Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - CHUBB CORP | d807409d8k.htm |
| EX-99.1 - EX-99.1 - CHUBB CORP | d807409dex991.htm |
Exhibit 99.2
| The Chubb Corporation |
Supplementary Investor Information |
September 30, 2014 |
| This report is for informational purposes only. It should be read in conjunction with documents filed by The Chubb Corporation with the Securities and Exchange Commission, including the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. |
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THE CHUBB CORPORATION
SUPPLEMENTARY INVESTOR INFORMATION
TABLE OF CONTENTS
SEPTEMBER 30, 2014
| Page | ||
| The Chubb Corporation: |
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| Consolidated Balance Sheet Highlights |
1 | |
| Share Repurchase Activity |
2 | |
| Summary of Invested Assets: |
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| Corporate |
3 | |
| Property and Casualty |
3 | |
| Investment Income After Taxes: |
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| Corporate |
4 | |
| Property and Casualty |
4 | |
| Property and Casualty Insurance Group: |
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| Statutory Policyholders’ Surplus |
4 | |
| Change in Net Unpaid Losses |
5 | |
| Underwriting Results - Quarterly |
6-10 | |
| Underwriting Results - Year-To-Date |
11-15 | |
| Definitions of Key Terms |
16-17 | |
THE CHUBB CORPORATION
CONSOLIDATED BALANCE SHEET HIGHLIGHTS
(in millions, except per share amounts)
| September 30 2014 |
December 31 2013 |
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| % of Total | % of Total | |||||||||||||||
| Invested Assets (at carrying value) |
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| Short Term Investments |
$ | 2,047 | 5 | % | $ | 2,114 | 5 | % | ||||||||
| Fixed Maturities |
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| Tax Exempt |
19,340 | 44 | 18,421 | 43 | ||||||||||||
| Taxable |
19,249 | 44 | 18,670 | 44 | ||||||||||||
| Equity Securities |
1,888 | 4 | 1,810 | 4 | ||||||||||||
| Other Invested Assets |
1,558 | 3 | 1,598 | 4 | ||||||||||||
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| Total Invested Assets |
$ | 44,082 | 100 | % | $ | 42,613 | 100 | % | ||||||||
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| Unrealized Appreciation of Investments |
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| Fixed Maturities |
$ | 1,751 | $ | 1,132 | ||||||||||||
| Equity Securities |
790 | 753 | ||||||||||||||
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| 2,541 | 1,885 | |||||||||||||||
| Deferred Income Tax Liability |
889 | 660 | ||||||||||||||
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| $ | 1,652 | $ | 1,225 | |||||||||||||
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| Capitalization |
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| Long Term Debt |
$ | 3,300 | $ | 3,300 | ||||||||||||
| Shareholders’ Equity |
16,506 | 16,097 | ||||||||||||||
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| Total Capitalization |
$ | 19,806 | $ | 19,397 | ||||||||||||
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| Debt as a Percentage of Total Capitalization |
16.7 | % | 17.0 | % | ||||||||||||
| Actual Common Shares Outstanding |
235.8 | 248.3 | ||||||||||||||
| Book Value Per Common Share |
$ | 70.00 | $ | 64.83 | ||||||||||||
| Book Value Per Common Share, with Available-for-Sale Fixed Maturities at Amortized Cost |
$ | 65.17 | $ | 61.86 | ||||||||||||
Page 1 of 17
THE CHUBB CORPORATION
SHARE REPURCHASE ACTIVITY
(dollars in millions, except per share amounts)
| Periods Ended September 30 | ||||||||||||
| Third Quarter 2014 |
Nine Months 2014 |
From December 2005 to September 30, 2014 |
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| Cost of Shares Repurchased |
$ | 425 | $ | 1,209 | $ | 13,122 | ||||||
| Average Cost Per Share |
$ | 90.38 | $ | 89.87 | $ | 58.18 | ||||||
| Shares Repurchased |
4,696,069 | 13,448,081 | 225,521,015 | |||||||||
During the period from December 2005 through January 2013, the Board of Directors periodically authorized share repurchase programs. Pursuant to these authorizations, approximately 213 million shares of the Corporation’s common stock were repurchased. No shares or funds remain available under these authorizations.
In January 2014, the Board of Directors authorized the repurchase of up to $1.5 billion of the Corporation’s common stock. The January 2014 authorization has no expiration date and, as of September 30, 2014, approximately $399 million remained under this authorization.
Page 2 of 17
THE CHUBB CORPORATION
SUMMARY OF INVESTED ASSETS
CORPORATE
| Cost or Amortized Cost |
Carrying Value (a) |
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| Sept. 30 2014 |
Dec. 31 2013 |
Sept. 30 2014 |
Dec. 31 2013 |
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| (in millions) | ||||||||||||||||
| Short Term Investments |
$ | 428 | $ | 864 | $ | 428 | $ | 864 | ||||||||
| Taxable Fixed Maturities |
1,368 | 1,115 | 1,383 | 1,130 | ||||||||||||
| Equity Securities |
— | — | — | 2 | ||||||||||||
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| TOTAL |
$ | 1,796 | $ | 1,979 | $ | 1,811 | $ | 1,996 | ||||||||
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PROPERTY AND CASUALTY
| Cost or Amortized Cost |
Carrying Value (a) |
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| Sept. 30 2014 |
Dec. 31 2013 |
Sept. 30 2014 |
Dec. 31 2013 |
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| (in millions) | ||||||||||||||||
| Short Term Investments |
$ | 1,619 | $ | 1,250 | $ | 1,619 | $ | 1,250 | ||||||||
| Fixed Maturities |
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| Tax Exempt |
18,214 | 17,808 | 19,340 | 18,421 | ||||||||||||
| Taxable |
17,256 | 17,036 | 17,866 | 17,540 | ||||||||||||
| Equity Securities |
1,098 | 1,057 | 1,888 | 1,808 | ||||||||||||
| Other Invested Assets |
1,558 | 1,598 | 1,558 | 1,598 | ||||||||||||
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| TOTAL |
$ | 39,745 | $ | 38,749 | $ | 42,271 | $ | 40,617 | ||||||||
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| (a) | Short term investments are carried at amortized cost, which approximates fair value. Fixed maturities and equity securities are carried at fair value. Other invested assets include private equity limited partnerships carried at the Corporation’s equity in the net assets of the partnerships. |
Page 3 of 17
THE CHUBB CORPORATION
INVESTMENT INCOME AFTER TAXES
| Periods Ended September 30 | ||||||||||||||||
| Third Quarter | Nine Months | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| (in millions) | ||||||||||||||||
| CORPORATE INVESTMENT INCOME |
$ | 3 | $ | 3 | $ | 11 | $ | 12 | ||||||||
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| PROPERTY AND CASUALTY INVESTMENT INCOME |
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| Tax Exempt Interest |
$ | 164 | $ | 171 | $ | 496 | $ | 523 | ||||||||
| Taxable Interest |
98 | 102 | 302 | 310 | ||||||||||||
| Other |
15 | 13 | 43 | 43 | ||||||||||||
| Investment Expenses |
(7 | ) | (6 | ) | (19 | ) | (22 | ) | ||||||||
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| TOTAL |
$ | 270 | $ | 280 | $ | 822 | $ | 854 | ||||||||
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| Effective Tax Rate |
17.4 | % | 18.1 | % | 18.1 | % | 18.0 | % | ||||||||
| After-Tax Annualized Yield |
2.70 | % | 2.83 | % | 2.76 | % | 2.88 | % | ||||||||
After-tax annualized yield is based on the average invested assets for the periods presented, with fixed maturities at amortized cost and equity securities at fair value.
STATUTORY POLICYHOLDERS’ SURPLUS
| Sept. 30 2014 |
Dec. 31 2013 |
Sept. 30 2013 |
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| (in millions) | ||||||||||||
| Estimated Statutory Policyholders’ Surplus |
$ | 15,325 | $ | 15,024 | $ | 14,800 | ||||||
| Rolling Year Statutory Net Premiums Written |
$ | 12,490 | $ | 12,214 | $ | 12,085 | ||||||
| Ratio of Statutory Net Premiums Written to Policyholders’ Surplus |
0.82:1 | 0.81:1 | 0.82:1 | |||||||||
Statutory Policyholders’ Surplus and Net Premiums Written include all domestic and foreign property and casualty subsidiaries.
Page 4 of 17
THE CHUBB CORPORATION
PROPERTY AND CASUALTY
CHANGE IN NET UNPAID LOSSES
NINE MONTHS ENDED SEPTEMBER 30, 2014
| Net Unpaid Losses | IBNR Increase (Decrease) |
All Other Unpaid Losses Increase (Decrease) |
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| Sept. 30 2014 |
Dec. 31 2013 |
Increase (Decrease) |
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| (in millions) | ||||||||||||||||||||
| Personal Insurance |
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| Automobile |
$ | 402 | $ | 390 | $ | 12 | $ | 14 | $ | (2 | ) | |||||||||
| Homeowners |
780 | 715 | 65 | 30 | 35 | |||||||||||||||
| Other |
1,008 | 968 | 40 | 47 | (7 | ) | ||||||||||||||
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| Total Personal |
2,190 | 2,073 | 117 | 91 | 26 | |||||||||||||||
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| Commercial Insurance |
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| Multiple Peril |
1,771 | 1,745 | 26 | 22 | 4 | |||||||||||||||
| Casualty |
6,554 | 6,576 | (22 | ) | 120 | (142 | ) | |||||||||||||
| Workers’ Compensation |
2,886 | 2,793 | 93 | 15 | 78 | |||||||||||||||
| Property and Marine |
900 | 886 | 14 | 22 | (8 | ) | ||||||||||||||
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| Total Commercial |
12,111 | 12,000 | 111 | 179 | (68 | ) | ||||||||||||||
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| Specialty Insurance |
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| Professional Liability |
6,732 | 6,889 | (157 | ) | (41 | ) | (116 | ) | ||||||||||||
| Surety |
76 | 71 | 5 | 5 | — | |||||||||||||||
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| Total Specialty |
6,808 | 6,960 | (152 | ) | (36 | ) | (116 | ) | ||||||||||||
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| Total Insurance |
21,109 | 21,033 | 76 | 234 | (158 | ) | ||||||||||||||
| Reinsurance Assumed |
280 | 311 | (31 | ) | (12 | ) | (19 | ) | ||||||||||||
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| Total |
$ | 21,389 | $ | 21,344 | $ | 45 | $ | 222 | $ | (177 | ) | |||||||||
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Page 5 of 17
THE CHUBB CORPORATION — WORLDWIDE
PROPERTY AND CASUALTY UNDERWRITING RESULTS
FOR THE QUARTERS ENDED SEPTEMBER 30, 2014 AND 2013
(DOLLARS IN MILLIONS)
| Personal Automobile |
Homeowners | Other Personal |
Total Personal |
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| 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||||||
| Net Premiums Written |
$ | 190 | $ | 185 | $ | 735 | $ | 707 | $ | 242 | $ | 214 | $ | 1,167 | $ | 1,106 | ||||||||||||||||
| Decrease (Increase) in Unearned Premiums |
(6 | ) | (5 | ) | (51 | ) | (52 | ) | 8 | 11 | (49 | ) | (46 | ) | ||||||||||||||||||
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| Net Premiums Earned |
184 | 180 | 684 | 655 | 250 | 225 | 1,118 | 1,060 | ||||||||||||||||||||||||
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| Net Losses Paid |
114 | 112 | 354 | 301 | 117 | 115 | 585 | 528 | ||||||||||||||||||||||||
| Increase (Decrease) in Outstanding Losses |
4 | 3 | (16 | ) | 36 | 14 | 4 | 2 | 43 | |||||||||||||||||||||||
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| Net Losses Incurred |
118 | 115 | 338 | 337 | 131 | 119 | 587 | 571 | ||||||||||||||||||||||||
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| Expenses Incurred |
59 | 59 | 227 | 232 | 104 | 90 | 390 | 381 | ||||||||||||||||||||||||
| Dividends Incurred |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
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| Statutory Underwriting Income |
$ | 7 | $ | 6 | $ | 119 | $ | 86 | $ | 15 | $ | 16 | $ | 141 | $ | 108 | ||||||||||||||||
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| Ratios After Dividends to Policyholders: |
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| Loss |
64.1 | % | 63.9 | % | 49.4 | % | 51.5 | % | 52.4 | % | 52.9 | % | 52.5 | % | 53.9 | % | ||||||||||||||||
| Expense |
31.1 | 31.9 | 30.9 | 32.8 | 43.0 | 42.0 | 33.4 | 34.4 | ||||||||||||||||||||||||
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| Combined |
95.2 | % | 95.8 | % | 80.3 | % | 84.3 | % | 95.4 | % | 94.9 | % | 85.9 | % | 88.3 | % | ||||||||||||||||
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| Premiums Written as a % of Total |
6.0 | % | 6.1 | % | 23.2 | % | 23.3 | % | 7.6 | % | 7.1 | % | 36.8 | % | 36.5 | % | ||||||||||||||||
Page 6 of 17
THE CHUBB CORPORATION — WORLDWIDE
PROPERTY AND CASUALTY UNDERWRITING RESULTS
FOR THE QUARTERS ENDED SEPTEMBER 30, 2014 AND 2013
(DOLLARS IN MILLIONS)
| Commercial Multiple Peril |
Commercial Casualty |
Commercial Workers’ Compensation |
Commercial Property and Marine |
Total Commercial |
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| 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||||||||||||
| Net Premiums Written |
$ | 291 | $ | 285 | $ | 401 | $ | 390 | $ | 279 | $ | 281 | $ | 330 | $ | 299 | $ | 1,301 | $ | 1,255 | ||||||||||||||||||||
| Decrease (Increase) in Unearned Premiums |
(12 | ) | (6 | ) | 9 | 25 | 4 | (12 | ) | 36 | 59 | 37 | 66 | |||||||||||||||||||||||||||
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| Net Premiums Earned |
279 | 279 | 410 | 415 | 283 | 269 | 366 | 358 | 1,338 | 1,321 | ||||||||||||||||||||||||||||||
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| Net Losses Paid |
132 | 125 | 213 | 225 | 121 | 119 | 236 | 229 | 702 | 698 | ||||||||||||||||||||||||||||||
| Increase (Decrease) in Outstanding Losses |
(5 | ) | — | 56 | 58 | 44 | 58 | (33 | ) | (120 | ) | 62 | (4 | ) | ||||||||||||||||||||||||||
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| Net Losses Incurred |
127 | 125 | 269 | 283 | 165 | 177 | 203 | 109 | 764 | 694 | ||||||||||||||||||||||||||||||
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| Expenses Incurred |
106 | 106 | 119 | 118 | 63 | 63 | 125 | 116 | 413 | 403 | ||||||||||||||||||||||||||||||
| Dividends Incurred |
— | — | — | — | 10 | 9 | — | — | 10 | 9 | ||||||||||||||||||||||||||||||
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| Statutory Underwriting Income |
$ | 46 | $ | 48 | $ | 22 | $ | 14 | $ | 45 | $ | 20 | $ | 38 | $ | 133 | $ | 151 | $ | 215 | ||||||||||||||||||||
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| Ratios After Dividends to Policyholders: |
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| Loss |
45.5 | % | 44.8 | % | 65.6 | % | 68.2 | % | 60.5 | % | 68.1 | % | 55.4 | % | 30.4 | % | 57.5 | % | 52.9 | % | ||||||||||||||||||||
| Expense |
36.4 | 37.2 | 29.7 | 30.3 | 23.4 | 23.1 | 37.9 | 38.8 | 32.0 | 32.3 | ||||||||||||||||||||||||||||||
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| Combined |
81.9 | % | 82.0 | % | 95.3 | % | 98.5 | % | 83.9 | % | 91.2 | % | 93.3 | % | 69.2 | % | 89.5 | % | 85.2 | % | ||||||||||||||||||||
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| Premiums Written as a % of Total |
9.2 | % | 9.4 | % | 12.7 | % | 12.9 | % | 8.8 | % | 9.3 | % | 10.4 | % | 9.9 | % | 41.1 | % | 41.5 | % | ||||||||||||||||||||
Page 7 of 17
THE CHUBB CORPORATION — WORLDWIDE
PROPERTY AND CASUALTY UNDERWRITING RESULTS
FOR THE QUARTERS ENDED SEPTEMBER 30, 2014 AND 2013
(DOLLARS IN MILLIONS)
| Professional Liability |
Surety | Total Specialty |
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| 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
| Net Premiums Written |
$ | 629 | $ | 594 | $ | 72 | $ | 76 | $ | 701 | $ | 670 | ||||||||||||
| Decrease (Increase) in Unearned Premiums |
(39 | ) | (21 | ) | 1 | (1 | ) | (38 | ) | (22 | ) | |||||||||||||
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| Net Premiums Earned |
590 | 573 | 73 | 75 | 663 | 648 | ||||||||||||||||||
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| Net Losses Paid |
312 | 365 | 6 | 4 | 318 | 369 | ||||||||||||||||||
| Increase (Decrease) in Outstanding Losses |
8 | (27 | ) | 2 | (5 | ) | 10 | (32 | ) | |||||||||||||||
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| Net Losses Incurred |
320 | 338 | 8 | (1 | ) | 328 | 337 | |||||||||||||||||
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| Expenses Incurred |
170 | 170 | 31 | 32 | 201 | 202 | ||||||||||||||||||
| Dividends Incurred |
— | — | 1 | 1 | 1 | 1 | ||||||||||||||||||
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| Statutory Underwriting Income |
$ | 100 | $ | 65 | $ | 33 | $ | 43 | $ | 133 | $ | 108 | ||||||||||||
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| Ratios After Dividends to Policyholders: |
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| Loss |
54.3 | % | 59.0 | % | 11.1 | % | (1.4 | )% | 49.6 | % | 52.1 | % | ||||||||||||
| Expense |
27.0 | 28.6 | 43.7 | 42.7 | 28.7 | 30.2 | ||||||||||||||||||
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| Combined |
81.3 | % | 87.6 | % | 54.8 | % | 41.3 | % | 78.3 | % | 82.3 | % | ||||||||||||
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| Premiums Written as a % of Total |
19.8 | % | 19.6 | % | 2.3 | % | 2.5 | % | 22.1 | % | 22.1 | % | ||||||||||||
Page 8 of 17
THE CHUBB CORPORATION — WORLDWIDE
PROPERTY AND CASUALTY UNDERWRITING RESULTS
FOR THE QUARTERS ENDED SEPTEMBER 30, 2014 AND 2013
(DOLLARS IN MILLIONS)
| Total Insurance |
Reinsurance Assumed |
Worldwide Total |
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| 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
| Net Premiums Written |
$ | 3,169 | $ | 3,031 | $ | — | $ | (2 | ) | $ | 3,169 | $ | 3,029 | |||||||||||
| Decrease (Increase) in Unearned Premiums |
(50 | ) | (2 | ) | — | — | (50 | ) | (2 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net Premiums Earned |
3,119 | 3,029 | — | (2 | ) | 3,119 | 3,027 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net Losses Paid |
1,605 | 1,595 | 10 | 9 | 1,615 | 1,604 | ||||||||||||||||||
| Increase (Decrease) in Outstanding Losses |
74 | 7 | (10 | ) | (11 | ) | 64 | (4 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net Losses Incurred |
1,679 | 1,602 | — | (2 | ) | 1,679 | 1,600 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Expenses Incurred |
1,004 | 986 | — | — | 1,004 | 986 | ||||||||||||||||||
| Dividends Incurred |
11 | 10 | — | — | 11 | 10 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Statutory Underwriting Income |
$ | 425 | $ | 431 | $ | — | $ | — | 425 | 431 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Increase in Deferred Acquisition Costs |
14 | 12 | ||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| GAAP Underwriting Income |
$ | 439 | $ | 443 | ||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Ratios After Dividends to Policyholders: |
||||||||||||||||||||||||
| Loss |
54.0 | % | 53.1 | % | * | % | * | % | 54.0 | % | 53.0 | % | ||||||||||||
| Expense |
31.8 | 32.6 | * | * | 31.8 | 32.7 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Combined |
85.8 | % | 85.7 | % | * | % | * | % | 85.8 | % | 85.7 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Premiums Written as a % of Total |
100.0 | % | 100.1 | % | 0.0 | % | (0.1 | )% | 100.0 | % | 100.0 | % | ||||||||||||
| * | Combined, loss and expense ratios are no longer presented for the Reinsurance Assumed business since it is in runoff. |
Page 9 of 17
THE CHUBB CORPORATION — WORLDWIDE
PROPERTY AND CASUALTY UNDERWRITING RESULTS
FOR THE QUARTERS ENDED SEPTEMBER 30, 2014 AND 2013
(DOLLARS IN MILLIONS)
| United States | Outside the United States |
Worldwide Total |
||||||||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
| Net Premiums Written |
$ | 2,444 | $ | 2,335 | $ | 725 | $ | 694 | $ | 3,169 | $ | 3,029 | ||||||||||||
| Decrease (Increase) in Unearned Premiums |
(88 | ) | (65 | ) | 38 | 63 | (50 | ) | (2 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net Premiums Earned |
2,356 | 2,270 | 763 | 757 | 3,119 | 3,027 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net Losses Paid |
1,211 | 1,180 | 404 | 424 | 1,615 | 1,604 | ||||||||||||||||||
| Increase (Decrease) in Outstanding Losses |
47 | 21 | 17 | (25 | ) | 64 | (4 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net Losses Incurred |
1,258 | 1,201 | 421 | 399 | 1,679 | 1,600 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Expenses Incurred |
711 | 702 | 293 | 284 | 1,004 | 986 | ||||||||||||||||||
| Dividends Incurred |
11 | 10 | — | — | 11 | 10 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Statutory Underwriting Income |
$ | 376 | $ | 357 | $ | 49 | $ | 74 | 425 | 431 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Increase in Deferred Acquisition Costs |
14 | 12 | ||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| GAAP Underwriting Income |
$ | 439 | $ | 443 | ||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Ratios After Dividends to Policyholders: |
||||||||||||||||||||||||
| Loss |
53.7 | % | 53.1 | % | 55.2 | % | 52.7 | % | 54.0 | % | 53.0 | % | ||||||||||||
| Expense |
29.2 | 30.2 | 40.4 | 40.9 | 31.8 | 32.7 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Combined |
82.9 | % | 83.3 | % | 95.6 | % | 93.6 | % | 85.8 | % | 85.7 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Premiums Written as a % of Total |
77.1 | % | 77.1 | % | 22.9 | % | 22.9 | % | 100.0 | % | 100.0 | % | ||||||||||||
Page 10 of 17
THE CHUBB CORPORATION — WORLDWIDE
PROPERTY AND CASUALTY UNDERWRITING RESULTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013
(DOLLARS IN MILLIONS)
| Personal Automobile |
Homeowners | Other Personal |
Total Personal |
|||||||||||||||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||||||
| Net Premiums Written |
$ | 558 | $ | 556 | $ | 2,093 | $ | 2,011 | $ | 738 | $ | 680 | $ | 3,389 | $ | 3,247 | ||||||||||||||||
| Decrease (Increase) in Unearned Premiums |
(17 | ) | (26 | ) | (68 | ) | (70 | ) | (8 | ) | (10 | ) | (93 | ) | (106 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Net Premiums Earned |
541 | 530 | 2,025 | 1,941 | 730 | 670 | 3,296 | 3,141 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Net Losses Paid |
344 | 319 | 1,161 | 1,091 | 339 | 327 | 1,844 | 1,737 | ||||||||||||||||||||||||
| Increase (Decrease) in Outstanding Losses |
15 | 17 | 70 | (95 | ) | 42 | 32 | 127 | (46 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Net Losses Incurred |
359 | 336 | 1,231 | 996 | 381 | 359 | 1,971 | 1,691 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Expenses Incurred |
173 | 176 | 658 | 666 | 306 | 275 | 1,137 | 1,117 | ||||||||||||||||||||||||
| Dividends Incurred |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Statutory Underwriting Income |
$ | 9 | $ | 18 | $ | 136 | $ | 279 | $ | 43 | $ | 36 | $ | 188 | $ | 333 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Ratios After Dividends to Policyholders: |
||||||||||||||||||||||||||||||||
| Loss |
66.4 | % | 63.4 | % | 60.8 | % | 51.3 | % | 52.2 | % | 53.6 | % | 59.8 | % | 53.8 | % | ||||||||||||||||
| Expense |
31.0 | 31.7 | 31.4 | 33.1 | 41.5 | 40.4 | 33.5 | 34.4 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Combined |
97.4 | % | 95.1 | % | 92.2 | % | 84.4 | % | 93.7 | % | 94.0 | % | 93.3 | % | 88.2 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Premiums Written as a % of Total |
5.9 | % | 6.0 | % | 22.2 | % | 21.9 | % | 7.8 | % | 7.4 | % | 35.9 | % | 35.3 | % | ||||||||||||||||
Page 11 of 17
THE CHUBB CORPORATION — WORLDWIDE
PROPERTY AND CASUALTY UNDERWRITING RESULTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013
(DOLLARS IN MILLIONS)
| Commercial Multiple Peril |
Commercial Casualty |
Commercial Workers’ Compensation |
Commercial Property and Marine |
Total Commercial |
||||||||||||||||||||||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||||||||||||
| Net Premiums Written |
$ | 837 | $ | 834 | $ | 1,251 | $ | 1,240 | $ | 874 | $ | 846 | $ | 1,122 | $ | 1,094 | $ | 4,084 | $ | 4,014 | ||||||||||||||||||||
| Decrease (Increase) in Unearned Premiums |
(1 | ) | 2 | (30 | ) | (2 | ) | (53 | ) | (68 | ) | (57 | ) | (18 | ) | (141 | ) | (86 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Net Premiums Earned |
836 | 836 | 1,221 | 1,238 | 821 | 778 | 1,065 | 1,076 | 3,943 | 3,928 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Net Losses Paid |
392 | 421 | 740 | 714 | 390 | 369 | 652 | 752 | 2,174 | 2,256 | ||||||||||||||||||||||||||||||
| Increase (Decrease) in Outstanding Losses |
32 | (17 | ) | 12 | 109 | 97 | 131 | 18 | (352 | ) | 159 | (129 | ) | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Net Losses Incurred |
424 | 404 | 752 | 823 | 487 | 500 | 670 | 400 | 2,333 | 2,127 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Expenses Incurred |
315 | 319 | 356 | 359 | 191 | 184 | 386 | 379 | 1,248 | 1,241 | ||||||||||||||||||||||||||||||
| Dividends Incurred |
— | — | — | — | 29 | 26 | — | — | 29 | 26 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Statutory Underwriting Income |
$ | 97 | $ | 113 | $ | 113 | $ | 56 | $ | 114 | $ | 68 | $ | 9 | $ | 297 | $ | 333 | $ | 534 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Ratios After Dividends to Policyholders: |
||||||||||||||||||||||||||||||||||||||||
| Loss |
50.7 | % | 48.3 | % | 61.6 | % | 66.5 | % | 61.5 | % | 66.5 | % | 62.9 | % | 37.2 | % | 59.6 | % | 54.5 | % | ||||||||||||||||||||
| Expense |
37.7 | 38.3 | 28.4 | 28.9 | 22.6 | 22.4 | 34.4 | 34.6 | 30.8 | 31.1 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Combined |
88.4 | % | 86.6 | % | 90.0 | % | 95.4 | % | 84.1 | % | 88.9 | % | 97.3 | % | 71.8 | % | 90.4 | % | 85.6 | % | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Premiums Written as a % of Total |
8.9 | % | 9.1 | % | 13.2 | % | 13.5 | % | 9.2 | % | 9.2 | % | 11.9 | % | 11.9 | % | 43.2 | % | 43.7 | % | ||||||||||||||||||||
Page 12 of 17
THE CHUBB CORPORATION — WORLDWIDE
PROPERTY AND CASUALTY UNDERWRITING RESULTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013
(DOLLARS IN MILLIONS)
| Professional Liability |
Surety | Total Specialty |
||||||||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
| Net Premiums Written |
$ | 1,753 | $ | 1,692 | $ | 227 | $ | 236 | $ | 1,980 | $ | 1,928 | ||||||||||||
| Decrease (Increase) in Unearned Premiums |
(7 | ) | 33 | (1 | ) | (2 | ) | (8 | ) | 31 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net Premiums Earned |
1,746 | 1,725 | 226 | 234 | 1,972 | 1,959 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net Losses Paid |
1,058 | 1,124 | 58 | 19 | 1,116 | 1,143 | ||||||||||||||||||
| Increase (Decrease) in Outstanding Losses |
(112 | ) | (77 | ) | 8 | (10 | ) | (104 | ) | (87 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net Losses Incurred |
946 | 1,047 | 66 | 9 | 1,012 | 1,056 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Expenses Incurred |
504 | 506 | 98 | 96 | 602 | 602 | ||||||||||||||||||
| Dividends Incurred |
— | — | 3 | 2 | 3 | 2 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Statutory Underwriting Income |
$ | 296 | $ | 172 | $ | 59 | $ | 127 | $ | 355 | $ | 299 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Ratios After Dividends to Policyholders: |
||||||||||||||||||||||||
| Loss |
54.2 | % | 60.7 | % | 29.6 | % | 3.9 | % | 51.4 | % | 53.9 | % | ||||||||||||
| Expense |
28.7 | 29.9 | 43.7 | 41.0 | 30.4 | 31.3 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Combined |
82.9 | % | 90.6 | % | 73.3 | % | 44.9 | % | 81.8 | % | 85.2 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Premiums Written as a % of Total |
18.5 | % | 18.4 | % | 2.4 | % | 2.6 | % | 20.9 | % | 21.0 | % | ||||||||||||
Page 13 of 17
THE CHUBB CORPORATION — WORLDWIDE
PROPERTY AND CASUALTY UNDERWRITING RESULTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013
(DOLLARS IN MILLIONS)
| Total Insurance |
Reinsurance Assumed |
Worldwide Total |
||||||||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
| Net Premiums Written |
$ | 9,453 | $ | 9,189 | $ | 1 | $ | (3 | ) | $ | 9,454 | $ | 9,186 | |||||||||||
| Decrease (Increase) in Unearned Premiums |
(242 | ) | (161 | ) | — | 1 | (242 | ) | (160 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net Premiums Earned |
9,211 | 9,028 | 1 | (2 | ) | 9,212 | 9,026 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net Losses Paid |
5,134 | 5,136 | 31 | 29 | 5,165 | 5,165 | ||||||||||||||||||
| Increase (Decrease) in Outstanding Losses |
182 | (262 | ) | (31 | ) | (41 | ) | 151 | (303 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net Losses Incurred |
5,316 | 4,874 | — | (12 | ) | 5,316 | 4,862 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Expenses Incurred |
2,987 | 2,960 | — | — | 2,987 | 2,960 | ||||||||||||||||||
| Dividends Incurred |
32 | 28 | — | — | 32 | 28 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Statutory Underwriting Income |
$ | 876 | $ | 1,166 | $ | 1 | $ | 10 | 877 | 1,176 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Increase in Deferred Acquisition Costs |
48 | 69 | ||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| GAAP Underwriting Income |
$ | 925 | $ | 1,245 | ||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Ratios After Dividends to Policyholders: |
||||||||||||||||||||||||
| Loss |
57.9 | % | 54.2 | % | * | % | * | % | 57.9 | % | 54.1 | % | ||||||||||||
| Expense |
31.7 | 32.3 | * | * | 31.7 | 32.3 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Combined |
89.6 | % | 86.5 | % | * | % | * | % | 89.6 | % | 86.4 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Premiums Written as a % of Total |
100.0 | % | 100.0 | % | 0.0 | % | 0.0 | % | 100.0 | % | 100.0 | % | ||||||||||||
| * | Combined, loss and expense ratios are no longer presented for the Reinsurance Assumed business since it is in runoff. |
Page 14 of 17
THE CHUBB CORPORATION — WORLDWIDE
PROPERTY AND CASUALTY UNDERWRITING RESULTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013
(DOLLARS IN MILLIONS)
| United States | Outside the United States |
Worldwide Total |
||||||||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
| Net Premiums Written |
$ | 7,151 | $ | 6,862 | $ | 2,303 | $ | 2,324 | $ | 9,454 | $ | 9,186 | ||||||||||||
| Decrease (Increase) in Unearned Premiums |
(197 | ) | (129 | ) | (45 | ) | (31 | ) | (242 | ) | (160 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net Premiums Earned |
6,954 | 6,733 | 2,258 | 2,293 | 9,212 | 9,026 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net Losses Paid |
3,907 | 3,982 | 1,258 | 1,183 | 5,165 | 5,165 | ||||||||||||||||||
| Increase (Decrease) in Outstanding Losses |
198 | (369 | ) | (47 | ) | 66 | 151 | (303 | ) | |||||||||||||||
|
|
|
|
|
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| Net Losses Incurred |
4,105 | 3,613 | 1,211 | 1,249 | 5,316 | 4,862 | ||||||||||||||||||
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| Expenses Incurred |
2,094 | 2,075 | 893 | 885 | 2,987 | 2,960 | ||||||||||||||||||
| Dividends Incurred |
32 | 28 | — | — | 32 | 28 | ||||||||||||||||||
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| Statutory Underwriting Income |
$ | 723 | $ | 1,017 | $ | 154 | $ | 159 | 877 | 1,176 | ||||||||||||||
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| Increase in Deferred Acquisition Costs |
48 | 69 | ||||||||||||||||||||||
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| GAAP Underwriting Income |
$ | 925 | $ | 1,245 | ||||||||||||||||||||
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| Ratios After Dividends to Policyholders: |
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| Loss |
59.3 | % | 53.8 | % | 53.6 | % | 54.5 | % | 57.9 | % | 54.1 | % | ||||||||||||
| Expense |
29.4 | 30.4 | 38.8 | 38.1 | 31.7 | 32.3 | ||||||||||||||||||
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| Combined |
88.7 | % | 84.2 | % | 92.4 | % | 92.6 | % | 89.6 | % | 86.4 | % | ||||||||||||
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| Premiums Written as a % of Total |
75.6 | % | 74.7 | % | 24.4 | % | 25.3 | % | 100.0 | % | 100.0 | % | ||||||||||||
Page 15 of 17
THE CHUBB CORPORATION
Definitions of Key Terms
Underwriting Income (Loss)
Management evaluates underwriting results separately from investment results. The underwriting operations consist of four separate business units: personal insurance, commercial insurance, specialty insurance and reinsurance assumed. Performance of the business units is measured based on statutory underwriting results. Statutory accounting principles applicable to property and casualty insurance companies differ in certain respects from generally accepted accounting principles (GAAP). Under statutory accounting principles, policy acquisition and other underwriting expenses are recognized immediately, not at the time premiums are earned. Statutory underwriting income (loss) is arrived at by reducing premiums earned by losses and loss expenses incurred and statutory underwriting expenses incurred.
Management uses underwriting results determined in accordance with GAAP, among other measures, to assess the overall performance of the underwriting operations. To convert statutory underwriting results to a GAAP basis, certain policy acquisition expenses are deferred and amortized over the period in which the related premiums are earned. Underwriting income (loss) determined in accordance with GAAP is defined as premiums earned less losses and loss expenses incurred and GAAP underwriting expenses incurred.
Property and Casualty Investment Income After Income Tax
Management uses property and casualty investment income after income tax, a non-GAAP financial measure, to evaluate its investment results because it reflects the impact of any change in the proportion of tax exempt investment income to total investment income and is therefore more meaningful for analysis purposes than investment income before income taxes.
Book Value per Common Share with Available-for-Sale Fixed Maturities at Amortized Cost
Book value per common share represents the portion of consolidated shareholders’ equity attributable to one share of common stock outstanding as of the balance sheet date. Consolidated shareholders’ equity includes, as part of accumulated other comprehensive income or loss, the after-tax appreciation or depreciation, including unrealized other-than-temporary impairment losses, of the Corporation’s available-for-sale fixed maturities, which are carried at fair value. The appreciation or depreciation of available-for-sale fixed maturities is subject to fluctuation due to changes in interest rates and therefore could distort the analysis of trends. Management believes that book value per common share with available-for-sale fixed maturities at amortized cost, a non-GAAP financial measure, is an important measure of the underlying equity attributable to one share of common stock.
Combined Loss and Expense Ratio or Combined Ratio
The combined loss and expense ratio, expressed as a percentage, is the key measure of underwriting profitability. Management uses the combined loss and expense ratio calculated in accordance with statutory accounting principles applicable to property and casualty insurance companies to evaluate the performance of the underwriting operations. It is the sum of the ratio of losses and loss expenses to premiums earned (loss ratio) and the ratio of statutory underwriting expenses to premiums written (expense ratio) after reducing both premium amounts by dividends to policyholders.
Page 16 of 17
THE CHUBB CORPORATION
Definitions of Key Terms
Operating Income
Operating income, a non-GAAP financial measure, is net income excluding after-tax realized investment gains and losses. Management uses operating income, among other measures, to evaluate its performance because the realization of investment gains and losses in any given period is largely discretionary as to timing and can fluctuate significantly, which could distort the analysis of trends.
Return on Equity and Operating Return on Equity
Return on equity is the ratio of annualized net income divided by average shareholders’ equity. Average shareholders’ equity is the average of the beginning and all quarter-end balances within the period.
Operating return on equity, a non-GAAP measure, is the ratio of annualized operating income divided by average shareholders’ equity excluding the after-tax unrealized appreciation or depreciation of investments. Consolidated shareholders’ equity includes, as part of accumulated other comprehensive income or loss, the after-tax appreciation or depreciation, including unrealized other-than-temporary impairment losses, of the Corporation’s available-for-sale fixed maturities and equity securities, which are carried at fair value. The appreciation or depreciation of available-for-sale fixed maturities and equity securities is subject to fluctuation and could distort the analysis of trends. Average shareholders’ equity excluding the after-tax unrealized appreciation or depreciation of investments is the average of the beginning and all quarter-end balances within the period. Management uses operating return on equity, among other measures, to assess the overall performance of the Corporation.
| Periods Ended September 30 | ||||||||||||||||
| Third Quarter | Nine Months | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| (dollars in millions) | ||||||||||||||||
| Annualized Net Income |
$ | 2,376 | $ | 2,164 | $ | 2,056 | $ | 2,368 | ||||||||
| Average Shareholders’ Equity |
$ | 16,502 | $ | 15,572 | $ | 16,332 | $ | 15,747 | ||||||||
| Return on Equity |
14.4 | % | 13.9 | % | 12.6 | % | 15.0 | % | ||||||||
| Annualized Operating Income |
$ | 2,088 | $ | 2,116 | $ | 1,752 | $ | 2,077 | ||||||||
| Average Shareholders’ Equity Excluding Unrealized Appreciation or Depreciation |
$ | 14,827 | $ | 14,257 | $ | 14,823 | $ | 14,082 | ||||||||
| Operating Return on Equity |
14.1 | % | 14.8 | % | 11.8 | % | 14.7 | % | ||||||||
Page 17 of 17