Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - CHUBB CORP | d290231d8k.htm |
| EX-99.2 - SUPPLEMENTARY INVESTOR INFORMATION REPORT - CHUBB CORP | d290231dex992.htm |
| EX-99.1 - PRESS RELEASE DATED JANUARY 26, 2012 - CHUBB CORP | d290231dex991.htm |
 The
Chubb Corporation The Chubb Corporation
2011 Update on Asbestos
2011 Update on Asbestos
Reserves
Reserves
Exhibit 99.3 |
 CHUBB
2
Forward Looking Statements
The
following
materials
contain
“forward
looking
statements,”
including
those
relating
to
loss
reserves
and
claim
estimates,
that
are
subject
to
certain
risks
and
uncertainties
which
could
cause
actual
results
to
differ
materially
from
those
expressed
or
suggested
by
such
statements.
Such
risks
or
uncertainties
include
but
are
not
limited
to
those
which
may
be
noted
more
fully
in
the
materials
themselves,
as
well
as
those
discussed
or
identified
from
time
to
time
in
The
Chubb
Corporation’s
public
filings
with
the
Securities
and
Exchange
Commission.
The
Chubb
Corporation
assumes
no
obligation
to
update
any
forward-looking
information
set
forth
in
the
following
materials,
which
speak
as
of
January
26,
2012
or
as
otherwise
specified
in
the
materials. |
 CHUBB
3
Contents
•
Purpose of Updated Review
•
Evaluation Methodology
•
Exposure Analysis
•
Asbestos Payments and Reserves
•
Three Year Reserve Comparison
•
Conclusions |
 CHUBB
4
Purpose of Review
•
Reassess Chubb’s ultimate liability regarding asbestos
exposures using an internal analysis, reviewed by our
independent outside consulting actuaries
•
Determine appropriate reserve levels
•
Ensure aggressive case management of asbestos claims
–
manage our exposure
–
identify trends or issues that may impact exposure
•
Provide relevant substantive information requested by
investors and rating agencies |
 CHUBB
5
Evaluation Methodology
•
Chubb segmented its defendant policyholders into two
groups
Traditional defendant policyholders (Tiers 1 & 2)
–
Those engaged in asbestos mining, manufacturing and
building products industries
Peripheral defendant policyholders (Tiers 3 & 4)
–
Those who manufactured, distributed, or installed an
asbestos-containing product or who owned or operated
a facility where asbestos products were present |
 CHUBB
6
Exposure Analysis
Within these policyholder categories:
•
All Tier 1 & 2 accounts and Tier 3 & 4 accounts with Chubb incurred
losses of at least $3M or judged to have high potential exposure
were
evaluated individually. Claimant information and available coverage
were reviewed for each defendant policyholder, including terms of
coverage, policy limits and aggregate limits.
•
Tier 3 & 4 accounts not individually evaluated were analyzed in the
aggregate using statistical techniques. Factors considered include
available coverage, claimant count, report year, bankruptcy, coverage
dispute and case reserve amount.
•
Future claims from unknown defendant policyholders were estimated
based on claim reporting patterns and projected claim severities.
|
 CHUBB
7
Asbestos Payments & Reserves by Category
#
$
$
Traditional Defendants Tier 1
2
–
33
Traditional Defendants Tier 2
14
5
110
Peripheral Defendants Tiers 3 & 4
349
40
327 All Other
3
20
Reserves for future claims from
unknown policyholders
Unknown
–
115
____
____ ____
Total
365
48
605
No. of Open
Total Net
Net Asbestos
Policyholders
Paid
Reserves
At 12/31/11
In 2011
At 12/31/11
($ in millions) |
 CHUBB
8
Asbestos Payments & Reserves by Category
Total net asbestos reserves at 12/31/11: $605M
•
Case reserves of $269M
–
Established by Claim Department on known claims
•
IBNR reserves of $336M
–
Includes provision for:
•
potential reserve development on known defendant
policyholders (development)
•
future claims from unknown defendant policyholders
(pure IBNR)
•
future declaratory judgment actions and other
litigation |
 CHUBB
9
Asbestos Net Loss Reserve Comparison
($ in Millions)
2010
2011
Beginning Reserves
$631
Incurred Losses & LAE
22
0
Calendar Year Payments
for Losses
(28)
(36)
(20)
(22)
Ending Reserves
$605
$631
IBNR portion of
Ending Reserves
$336
$359
2009
$747
0
(38)
(20)
$689
$378
$689
Calendar Year Payments
for LAE |
 CHUBB
10
Conclusions
•
Chubb’s asbestos net reserves of $605M at 12/31/11 are
based on our 2011 analysis of our ultimate asbestos liabilities
•
This reserve represents Chubb’s best estimate of our ultimate
asbestos liability at 12/31/11
•
This reserve amount is at full (undiscounted) value, and no
consideration has been given for legislative or judicial relief
•
The net reserve reflects a modest reinsurance recoverable
amount of approximately 4% of the gross reserve
•
Net payments for asbestos liabilities in 2011 were $48M
•
Reserves at 12/31/11 calculate to a 3 year survival ratio of 11.1
|