of directors, executive management or advisory
board in undertakings with an economic purpose not listed above: Member of the Board of
Directors, Abt Associates (non-listed company); Member of the Board of Directors, Ascension
Health Alliance (non-listed company); Member of the Board of Directors, Strategic Partnership LLC
(non-listed company)
Michael L. Corbat served as Chief Executive Officer of Citigroup Inc. (global banking and financial
services) from October 2012 until March 2021. Mr. Corbat held a number of key executive
management positions in his nearly 40-year career at Citigroup, in which he gained experience in
substantially all of Citi’s business operations, including Chief Executive Officer of Europe, Middle
East and Africa from December 2011 to October 2012, Chief Executive Officer of Citi Holdings from
January 2009 to December 2011, Chief Executive Officer of Citi Global Wealth Management from
September 2008 to January 2009, and prior to that Head of the Global Corporate and Global
Commercial Bank and Head of the Global Relationship Bank. In 2022, Mr. Corbat joined as a
Senior Advisor to 26North Partners, a private investment firm (non-listed), and founded Teton
Advisors LLC, a private consulting business (non-listed).
Mr. Corbat previously served as a member of the Board of Directors of Citigroup Inc. from 2012 to
2021, and also a former member during the last five years of The Clearing House Association
(including Chairman of the Supervisory Board), Financial Services Forum (including Vice Chairman),
Bank Policy Institute (Member), The Partnership for New York City (Executive Committee Member),
The Business Council (Member), Business Roundtable (Member), International Business Council of
WEF (Member), and The U.S. Ski & Snowboard Team Foundation (Trustee).
Other current mandates as a member of the board of directors, executive management or advisory
board in undertakings with an economic purpose not listed above: Member of the Board of
Directors, Jackson Hole Mountain Resort (non-listed company)
Robert J. Hugin served as Chief Executive Officer of Celgene Corporation (a biopharmaceutical
company) from June 2010 until March 2016, as Chairman of its Board of Directors from June
2011 to March 2016 and as Executive Chairman from March 2016 to January 2018. Prior to June
2016, Mr. Hugin held a number of management roles at Celgene, including President from May
2006 to July 2014, Chief Operating Officer from May 2006 to June 2010 and Senior Vice
President and Chief Financial Officer from June 1999 to May 2006. Prior to that, Mr. Hugin was a
Managing Director at J.P. Morgan & Co. Inc., which he joined in 1985. Mr. Hugin is currently a
director of Biohaven Pharmaceutical Holding Company Ltd. (pharmaceutical company) (listed
company). Mr. Hugin has previously served as a director of Allergan plc (multispecialty health care
company), Danaher Corporation (science and technology company) and The Medicines Company
(pharmaceutical company).
Other current mandates as a member of the board of directors, executive management or advisory
board in undertakings with an economic purpose not listed above: Member of the Board of
Directors, Nereid Therapeutics (non-listed company)
Robert W. Scully was a member of the Office of the Chairman of Morgan Stanley from 2007 until
his retirement in 2009, and he previously served at Morgan Stanley as Co-President, Chairman of
global capital markets and Vice Chairman of investment banking. Prior to joining Morgan Stanley in
1996, he served as a managing director at Lehman Brothers and at Salomon Brothers Inc. Mr.
Scully is currently a director of KKR & Co. Inc. (listed company) and Zoetis Inc. (listed company).
Previously, Mr. Scully was a Public Governor of the Financial Industry Regulatory Authority (FINRA)
and a director of UBS Group AG, Bank of America Corporation, GMAC Financial Services and MSCI
Inc.
Other current mandates as a member of the board of directors, executive management or advisory
board in undertakings with an economic purpose not listed above: none
SC-9
SWISS STATUTORY COMPENSATION REPORT (continued)
Theodore E. Shasta
Retired Partner,
Wellington Management Company
Age: 73
Years of Service: 14 (since 2010)
Committee Memberships:
Audit
David H. Sidwell
Retired Chief Financial Officer,
Morgan Stanley
Age: 71
Years of Service: 10 (since 2014)
Committee Memberships:
Nominating & Governance (Chair), Compensation,
Executive
Olivier Steimer
Former Chairman,
Banque Cantonale Vaudoise
Age: 68
Years of Service: 16 (since 2008)
Committee Memberships:
Risk & Finance (Chair),
Executive
Frances F. Townsend
Advisory Services,
Frances Fragos Townsend, LLC
Age: 62
Years of Service: 4 (since 2020)
Committee Memberships:
Compensation (Chair),
Nominating & Governance, Executive
Theodore E. Shasta has served since 2009 as a Director of MBIA, Inc. (financial guarantee
insurance provider) (listed company), and also serves as the Chair of its Audit Committee and a
member of its Finance and Risk Committee, Compensation and Governance Committee and
Executive Committee. Mr. Shasta was formerly a Senior Vice President and Partner of Wellington
Management Company, a global investment advisor. Mr. Shasta joined Wellington Management
Company in 1996 and specialized in the financial analysis of publicly-traded insurance companies
and retired in June 2009. Prior to joining Wellington Management Company, Mr. Shasta was a
Senior Vice President of Loomis, Sayles & Company (investment management). Before that, he
served in various capacities with Dewey Square Investors and Bank of Boston. In total, Mr. Shasta
spent 25 years covering the insurance industry as a financial analyst.
Other current mandates as a member of the board of directors, executive management or advisory
board in undertakings with an economic purpose not listed above: none
David H. Sidwell was Executive Vice President and Chief Financial Officer of Morgan Stanley from
March 2004 to October 2007, when he retired. From 1984 to March 2004, Mr. Sidwell worked
for JPMorgan Chase & Co. in a variety of financial and operating positions, most recently as Chief
Financial Officer of JPMorgan Chase’s investment bank from January 2000 to March 2004. Prior to
joining JP Morgan in 1984, Mr. Sidwell was with Price Waterhouse LLP, a major public accounting
firm, from 1975 to 1984, where he was qualified as a chartered accountant with the Institute of
Chartered Accountants in England and Wales. Mr. Sidwell was Senior Independent Director of UBS
Group AG until April 2020 and was a director of the Federal National Mortgage Association (Fannie
Mae) until October 2016.
Other current mandates as a member of the board of directors, executive management or advisory
board in undertakings with an economic purpose not listed above: none
Olivier Steimer was Chairman of the Board of Banque Cantonale Vaudoise from October 2002 until
December 2017. Previously, he worked for the Credit Suisse Group from 1983 to 2002, with his
most recent position at that organization being Chief Executive Officer, Private Banking
International, and member of the Group Executive Board. Mr. Steimer has served since 2013 on the
Board of Allreal Holding AG (Swiss real estate manager and developer) (listed company) and since
January 2018 on the Board of Bank Lombard Odier & Co. Ltd. (a Swiss private bank) (non-listed
company). Also, from 2009 to 2021, he served as a member, and from 2012 to 2021 as Vice
Chairman, of the Bank Council of Swiss National Bank. He was Chairman of the foundation board
of the Swiss Finance Institute until June 2017. From 2003, he served as a member, and from
2010 to 2014 as Vice Chairman, of the Board of Directors of SBB CFF FFS (the Swiss national
railway company), and, from 2009 until 2012, he was the Chairman of the Board of Piguet
Galland & Cie SA. Mr. Steimer is a Swiss citizen.
Other current mandates as a member of the board of directors, executive management or advisory
board in undertakings with an economic purpose not listed above: none
Frances F. Townsend currently runs her own independent corporate consulting business, Frances
Fragos Townsend, LLC. From December 2020 until November 2023, Ms. Townsend served in a
variety of roles at Activision Blizzard (interactive gaming and entertainment), including Executive
Vice President for Corporate Affairs, Corporate Secretary, Chief Compliance Officer and Senior
Counsel. From October 2010 to December 2020, Ms. Townsend served at MacAndrews & Forbes
Incorporated (a diversified holding company). At the time of her departure she was Vice Chairman,
General Counsel and Chief Administrative Officer. From April 2009 to October 2010, Ms.
Townsend was a partner at the law firm of Baker Botts LLP. Prior to that, she served as Assistant to
President George W. Bush for Homeland Security and Counterterrorism and chaired the U.S.
Homeland Security Council from May 2004 until January 2008. She also served as Deputy
Assistant to the President and Deputy National Security Advisor for Combating Terrorism from May
2003 to May 2004. Prior to serving the President, Ms. Townsend was the first Assistant
Commandant for Intelligence for the U.S. Coast Guard and spent 13 years at the U.S. Department
of Justice in various senior positions. Ms. Townsend is a board member of the Council on Foreign
Relations and the Trilateral Commission, and is currently the lead independent director of Leonardo
DRS, Inc. (defense contractor) and a director of Freeport-McMoRan Inc. (international mining
company). During the past five years, Ms. Townsend served as a director of Scientific Games
Corporation (now Light & Wonder Inc.), SciPlay Corporation and The Western Union Company.
Other current mandates as a member of the board of directors, executive management or advisory
board in undertakings with an economic purpose not listed above: Member of the Advisory Board,
Beacon Global Strategies (non-listed company); Member of the Advisory Board, Coinbase (listed
company); Member of the Advisory Board, Investcorp Bank (non-listed company); Member of the
Board of Directors, SAP National Security Services (non-listed company); Member of the Board of
Directors, Thomson Reuters Special Services (non-listed company)
SC-10
SWISS STATUTORY COMPENSATION REPORT (continued)
b) Executive Management
Evan G. Greenberg
See above under “Board of Directors.”
Chairman and Chief Executive Officer
John W. Keogh
President and Chief Operating Officer
Age: 59
Peter C. Enns
Chief Financial Officer
Age: 58
Joseph F. Wayland
General Counsel and Secretary
Age: 66
John W. Keogh was appointed President of Chubb in December 2020, and has served as Chief Operating
Officer since July 2011. Mr. Keogh was appointed Vice Chairman of Chubb Limited in 2010 and Executive
Vice Chairman in 2015. Mr. Keogh joined Chubb in 2006 as Chairman, Insurance – Overseas General.
Before joining Chubb, Mr. Keogh held a range of positions with increasing responsibility during a 20-year
career with AIG, including Senior Vice President, Domestic General Insurance, and President and Chief
Executive Officer of National Union Fire Insurance Company of Pittsburgh, an AIG member company. He
began his insurance career as an underwriter with AIG in 1986.
Other current mandates as a member of the board of directors, executive management or advisory board in
undertakings with an economic purpose not listed above: none
Peter C. Enns was appointed Executive Vice President and Chief Financial Officer of Chubb Limited in July
2021. Mr. Enns, who joined Chubb in April 2021 as Executive Vice President, Finance, has more than 30
years of finance and investment banking experience. Before joining Chubb, Mr. Enns held several
management positions at HSBC from 2018 to 2020, including Global Head of Financial Institutions Group,
Global Co-Head of Corporate Finance Coverage, and Global Co-Head of Investment Banking Coverage. Prior
to HSBC, Mr. Enns held several senior positions through 2017 during a more than 20-year career at
Goldman Sachs, including Chairman and CEO of Goldman Sachs Canada, Head of the Asia Financial
Institutions Group, and Partner of the U.S. Financial Institutions Group.
Other current mandates as a member of the board of directors, executive management or advisory board in
undertakings with an economic purpose not listed above: none
Joseph F. Wayland was appointed Executive Vice President of Chubb Limited in January 2016, and
General Counsel and Secretary of Chubb Limited in July 2013. Mr. Wayland joined Chubb from the law
firm of Simpson Thacher & Bartlett LLP, where he was a partner since 1994. From 2010 to 2012, he
served in the United States Department of Justice, first as Deputy Assistant Attorney General of the
Antitrust Division, and was later appointed as the Acting Assistant Attorney General in charge of that
division.
Other current mandates as a member of the board of directors, executive management or advisory board in
undertakings with an economic purpose not listed above: none
SC-11
REPORT OF THE STATUTORY AUDITOR TO THE GENERAL MEETING OF CHUBB LIMITED, ZURICH ON
THE (SWISS STATUTORY) COMPENSATION REPORT
Report on the audit of the compensation report
Opinion
We have audited the Swiss Statutory Compensation Report (compensation report) of Chubb Limited (the Company) for the year
ended December 31, 2023. The audit was limited to the information pursuant to article 734a-734f CO in the tables/information
marked 'audited' on pages SC-4 to SC-11 of the compensation report.
In our opinion, the information pursuant to article 734a-734f CO in the accompanying compensation report complies with
Swiss law and the Company's articles of association.
Basis for opinion
We conducted our audit in accordance with Swiss law and Swiss Standards on Auditing (SA-CH). Our responsibilities under
those provisions and standards are further described in the 'Auditor’s responsibilities for the audit of the compensation report'
section of our report. We are independent of the Company in accordance with the provisions of Swiss law and the requirements
of the Swiss audit profession, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Other information
The Board of Directors is responsible for the other information. The other information comprises the information included in the
annual report, but does not include the tables marked 'audited' in the compensation report, the consolidated financial
statements, the financial statements and our auditor’s reports thereon.
Our opinion on the compensation report does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the compensation report, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the audited financial information in the compensation
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Board of Directors’ responsibilities for the compensation report
The Board of Directors is responsible for the preparation of a compensation report in accordance with the provisions of Swiss
law and the Company's articles of association, and for such internal control as the Board of Directors determines is necessary to
enable the preparation of a compensation report that is free from material misstatement, whether due to fraud or error. It is also
responsible for designing the remuneration system and defining individual remuneration packages.
Auditor’s responsibilities for the audit of the compensation report
Our objectives are to obtain reasonable assurance about whether the information pursuant to article 734a-734f CO is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Swiss law and SA-CH
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of this compensation report.
As part of an audit in accordance with Swiss law and SA-CH, we exercise professional judgment and maintain professional
scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement in the compensation report, whether due to fraud or error, design
and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
SC-12
REPORT OF THE STATUTORY AUDITOR TO THE GENERAL MEETING OF CHUBB LIMITED, ZURICH ON
THE (SWISS STATUTORY) COMPENSATION REPORT (continued)
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal
control.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made.
We communicate with the Board of Directors or its relevant committee regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during
our audit.
We also provide the Board of Directors or its relevant committee with a statement that we have complied with relevant ethical
requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be
thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
PricewaterhouseCoopers AG
/s/ Peter Eberli
Peter Eberli
Licensed audit expert
Auditor in charge
Zurich, March 21, 2024
/s/ Beat Walter
Beat Walter
Licensed audit expert
SC-13
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Core Operating Income
$9.34B
A record and up 45.2%
P&C Combined Ratio
86.5%
A record
Adjusted Net Investment Income
$5.34B
A record and up 32.8%
Core Operating EPS
$22.54
A record and up 48.5%
Consolidated Net Premiums Written
13.5%
Increase
All metrics are for the year 2023
Contents
Financial Summary
Chairman and CEO
Letter to Shareholders
Review of Operations
Sustainability at Chubb
Chubb Group Corporate Officers
and Other Executives
Chubb Limited Board of Directors 46
Shareholder Information
Non–GAAP Financial Measures
Form 10–K
Swiss Statutory Financial Statements
Swiss Statutory Compensation Report
1
2
22
43
44
47
48
Featured artwork
Detail of artwork on cover, gatefold and pages 22, 31, 32 and 43
Donna Huanca
MAGMA SLIT #2 (FALL), 2021
oil, sand on digital print on canvas
90 9/16 x 129 15/16 inches (230 x 330 cm)
© Donna Huanca
Courtesy: the artist and Sean Kelly, New York/Los Angeles
Page 2
Jose Dávila
Homage to the Square, 2015
stainless steel frames, epoxy paint and wire
35 7/16 x 35 7/16 x 35 7/16 inches (90 x 90 x 90 cm)
© Jose Dávila
Courtesy: the artist and Sean Kelly, New York/Los Angeles
Page 21
Jose Dávila
Homage to the Square, 2021
polished stainless steel and epoxy paint
70 7/8 x 70 7/8 x 70 7/8 inches (180 x 180 x 180 cm)
© Jose Dávila
Courtesy: the artist and Sean Kelly, New York/Los Angeles
Page 27
Idris Khan
Between the Curtain and the Glass, 2022
digital C-type print on aluminum
print: 52 11/16 x 115 1/4 x 1 3/16 inches (133.8 x 292.8 x 3 cm)
framed: 57 13/16 x 120 3/8 x 2 15/16 inches (146.8 x 305.8 x 7.5 cm)
edition of 7 with 2 APs (#2/7)
© Idris Khan
Courtesy: the artist and Sean Kelly, New York/Los Angeles
Page 28
Rebecca Ward
spine, 2022
acrylic and dye on stitched canvas
60 x 80 x 1 1/2 inches (152.4 x 203.2 x 3.8 cm)
© Rebecca Ward
Page 30
Jongsuk Yoon
Mai, 2022
oil on canvas
80 11/16 x 167 5/16 inches (205 x 425 cm)
artwork by Jongsuk Yoon | courtesy Galerie nächst St. Stephan
Rosemarie Schwarzwälder, Vienna | © Photo: Markus Wörgötter
Page 37
Angelina Pwerle
Bush Plum Dreaming, 2002
synthetic polymer paint on linen
painting: 46 7/16 x 70 7/8 inches (118 x 180 cm)
framed: 47 3/8 x 71 13/16 x 2 1/2 inches (120.3 x 182.4 x 6.3 cm)
© Copyright Agency. Licensed by Artists Rights Society (ARS),
New York, 2024
Page 38
Mariko Mori
Plasma Stone II, 2017-2018
dichroic coated layered acrylic in 2 parts, Corian base
50 x 23 1/2 x 18 inches (127 x 59.7 x 45.7 cm) each
edition of 5 with 2 APs (#1/5)
© Mariko Mori
Courtesy: the artist and Sean Kelly, New York/Los Angeles
Chubb Limited
Bärengasse 32
CH—8001 Zurich
Switzerland
chubb.com
A Record-Breaking Year
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Chubb Limited
Annual Report
2023
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