Chubb Ltd - FORM 8-K - EX-99.2

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8-K - FORM 8-K - Chubb Ltd	d339427d8k.htm
EX-99.1 - EX-99.1 - Chubb Ltd	d339427dex991.htm

Exhibit 99.2

LOGO

Chubb Limited

Financial Supplement

for the Quarter and Year Ended December 31, 2016

Investor Contact

Helen M. Wilson

Phone: (441) 299-9283

email: investorrelations@chubb.com

This report is for informational purposes only. It should be read in conjunction with documents filed by Chubb Limited with the Securities and Exchange Commission, including the most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and the closing reports on Form 8-K/A filed on March 24, 2016.

Segment Reporting and Combined Legacy ACE and Legacy Chubb Results (“As If”) Disclosures

Since the completion of its acquisition of The Chubb Corporation (referred to as Legacy Chubb) on January 14, 2016, Chubb Limited (formerly ACE Limited and referred to as Legacy ACE) began reporting its financial results within 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. Corporate includes all run-off asbestos and environmental (A&E) exposures, the results of its Brandywine business, the results of its Westchester Specialty operations for 1996 and prior years, certain other run-off exposures and Legacy Chubb A&E and mass tort exposures. Revenue and expenses managed at the corporate level, Chubb integration expenses, which are incurred by the overall company, and the one-time pension curtailment benefit related to the harmonization of the company’s U.S. pension plans are included in Corporate. These items are not related to the on-going business activities of the segments and are therefore excluded from our definition of segment income.

Segment income includes underwriting income, investment income (excluding the amortization of the fair value adjustments related to purchased invested assets from The Chubb Corp acquisition), other operating income and expense items such as each segments share of the operating income (loss) related to partially-owned entities and miscellaneous income and expense items for which the segments are held accountable.

“As If” company measures presented throughout this document are prepared exclusive of the impact of the unearned premium reserves intangible amortization and the elimination of the historical policy acquisition costs, as a result of purchase accounting, in order to present the underlying profitability of our insurance business. We believe this measure provides visibility into our results and allows for comparability to our historical results and is consistent with how management evaluates results. We have discussed our results on an “As If” basis for both the current and prior year periods, which are defined as follows:

2016 “As If” results: The 2016 and 2015 As If underwriting results do not include any impact from purchase accounting adjustments. The first quarter and full year combined company results are inclusive of the results of Legacy Chubb for the first 14 days of January 2016 when the acquisition had not yet been completed.

2015 “As If” results: Legacy ACE plus Legacy Chubb historical results. For comparative purposes, the company reclassified certain income and expense items in the 2015 reported amounts of Legacy Chubb to be on the same basis as Legacy ACE results.

“As If” company results presented throughout this document are unaudited and are provided for informational purposes only. A reconciliation of “As If” company results as defined above to pro forma results in accordance with SEC guidance under Article 11, is provided in the Reconciliation of non-GAAP section starting on page 37.

Cautionary Statement Regarding Forward-Looking Statements

Any forward-looking statements made in this financial supplement reflect Chubb Limited’s current views with respect to future events and financial performance and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties which may cause actual results to differ materially from as indicated by such statements. For example, forward-looking statements related to financial performance including exposures, reserves and recoverables could be affected by the frequency of unpredictable catastrophic events, actual loss experience, uncertainties in the reserving or settlement process, currency exchange fluctuations, new theories of liability, judicial, legislative, regulatory and other governmental developments, litigation tactics and developments, investigation developments and actual settlement terms, the amount and timing of reinsurance receivable, credit developments among reinsurers, and activities and expenses related to post-acquisition integration of Legacy ACE and Legacy Chubb.

Our forward-looking statements could also be affected by competition, pricing and policy term trends, market acceptance, changes in demand, actual market developments, rating agency action, possible terrorism or the outbreak and effects of war. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

As If Results Definition

Chubb Limited

Financial Supplement Table of Contents


		Page
I.	Financial Highlights
	- Consolidated Financial Highlights		1-2

II.	Consolidated Results
	- Consolidated Statement of Operations		3
	- P&C Results - Consecutive Quarters		4-5
	- Summary Consolidated Balance Sheets		6
	- Line of Business		7
	- Consolidated Results by Segment		8-9
	- Consolidated Results by Segment - “As If” Basis		10-11

III.	Global P&C Results
	- Global P&C Underwriting Results - Consecutive Quarters		12-13

IV.	Segment Results
	- North America Commercial P&C Insurance		14-15
	- North America Personal P&C Insurance		16-17
	- North America Agricultural Insurance		18
	- Overseas General Insurance		19-20
	- Global Reinsurance		21-22
	- Life Insurance		23-24
	- Corporate		25

V.	Balance Sheet Details
	- Loss Reserve Rollforward		26
	- Reinsurance Recoverable Analysis		27
	- Investment Portfolio		28-31
	- Net Realized and Unrealized Gains (Losses)		32-33
	- Debt and Capital		34
	- Computation of Basic and Diluted Earnings Per Share		35
	- Book Value and Book Value per Common Share		36

VI.	Other Disclosures
	- Non-GAAP Financial Measures		37-44
	- Glossary		45

Chubb Limited

Consolidated Financial Highlights - Quarter

(in millions of U.S. dollars, except share, per share data, and ratios)

(Unaudited)

Note: All dollar amounts in the Financial Supplement are rounded. However, percent changes and ratios are calculated using whole dollars. Accordingly, calculations using rounded dollars may differ.


															As If *
												Constant $														Constant $
							% Change					% Change									% Change					% Change
	Three months ended December 31						4Q-16 vs.			Constant $		4Q-16 vs.			Three months ended December 31						4Q-16 vs.			Constant $		4Q-16 vs.
	2016			2015			4Q-15			2015⁽¹⁾		4Q-15 ⁽¹⁾			2016			2015			4Q-15			2015⁽¹⁾		4Q-15 ⁽¹⁾
Gross premiums written	$	8,837		$	5,639			56.7	%	$	5,619		57.3	%	$	8,837		$	8,931			-1.1	%	$	8,877		-0.5	%
Net premiums written	$	6,938		$	4,144			67.4	%	$	4,121		68.3	%	$	6,938		$	7,209			-3.8	%	$	7,156		-3.1	%
P&C net premiums written	$	6,389		$	3,629			76.1	%	$	3,608		77.1	%	$	6,389		$	6,671			-4.2	%	$	6,621		-3.5	%
Global P&C net premiums written	$	6,349		$	3,487			82.0	%	$	3,466		83.1	%	$	6,349		$	6,529			-2.8	%	$	6,479		-2.0	%
Net premiums earned	$	7,059		$	4,207			67.8	%	$	4,187		68.6	%	$	7,059		$	7,343			-3.9	%	$	7,296		-3.2	%
Net investment income	$	744		$	532			39.7	%	$	530		40.3	%
Adjusted net investment income	$	845		$	532			58.6	%	$	530		59.2	%
Operating income	$	1,283		$	780			64.5	%	$	782		64.0	%
Net income	$	1,610		$	683			135.7	%
Comprehensive income	$	99		$	140			-29.0	%
Operating cash flow	$	1,455		$	1,165

P&C combined ratio ⁽²⁾
Loss and loss expense ratio		57.0	%		58.0	%										57.0	%		56.3	%
Underwriting and administrative expense ratio		30.8	%		29.7	%										30.6	%		31.0	%

Combined ratio		87.8	%		87.7	%										87.6	%		87.3	%

Operating return on equity (ROE)		11.0	%		11.1	%
ROE		13.3	%		9.4	%

Operating effective tax rate		17.6	%		11.1	%
Effective tax rate		13.8	%		9.0	%

Diluted earnings per share
Operating income	$	2.72		$	2.38			14.3	%
Net income	$	3.41		$	2.08			63.9	%

												% Change
										September 30		4Q-16 vs
										2016		3Q-16
Book value per common share	$	103.60								$	103.96		-0.3	%
Book value per common share excluding foreign currency ⁽³⁾	$	104.25								$	103.96		0.3	%

Tangible book value per common share	$	60.64								$	60.26		0.6	%
Tangible book value per common share excluding foreign currency ⁽³⁾	$	60.97								$	60.26		1.2	%

Weighted average basic common shares outstanding		468.3			324.6
Weighted average diluted common shares outstanding		471.6			327.8

(1)	Prior periods on a constant dollar basis.

(2)	Q4 2016 excludes a one-time pension curtailment benefit of $113 million related to the harmonization of the company’s U.S. pension plans. Including the one-time pension curtailment benefit, P&C combined ratio for Q4 2016 was 86.1% or 85.9% on an As If basis.

(3)	Book value per common share and tangible book value per common share exclude the impact of foreign currency movement during the quarter.

*	2015 As If results: Legacy ACE plus Legacy Chubb historical results. For comparative purposes, the company reclassified certain income and expense items in the 2015 reported amounts of Legacy Chubb to be on the same basis as Legacy ACE results.


Financial Highlights - QTR		Page 1

Chubb Limited

Consolidated Financial Highlights - Full Year

(in millions of U.S. dollars, except share, per share data, and ratios)

(Unaudited)


															As If *
												Constant $														Constant $
							% Change					% Change									% Change					% Change
	Year ended December 31						2016 vs			Constant $		2016 vs			Year ended December 31						2016 vs			Constant $		2016 vs
	2016			2015			2015			2015⁽¹⁾		2015 ⁽¹⁾			2016			2015			2015			2015⁽¹⁾		2015 ⁽¹⁾
Gross premiums written	$	34,983		$	23,811			46.9	%	$	23,365		49.7	%	$	35,915		$	37,461			-4.1	%	$	36,795		-2.4	%
Net premiums written	$	28,145		$	17,713			58.9	%	$	17,346		62.3	%	$	29,000		$	30,423			-4.7	%	$	29,843		-2.8	%
P&C net premiums written	$	26,021		$	15,715			65.6	%	$	15,389		69.1	%	$	26,875		$	28,330			-5.1	%	$	27,794		-3.3	%
Global P&C net premiums written	$	24,693		$	14,369			71.8	%	$	14,043		75.8	%	$	25,547		$	26,984			-5.3	%	$	26,448		-3.4	%
Net premiums earned	$	28,749		$	17,213			67.0	%	$	16,885		70.3	%	$	29,140		$	29,786			-2.2	%	$	29,275		-0.5	%
Net investment income	$	2,865		$	2,194			30.6	%	$	2,168		32.2	%
Adjusted net investment income	$	3,258		$	2,194			48.5	%	$	2,168		50.3	%
Operating income	$	4,716		$	3,210			46.9	%	$	3,174		48.6	%
Net income	$	4,135		$	2,834			45.9	%
Comprehensive income	$	4,556		$	908			N/M
Operating cash flow	$	5,292		$	3,864

P&C combined ratio ⁽²⁾
Loss and loss expense ratio		57.8	%		58.2	%										57.7	%		57.0	%
Underwriting and administrative expense ratio		30.9	%		29.2	%										30.3	%		30.5	%

Combined ratio		88.7	%		87.4	%										88.0	%		87.5	%

Operating return on equity (ROE)		10.5	%		11.5	%
ROE		9.0	%		9.7	%

Operating effective tax rate		17.4	%		13.3	%
Effective tax rate		16.5	%		14.0	%

Diluted earnings per share
Operating income	$	10.12		$	9.76			3.7	%
Net income	$	8.87		$	8.62			2.9	%

Full year diluted earnings per share ⁽³⁾
Operating income	$	10.14		$	9.76			3.9	%
Net income	$	8.91		$	8.62			3.4	%

Book value per common share	$	103.60		$	89.77			15.4	%
Tangible book value per common share	$	60.64		$	72.25			-16.1	%

Weighted average basic common shares outstanding		462.5			325.6
Weighted average diluted common shares outstanding		465.9			328.8

Total hybrid & financial debt/capitalization		21.8	%		25.0	%

(1)	Prior periods on a constant dollar basis.

(2)	Full year 2016 excludes a one-time pension curtailment benefit of $113 million related to the harmonization of the company’s U.S. pension plans. Including the one-time pension curtailment benefit, P&C combined ratio for the full year 2016 was 88.3% or 87.6% on an As If basis.

(3)	Full year diluted earnings per share includes the combined company results inclusive of the first 14 days of January 2016 and includes the impact of purchase accounting adjustments related to The Chubb Corporation acquisition.

*	2016 As If results: The 2016 and 2015 As If underwriting results do not include any impact from purchase accounting adjustments. The full year 2016 combined company results are inclusive of the first 14 days of January 2016.

2015 As If results: Legacy ACE plus Legacy Chubb historical results. For comparative purposes, the company reclassified certain income and expense items in the 2015 reported amounts of Legacy Chubb to be on the same basis as Legacy ACE results.


Financial Highlights - FY		Page 2

Chubb Limited

Statement of Operations - Consecutive Quarters

(in millions of U.S. dollars)

(Unaudited)

Consolidated Statements of Operations


																				Legacy ACE
														Legacy ACE			Full Year			Full Year
		4Q-16			3Q-16			2Q-16			1Q-16			4Q-15			2016			2015
	Gross premiums written	$	8,837		$	9,483		$	9,274		$	7,389		$	5,639		$	34,983		$	23,811
	Net premiums written		6,938			7,573			7,639			5,995			4,144			28,145			17,713
	Net premiums earned		7,059			7,688			7,405			6,597			4,207			28,749			17,213
(1)	Adjusted losses and loss expenses		3,884			4,266			4,256			3,674			2,305			16,080			9,493
	Realized (gains) losses on crop derivatives		6			(3	)		2			—			3			5			9
	Pension curtailment benefit		(23	)		—			—			—			—			(23	)		—

	Losses and loss expenses		3,855			4,269			4,254			3,674			2,302			16,052			9,484
	Policy benefits		161			155			146			126			159			588			543
	Policy acquisition costs		1,417			1,514			1,560			1,413			736			5,904			2,941
(2)	Adjusted administrative expenses		798			772			829			772			570			3,171			2,270
	Pension curtailment benefit		(90	)		—			—			—			—			(90	)		—

	Administrative expenses		708			772			829			772			570			3,081			2,270
(3)	Adjusted net investment income		845			830			816			767			532			3,258			2,194
	Amortization expense of fair value adjustment on acquired invested assets		(101	)		(91	)		(108	)		(93	)		—			(393	)		—

	Net investment income		744			739			708			674			532			2,865			2,194
(4)	Adjusted realized gains (losses)		371			97			(214	)		(394	)		(57	)		(140	)		(411	)
	Realized gains (losses) on crop derivatives		(6	)		3			(2	)		—			(3	)		(5	)		(9	)

	Net realized gains (losses)		365			100			(216	)		(394	)		(60	)		(145	)		(420	)
(5)	Adjusted interest expense		167			164			166			149			64			646			271
	Interest expense related to pre-acquisition debt		—			—			—			7			29			7			29
	Amortization benefit of fair value adjustment on acquired long term debt		(13	)		(12	)		(13	)		(10	)		—			(48	)		—

	Interest expense		154			152			153			146			93			605			300
	Gains (losses) from fair value changes in separate account assets		(11	)		22			3			(3	)		13			11			(19	)
	Net realized gains (losses) related to unconsolidated entities		162			72			18			(25	)		(17	)		227			67
	Other income (expense) - operating		(21	)		(3	)		8			—			(6	)		(16	)		3

	Other income (expense)		130			91			29			(28	)		(10	)		222			51
	Amortization expense of purchased intangibles		3			4			5			7			35			19			171
	Chubb integration expenses		131			115			98			148			24			492			33
	Income tax expense		259			277			155			124			67			815			462

	Net income	$	1,610		$	1,360		$	726		$	439		$	683		$	4,135		$	2,834

(1)	Adjusted losses and loss expenses used throughout this report exclude a portion of the one-time pension curtailment benefit, recorded in Corporate, and include realized gains and losses on crop derivatives.

(2)	Adjusted administrative expenses used throughout this report exclude a portion of the one-time pension curtailment benefit.

(3)	Adjusted net investment income used throughout this report excludes amortization of the fair value adjustment on acquired invested assets.

(4)	Adjusted realized gains and losses used throughout this report excludes realized gains and losses on crop derivatives.

(5)	Adjusted interest expense used throughout this report excludes interest expense related to pre-acquisition debt and amortization benefit of the fair value adjustment on acquired long term debt.


Statement of Operations		Page 3

Chubb Limited

P&C Underwriting Results - Consecutive Quarters

(in millions of U.S. dollars, except ratios)

(Unaudited)

Chubb Limited P&C Underwriting Results


																			Legacy ACE
													Legacy ACE			Full Year			Full Year
	4Q-16			3Q-16			2Q-16			1Q-16			4Q-15			2016			2015
P&C Underwriting Income (Including Corporate and excluding Life Insurance)
Gross premiums written	$	8,260		$	8,921		$	8,717		$	6,843		$	5,091		$	32,741		$	21,690
Net premiums written		6,389			7,041			7,112			5,479			3,629			26,021			15,715
Net premiums earned		6,525			7,176			6,893			6,100			3,701			26,694			15,266
Adjusted losses and loss expenses		3,719			4,092			4,109			3,497			2,146			15,417			8,892
Policy acquisition costs (excluding amortization of acquired UPR intangible)		1,150			1,067			898			721			602			3,836			2,465
Amortization of acquired UPR intangible ⁽¹⁾		144			320			525			570			—			1,559			—
Adjusted administrative expenses		717			695			752			700			500			2,864			1,979

P&C Underwriting income	$	795		$	1,002		$	609		$	612		$	453		$	3,018		$	1,930

% Change versus prior year period
Net premiums written		76.1	%		67.0	%		66.0	%		52.8	%		-4.6	%		65.6	%		-0.5	%
Net premiums earned		76.3	%		69.3	%		77.9	%		76.7	%		-4.4	%		74.8	%		-1.3	%

Net premiums written constant $		77.1	%		68.8	%		68.8	%		61.3	%		1.7	%		69.1	%		5.3	%
Net premiums earned constant $		77.1	%		71.0	%		81.1	%		85.3	%		1.6	%		78.2	%		4.4	%

Other ratios

Net premiums written/gross premiums written		77	%		79	%		82	%		80	%		71	%		79	%		72	%

P&C combined ratio ⁽²⁾
Loss and loss expense ratio		57.0	%		57.0	%		59.6	%		57.3	%		58.0	%		57.8	%		58.2	%
Policy acquisition cost ratio		19.8	%		19.3	%		20.6	%		21.2	%		16.2	%		20.2	%		16.1	%
Administrative expense ratio		11.0	%		9.7	%		11.0	%		11.5	%		13.5	%		10.7	%		13.1	%

Combined ratio		87.8	%		86.0	%		91.2	%		90.0	%		87.7	%		88.7	%		87.4	%

Combined ratio excluding catastrophe losses and PPD		87.4	%		88.9	%		89.9	%		89.9	%		88.4	%		89.0	%		88.8	%

P&C expense ratio		30.8	%		29.0	%		31.6	%		32.7	%		29.7	%		30.9	%		29.2	%
P&C expense ratio excluding A&H		28.8	%		27.0	%		29.8	%		30.8	%		26.3	%		29.0	%		25.7	%

Catastrophe reinstatement premiums (expensed) collected - pre-tax	$	1		$	—		$	6		$	—		$	(1	)	$	7		$	(1	)
Catastrophe losses - pre-tax	$	269		$	144		$	396		$	258		$	74		$	1,067		$	321
Favorable prior period development (PPD) - pre-tax	$	(238	)	$	(349	)	$	(301	)	$	(247	)	$	(100	)	$	(1,135	)	$	(546	)
Loss and loss expense ratio excluding catastrophe losses and PPD		56.4	%		60.0	%		58.4	%		57.4	%		58.5	%		58.1	%		59.7	%

(1)	Purchase accounting adjustments related to the acquisition of The Chubb Corporation.

(2)	Q4 2016 and full year 2016 exclude a one-time pension curtailment benefit of $113 million related to the harmonization of the company’s U.S. pension plans.

Note: See Glossary on page 45 for further information on the calculation of the components of combined ratios.


P&C Results - Reported		Page 4

Chubb Limited

P&C Underwriting Results - Consecutive Quarters

(in millions of U.S. dollars, except ratios)

(Unaudited)

Chubb Limited P&C Underwriting Results - As If Basis


	As If *
																Full Year			Full Year
	4Q-16			3Q-16			2Q-16			1Q-16			4Q-15			2016			2015
P&C Underwriting Income (Including Corporate and excluding Life Insurance)
Gross premiums written	$	8,260		$	8,921		$	8,717		$	7,774		$	8,359		$	33,672		$	35,241
Net premiums written		6,389			7,041			7,112			6,333			6,671			26,875			28,330
Net premiums earned		6,525			7,176			6,893			6,489			6,812			27,083			27,743
Adjusted losses and loss expenses		3,719			4,092			4,109			3,719			3,835			15,639			15,816
Policy acquisition costs		1,277			1,348			1,357			1,287			1,330			5,269			5,332
Adjusted administrative expenses		717			695			752			763			780			2,927			3,137

P&C Underwriting income	$	812		$	1,041		$	675		$	720		$	867		$	3,248		$	3,458

% Change versus prior year period
Net premiums written		-4.2	%		-4.5	%		-6.2	%		-5.5	%					-5.1	%
Net premiums earned		-4.2	%		-3.0	%		-1.4	%		-0.7	%					-2.4	%

Net premiums written constant $		-3.5	%		-3.4	%		-4.7	%		-1.4	%					-3.3	%
Net premiums earned constant $		-3.6	%		-1.9	%		0.1	%		2.9	%					-0.7	%

Net premiums written constant $ excluding merger-related underwriting actions, including additional reinsurance ⁽¹⁾		-0.4	%		1.1	%		-3.5	%		-1.0	%					-1.0	%

Other ratios
Net premiums written/gross premiums written		77	%		79	%		82	%		81	%		80	%		80	%		80	%

P&C combined ratio ⁽²⁾
Loss and loss expense ratio		57.0	%		57.0	%		59.6	%		57.3	%		56.3	%		57.7	%		57.0	%
Policy acquisition cost ratio		19.6	%		18.8	%		19.6	%		19.8	%		19.5	%		19.5	%		19.2	%
Administrative expense ratio		11.0	%		9.7	%		11.0	%		11.8	%		11.5	%		10.8	%		11.3	%

Combined ratio		87.6	%		85.5	%		90.2	%		88.9	%		87.3	%		88.0	%		87.5	%

Combined ratio excluding catastrophe losses and PPD		87.1	%		88.4	%		88.9	%		88.8	%		88.6	%		88.3	%		88.7	%

P&C expense ratio		30.6	%		28.5	%		30.6	%		31.6	%		31.0	%		30.3	%		30.5	%
P&C expense ratio excluding A&H		28.5	%		26.4	%		28.8	%		29.8	%		29.1	%		28.3	%		28.6	%

Catastrophe reinstatement premiums (expensed) collected - pre-tax	$	1		$	—		$	6		$	—		$	(1	)	$	7		$	(1	)
Catastrophe losses - pre-tax	$	269		$	144		$	396		$	258		$	158		$	1,067		$	848
Favorable prior period development (PPD) - pre-tax	$	(238	)	$	(349	)	$	(301	)	$	(247	)	$	(253	)	$	(1,135	)	$	(1,170	)
Loss and loss expense ratio excluding catastrophe losses and PPD		56.4	%		60.0	%		58.4	%		57.4	%		57.6	%		58.1	%		58.2	%

(1)	Included in Q4 2016 is a decrease in net premiums written of $206 million, comprising of $119 million due to additional reinsurance purchased and $87 million due to other merger-related underwriting actions.

Included in full year 2016 is a decrease in net premiums written of $650 million, comprising of $438 million due to additional reinsurance purchased and $212 million due to other merger-related underwriting actions.

(2)	Q4 2016 and full year 2016 exclude a one-time pension curtailment benefit of $113 million related to the harmonization of the company’s U.S. pension plans.

*	2016 As If results: The 2016 and 2015 As If company underwriting results do not include any impact from purchase accounting adjustments. The Q1 2016 and full year 2016 As If company results are inclusive of the first 14 days of January 2016.


P&C Results - As If		Page 5

Chubb Limited

Summary Consolidated Balance Sheets

(in millions of U.S. dollars, except per share data)

(Unaudited)


													Legacy ACE
	December 31			September 30			June 30			March 31			December 31
	2016			2016			2016			2016			2015
Assets
Fixed maturities available for sale, at fair value	$	80,115		$	81,358		$	79,951		$	77,538		$	43,587
Fixed maturities held to maturity, at amortized cost		10,644			10,927			11,090			11,280			8,430
Equity securities, at fair value		814			803			787			893			497
Short-term investments, at fair value		3,002			3,548			3,631			3,382			10,446
Other investments		4,519			4,400			4,387			4,493			3,291

Total investments		99,094			101,036			99,846			97,586			66,251

Cash		985			870			1,011			1,091			1,775
Securities lending collateral		1,092			1,140			1,142			1,003			1,046
Insurance and reinsurance balances receivable		8,970			8,493			8,532			7,692			5,323
Reinsurance recoverable on losses and loss expenses		13,577			13,448			13,235			12,891			11,386
Deferred policy acquisition costs		4,314			4,238			3,948			3,376			2,873
Value of business acquired		355			368			381			390			395
Prepaid reinsurance premiums		2,448			2,449			2,464			2,376			2,082
Goodwill and other intangible assets		22,095			22,472			22,923			23,359			5,683
Deferred tax assets		—			—			—			—			318
Investments in partially-owned insurance companies		666			665			658			654			653
Other assets		6,190			6,631			6,063			6,226			4,521

Total assets	$	159,786		$	161,810		$	160,203		$	156,644		$	102,306

Liabilities
Unpaid losses and loss expenses	$	60,540		$	61,347		$	60,819		$	60,206		$	37,303
Unearned premiums		14,779			15,054			15,229			14,896			8,439
Future policy benefits		5,036			5,010			4,975			4,869			4,807
Insurance and reinsurance balances payable		5,637			4,885			4,944			4,733			4,270
Securities lending payable		1,093			1,141			1,143			1,004			1,047
Accounts payable, accrued expenses, and other liabilities		10,020			11,154			11,019			10,453			7,609
Deferred tax liabilities		988			1,418			1,409			1,142			—
Short-term debt		500			500			500			500			—
Long-term debt		12,610			12,621			12,631			12,636			9,389
Trust preferred securities		308			308			308			308			307

Total liabilities		111,511			113,438			112,977			110,747			73,171

Shareholders’ equity
Total shareholders’ equity, excl. AOCI		48,589			47,175			46,045			45,530			29,870
Accumulated other comprehensive income (AOCI)		(314	)		1,197			1,181			367			(735	)

Total shareholders’ equity		48,275			48,372			47,226			45,897			29,135

Total liabilities and shareholders’ equity	$	159,786		$	161,810		$	160,203		$	156,644		$	102,306

Book value per common share	$	103.60		$	103.96		$	101.56		$	98.85		$	89.77
% change over prior quarter		-0.3	%		2.4	%		2.7	%		10.1	%		-0.1	%
Tangible book value per common share	$	60.64		$	60.26		$	57.14		$	53.83		$	72.25
% change over prior quarter		0.6	%		5.5	%		6.1	%		-25.5	%		0.0	%


Consol Bal Sheet		Page 6

Chubb Limited

Consolidated Net Premiums Written by Line of Business - Quarter

(in millions of U.S. dollars)

(Unaudited)


													Constant $
													% Change
													4Q-16 vs.
										Constant $			As If 4Q-15
							% Change			% Change			Excluding
							4Q-16 vs.			4Q-16 vs.			Merger-related
			Legacy ACE		As If		As If			As If			Underwriting
	4Q-16		4Q-15		4Q-15		4Q-15			4Q-15			Actions ⁽¹⁾
Net premiums written

Commercial multiple peril ⁽²⁾	$	219	$	—	$	228		-3.9	%		-3.9	%		-2.6	%
Commercial casualty		910		653		975		-6.7	%		-6.6	%		-2.8	%
Workers’ compensation		539		265		544		-0.9	%		-0.7	%		0.2	%
Professional liability		1,013		415		1,044		-3.0	%		-1.8	%		0.2	%
Surety		143		83		175		-18.3	%		-12.8	%		-12.2	%
Property and other short-tail lines		921		627		957		-3.8	%		-3.7	%		1.6	%
International other casualty		267		192		262		1.9	%		7.7	%		10.1	%

Total Commercial P&C ⁽¹⁾		4,012		2,235		4,185		-4.1	%		-3.2	%		-0.2	%

Agriculture		40		142		142		-71.6	%		-71.6	%		-71.6	%

Personal automobile - North America		178		48		175		1.7	%		1.7	%		1.7	%
Personal automobile - International		175		154		154		13.6	%		19.9	%		19.9	%
Personal homeowners		772		163		823		-6.2	%		-6.7	%		2.2	%
Personal other		351		176		350		0.3	%		1.7	%		1.7	%

Total Personal lines ⁽¹⁾		1,476		541		1,502		-1.7	%		12.0	%		17.5	%

Total Property and Casualty lines		5,528		2,918		5,829		-5.2	%		-1.4	%		2.1	%
Other Lines
Global A&H ^{(1) (3)}		1,015		860		989		2.6	%		2.4	%		3.4	%
Reinsurance		114		109		111		3.0	%		5.5	%		5.5	%
Life		281		257		280		0.4	%		1.4	%		1.4	%

Total consolidated	$	6,938	$	4,144	$	7,209		-3.8	%		-3.0	%		-0.2	%

(1)	Included in Commercial P&C is a decrease in net premiums written of $123 million, comprising of $46 million due to additional reinsurance purchased and $77 million due to other merger-related underwriting actions.

Included in Personal lines is a decrease in net premiums written of $73 million due to additional reinsurance purchased.

Included in Global A&H is a decrease in net premiums written of $10 million due to merger-related underwriting actions.

(2)	Commercial multiple peril represents retail package business (property and general liability).

(3)

For purposes of this schedule only, A&H results from our Combined North America and International businesses, normally included in the Life Insurance and Overseas General Insurance segments, respectively, as well as the A&H results of our North America Commercial P&C segment, are included in the Global A&H line item above.

2015 As If results: Legacy ACE plus Legacy Chubb historical results.


Line of Business		Page 7

Chubb Limited

Consolidated Results - Quarter

(in millions of U.S. dollars, except ratios)

(Unaudited)


	North			North			North
	America			America			America			Overseas
	Commercial P&C			Personal P&C			Agricultural			General			Global						Total			Life			Total
Q4 2016	Insurance			Insurance			Insurance			Insurance			Reinsurance			Corporate			P&C			Insurance			Consolidated
Net premiums written	$	3,083		$	1,040		$	40		$	2,112		$	114		$	—		$	6,389		$	549		$	6,938
Net premiums earned		3,087			1,074			147			2,050			167			—			6,525			534			7,059
Adjusted losses and loss expenses		1,858			642			(38	)		1,052			100			105			3,719			165			3,884
Policy benefits		—			—			—			—			—			—			—			161			161
(Gains) losses from fair value changes in separate account assets ⁽¹⁾		—			—			—			—			—			—			—			11			11
Policy acquisition costs (excluding amortization of acquired UPR intangible)		396			174			6			529			45			—			1,150			123			1,273
Amortization of acquired UPR intangible⁽²⁾		78			45			—			21			—			—			144			—			144
Adjusted administrative expenses		285			88			(5	)		256			12			81			717			81			798

Underwriting income (loss)		470			125			184			192			10			(186	)		795			(7	)		788
Adjusted net investment income		489			52			5			155			64			4			769			76			845
Other income (expense) - operating⁽¹⁾		(4	)		—			(1	)		(5	)		1			(4	)		(13	)		(8	)		(21	)
Amortization (expense) benefit of purchased intangibles		—			(3	)		(7	)		(12	)		—			20			(2	)		(1	)		(3	)

Segment income (loss)	$	955		$	174		$	181		$	330		$	75		$	(166	)	$	1,549		$	60		$	1,609

Combined ratio		84.8	%		88.3	%		-25.4	%		90.6	%		94.0	%					87.8	%
Combined ratio excluding catastrophe losses and PPD		88.9	%		82.9	%		-10.9	%		91.2	%		78.8	%					87.4	%

	Legacy ACE
	North			North			North
	America			America			America			Overseas
	Commercial P&C			Personal P&C			Agricultural			General			Global						Total			Life			Total
Q4 2015	Insurance			Insurance			Insurance			Insurance			Reinsurance			Corporate			P&C			Insurance			Consolidated
Net premiums written	$	1,557		$	234		$	142		$	1,587		$	109		$	—		$	3,629		$	515		$	4,144
Net premiums earned		1,425			261			240			1,575			200			—			3,701			506			4,207
Adjusted losses and loss expenses		917			144			178			748			99			60			2,146			159			2,305
Policy benefits		—			—			—			—			—			—			—			159			159
(Gains) losses from fair value changes in separate account assets ⁽¹⁾		—			—			—			—			—			—			—			(13	)		(13	)
Policy acquisition costs		128			26			8			391			48			1			602			134			736
Administrative expenses		162			34			(2	)		241			12			53			500			70			570

Underwriting income (loss)		218			57			56			195			41			(114	)		453			(3	)		450
Net investment income		252			6			6			125			70			6			465			67			532
Other income (expense) - operating⁽¹⁾		2			(1	)		—			5			1			(9	)		(2	)		(4	)		(6	)
Amortization expense of purchased intangibles		—			(15	)		(8	)		(11	)		—			—			(34	)		(1	)		(35	)

Segment income (loss)	$	472		$	47		$	54		$	314		$	112		$	(117	)	$	882		$	59		$	941

Combined ratio		84.6	%		78.4	%		76.4	%		87.6	%		79.8	%					87.7	%
Combined ratio excluding catastrophe losses and PPD		88.3	%		77.5	%		79.2	%		89.7	%		76.6	%					88.4	%

(1)	(Gains) losses from fair value changes in separate account assets that do not qualify for separate account reporting under GAAP have been reclassified for underwriting income presentation from Other income (expense).

(2)	Related to the acquisition of The Chubb Corporation.


Consol Results - QTD		Page 8

Chubb Limited

Consolidated Results - Full Year

(in millions of U.S. dollars, except ratios)

(Unaudited)


	North			North			North
	America			America			America			Overseas
	Commercial P&C			Personal P&C			Agricultural			General			Global						Total			Life			Total
Full Year 2016	Insurance			Insurance			Insurance			Insurance			Reinsurance			Corporate			P&C			Insurance			Consolidated
Net premiums written	$	11,740		$	4,153		$	1,328		$	8,124		$	676		$	—		$	26,021		$	2,124		$	28,145
Net premiums earned		12,217			4,319			1,316			8,132			710			—			26,694			2,055			28,749
Adjusted losses and loss expenses		7,439			2,558			898			4,005			325			192			15,417			663			16,080
Policy benefits		—			—			—			—			—			—			—			588			588
(Gains) losses from fair value changes in separate account assets ⁽¹⁾		—			—			—			—			—			—			—			(11	)		(11	)
Policy acquisition costs (excluding amortization of acquired UPR intangible)		1,164			474			83			1,928			187			—			3,836			509			4,345
Amortization of acquired UPR intangible⁽²⁾		859			492			—			208			—			—			1,559			—			1,559
Adjusted administrative expenses		1,125			363			(6	)		1,057			52			273			2,864			307			3,171

Underwriting income (loss)		1,630			432			341			934			146			(465	)		3,018			(1	)		3,017
Adjusted net investment income		1,860			207			20			600			263			25			2,975			283			3,258
Other income (expense) - operating⁽¹⁾		2			(6	)		(1	)		11			4			(10	)		—			(16	)		(16	)
Amortization (expense) benefit of purchased intangibles		—			(19	)		(29	)		(48	)		—			80			(16	)		(3	)		(19	)

Segment income (loss)	$	3,492		$	614		$	331		$	1,497		$	413		$	(370	)	$	5,977		$	263		$	6,240

Combined ratio		86.7	%		90.0	%		74.1	%		88.5	%		79.5	%					88.7	%
Combined ratio excluding catastrophe losses and PPD		89.4	%		81.8	%		78.9	%		91.5	%		78.6	%					89.0	%

	Legacy ACE
	North			North			North
	America			America			America			Overseas
	Commercial P&C			Personal P&C			Agricultural			General			Global						Total			Life			Total
Full Year 2015	Insurance			Insurance			Insurance			Insurance			Reinsurance			Corporate			P&C			Insurance			Consolidated
Net premiums written	$	5,715		$	1,192		$	1,346		$	6,634		$	828		$	—		$	15,715		$	1,998		$	17,713
Net premiums earned		5,634			948			1,364			6,471			849			—			15,266			1,947			17,213
Adjusted losses and loss expenses		3,661			590			1,097			3,052			290			202			8,892			601			9,493
Policy benefits		—			—			—			—			—			—			—			543			543
(Gains) losses from fair value changes in separate account assets ⁽¹⁾		—			—			—			—			—			—			—			19			19
Policy acquisition costs		531			69			69			1,581			214			1			2,465			476			2,941
Administrative expenses		621			123			1			997			49			188			1,979			291			2,270

Underwriting income (loss)		821			166			197			841			296			(391	)		1,930			17			1,947
Net investment income		1,032			25			23			534			300			15			1,929			265			2,194
Other income (expense) - operating⁽¹⁾		7			(2	)		(1	)		17			6			(20	)		7			(4	)		3
Amortization expense of purchased intangibles		—			(78	)		(30	)		(61	)		—			—			(169	)		(2	)		(171	)

Segment income (loss)	$	1,860		$	111		$	189		$	1,331		$	602		$	(396	)	$	3,697		$	276		$	3,973

Combined ratio		85.4	%		82.6	%		85.5	%		87.0	%		65.2	%					87.4	%
Combined ratio excluding catastrophe losses and PPD		88.6	%		73.2	%		88.2	%		90.1	%		76.8	%					88.8	%

(1)	(Gains) losses from fair value changes in separate account assets that do not qualify for separate account reporting under GAAP have been reclassified for underwriting income presentation from Other income (expense).

(2)	Related to the acquisition of The Chubb Corporation.


Consol Results - FY		Page 9

Chubb Limited

Segment Results - As If Basis

(in millions of U.S. dollars, except ratios)

(Unaudited)


	*As If (excluding purchase accounting adjustments)**
	North America			North America			North America			Overseas
	Commercial P&C			Personal P&C			Agricultural			General			Global												Total
Q4 2016	Insurance			Insurance			Insurance			Insurance			Reinsurance			Corporate			Total P&C			Life Insurance			Consolidated
Net premiums written	$	3,083		$	1,040		$	40		$	2,112		$	114		$	—		$	6,389		$	549		$	6,938
Net premiums earned		3,087			1,074			147			2,050			167			—			6,525			534			7,059
Adjusted losses and loss expenses		1,858			642			(38	)		1,052			100			105			3,719			165			3,884
Policy benefits		—			—			—			—			—			—			—			161			161
(Gains) losses from fair value changes in separate account assets		—			—			—			—			—			—			—			11			11
Policy acquisition costs		462			211			6			553			45			—			1,277			123			1,400
Adjusted administrative expenses		285			88			(5	)		256			12			81			717			81			798

Adjusted underwriting income (loss)	$	482		$	133		$	184		$	189		$	10		$	(186	)	$	812		$	(7	)	$	805

Combined ratio		84.4	%		87.6	%		-25.4	%		90.8	%		94.0	%					87.6	%
Combined ratio excluding catastrophe losses and PPD		88.5	%		82.1	%		-10.9	%		91.4	%		78.8	%					87.1	%


	*As If (excluding purchase accounting adjustments)**
	North America			North America			North America			Overseas
	Commercial P&C			Personal P&C			Agricultural			General			Global												Total
Q4 2015	Insurance			Insurance			Insurance			Insurance			Reinsurance			Corporate			Total P&C			Life Insurance			Consolidated
Net premiums written	$	3,247		$	1,093		$	142		$	2,078		$	111		$	—		$	6,671		$	538		$	7,209
Net premiums earned		3,140			1,140			240			2,084			208			—			6,812			531			7,343
Adjusted losses and loss expenses		1,844			597			178			1,011			103			102			3,835			171			4,006
Policy benefits		—			—			—			—			—			—			—			159			159
(Gains) losses from fair value changes in separate account assets		—			—			—			—			—			—			—			(13	)		(13	)
Policy acquisition costs		498			228			8			547			48			1			1,330			138			1,468
Administrative expenses		304			96			(2	)		287			12			83			780			80			860

Underwriting income (loss)	$	494		$	219		$	56		$	239		$	45		$	(186	)	$	867		$	(4	)	$	863

Combined ratio		84.2	%		80.9	%		76.4	%		88.5	%		78.6	%					87.3	%
Combined ratio excluding catastrophe losses and PPD		88.5	%		80.9	%		79.2	%		91.2	%		77.8	%					88.6	%

The following table presents the reconciliation of Q4 2016 underwriting income (loss) for each segment to Q4 2016 adjusted underwriting income (loss) shown above.


	North America			North America			North America		Overseas
	Commercial P&C			Personal P&C			Agricultural		General			Global											Total
Q4 2016	Insurance			Insurance			Insurance		Insurance			Reinsurance		Corporate			Total P&C			Life Insurance			Consolidated
Underwriting income (loss)	$	470		$	125		$	184	$	192		$	10	$	(186	)	$	795		$	(7	)	$	788
Less: amortization of acquired UPR intangible⁽¹⁾		78			45			—		21			—		—			144			—			144
Add: elimination of DAC benefit ⁽¹⁾		(66	)		(37	)		—		(24	)		—		—			(127	)		—			(127	)

Adjusted underwriting income (loss)	$	482		$	133		$	184	$	189		$	10	$	(186	)	$	812		$	(7	)	$	805

(1)	Related to the acquisition of The Chubb Corporation.

*	2016 As If results: The 2016 and 2015 As If company underwriting results do not include any impact from purchase accounting adjustments.


As If - QTD		Page 10

Chubb Limited

Segment Results - As If Basis

(in millions of U.S. dollars, except ratios)

(Unaudited)


	*As If (excluding purchase accounting adjustments)**
	North America			North America			North America			Overseas
	Commercial P&C			Personal P&C			Agricultural			General			Global												Total
Full Year 2016	Insurance			Insurance			Insurance			Insurance			Reinsurance			Corporate			Total P&C			Life Insurance			Consolidated
Net premiums written	$	12,259		$	4,253		$	1,328		$	8,339		$	696		$	—		$	26,875		$	2,125		$	29,000
Net premiums earned		12,425			4,429			1,316			8,203			710			—			27,083			2,057			29,140
Adjusted losses and loss expenses		7,566			2,611			898			4,047			325			192			15,639			663			16,302
Policy benefits		—			—			—			—			—			—			—			588			588
(Gains) losses from fair value changes in separate account assets		—			—			—			—			—			—			—			(11	)		(11	)
Policy acquisition costs		1,926			894			83			2,179			187			—			5,269			510			5,779
Adjusted administrative expenses		1,160			376			(6	)		1,069			52			276			2,927			308			3,235

Adjusted underwriting income (loss)	$	1,773		$	548		$	341		$	908		$	146		$	(468	)	$	3,248		$	(1	)	$	3,247

Combined ratio		85.7	%		87.6	%		74.1	%		88.9	%		79.5	%					88.0	%
Combined ratio excluding catastrophe losses and PPD		88.4	%		79.6	%		78.9	%		91.9	%		78.6	%					88.3	%

	*As If (excluding purchase accounting adjustments)**
	North America			North America			North America			Overseas
	Commercial P&C			Personal P&C			Agricultural			General			Global												Total
Full Year 2015	Insurance			Insurance			Insurance			Insurance			Reinsurance			Corporate			Total P&C			Life Insurance			Consolidated
Net premiums written	$	12,614		$	4,762		$	1,346		$	8,751		$	857		$	—		$	28,330		$	2,093		$	30,423
Net premiums earned		12,484			4,454			1,364			8,566			875			—			27,743			2,043			29,786
Adjusted losses and loss expenses		7,342			2,669			1,097			4,120			295			293			15,816			648			16,464
Policy benefits		—			—			—			—			—			—			—			543			543
(Gains) losses from fair value changes in separate account assets		—			—			—			—			—			—			—			19			19
Policy acquisition costs		1,980			858			69			2,210			214			1			5,332			494			5,826
Administrative expenses		1,187			379			1			1,198			55			317			3,137			328			3,465

Underwriting income (loss)	$	1,975		$	548		$	197		$	1,038		$	311		$	(611	)	$	3,458		$	11		$	3,469

Combined ratio		84.2	%		87.7	%		85.5	%		87.9	%		64.4	%					87.5	%
Combined ratio excluding catastrophe losses and PPD		88.3	%		79.5	%		88.2	%		91.5	%		77.3	%					88.7	%

The following table presents the reconciliation of full year 2016 underwriting income (loss) for each segment to full year 2016 adjusted underwriting income (loss) shown above.

	North America			North America			North America			Overseas
	Commercial P&C			Personal P&C			Agricultural			General			Global												Total
Full Year 2016	Insurance			Insurance			Insurance			Insurance			Reinsurance			Corporate			Total P&C			Life Insurance			Consolidated
Underwriting income (loss)	$	1,630		$	432		$	341		$	934		$	146		$	(465	)	$	3,018		$	(1	)	$	3,017
Add: Pre-acquisition underwriting income (loss) (14 days prior to close)		13			30			—			4			—			(3	)		44			—			44
Less: amortization of acquired UPR intangible⁽¹⁾		859			492			—			208			—			—			1,559			—			1,559
Add: elimination of DAC benefit ⁽¹⁾		(729	)		(406	)		—			(238	)		—			—			(1,373	)		—			(1,373	)

Adjusted underwriting income (loss)	$	1,773		$	548		$	341		$	908		$	146		$	(468	)	$	3,248		$	(1	)	$	3,247

(1)	Related to the acquisition of The Chubb Corporation.

*	2016 As If results: The 2016 and 2015 As If company underwriting results do not include any impact from purchase accounting adjustments. The full year 2016 As If company results are inclusive of the first 14 days of January 2016.


As If - FY		Page 11

Chubb Limited

Global P&C Underwriting Results - Consecutive Quarters

(in millions of U.S. dollars, except ratios)

(Unaudited)

Global P&C includes the company’s North America Commercial P&C Insurance segment (refer to page 14), North America Personal P&C Insurance segment (refer to page 16), Overseas General Insurance segment (refer to page 19), Global Reinsurance segment (refer to page 21), and Corporate (refer to page 25). Global P&C excludes the North America Agricultural Insurance and Life Insurance segments.

Global P&C (Including Corporate and excluding Agriculture)


																			Legacy ACE
													Legacy ACE			Full Year			Full Year
	4Q-16			3Q-16			2Q-16			1Q-16			4Q-15			2016			2015
Global P&C Underwriting Income
Gross premiums written	$	7,994		$	7,681		$	8,172		$	6,707		$	4,821		$	30,554		$	19,483
Net premiums written		6,349			6,192			6,737			5,415			3,487			24,693			14,369
Net premiums earned		6,378			6,357			6,566			6,077			3,461			25,378			13,902
Adjusted losses and loss expenses		3,757			3,412			3,823			3,527			1,968			14,519			7,795
Policy acquisition costs (excluding amortization of acquired UPR intangible)		1,144			1,019			873			717			594			3,753			2,396
Amortization of acquired UPR intangible ⁽¹⁾		144			320			525			570			—			1,559			—
Adjusted administrative expenses		722			694			750			704			502			2,870			1,978

Global P&C Underwriting income	$	611		$	912		$	595		$	559		$	397		$	2,677		$	1,733

% Change versus prior year period
Net premiums written		82.0	%		78.0	%		72.5	%		54.9	%		-2.0	%		71.8	%		1.2	%
Net premiums earned		84.3	%		81.6	%		84.8	%		79.4	%		-2.4	%		82.6	%		-0.3	%

Net premiums written constant $		83.1	%		80.3	%		75.7	%		63.6	%		4.9	%		75.8	%		7.7	%
Net premiums earned constant $		85.3	%		83.8	%		88.4	%		88.3	%		4.3	%		86.4	%		6.2	%

Other ratios
Net premiums written/gross premiums written		79	%		81	%		82	%		81	%		72	%		81	%		74	%

Combined ratio ⁽²⁾
Loss and loss expense ratio		58.9	%		53.7	%		58.2	%		58.0	%		56.9	%		57.2	%		56.1	%
Policy acquisition cost ratio		20.2	%		21.1	%		21.3	%		21.2	%		17.1	%		20.9	%		17.2	%
Administrative expense ratio		11.3	%		10.9	%		11.4	%		11.6	%		14.5	%		11.4	%		14.2	%

Combined ratio		90.4	%		85.7	%		90.9	%		90.8	%		88.5	%		89.5	%		87.5	%

Combined ratio excluding catastrophe losses and PPD		89.7	%		88.8	%		89.8	%		90.0	%		89.1	%		89.5	%		88.9	%

Expense ratio		31.5	%		32.0	%		32.7	%		32.8	%		31.6	%		32.3	%		31.4	%
Expense ratio excluding A&H		29.5	%		30.0	%		31.0	%		31.0	%		28.3	%		30.4	%		28.1	%

Catastrophe reinstatement premiums (expensed) collected - pre-tax	$	1		$	—		$	6		$	—		$	(1	)	$	7		$	(1	)
Catastrophe losses - pre-tax	$	267		$	143		$	382		$	256		$	73		$	1,048		$	312
Favorable prior period development (PPD) - pre-tax	$	(218	)	$	(338	)	$	(301	)	$	(206	)	$	(93	)	$	(1,063	)	$	(501	)
Loss and loss expense ratio excluding catastrophe losses and PPD		58.2	%		56.9	%		57.1	%		57.2	%		57.3	%		57.4	%		57.4	%

(1)	Related to the acquisition of The Chubb Corporation.

(2)	Q4 2016 and full year 2016 exclude a one-time pension curtailment benefit of $113 million related to the harmonization of the company’s U.S. pension plans.


Global P&C - Reported		Page 12

Chubb Limited

Global P&C Underwriting Results - Consecutive Quarters

(in millions of U.S. dollars, except ratios)

(Unaudited)

Global P&C includes the company’s North America Commercial P&C Insurance segment (refer to page 15), North America Personal P&C Insurance segment (refer to page 17), Overseas General Insurance segment (refer to page 20), Global Reinsurance segment (refer to page 22), and Corporate (refer to page 25). Global P&C excludes the North America Agricultural Insurance and Life Insurance segments.

Global P&C (Including Corporate and excluding Agriculture)


	As If *
																Full Year			Full Year
	4Q-16			3Q-16			2Q-16			1Q-16			4Q-15			2016			2015
Global P&C Underwriting Income
Gross premiums written	$	7,994		$	7,681		$	8,172		$	7,638		$	8,089		$	31,485		$	33,034
Net premiums written		6,349			6,192			6,737			6,269			6,529			25,547			26,984
Net premiums earned		6,378			6,357			6,566			6,466			6,572			25,767			26,379
Adjusted losses and loss expenses		3,757			3,412			3,823			3,749			3,657			14,741			14,719
Policy acquisition costs		1,271			1,300			1,332			1,283			1,322			5,186			5,263
Adjusted administrative expenses		722			694			750			767			782			2,933			3,136

Global P&C Underwriting income	$	628		$	951		$	661		$	667		$	811		$	2,907		$	3,261

% Change versus prior year period
Net premiums written		-2.8	%		-6.7	%		-6.5	%		-5.2	%					-5.3	%
Net premiums earned		-3.0	%		-4.5	%		-1.6	%		-0.1	%					-2.3	%

Net premiums written constant $		-2.0	%		-5.5	%		-4.9	%		-1.0	%					-3.4	%
Net premiums earned constant $		-2.3	%		-3.3	%		0.0	%		3.6	%					-0.5	%

Net premiums written constant $ excluding merger-related underwriting actions, including additional reinsurance⁽¹⁾		1.2	%		-0.5	%		-3.6	%		-0.6	%					-1.0	%

Other ratios
Net premiums written/gross premiums written		79	%		81	%		82	%		82	%		81	%		81	%		82	%

Combined ratio ⁽²⁾
Loss and loss expense ratio		58.9	%		53.7	%		58.2	%		58.0	%		55.6	%		57.2	%		55.8	%
Policy acquisition cost ratio		20.0	%		20.4	%		20.3	%		19.9	%		20.1	%		20.1	%		19.9	%
Administrative expense ratio		11.3	%		10.9	%		11.4	%		11.8	%		12.0	%		11.4	%		11.9	%

Combined ratio		90.2	%		85.0	%		89.9	%		89.7	%		87.7	%		88.7	%		87.6	%

Combined ratio excluding catastrophe losses and PPD		89.4	%		88.2	%		88.8	%		88.9	%		89.0	%		88.8	%		88.7	%

Expense ratio		31.3	%		31.3	%		31.7	%		31.7	%		32.1	%		31.5	%		31.8	%
Expense ratio excluding A&H		29.2	%		29.3	%		29.9	%		29.9	%		30.2	%		29.6	%		30.0	%

Catastrophe reinstatement premiums (expensed) collected - pre-tax	$	1		$	—		$	6		$	—		$	(1	)	$	7		$	(1	)
Catastrophe losses - pre-tax	$	267		$	143		$	382		$	256		$	157		$	1,048		$	839
Favorable prior period development (PPD) - pre-tax	$	(218	)	$	(338	)	$	(301	)	$	(206	)	$	(246	)	$	(1,063	)	$	(1,125	)
Loss and loss expense ratio excluding catastrophe losses and PPD		58.2	%		56.9	%		57.1	%		57.2	%		56.9	%		57.3	%		56.9	%

(1)	Included in Q4 2016 is a decrease in net premiums written of $206 million, comprising of $119 million due to additional reinsurance purchased and $87 million due to other merger-related underwriting actions.

(2)	Q4 2016 and full year 2016 exclude a one-time pension curtailment benefit of $113 million related to the harmonization of the company’s U.S. pension plans.

*	2016 As If results: The 2016 and 2015 As If company underwriting results do not include any impact from purchase accounting adjustments. The Q1 2016 and full year 2016 As If company results are inclusive of the first 14 days of January 2016.


Global P&C - As If		Page 13

Chubb Limited

Segment Results - Consecutive Quarters

(in millions of U.S. dollars, except ratios)

(Unaudited)

North America Commercial P&C Insurance


																			Legacy ACE
													Legacy ACE			Full Year			Full Year
	4Q-16			3Q-16			2Q-16			1Q-16			4Q-15			2016			2015
Gross premiums written	$	4,109		$	3,832		$	4,041		$	3,004		$	2,408		$	14,986		$	8,451
Net premiums written		3,083			3,110			3,245			2,302			1,557			11,740			5,715
Net premiums earned		3,087			3,086			3,148			2,896			1,425			12,217			5,634
Losses and loss expenses		1,858			1,863			1,971			1,747			917			7,439			3,661
Policy acquisition costs (excluding amortization of acquired UPR intangible)		396			346			255			167			128			1,164			531
Amortization of acquired UPR intangible ⁽¹⁾		78			176			290			315			—			859			—
Administrative expenses		285			275			299			266			162			1,125			621

Underwriting income		470			426			333			401			218			1,630			821
Net investment income		489			477			468			426			252			1,860			1,032
Other income (expense) - operating		(4	)		(3	)		9			—			2			2			7

Segment income	$	955		$	900		$	810		$	827		$	472		$	3,492		$	1,860

Combined ratio
Loss and loss expense ratio		60.2	%		60.4	%		62.6	%		60.3	%		64.4	%		60.9	%		65.0	%
Policy acquisition cost ratio		15.3	%		16.9	%		17.3	%		16.7	%		8.9	%		16.6	%		9.4	%
Administrative expense ratio		9.3	%		8.9	%		9.6	%		9.1	%		11.3	%		9.2	%		11.0	%

Combined ratio		84.8	%		86.2	%		89.5	%		86.1	%		84.6	%		86.7	%		85.4	%

Combined ratio excluding catastrophe losses and PPD		88.9	%		89.4	%		89.7	%		89.5	%		88.3	%		89.4	%		88.6	%

Catastrophe losses - pre-tax	$	117		$	90		$	160		$	81		$	25		$	448		$	85
Favorable prior period development (PPD) - pre-tax	$	(245	)	$	(187	)	$	(168	)	$	(178	)	$	(79	)	$	(778	)	$	(264	)
Loss and loss expense ratio excluding catastrophe losses and PPD		64.4	%		63.8	%		62.9	%		63.7	%		67.8	%		63.7	%		68.2	%

% Change versus prior year period
Net premiums written		97.9	%		117.1	%		127.4	%		77.4	%		2.1	%		105.4	%		0.5	%
Net premiums earned		116.6	%		119.1	%		121.8	%		109.9	%		0.5	%		116.9	%		1.6	%

Other ratios
Net premiums written/gross premiums written		75	%		81	%		80	%		77	%		65	%		78	%		68	%

(1)	Related to the acquisition of The Chubb Corporation.


NA Commercial - Reported		Page 14

Chubb Limited

Segment Results - Consecutive Quarters

(in millions of U.S. dollars, except ratios)

(Unaudited)

North America Commercial P&C Insurance


	As If*
	4Q-16			3Q-16			2Q-16			1Q-16			4Q-15			Full Year 2016			Full Year 2015
Gross premiums written	$	4,109		$	3,832		$	4,041		$	3,572		$	4,237		$	15,554		$	15,943
Net premiums written		3,083			3,110			3,245			2,821			3,247			12,259			12,614
Net premiums earned		3,087			3,086			3,148			3,104			3,140			12,425			12,484
Losses and loss expenses		1,858			1,863			1,971			1,874			1,844			7,566			7,342
Policy acquisition costs		462			496			499			469			498			1,926			1,980
Administrative expenses		285			275			299			301			304			1,160			1,187

Underwriting income	$	482		$	452		$	379		$	460		$	494		$	1,773		$	1,975

Combined ratio
Loss and loss expense ratio		60.2	%		60.4	%		62.6	%		60.4	%		58.7	%		60.9	%		58.8	%
Policy acquisition cost ratio		14.9	%		16.0	%		15.8	%		15.1	%		15.9	%		15.5	%		15.9	%
Administrative expense ratio		9.3	%		8.9	%		9.6	%		9.7	%		9.6	%		9.3	%		9.5	%

Combined ratio		84.4	%		85.3	%		88.0	%		85.2	%		84.2	%		85.7	%		84.2	%

Combined ratio excluding catastrophe losses and PPD		88.5	%		88.6	%		88.3	%		88.3	%		88.5	%		88.4	%		88.3	%

Catastrophe losses - pre-tax	$	117		$	90		$	160		$	81		$	84		$	448		$	268
Favorable prior period development (PPD) - pre-tax	$	(245	)	$	(187	)	$	(168	)	$	(178	)	$	(220	)	$	(778	)	$	(783	)
Loss and loss expense ratio excluding catastrophe losses and PPD		64.4	%		63.8	%		62.9	%		63.5	%		62.9	%		63.7	%		62.9	%

% Change versus prior year period
Net premiums written		-5.1	%		-2.4	%		-0.2	%		-3.7	%					-2.8	%
Net premiums earned		-1.7	%		-2.2	%		1.1	%		1.0	%					-0.5	%

Net premiums written excluding merger-related underwriting actions, including additional reinsurance ⁽¹⁾		-2.5	%		0.0	%		1.6	%		-2.9	%					-0.9	%

Other ratios
Net premiums written/gross premiums written		75	%		81	%		80	%		79	%		77	%		79	%		79	%

Production by Size	4Q-16
Net Premiums Written
Major account & specialty⁽²⁾	$	1,860
Commercial ⁽³⁾		1,223

Total	$	3,083

(1)	Included in Q4 2016 is a decrease in net premiums written of $83 million, comprising of $29 million due to additional reinsurance purchased and $54 million due to other merger-related underwriting actions.

Included in full year 2016 is a decrease in net premiums written of $241 million, comprising of $124 million due to additional reinsurance purchased and $117 million due to other merger-related underwriting actions.

(2)	Principally large corporate accounts and wholesale business.

(3)	Principally middle market and small commercial accounts.

*	2016 As If results: The 2016 and 2015 As If company underwriting results do not include any impact from purchase accounting adjustments. The Q1 2016 and full year 2016 As If company results are inclusive of the first 14 days of January 2016.


NA Commercial - As If		Page 15

Chubb Limited

Segment Results - Consecutive Quarters

(in millions of U.S. dollars, except ratios)

(Unaudited)

North America Personal P&C Insurance


																			Legacy ACE
													Legacy ACE			Full Year			Full Year
	4Q-16			3Q-16			2Q-16			1Q-16			4Q-15			2016			2015
Gross premiums written	$	1,228		$	1,323		$	1,369		$	974		$	314		$	4,894		$	1,673
Net premiums written		1,040			1,011			1,231			871			234			4,153			1,192
Net premiums earned		1,074			1,081			1,140			1,024			261			4,319			948
Losses and loss expenses		642			594			661			661			144			2,558			590
Policy acquisition costs (excluding amortization of acquired UPR intangible)		174			128			104			68			26			474			69
Amortization of acquired UPR intangible ⁽¹⁾		45			101			165			181			—			492			—
Administrative expenses		88			89			98			88			34			363			123

Underwriting income		125			169			112			26			57			432			166
Net investment income		52			53			55			47			6			207			25
Other expense - operating		—			(2	)		(3	)		(1	)		(1	)		(6	)		(2	)
Amortization expense of purchased intangibles		(3	)		(4	)		(4	)		(8	)		(15	)		(19	)		(78	)

Segment income	$	174		$	216		$	160		$	64		$	47		$	614		$	111

Combined ratio
Loss and loss expense ratio		59.7	%		54.9	%		58.0	%		64.6	%		55.2	%		59.2	%		62.3	%
Policy acquisition cost ratio		20.4	%		21.2	%		23.6	%		24.3	%		10.1	%		22.4	%		7.3	%
Administrative expense ratio		8.2	%		8.3	%		8.5	%		8.6	%		13.1	%		8.4	%		13.0	%

Combined ratio		88.3	%		84.4	%		90.1	%		97.5	%		78.4	%		90.0	%		82.6	%

Combined ratio excluding catastrophe losses and PPD		82.9	%		78.8	%		83.0	%		82.5	%		77.5	%		81.8	%		73.2	%

Catastrophe losses - pre-tax	$	51		$	22		$	97		$	156		$	2		$	326		$	63
Unfavorable (favorable) prior period development (PPD) - pre-tax	$	7		$	38		$	(15	)	$	(3	)	$	—		$	27		$	25
Loss and loss expense ratio excluding catastrophe losses and PPD		54.3	%		49.3	%		50.9	%		49.6	%		54.3	%		51.0	%		52.9	%

% Change versus prior year period
Net premiums written		344.7	%		263.4	%		125.1	%		NM			62.7	%		248.4	%		106.4	%
Net premiums earned		311.9	%		296.3	%		322.4	%		NM			82.5	%		355.5	%		69.2	%

Other ratios
Net premiums written/gross premiums written		85	%		76	%		90	%		89	%		75	%		85	%		71	%

(1)	Related to the acquisition of The Chubb Corporation.


NA Personal - Reported		Page 16

Chubb Limited

Segment Results - Consecutive Quarters

(in millions of U.S. dollars, except ratios)

(Unaudited)

North America Personal P&C Insurance


	As If*
	4Q-16			3Q-16			2Q-16			1Q-16			4Q-15			Full Year 2016			Full Year 2015
Gross premiums written	$	1,228		$	1,323		$	1,369		$	1,083		$	1,226		$	5,003		$	5,444
Net premiums written		1,040			1,011			1,231			971			1,093			4,253			4,762
Net premiums earned		1,074			1,081			1,140			1,134			1,140			4,429			4,454
Losses and loss expenses		642			594			661			714			597			2,611			2,669
Policy acquisition costs		211			211			240			232			228			894			858
Administrative expenses		88			89			98			101			96			376			379

Underwriting income	$	133		$	187		$	141		$	87		$	219		$	548		$	548

Combined ratio
Loss and loss expense ratio		59.7	%		54.9	%		58.0	%		62.9	%		52.4	%		58.9	%		59.9	%
Policy acquisition cost ratio		19.7	%		19.6	%		21.1	%		20.5	%		20.0	%		20.2	%		19.3	%
Administrative expense ratio		8.2	%		8.3	%		8.5	%		8.9	%		8.5	%		8.5	%		8.5	%

Combined ratio		87.6	%		82.8	%		87.6	%		92.3	%		80.9	%		87.6	%		87.7	%

Combined ratio excluding catastrophe losses and PPD		82.1	%		77.2	%		80.5	%		78.7	%		80.9	%		79.6	%		79.5	%

Catastrophe losses - pre-tax	$	51		$	22		$	97		$	156		$	15		$	326		$	383
Unfavorable (favorable) prior period development (PPD) - pre-tax	$	7		$	38		$	(15	)	$	(3	)	$	(15	)	$	27		$	(18	)
Loss and loss expense ratio excluding catastrophe losses and PPD		54.3	%		49.3	%		50.9	%		49.3	%		52.4	%		50.9	%		51.7	%

% Change versus prior year period
Net premiums written		-4.8	%		-16.4	%		-20.6	%		6.8	%					-10.7	%
Net premiums earned		-5.7	%		-5.9	%		-1.8	%		12.7	%					-0.6	%

Net premiums written excluding merger-related underwriting actions, including additional reinsurance and Fireman’s Fund ⁽¹⁾		2.2	%		3.1	%		-1.4	%		2.5	%					1.5	%

Other ratios
Net premiums written/gross premiums written		85	%		76	%		90	%		90	%		89	%		85	%		87	%

(1)

Included in Q4 2016 and full year 2016 is a decrease in net premiums written of $73 million and $273 million, respectively, due to additional reinsurance purchased. Q4 2016 and full year 2016 included net premiums written of $72 million and $263 million, respectively, related to Fireman’s Fund high net worth personal lines business. Q4 2015 and full year 2015 included Fireman’s Fund net premiums written of $74 million and $561 million, respectively.

*	2016 As If results: The 2016 and 2015 As If company underwriting results do not include any impact from purchase accounting adjustments. The Q1 2016 and full year 2016 As If company results are inclusive of the first 14 days of January 2016.


NA Personal - As If		Page 17

Chubb Limited

Segment Results - Consecutive Quarters

(in millions of U.S. dollars, except ratios)

(Unaudited)

North America Agricultural Insurance


	4Q-16			3Q-16			2Q-16			1Q-16			4Q-15			Full Year 2016			Full Year 2015
Gross premiums written	$	266		$	1,240		$	545		$	136		$	270		$	2,187		$	2,207
Net premiums written		40			849			375			64			142			1,328			1,346
Net premiums earned		147			819			327			23			240			1,316			1,364
Adjusted losses and loss expenses ⁽¹⁾		(38	)		680			286			(30	)		178			898			1,097
Policy acquisition costs		6			48			25			4			8			83			69
Administrative expenses		(5	)		1			2			(4	)		(2	)		(6	)		1

Underwriting income		184			90			14			53			56			341			197
Net investment income		5			5			5			5			6			20			23
Other income (expense) - operating		(1	)		—			—			—			—			(1	)		(1	)
Amortization expense of purchased intangibles		(7	)		(7	)		(8	)		(7	)		(8	)		(29	)		(30	)

Segment income	$	181		$	88		$	11		$	51		$	54		$	331		$	189

Combined ratio
Loss and loss expense ratio		-26.0	%		83.0	%		87.5	%		-125.2	%		73.9	%		68.3	%		80.4	%
Policy acquisition cost ratio		3.9	%		5.9	%		7.7	%		15.9	%		3.4	%		6.3	%		5.1	%
Administrative expense ratio		-3.3	%		0.0	%		0.7	%		-17.6	%		-0.9	%		-0.5	%		0.0	%

Combined ratio		-25.4	%		88.9	%		95.9	%		-126.9	%		76.4	%		74.1	%		85.5	%

Combined ratio excluding catastrophe losses and PPD		-10.9	%		90.1	%		91.6	%		80.6	%		79.2	%		78.9	%		88.2	%

Catastrophe losses - pre-tax	$	2		$	1		$	14		$	2		$	1		$	19		$	9
Favorable prior period development (PPD) - pre-tax	$	(20	)	$	(11	)	$	—		$	(41	)	$	(7	)	$	(72	)	$	(45	)
Loss and loss expense ratio excluding catastrophe losses and PPD		-16.9	%		84.2	%		83.3	%		75.1	%		75.4	%		72.4	%		82.8	%

% Change versus prior year period
Net premiums written		-71.6	%		15.2	%		-1.2	%		-27.0	%		-41.9	%		-1.3	%		-15.3	%
Net premiums earned		-39.1	%		10.9	%		1.6	%		-63.7	%		-26.2	%		-3.6	%		-10.6	%

Other ratios
Net premiums written/gross premiums written		15	%		68	%		69	%		47	%		52	%		61	%		61	%

(1)	Includes realized gains/losses on crop derivatives.


NA Agriculture		Page 18

Chubb Limited

Segment Results - Consecutive Quarters

(in millions of U.S. dollars, except ratios)

(Unaudited)

Overseas General Insurance


																			Legacy ACE
													Legacy ACE			Full Year 2016			Full Year 2015
	4Q-16			3Q-16			2Q-16			1Q-16			4Q-15			Full Year 2016			Full Year 2015
Gross premiums written	$	2,542		$	2,383		$	2,494		$	2,516		$	1,990		$	9,935		$	8,476
Net premiums written		2,112			1,940			2,031			2,041			1,587			8,124			6,634
Net premiums earned		2,050			2,034			2,093			1,955			1,575			8,132			6,471
Losses and loss expenses		1,052			843			1,089			1,021			748			4,005			3,052
Policy acquisition costs (excluding amortization of acquired UPR intangible)		529			503			467			429			391			1,928			1,581
Amortization of acquired UPR intangible ⁽¹⁾		21			43			70			74			—			208			—
Administrative expenses		256			261			277			263			241			1,057			997

Underwriting income		192			384			190			168			195			934			841
Net investment income		155			152			147			146			125			600			534
Other income - operating		(5	)		6			5			5			5			11			17
Amortization expense of purchased intangibles		(12	)		(12	)		(13	)		(11	)		(11	)		(48	)		(61	)

Segment income	$	330		$	530		$	329		$	308		$	314		$	1,497		$	1,331

Combined ratio
Loss and loss expense ratio		51.3	%		41.5	%		52.1	%		52.2	%		47.5	%		49.3	%		47.2	%
Policy acquisition cost ratio		26.9	%		26.8	%		25.6	%		25.7	%		24.8	%		26.3	%		24.4	%
Administrative expense ratio		12.4	%		12.9	%		13.2	%		13.5	%		15.3	%		12.9	%		15.4	%

Combined ratio		90.6	%		81.2	%		90.9	%		91.4	%		87.6	%		88.5	%		87.0	%

Combined ratio excluding catastrophe losses and PPD		91.2	%		91.1	%		91.5	%		92.0	%		89.7	%		91.5	%		90.1	%

Catastrophe reinstatement premiums expensed - pre-tax	$	—		$	—		$	—		$	—		$	(2	)	$	—		$	(2	)
Catastrophe losses - pre-tax	$	72		$	20		$	73		$	18		$	40		$	183		$	142
Favorable prior period development (PPD) - pre-tax	$	(85	)	$	(223	)	$	(85	)	$	(30	)	$	(74	)	$	(423	)	$	(343	)
Loss and loss expense ratio excluding catastrophe losses and PPD		51.9	%		51.4	%		52.7	%		52.8	%		49.6	%		52.2	%		50.3	%

% Change versus prior year period
Net premiums written as reported		33.2	%		22.5	%		21.6	%		13.8	%		-9.3	%		22.5	%		-5.2	%
Net premiums earned as reported		30.2	%		26.0	%		27.3	%		19.4	%		-10.5	%		25.7	%		-4.9	%

Net premiums written constant $		34.7	%		25.8	%		26.7	%		26.1	%		3.6	%		28.3	%		7.1	%
Net premiums earned constant $		31.4	%		29.0	%		32.4	%		31.3	%		1.7	%		31.0	%		7.5	%

Other ratios
Net premiums written/gross premiums written		83	%		81	%		81	%		81	%		80	%		82	%		78	%

(1)	Related to the acquisition of The Chubb Corporation.


Overseas General Insurance - RP		Page 19

Chubb Limited

Segment Results - Consecutive Quarters

(in millions of U.S. dollars, except ratios)

(Unaudited)

Overseas General Insurance


	As If*
																Full Year 2016			Full Year 2015
	4Q-16			3Q-16			2Q-16			1Q-16			4Q-15			Full Year 2016			Full Year 2015
Gross premiums written	$	2,542		$	2,383		$	2,494		$	2,749		$	2,515		$	10,168		$	10,726
Net premiums written		2,112			1,940			2,031			2,256			2,078			8,339			8,751
Net premiums earned		2,050			2,034			2,093			2,026			2,084			8,203			8,566
Losses and loss expenses		1,052			843			1,089			1,063			1,011			4,047			4,120
Policy acquisition costs		553			551			546			529			547			2,179			2,210
Administrative expenses		256			261			277			275			287			1,069			1,198

Underwriting income	$	189		$	379		$	181		$	159		$	239		$	908		$	1,038

Combined ratio
Loss and loss expense ratio		51.3	%		41.5	%		52.1	%		52.4	%		48.5	%		49.3	%		48.1	%
Policy acquisition cost ratio		27.1	%		27.0	%		26.0	%		26.1	%		26.3	%		26.6	%		25.8	%
Administrative expense ratio		12.4	%		12.9	%		13.2	%		13.7	%		13.7	%		13.0	%		14.0	%

Combined ratio		90.8	%		81.4	%		91.3	%		92.2	%		88.5	%		88.9	%		87.9	%

Combined ratio excluding catastrophe losses and PPD		91.4	%		91.3	%		92.0	%		92.8	%		91.2	%		91.9	%		91.5	%

Catastrophe reinstatement premiums expensed - pre-tax	$	—		$	—		$	—		$	—		$	(2	)	$	—		$	(2	)
Catastrophe losses - pre-tax	$	72		$	20		$	73		$	18		$	49		$	183		$	162
Favorable prior period development (PPD) - pre-tax	$	(85	)	$	(223	)	$	(85	)	$	(30	)	$	(106	)	$	(423	)	$	(477	)
Loss and loss expense ratio excluding catastrophe losses and PPD		51.9	%		51.4	%		52.7	%		53.0	%		51.2	%		52.3	%		51.8	%

% Change versus prior year period
Net premiums written as reported		1.6	%		-5.7	%		-5.0	%		-9.0	%					-4.7	%
Net premiums earned as reported		-1.7	%		-5.1	%		-3.5	%		-6.4	%					-4.2	%

Net premiums written constant $		4.0	%		-1.7	%		0.5	%		1.7	%					1.2	%
Net premiums earned constant $		0.4	%		-1.3	%		1.2	%		4.0	%					1.0	%

Net premiums written constant $ excluding merger-related underwriting actions, including additional reinsurance ⁽¹⁾		6.5	%		0.7	%		1.4	%		1.9	%					2.6	%
Other ratios
Net premiums written/gross premiums written		83	%		81	%		81	%		82	%		83	%		82	%		82	%


										Constant $												Constant $
					% Change					% Change							% Change					% Change
					4Q-16 vs			Constant $		4Q-16 vs			Full Year		Full Year		2016 vs			Constant $		2016 vs
Production by Region	4Q-16		4Q-15		4Q-15			4Q-15 ⁽²⁾		4Q-15 ⁽²⁾			2016		2015		2015			2015 ⁽²⁾		2015 ⁽²⁾
Gross premiums written
Europe	$	1,052	$	1,084		-3.0	%	$	1,018		3.3	%	$	4,479	$	4,686		-4.4	%	$	4,474		0.1	%
Latin America		677		657		3.0	%		647		4.6	%		2,484		2,845		-12.7	%		2,523		-1.5	%
Asia		740		691		7.1	%		722		2.5	%		2,874		2,820		1.9	%		2,793		2.9	%
Other⁽³⁾		73		83		-12.0	%		78		-6.4	%		331		375		-11.7	%		358		-7.5	%

Total	$	2,542	$	2,515		1.1	%	$	2,465		3.1	%	$	10,168	$	10,726		-5.2	%	$	10,148		0.2	%

Net Premiums Written
Europe	$	809	$	837		-3.3	%	$	781		3.6	%	$	3,407	$	3,588		-5.0	%	$	3,412		-0.1	%
Latin America		557		530		5.1	%		514		8.4	%		2,006		2,281		-12.1	%		2,000		0.3	%
Asia		663		616		7.6	%		643		3.1	%		2,558		2,486		2.9	%		2,460		4.0	%
Other⁽³⁾		83		95		-12.6	%		93		-10.8	%		368		396		-7.1	%		372		-1.1	%

Total	$	2,112	$	2,078		1.6	%	$	2,031		4.0	%	$	8,339	$	8,751		-4.7	%	$	8,244		1.2	%

(1)

Included in Q4 2016 is a decrease in net premiums written of $50 million, comprising of $17 million due to additional reinsurance purchased and $33 million due to other merger-related underwriting actions. Included in full year 2016 is a decrease in net premiums written of $119 million, comprising of $24 million due to additional reinsurance purchased and $95 million due to other merger-related underwriting actions. Also included in Q4 2016 is a one-time increase in net premiums written of $48 million that will not recur in 2017. Excluding this increase, as well as the merger-related underwriting actions, net premiums written increased 4.1% for the quarter and 2.0% for the year in constant dollars.

(2)	Prior periods on a constant dollar basis.

(3)	Primarily includes Eurasia and Africa, and the company’s international supplemental A&H business of Combined Insurance.

*	2016 As If results: The 2016 and 2015 As If company underwriting results do not include any impact from purchase accounting adjustments. The Q1 2016 and full year 2016 As If company results are inclusive of the first 14 days of January 2016.


Overseas General Ins. - As If		Page 20

Chubb Limited

Segment Results - Consecutive Quarters

(in millions of U.S. dollars, except ratios)

(Unaudited)

Global Reinsurance


																			Legacy ACE
													Legacy ACE			Full Year 2016			Full Year 2015
	4Q-16			3Q-16			2Q-16			1Q-16			4Q-15			Full Year 2016			Full Year 2015
Gross premiums written	$	115		$	143		$	268		$	213		$	109		$	739		$	883
Net premiums written		114			131			230			201			109			676			828
Net premiums earned		167			156			185			202			200			710			849
Losses and loss expenses		100			49			87			89			99			325			290
Policy acquisition costs		45			42			47			53			48			187			214
Administrative expenses		12			12			14			14			12			52			49

Underwriting income		10			53			37			46			41			146			296
Net investment income		64			67			65			67			70			263			300
Other income - operating		1			—			2			1			1			4			6

Segment income	$	75		$	120		$	104		$	114		$	112		$	413		$	602

Combined ratio
Loss and loss expense ratio		59.7	%		31.3	%		46.9	%		44.3	%		49.7	%		45.7	%		34.2	%
Policy acquisition cost ratio		26.6	%		27.1	%		25.5	%		26.2	%		24.1	%		26.3	%		25.2	%
Administrative expense ratio		7.7	%		7.9	%		7.4	%		6.8	%		6.0	%		7.5	%		5.8	%

Combined ratio		94.0	%		66.3	%		79.8	%		77.3	%		79.8	%		79.5	%		65.2	%

Combined ratio excluding catastrophe losses and PPD		78.8	%		78.1	%		78.9	%		78.5	%		76.6	%		78.6	%		76.8	%

Catastrophe reinstatement premiums collected - pre-tax	$	1		$	—		$	6		$	—		$	1		$	7		$	1
Catastrophe losses - pre-tax	$	27		$	11		$	52		$	1		$	6		$	91		$	22
Favorable prior period development (PPD) - pre-tax	$	—		$	(28	)	$	(47	)	$	(3	)	$	—		$	(78	)	$	(119	)
Loss and loss expense ratio excluding catastrophe losses and PPD		44.2	%		44.2	%		46.0	%		45.5	%		46.5	%		45.0	%		45.9	%

% Change versus prior year period
Net premiums written as reported		4.0	%		-29.4	%		-11.9	%		-26.3	%		-22.1	%		-18.4	%		-11.4	%
Net premiums earned as reported		-16.9	%		-23.5	%		-15.7	%		-10.7	%		-11.3	%		-16.5	%		-17.2	%

Net premiums written constant $		6.5	%		-28.1	%		-11.6	%		-24.6	%		-20.2	%		-17.1	%		-9.3	%
Net premiums earned constant $		-15.6	%		-22.2	%		-15.0	%		-9.2	%		-9.0	%		-15.3	%		-15.1	%

Other ratios
Net premiums written/gross premiums written		99	%		91	%		86	%		94	%		100	%		91	%		94	%


Global Reinsurance - Reported		Page 21

Chubb Limited

Segment Results - Consecutive Quarters

(in millions of U.S. dollars, except ratios)

(Unaudited)

Global Reinsurance


	As If*
																Full Year			Full Year
	4Q-16			3Q-16			2Q-16			1Q-16			4Q-15			2016			2015
Gross premiums written	$	115		$	143		$	268		$	234		$	111		$	760		$	921
Net premiums written		114			131			230			221			111			696			857
Net premiums earned		167			156			185			202			208			710			875
Losses and loss expenses		100			49			87			89			103			325			295
Policy acquisition costs		45			42			47			53			48			187			214
Administrative expenses		12			12			14			14			12			52			55

Underwriting income	$	10		$	53		$	37		$	46		$	45		$	146		$	311

Combined ratio
Loss and loss expense ratio		59.7	%		31.3	%		46.9	%		44.3	%		49.2	%		45.7	%		33.7	%
Policy acquisition cost ratio		26.6	%		27.1	%		25.5	%		26.2	%		23.6	%		26.3	%		24.4	%
Administrative expense ratio		7.7	%		7.9	%		7.4	%		6.8	%		5.8	%		7.5	%		6.3	%

Combined ratio		94.0	%		66.3	%		79.8	%		77.3	%		78.6	%		79.5	%		64.4	%

Combined ratio excluding catastrophe losses and PPD		78.8	%		78.1	%		78.9	%		78.5	%		77.8	%		78.6	%		77.3	%

Catastrophe reinstatement premiums collected - pre-tax	$	1		$	—		$	6		$	—		$	1		$	7		$	1
Catastrophe losses - pre-tax	$	27		$	11		$	52		$	1		$	9		$	91		$	26
Favorable prior period development (PPD) - pre-tax	$	—		$	(28	)	$	(47	)	$	(3	)	$	(7	)	$	(78	)	$	(138	)
Loss and loss expense ratio excluding catastrophe losses and PPD		44.2	%		44.2	%		46.0	%		45.5	%		48.4	%		45.0	%		46.7	%

% Change versus prior year period
Net premiums written as reported		3.0	%		-29.8	%		-13.3	%		-25.1	%					-18.8	%
Net premiums earned as reported		-20.1	%		-26.8	%		-18.2	%		-11.5	%					-19.0	%

Net premiums written constant $		5.5	%		-28.5	%		-13.0	%		-23.4	%					-17.5	%
Net premiums earned constant $		-18.8	%		-25.6	%		-17.6	%		-10.0	%					-17.9	%

Net premiums written constant $ excluding merger-related underwriting actions, including additional reinsurance⁽¹⁾		5.5	%		-25.0	%		-9.2	%		-23.4	%					-15.6	%

Other ratios
Net premiums written/gross premiums written		99	%		91	%		86	%		94	%		99	%		92	%		93	%

(1)	Included in full year 2016 is a decrease in net premiums written of $17 million due to additional reinsurance purchased.

*	2016 As If results: The 2016 and 2015 As If company underwriting results do not include any impact from purchase accounting adjustments. The Q1 2016 and full year 2016 As If company results are inclusive of the first 14 days of January 2016.


Global Reinsurance - As If		Page 22

Chubb Limited

Segment Results - Consecutive Quarters

(in millions of U.S. dollars)

(Unaudited)

Life Insurance


																			Legacy ACE
													Legacy ACE			Full Year			Full Year
	4Q-16			3Q-16			2Q-16			1Q-16			4Q-15			2016			2015
Gross premiums written	$	577		$	562		$	557		$	546		$	548		$	2,242		$	2,121
Net premiums written		549			532			527			516			515			2,124			1,998
Net premiums earned		534			512			512			497			506			2,055			1,947
Losses and loss expenses		165			174			147			177			159			663			601
Policy benefits ⁽¹⁾		161			155			146			126			159			588			543
(Gains) losses from fair value changes in separate account assets ⁽¹⁾		11			(22	)		(3	)		3			(13	)		(11	)		19
Policy acquisition costs		123			127			137			122			134			509			476
Administrative expenses		81			77			77			72			70			307			291
Net investment income		76			71			69			67			67			283			265

Life Insurance underwriting income⁽²⁾		69			72			77			64			64			282			282
Other income (expense) - operating ⁽¹⁾		(8	)		(2	)		(3	)		(3	)		(4	)		(16	)		(4	)
Amortization expense of purchased intangibles		(1	)		(1	)		—			(1	)		(1	)		(3	)		(2	)

Segment income	$	60		$	69		$	74		$	60		$	59		$	263		$	276

% Change versus prior year period
Net premiums written		6.5	%		8.1	%		5.5	%		5.1	%		-1.6	%		6.3	%		-0.7	%
Net premiums earned		5.7	%		6.7	%		5.1	%		4.9	%		1.4	%		5.6	%		-0.8	%

Net premiums written constant $		6.9	%		9.1	%		8.2	%		10.2	%		3.7	%		8.5	%		3.7	%
Net premiums earned constant $		6.0	%		7.6	%		7.8	%		9.8	%		6.8	%		7.8	%		3.5	%

(1)

(Gains) losses from fair value changes in separate account assets that do not qualify for separate account reporting under GAAP have been reclassified from Other income (expense) for purposes of presenting Life Insurance underwriting income. The offsetting movement in the separate account liabilities is included in Policy benefits.

(2)	We assess the performance of our Life Insurance business based on Life Insurance underwriting income which includes Net investment income and (Gains) losses from fair value changes in separate account assets.

International life insurance net premiums written and deposits breakdown (excludes Combined North American and Life reinsurance businesses):


					Constant $							Constant $
					% Change							% Change
			Constant $		4Q-16 vs.			Full Year		Constant $		2016 vs
	4Q-16		4Q-15 ⁽⁴⁾		4Q-15 ⁽⁴⁾			2016		2015 ⁽⁴⁾		2015 ⁽⁴⁾
International life insurance net premiums written	$	223	$	197		12.5	%	$	839	$	712		17.8	%

International life insurance deposits ⁽³⁾		258		295		-12.4	%		1,006		997		0.9	%

Total international life insurance net premiums written and deposits	$	481	$	492		-2.4	%	$	1,845	$	1,709		7.9	%

(3)	Includes deposits collected on universal life and investment contracts. Consistent with GAAP, premiums collected on universal life and investment contracts are considered deposits and excluded from revenues.

(4)	Prior periods on a constant dollar basis.


Life Insurance - Reported		Page 23

Chubb Limited

Segment Results - Consecutive Quarters

(in millions of U.S. dollars)

(Unaudited)

Life Insurance


	As If*
																Full Year			Full Year
	4Q-16			3Q-16			2Q-16			1Q-16			4Q-15			2016			2015
Gross premiums written	$	577		$	562		$	557		$	547		$	572		$	2,243		$	2,220
Net premiums written		549			532			527			517			538			2,125			2,093
Net premiums earned		534			512			512			499			531			2,057			2,043
Losses and loss expenses		165			174			147			177			171			663			648
Policy benefits ⁽¹⁾		161			155			146			126			159			588			543
(Gains) losses from fair value changes in separate account assets ⁽¹⁾		11			(22	)		(3	)		3			(13	)		(11	)		19
Policy acquisition costs		123			127			137			123			138			510			494
Administrative expenses		81			77			77			73			80			308			328
Net investment income		76			71			69			67			67			283			265

Life Insurance underwriting income⁽²⁾	$	69		$	72		$	77		$	64		$	63		$	282		$	276

% Change versus prior year period
Net premiums written		2.1	%		3.4	%		0.7	%		0.0	%					1.6	%
Net premiums earned		0.9	%		1.6	%		0.2	%		0.2	%					0.7	%

Net premiums written constant $		2.4	%		4.3	%		3.5	%		4.6	%					3.7	%
Net premiums earned constant $		1.2	%		2.5	%		2.9	%		4.7	%					2.8	%

(1)	(Gains) losses from fair value changes in separate account assets that do not qualify for separate account reporting under GAAP have been reclassified from Other income (expense). The offsetting movement in the separate account liabilities is included in Policy benefits.

(2)	We assess the performance of our Life Insurance business based on Life Insurance underwriting income which includes Net investment income and (Gains) losses from fair value changes in separate account assets.

*	2016 As If results: The 2016 and 2015 As If company underwriting results do not include any impact from purchase accounting adjustments. The Q1 2016 and full year 2016 As If company results are inclusive of the first 14 days of January 2016.


Life Insurance - As If		Page 24

Chubb Limited

Segment Results - Consecutive Quarters

(in millions of U.S. dollars)

(Unaudited)

Corporate


																			Legacy ACE
													Legacy ACE			Full Year			Full Year
	4Q-16			3Q-16			2Q-16			1Q-16			4Q-15			2016			2015
Gross premiums written	$	—		$	—		$	—		$	—		$	—		$	—		$	—
Net premiums written		—			—			—			—			—			—			—
Net premiums earned		—			—			—			—			—			—			—
Adjusted losses and loss expenses ⁽¹⁾		105			63			15			9			60			192			202
Policy acquisition costs		—			—			—			—			1			—			1
Adjusted administrative expenses ⁽¹⁾		81			57			62			73			53			273			188

Underwriting loss		(186	)		(120	)		(77	)		(82	)		(114	)		(465	)		(391	)
Adjusted net investment income		4			5			7			9			6			25			15
Other expense - operating		(4	)		(2	)		(2	)		(2	)		(9	)		(10	)		(20	)
Adjusted interest expense⁽²⁾		(167	)		(164	)		(166	)		(149	)		(64	)		(646	)		(271	)
Amortization benefit of purchased intangibles ⁽³⁾		20			20			20			20			—			80			—
Pension curtailment benefit⁽¹⁾		113			—			—			—			—			113			—
Chubb integration and related expenses		(131	)		(115	)		(98	)		(155	)		(53	)		(499	)		(62	)
Amortization of fair value adjustment of acquired invested assets and long-term debt		(88	)		(79	)		(95	)		(83	)		—			(345	)		—
Adjusted net realized gains (losses) ⁽²⁾		371			97			(214	)		(394	)		(57	)		(140	)		(411	)
Net realized gains (losses) related to unconsolidated entities		162			72			18			(25	)		(17	)		227			67
Income tax expense		(259	)		(277	)		(155	)		(124	)		(67	)		(815	)		(462	)

Net corporate loss	$	(165	)	$	(563	)	$	(762	)	$	(985	)	$	(375	)	$	(2,475	)	$	(1,535	)

Unfavorable prior period development (PPD) - pre-tax	$	105		$	62		$	14		$	8		$	60		$	189		$	200

	As If*
																Full Year			Full Year
	4Q-16			3Q-16			2Q-16			1Q-16			4Q-15			2016			2015
Gross premiums written	$	—		$	—		$	—		$	—		$	—		$	—		$	—
Net premiums written		—			—			—			—			—			—			—
Net premiums earned		—			—			—			—			—			—			—
Losses and loss expenses		105			63			15			9			102			192			293
Policy acquisition costs		—			—			—			—			1			—			1
Administrative expenses		81			57			62			76			83			276			317

Underwriting loss	$	(186	)	$	(120	)	$	(77	)	$	(85	)	$	(186	)	$	(468	)	$	(611	)

Unfavorable prior period development (PPD) - pre-tax	$	105		$	62		$	14		$	8		$	102		$	189		$	291

(1)

During Q4 2016, the company recognized a one-time curtailment benefit of $113 million related to the harmonization of the company’s U.S. pension plans. For GAAP purposes, this benefit is recorded to losses and loss expenses ($23 million) and administrative expenses ($90 million). For Corporate presentation purposes, this benefit is excluded from adjusted losses and loss expenses and adjusted administrative expenses in order to provide a better understanding of annual expenses.

(2)	See non-GAAP financial measures.

(3)	Related to the acquisition of The Chubb Corporation.

*	2016 As If results: The 2016 and 2015 As If company underwriting results do not include any impact from purchase accounting adjustments. The Q1 2016 and full year 2016 As If company results are inclusive of the first 14 days of January 2016.


Corporate		Page 25

Chubb Limited

Loss Reserve Rollforward

(in millions of U.S. dollars, except ratios)

(Unaudited)


	Unpaid Losses									Net Paid to
	Gross			Ceded			Net			Incurred Ratio
Balance at December 31, 2014	$	38,315		$	11,307		$	27,008
Losses and loss expenses incurred		2,743			621			2,122
Losses and loss expenses paid		(3,062	)		(744	)		(2,318	)		109	%
Other (incl. foreign exch. revaluation)		(670	)		(197	)		(473	)

Balance at March 31, 2015	$	37,326		$	10,987		$	26,339
Losses and loss expenses incurred		3,065			648			2,417
Losses and loss expenses paid		(2,830	)		(547	)		(2,283	)		94	%
Other (incl. foreign exch. revaluation)		669			60			609

Balance at June 30, 2015	$	38,230		$	11,148		$	27,082
Losses and loss expenses incurred		3,252			609			2,643
Losses and loss expenses paid		(3,391	)		(908	)		(2,483	)		94	%
Other (incl. foreign exch. revaluation)		(527	)		(193	)		(334	)

Balance at September 30, 2015	$	37,564		$	10,656		$	26,908
Losses and loss expenses incurred		3,481			1,179			2,302
Losses and loss expenses paid		(3,616	)		(1,050	)		(2,566	)		111	%
Other (incl. foreign exch. revaluation)		(126	)		(44	)		(82	)

Balance at December 31, 2015	$	37,303		$	10,741		$	26,562
Losses and loss expenses incurred		4,663			989			3,674
Losses and loss expenses paid		(4,692	)		(1,143	)		(3,549	)		97	%
Acquired reserve (Legacy Chubb)		22,878			1,515			21,363
Other (incl. foreign exch. revaluation)		54			25			29

Balance at March 31, 2016	$	60,206		$	12,127		$	48,079
Losses and loss expenses incurred		5,239			985			4,254
Losses and loss expenses paid		(4,708	)		(752	)		(3,956	)		93	%
Other (incl. foreign exch. revaluation)		82			36			46

Balance at June 30, 2016	$	60,819		$	12,396		$	48,423
Losses and loss expenses incurred		5,335			1,066			4,269
Losses and loss expenses paid		(4,612	)		(782	)		(3,830	)		90	%
Other (incl. foreign exch. revaluation)		(195	)		(4	)		(191	)

Balance at September 30, 2016	$	61,347		$	12,676		$	48,671
Losses and loss expenses incurred		4,960			1,105			3,855
Losses and loss expenses paid		(5,425	)		(1,045	)		(4,380	)		114	%
Other (incl. foreign exch. revaluation)		(342	)		(28	)		(314	)

Balance at December 31, 2016	$	60,540		$	12,708		$	47,832
Add net recoverable on paid losses		—			869			(869	)

Balance including net recoverable on paid losses	$	60,540		$	13,577		$	46,963


Loss Reserve Rollforward		Page 26

Chubb Limited

Reinsurance Recoverable Analysis

(in millions of U.S. dollars)

(Unaudited)

Net Reinsurance Recoverable by Division


													Legacy ACE
	December 31			September 30			June 30			March 31			December 31
	2016			2016			2016			2016			2015
Reinsurance recoverable on paid losses and loss expenses
Active operations	$	686		$	558		$	598		$	592		$	450
Brandywine and Other Run-off		274			300			323			269			288

Total	$	960		$	858		$	921		$	861		$	738

Reinsurance recoverable on unpaid losses and loss expenses
Active operations	$	11,632		$	11,790		$	11,535		$	11,169		$	9,884
Brandywine and Other Run-off		1,285			1,113			1,097			1,182			1,092

Total	$	12,917		$	12,903		$	12,632		$	12,351		$	10,976

Gross reinsurance recoverable
Active operations	$	12,318		$	12,348		$	12,133		$	11,761		$	10,334
Brandywine and Other Run-off		1,559			1,413			1,420			1,451			1,380

Total	$	13,877		$	13,761		$	13,553		$	13,212		$	11,714

Provision for uncollectible reinsurance ⁽¹⁾
Active operations	$	(159	)	$	(163	)	$	(162	)	$	(164	)	$	(194	)
Brandywine and Other Run-off		(141	)		(150	)		(156	)		(157	)		(134	)

Total	$	(300	)	$	(313	)	$	(318	)	$	(321	)	$	(328	)

Net reinsurance recoverable
Active operations	$	12,159		$	12,185		$	11,971		$	11,597		$	10,140
Brandywine and Other Run-off		1,418			1,263			1,264			1,294			1,246

Total	$	13,577		$	13,448		$	13,235		$	12,891		$	11,386

(1)	The provision for uncollectible reinsurance is based on a default analysis applied to gross reinsurance, net of usable collateral of approximately $3.3 billion.


Reinsurance Recoverable		Page 27

Chubb Limited

Investment Portfolio

(in millions of U.S. dollars)

(Unaudited)


																					Legacy ACE
	December 31					September 30					June 30					March 31					December 31
	2016					2016					2016					2016					2015
Market Value
Fixed maturities available for sale	$	80,115				$	81,358				$	79,951				$	77,538				$	43,587
Fixed maturities held to maturity		10,670					11,366					11,581					11,580					8,552
Short-term investments		3,002					3,548					3,631					3,382					10,446

Total fixed maturities	$	93,787				$	96,272				$	95,163				$	92,500				$	62,585

Asset Allocation by Market Value
Treasury	$	2,832		3	%	$	2,885		3	%	$	2,864		3	%	$	3,145		3	%	$	2,395		4	%
Agency		699		1	%		558		1	%		550		1	%		634		1	%		878		1	%
Corporate and asset-backed		26,944		29	%		26,754		28	%		25,450		27	%		24,060		26	%		17,985		28	%
Mortgage-backed		15,435		16	%		15,040		15	%		14,440		15	%		13,757		15	%		11,701		19	%
Municipal		22,768		24	%		24,240		25	%		24,975		26	%		24,945		27	%		4,950		8	%
Non-U.S.		22,107		24	%		23,247		24	%		23,253		24	%		22,577		24	%		14,230		23	%
Short-term investments		3,002		3	%		3,548		4	%		3,631		4	%		3,382		4	%		10,446		17	%

Total fixed maturities	$	93,787		100	%	$	96,272		100	%	$	95,163		100	%	$	92,500		100	%	$	62,585		100	%

Credit Quality by Market Value
AAA	$	15,746		17	%	$	16,878		17	%	$	17,412		18	%	$	19,524		21	%	$	14,369		23	%
AA		36,235		39	%		37,325		39	%		36,802		39	%		34,399		37	%		22,141		36	%
A		17,519		19	%		17,956		19	%		18,016		19	%		17,726		19	%		10,163		16	%
BBB		12,237		13	%		12,387		13	%		12,148		13	%		11,604		13	%		8,941		14	%
BB		6,993		7	%		6,719		7	%		6,465		7	%		5,484		6	%		3,775		6	%
B		4,814		5	%		4,722		5	%		4,061		4	%		3,494		4	%		3,018		5	%
Other		243		0	%		285		0	%		259		0	%		269		0	%		178		0	%

Total fixed maturities	$	93,787		100	%	$	96,272		100	%	$	95,163		100	%	$	92,500		100	%	$	62,585		100	%

Cost/Amortized Cost
Fixed maturities available for sale	$	79,536				$	78,630				$	77,436				$	75,991				$	43,149
Fixed maturities held to maturity		10,644					10,927					11,090					11,280					8,430
Short-term investments		3,002					3,548					3,631					3,382					10,446

Subtotal fixed maturities		93,182					93,105					92,157					90,653					62,025
Equity securities		706					695					703					841					441
Other investments		4,270					4,170					4,152					4,233					2,993

Total investment portfolio	$	98,158				$	97,970				$	97,012				$	95,727				$	65,459

Avg. duration of fixed maturities ⁽¹⁾		4.2 years					3.9 years					3.9 years					3.9 years					3.5 years
Avg. market yield of fixed maturities		2.8	%				2.2	%				2.3	%				2.5	%				2.8	%
Avg. credit quality		A/Aa					A/Aa					A/Aa					AA/Aa					A/Aa
Avg. yield on invested assets⁽²⁾		3.4	%				3.4	%				3.4	%				3.4	%				3.4	%

(1)	The portfolio’s duration extended to 4.2 years from 3.9 years at September 30, 2016 as the estimated duration on both mortgage backed securities and certain callable securities increased due to higher interest rates.

(2)	Calculated using adjusted net investment income.


Investments		Page 28

Chubb Limited

Investment Portfolio - 2

(in millions of U.S. dollars)

(Unaudited)

Mortgage-backed Fixed Income Portfolio

Mortgage-backed securities


	S&P Credit Rating
	AAA		AA		A		BBB		BB and below		Total
Market Value at December 31, 2016
Agency residential mortgage-backed (RMBS)	$	—	$	12,530	$	—	$	—	$	—	$	12,530
Non-agency RMBS		1		5		60		5		32		103
Commercial mortgage-backed		2,763		38		1		—		—		2,802

Total mortgage-backed securities at market value	$	2,764	$	12,573	$	61	$	5	$	32	$	15,435


U.S. Corporate and Asset-backed Fixed Income Portfolios

	S&P Credit Rating
	Investment Grade
	AAA		AA		A		BBB		Total
Market Value at December 31, 2016
Asset-backed	$	767	$	51	$	—	$	—	$	818
Banks		—		22		1,673		1,741		3,436
Basic Materials		—		—		98		225		323
Communications		—		167		265		1,285		1,717
Consumer, Cyclical		—		185		599		700		1,484
Consumer, Non-Cyclical		111		488		1,811		1,122		3,532
Diversified Financial Services		28		28		507		210		773
Energy		—		57		103		724		884
Industrial		—		370		551		486		1,407
Utilities		1		8		993		605		1,607
All Others		131		535		840		607		2,113

Total	$	1,038	$	1,911	$	7,440	$	7,705	$	18,094

			S&P Credit Rating
			Below Investment Grade
			BB		B		CCC		Total
Market Value at December 31, 2016
Asset-backed			$	3	$	3	$	9	$	15
Banks				25		—		—		25
Basic Materials				214		167		3		384
Communications				906		779		23		1,708
Consumer, Cyclical				1,082		691		27		1,800
Consumer, Non-Cyclical				815		1,109		28		1,952
Diversified Financial Services				198		45		1		244
Energy				342		188		19		549
Industrial				400		452		29		881
Utilities				292		77		—		369
All Others				494		411		18		923

Total			$	4,771	$	3,922	$	157	$	8,850


Investments 2		Page 29

Chubb Limited

Investment Portfolio - 3

(in millions of U.S. dollars)

(Unaudited)

Non-U.S. Fixed Income Portfolio

December 31, 2016

Non-U.S. Government Securities


	Market Value by S&P Credit Rating
	AAA		AA		A		BBB		BB and below		Total
United Kingdom	$	—	$	1,647	$	—	$	—	$	—	$	1,647
Canada		1,066		—		—		—		—		1,066
Republic of Korea		—		1,038		—		—		—		1,038
Federative Republic of Brazil		—		—		—		—		860		860
Province of Ontario		—		3		564		—		—		567
Province of Quebec		—		20		422		—		—		442
Germany		437		—		—		—		—		437
United Mexican States		—		—		299		123		—		422
Kingdom of Thailand		—		—		403		—		—		403
Australia		331		3		—		—		—		334
Other Non-U.S. Government Securities		992		1,453		476		381		650		3,952

Total	$	2,826	$	4,164	$	2,164	$	504	$	1,510	$	11,168


Non-U.S. Corporate Securities

	Market Value by S&P Credit Rating
	AAA		AA		A		BBB		BB and below		Total
United Kingdom	$	85	$	112	$	750	$	840	$	244	$	2,031
Canada		108		319		275		462		284		1,448
United States ⁽¹⁾		2		86		153		341		266		848
France		21		41		457		257		33		809
Netherlands		89		11		424		197		44		765
Australia		99		133		275		105		22		634
Germany		193		54		110		229		18		604
Japan		—		42		329		12		10		393
Switzerland		27		20		109		133		33		322
China		—		118		133		22		5		278
Other Non-U.S. Corporate Securities		415		390		783		758		461		2,807

Total	$	1,039	$	1,326	$	3,798	$	3,356	$	1,420	$	10,939

(1)	Countries represent the ultimate parent company’s country of risk. Non-U.S. corporate securities could be issued by foreign subsidiaries of U.S. corporations.


Investments 3		Page 30

Chubb Limited

Investment Portfolio - 4

(in millions of U.S. dollars)

(Unaudited)

Fixed Maturity Investment Portfolio

Top 10 Global Corporate Exposures


	December 31, 2016	Market Value		Rating
1	JP Morgan Chase & Co	$	575	A-
2	Wells Fargo & Co		522	A
3	Goldman Sachs Group Inc		435	BBB+
4	Anheuser-Busch InBev NV		426	A-
5	General Electric Co		423	AA-
6	Verizon Communications Inc		381	BBB+
7	Morgan Stanley		358	BBB+
8	Bank of America Corp		356	BBB+
9	AT&T Inc		338	BBB+
10	Berkshire Hathaway Inc		324	AA


Investments 4		Page 31

Chubb Limited

Net Realized and Unrealized Gains (Losses)

(in millions of U.S. dollars)

(Unaudited)


	Three months ended December 31, 2016
	Realized Gains (Losses)									Unrealized Gains (Losses)									Realized and Unrealized Gains (Losses)
	Gains			Tax			Gains			Gains			Tax			Gains			Gains			Tax			Gains
	(Losses)			(Expense)			(Losses)			(Losses)			(Expense)			(Losses)			(Losses)			(Expense)			(Losses)
	Pre-Tax			Benefit			After-Tax			Pre-Tax			Benefit			After-Tax			Pre-Tax			Benefit			After-Tax
Fixed maturities	$	(7	)	$	(15	)	$	(22	)	$	(2,154	)	$	641		$	(1,513	)	$	(2,161	)	$	626		$	(1,535	)
Fixed income derivatives		52			(18	)		34			—			—			—			52			(18	)		34
Public equity		5			3			8			—			2			2			5			5			10
Private equity		155			(15	)		140			24			—			24			179			(15	)		164

Total investment portfolio ⁽¹⁾		205			(45	)		160			(2,130	)		643			(1,487	)		(1,925	)		598			(1,327	)
Mark-to-market from variable annuity reinsurance derivative transactions, net of applicable hedges ⁽²⁾		275			—			275			—			—			—			275			—			275
Foreign exchange		72			1			73			(423	)		48			(375	)		(351	)		49			(302	)
Partially-owned entities ⁽³⁾		—			—			—			(2	)		—			(2	)		(2	)		—			(2	)
Other ⁽⁴⁾		(19	)		(2	)		(21	)		537			(184	)		353			518			(186	)		332

Net gains (losses)	$	533		$	(46	)	$	487		$	(2,018	)	$	507		$	(1,511	)	$	(1,485	)	$	461		$	(1,024	)

(1)	Other-than-temporary impairments for the quarter in realized gains (losses) include $4 million for fixed maturities, $1 million for public equity and $7 million for private equity.

(2)	The quarter includes $48 million of losses on applicable hedges. These losses are both pre-tax and after-tax.

(3)	Partially-owned entities are investments where we hold more than an insignificant percentage of the investee’s shares. Refer to the Non-GAAP financial measures section for additional details.

(4)	Other unrealized gains/losses are related to the company’s post-retirement programs.


	Legacy ACE
	Three months ended December 31, 2015
	Realized Gains (Losses)									Unrealized Gains (Losses)									Realized and Unrealized Gains (Losses)
	Gains			Tax			Gains			Gains			Tax			Gains			Gains			Tax			Gains
	(Losses)			(Expense)			(Losses)			(Losses)			(Expense)			(Losses)			(Losses)			(Expense)			(Losses)
	Pre-Tax			Benefit			After-Tax			Pre-Tax			Benefit			After-Tax			Pre-Tax			Benefit			After-Tax
Fixed maturities	$	(130	)	$	15		$	(115	)	$	(446	)	$	46		$	(400	)	$	(576	)	$	61		$	(515	)
Fixed income derivatives		26			(3	)		23			—			—			—			26			(3	)		23
Public equity		(3	)		(3	)		(6	)		23			(7	)		16			20			(10	)		10
Private equity		(12	)		3			(9	)		(27	)		—			(27	)		(39	)		3			(36	)

Total investment portfolio ⁽⁵⁾		(119	)		12			(107	)		(450	)		39			(411	)		(569	)		51			(518	)
Mark-to-market from variable annuity reinsurance derivative transactions, net of applicable hedges ⁽⁶⁾		55			—			55			—			—			—			55			—			55
Foreign exchange		(7	)		3			(4	)		(98	)		(35	)		(133	)		(105	)		(32	)		(137	)
Partially-owned entities ⁽⁷⁾		(3	)		(3	)		(6	)		—			—			—			(3	)		(3	)		(6	)
Other		—			—			—			4			(3	)		1			4			(3	)		1

Net gains (losses)	$	(74	)	$	12		$	(62	)	$	(544	)	$	1		$	(543	)	$	(618	)	$	13		$	(605	)

(5)	Other-than-temporary impairments for the quarter in realized gains (losses) include $57 million for fixed maturities, $3 million for public equity and $1 million for private equity.

(6)	The quarter includes $79 million of losses on applicable hedges. These losses are both pre-tax and after-tax.

(7)	Partially-owned entities are investments where we hold more than an insignificant percentage of the investee’s shares. Refer to the Non-GAAP financial measures section for additional details.


Net Gains (Losses) 1		Page 32

Chubb Limited

Net Realized and Unrealized Gains (Losses)

(in millions of U.S. dollars)

(Unaudited)


	Year ended December 31, 2016
	Realized Gains (Losses)									Unrealized Gains (Losses)									Realized and Unrealized Gains (Losses)
	Gains			Tax			Gains			Gains			Tax			Gains			Gains			Tax			Gains
	(Losses)			(Expense)			(Losses)			(Losses)			(Expense)			(Losses)			(Losses)			(Expense)			(Losses)
	Pre-Tax			Benefit			After-Tax			Pre-Tax			Benefit			After-Tax			Pre-Tax			Benefit			After-Tax
Fixed maturities	$	(163	)	$	(17	)	$	(180	)	$	83		$	108		$	191		$	(80	)	$	91		$	11
Fixed income derivatives		(33	)		(4	)		(37	)		—			—			—			(33	)		(4	)		(37	)
Public equity		44			(11	)		33			52			(8	)		44			96			(19	)		77
Private equity		228			(24	)		204			(49	)		—			(49	)		179			(24	)		155

Total investment portfolio ⁽¹⁾		76			(56	)		20			86			100			186			162			44			206
Mark-to-market from variable annuity reinsurance derivative transactions, net of applicable hedges ⁽²⁾		(83	)		—			(83	)		—			—			—			(83	)		—			(83	)
Foreign exchange		118			(11	)		107			(154	)		30			(124	)		(36	)		19			(17	)
Partially-owned entities ⁽³⁾		(5	)		1			(4	)		(2	)		—			(2	)		(7	)		1			(6	)
Other ⁽⁴⁾		(19	)		(2	)		(21	)		545			(184	)		361			526			(186	)		340

Net gains (losses)	$	87		$	(68	)	$	19		$	475		$	(54	)	$	421		$	562		$	(122	)	$	440

(1)	Full year other-than-temporary impairments in realized gains (losses) include $81 million for fixed maturities, $8 million for public equity and $14 million for private equity.

(2)	Full year includes $136 million of losses on applicable hedges. These losses are both pre-tax and after-tax.

(3)	Partially-owned entities are investments where we hold more than an insignificant percentage of the investee’s shares. Refer to the Non-GAAP financial measures section for additional details.

(4)	Other unrealized gains/losses are related to the company’s post-retirement programs.


	Legacy ACE
	Year ended December 31, 2015
	Realized Gains (Losses)									Unrealized Gains (Losses)									Realized and Unrealized Gains (Losses)
	Gains			Tax			Gains			Gains			Tax			Gains			Gains			Tax			Gains
	(Losses)			(Expense)			(Losses)			(Losses)			(Expense)			(Losses)			(Losses)			(Expense)			(Losses)
	Pre-Tax			Benefit			After-Tax			Pre-Tax			Benefit			After-Tax			Pre-Tax			Benefit			After-Tax
Fixed maturities	$	(180	)	$	15		$	(165	)	$	(1,076	)	$	149		$	(927	)	$	(1,256	)	$	164		$	(1,092	)
Fixed income derivatives		32			(2	)		30			—			—			—			32			(2	)		30
Public equity		29			(13	)		16			(17	)		5			(12	)		12			(8	)		4
Private equity		37			(5	)		32			(46	)		—			(46	)		(9	)		(5	)		(14	)

Total investment portfolio ⁽⁵⁾		(82	)		(5	)		(87	)		(1,139	)		154			(985	)		(1,221	)		149			(1,072	)
Mark-to-market from variable annuity reinsurance derivative transactions, net of applicable hedges ⁽⁶⁾		(213	)		—			(213	)		—			—			—			(213	)		—			(213	)
Foreign exchange		(80	)		20			(60	)		(958	)		—			(958	)		(1,038	)		20			(1,018	)
Partially-owned entities ⁽⁷⁾		42			(7	)		35			10			(2	)		8			52			(9	)		43
Other		(11	)		2			(9	)		15			(6	)		9			4			(4	)		—

Net gains (losses)	$	(344	)	$	10		$	(334	)	$	(2,072	)	$	146		$	(1,926	)	$	(2,416	)	$	156		$	(2,260	)

(5)	Full year other-than-temporary impairments in realized gains (losses) include $103 million for fixed maturities, $7 million for public equities and $2 million for private equity.

(6)	Full year includes $10 million of losses on applicable hedges. These losses are both pre-tax and after-tax.

(7)	Partially-owned entities are investments where we hold more than an insignificant percentage of the investee’s shares. Refer to the Non-GAAP financial measures section for additional details.


Net Gains (Losses) 2		Page 33

Chubb Limited

Debt and Capital

(in millions of U.S. dollars, except ratios)

(Unaudited)


													Legacy ACE
	December 31			September 30			June 30			March 31			December 31			December 31
	2016			2016			2016			2016			2015			2014
Financial Debt:
Total short-term debt	$	500		$	500		$	500		$	500		$	—		$	1,150
Total long-term debt ⁽¹⁾		12,610			12,621			12,631			12,636			9,389			3,334

Total financial debt	$	13,110		$	13,121		$	13,131		$	13,136		$	9,389		$	4,484

Hybrid debt:
Total trust preferred securities		308			308			308			308			307			307

Total	$	13,418		$	13,429		$	13,439		$	13,444		$	9,696		$	4,791

Capitalization:
Shareholders’ equity	$	48,275		$	48,372		$	47,226		$	45,897		$	29,135		$	29,587
Hybrid debt		308			308			308			308			307			307
Financial debt		13,110			13,121			13,131			13,136			9,389			4,484

Total capitalization	$	61,693		$	61,801		$	60,665		$	59,341		$	38,831		$	34,378

Leverage ratios (based on total capital):
Hybrid debt		0.5	%		0.5	%		0.5	%		0.5	%		0.8	%		0.9	%
Financial debt		21.3	%		21.2	%		21.6	%		22.1	%		24.2	%		13.0	%

Total hybrid & financial debt		21.8	%		21.7	%		22.1	%		22.6	%		25.0	%		13.9	%

Note: As of December 31, 2016, there was $0.4 billion usage of credit facilities on a total commitment of $1.5 billion.

(1)	In connection with our acquisition of The Chubb Corporation, we assumed $3.3 billion par value of Legacy Chubb’s debt, fair valued at $3.8 billion for purchase accounting purposes. This included $1 billion of junior subordinated capital securities.


Debt and Capital		Page 34

Chubb Limited

Computation of Basic and Diluted Earnings Per Share

(in millions of U.S. dollars, except share and per share data)

(Unaudited)


	Three months ended December 31						Year ended December 31
	2016			2015			2016			2015
Numerator
Operating income to common shares	$	1,283		$	780		$	4,716		$	3,210
Amortization of fair value adjustment of acquired invested assets and long-term debt, pre-tax ⁽¹⁾		(88	)		—			(345	)		—
Tax benefit on amortization adjustment		22			—			101			—
Chubb integration and related expenses, pre-tax		(131	)		(53	)		(499	)		(62	)
Tax benefit on Chubb integration and related expenses		37			18			143			20
Adjusted net realized gains (losses), pre-tax		533			(74	)		87			(344	)
Tax (expense) benefit on adjusted net realized gains (losses)		(46	)		12			(68	)		10

Net income	$	1,610		$	683		$	4,135		$	2,834

Rollforward of Common Shares Outstanding
Shares - beginning of period		465,286,110			324,062,368			324,563,441			328,659,686
Share Issuance for Chubb Acquisition		—			—			136,950,381			—
Repurchase of shares		—			—			—			(6,677,663	)
Shares issued, excluding option exercises		221,688			84,600			2,725,945			1,123,838
Issued for option exercises		460,918			416,473			1,728,949			1,457,580

Shares - end of period		465,968,716			324,563,441			465,968,716			324,563,441

Denominator
Weighted average shares outstanding ⁽²⁾		468,258,439			324,578,610			462,519,789			325,589,361
Effect of other dilutive securities		3,354,791			3,227,644			3,429,610			3,246,017

Adj. wtd. avg. shares outstanding and assumed conversions		471,613,230			327,806,254			465,949,399			328,835,378

Basic earnings per share
Operating income	$	2.74		$	2.40		$	10.20		$	9.86
Amortization of fair value adjustment of acquired invested assets and long-term debt, net of tax ⁽¹⁾		(0.14	)		—			(0.53	)		—
Chubb integration and related expenses, net of tax		(0.20	)		(0.11	)		(0.77	)		(0.13	)
Adjusted net realized gains (losses), net of tax		1.04			(0.19	)		0.04			(1.02	)

Net income	$	3.44		$	2.10		$	8.94		$	8.71

Diluted earnings per share
Operating income	$	2.72		$	2.38		$	10.12		$	9.76
Amortization of fair value adjustment of acquired invested assets and long-term debt ⁽¹⁾		(0.14	)		—			(0.52	)		—
Chubb integration and related expenses		(0.20	)		(0.11	)		(0.76	)		(0.13	)
Adjusted net realized gains (losses)		1.03			(0.19	)		0.03			(1.01	)

Net income	$	3.41		$	2.08		$	8.87		$	8.62

(1)	Related to the acquisition of The Chubb Corporation.

(2)	Includes unvested restricted stock units that are not included in common shares outstanding as the shares are not issued until time of vesting, but are eligible to receive dividends (participating securities).


Earnings per share		Page 35

Chubb Limited

Book Value and Book Value per Common Share

(in millions of U.S. dollars, except share and per share data)

(Unaudited)

Reconciliation of Book Value per Common Share


	December 31			September 30			June 30			March 31			December 31
	2016			2016			2016			2016			2015
Shareholders’ equity	$	48,275		$	48,372		$	47,226		$	45,897		$	29,135
Less: goodwill and other intangible assets, net of tax		20,019			20,332			20,656			20,904			5,683

Numerator for tangible book value per share	$	28,256		$	28,040		$	26,570		$	24,993		$	23,452

Book value - % change over prior quarter		-0.2	%		2.4	%		2.9	%		57.5	%		0.0	%
Tangible book value - % change over prior quarter		0.8	%		5.5	%		6.3	%		6.6	%		0.2	%

Denominator		465,968,716			465,286,110			465,012,980			464,283,520			324,563,441

Book value per common share	$	103.60		$	103.96		$	101.56		$	98.85		$	89.77
Tangible book value per common share	$	60.64		$	60.26		$	57.14		$	53.83		$	72.25

Reconciliation of Book Value

Shareholders’ equity, beginning of quarter	$	48,372		$	47,226		$	45,897		$	29,135		$	29,127
Operating income		1,283			1,356			1,058			1,019			780
Amortization of fair value adjustment of acquired invested assets and long-term debt, net of tax ⁽¹⁾		(66	)		(53	)		(66	)		(59	)		—
Chubb integration and related expenses, net of tax		(94	)		(85	)		(71	)		(106	)		(35	)
Adjusted net realized gains (losses), net of tax		487			142			(195	)		(415	)		(62	)
Net unrealized gains (losses) on the investment portfolio		(1,487	)		143			706			824			(411	)
Share Issuance related to acquisition of The Chubb Corp.		—			—			—			15,204			—
Fair value of equity awards assumed in acquisition of The Chubb Corp.		—			—			—			323			—
Dividend declared on common shares		(324	)		(323	)		(323	)		(314	)		(218	)
Cumulative translation		(375	)		(131	)		105			277			(133	)
Pension liability		353			4			3			1			1
Other⁽²⁾		126			93			112			8			86

	$	48,275		$	48,372		$	47,226		$	45,897		$	29,135

(1)	Related to the acquisition of The Chubb Corporation.

(2)	Other primarily includes proceeds from exercise of stock options and stock compensation.


Reconciliation Book Value		Page 36

Chubb Limited

Non-GAAP Financial Measures

(in millions of U.S. dollars)

(Unaudited)

Regulation G - Non-GAAP Financial Measures

In presenting our results, we included and discussed certain non-GAAP measures. These non-GAAP measures, which may be defined differently by other companies, are important for an understanding of our overall results of operations and financial condition. However, they should not be viewed as a substitute for measures determined in accordance with generally accepted accounting principles (GAAP).

We provide financial measures such as gross premiums written, net premiums written, net premiums earned, and operating income on a constant-dollar basis. We believe it is useful to evaluate the trends in these measures exclusive of the effect of fluctuations in exchange rates between the U.S. dollar and the currencies in which our international business is transacted, as these exchange rates could fluctuate significantly between periods and distort the analysis of trends. The impact is determined by assuming constant foreign exchange rates between periods by translating prior period results using the same local currency exchange rates as the comparable current period.

Adjusted losses and loss expenses and adjusted administrative expenses are non-GAAP financial measures that exclude the one-time curtailment benefit related to the harmonization of the company’s U.S. pension plans. During the fourth quarter of 2016, the company harmonized and amended several U.S. retirement programs to create a unified retirement savings program which resulted in the one-time pension curtailment benefit. The portion of the benefit related to claims staff is excluded from adjusted losses and loss expenses with the remainder excluded from adjusted administrative expenses. We believe that excluding the impact of the one-time pension curtailment provides a better evaluation of our underwriting performance and enhances the understanding of the trends in our property & casualty business that may be obscured by this item. Adjusted losses and loss expenses also includes realized gains and losses on crop derivatives. The crop derivatives are purchased to provide economic benefit, in a manner similar to reinsurance protection, in the event that a significant decline in commodity pricing will impact underwriting results. We view gains and losses on these derivatives as part of the results of our underwriting operations and therefore realized gains and losses from these derivatives are reclassified from adjusted net realized gains (losses), also a non-GAAP financial measure.

In presenting our segment income results, we have shown our performance with reference to underwriting results. Underwriting results are calculated by subtracting adjusted losses and loss expenses, policy benefits, policy acquisition costs, and adjusted administrative expenses from net premiums earned. We use underwriting results and operating ratios to monitor the results of our operations without the impact of certain factors, including investment income, other income and expenses, interest and income tax expense, and adjusted net realized gains (losses). P&C underwriting income is a non-GAAP financial measure which excludes the Life Insurance segment. P&C loss and loss expense ratio and P&C combined ratio (both non-GAAP financial measures) include adjusted losses and loss expenses in the ratio numerator. P&C expense ratio (a non-GAAP financial measure) and P&C combined ratio include policy acquisition costs and adjusted administrative expenses in the ratio numerator. A reconciliation of GAAP combined ratio to P&C combined ratio is provided on page 40.

P&C combined ratio excluding the impact of catastrophe losses and prior period development (PPD) and the P&C loss and loss expense ratio excluding the impact of catastrophe losses and PPD are non-GAAP financial measures. The loss ratio numerator includes adjusted losses and loss expenses and excludes catastrophe losses and PPD. The combined ratio numerator includes adjusted losses and loss expenses, policy acquisition costs, and adjusted administrative expenses. The denominator for both ratios includes net premiums earned adjusted to exclude the amount of reinstatement premiums (expensed) collected. In periods where there are adjustments on loss sensitive policies, these adjustments are excluded from PPD and net earned premiums when calculating the ratios. We believe that excluding the impact of catastrophe losses and PPD provides a better evaluation of our underwriting performance and enhances the understanding of the trends in our property & casualty business that may be obscured by these items.

P&C expense ratio excluding accident and health (A&H) is a non-GAAP financial measure and excludes the impact of our A&H business from our P&C expense ratio. The expense ratio for the A&H business is typically higher than our traditional P&C business, and we believe that this measure provides better comparison to our peer companies that may not have a significant A&H block of business.

Global P&C performance metrics are non-GAAP financial measures and comprise consolidated operating results (including corporate) and exclude the operating results of the company’s Life Insurance and North America Agricultural Insurance segments. We believe that these measures are useful and meaningful to investors as they are used by management to assess the company’s global P&C operations which are the most economically similar. We exclude the North America Agricultural Insurance and Life Insurance segments because the results of these businesses do not always correlate with the results of our global P&C operations.

Adjusted net investment income is net investment income excluding the amortization of the fair value adjustment of acquired invested assets. Adjusted interest expense is interest expense excluding the amortization of the fair value adjustment of acquired debt and the pre-acquisition interest expense on the $5.3 billion senior notes issued in November 2015. We believe that excluding these items are meaningful in order to present the underlying economics of the company’s business.

Other income (expense) – operating is a non-GAAP financial measure and excludes the portion of net realized gains and losses related to unconsolidated entities from other income (expense). These gains and losses are reported as net realized gains (losses) and represent the non-operating activities of entities where we hold more than an insignificant percentage of the investee’s shares. We exclude these gains and losses from other income (expense) to enhance the understanding of our segments’ operations as they are heavily influenced by, and fluctuate in part according to market conditions. Other income (expense) – operating and net realized gains and losses related to unconsolidated entities are recorded to Other income (expense) in our income statement on a GAAP basis.

Operating income is a non-GAAP financial measure that excludes the after-tax impact of adjusted net realized gains (losses), net realized gains (losses) included in other income (expense) related to partially owned entities, Chubb integration and related expenses, and the amortization of the fair value adjustments related to purchased invested assets and long-term debt from the Chubb Corp acquisition. We exclude realized gains and losses because the amount of these gains (losses) are heavily influenced by, and fluctuate in part according to the availability of market opportunities. We exclude Chubb integration and related expenses due to the size and complexity of this acquisition. These integration and related expenses are distortive to our results and are not indicative of our underlying profitability. We believe that excluding these integration and related expenses facilitates the comparison of our financial results to our historical operating results. These expenses include legal and professional fees and all other costs directly related to the integration activities of the Chubb Corp acquisition. Chubb integration expenses are incurred by the overall company and are therefore included in Corporate. The costs are not related to the on-going activities of the individual segments and are therefore excluded from our definition of segment income, as well. In addition, we excluded the pre-acquisition interest expense on the $5.3 billion senior notes issued in November 2015 from operating income because the operations for which the debt was issued were not part of our operating activities prior to the completion of the acquisition. Effective with the close of the Chubb Corp acquisition (January 14, 2016), this debt was considered a cost of our operations and interest expense associated with this debt is included within operating income. We believe this presentation enhances the understanding of our results of operations by highlighting the underlying profitability of our insurance business. Operating income should not be viewed as a substitute for net income determined in accordance with GAAP.

Operating effective tax rate is a non-GAAP financial measure. The numerator excludes tax on adjusted net realized gains (losses), tax on net realized gains (losses) included in other income (expense) related to partially owned entities, tax on Chubb integration and related expenses, and tax on the amortization of the fair value adjustments related to purchased invested assets and long-term debt from the Chubb Corp acquisition. The denominator excludes these same items, before tax. Operating effective tax rate should not be viewed as a substitute for effective tax rate determined in accordance with GAAP.

Tangible book value per common share is a non-GAAP financial measure and is shareholders’ equity less goodwill and other intangible assets, net of tax, divided by the shares outstanding. We believe that goodwill and other intangible assets are not indicative of our underlying insurance results or trends and make book value comparisons to less acquisitive peer companies less meaningful. A reconciliation of tangible book value per share is provided on page 36. In addition, we disclose per share measures that exclude the impact of foreign currency fluctuations during 2016 in order to adjust for the distortive effects of fluctuations in exchange rates.

International life insurance net premiums written and deposits collected, is a non-GAAP financial measure. Deposits collected on universal life and investment contracts (life deposits) are not reflected as revenues in our consolidated statements of operations in accordance with GAAP. However, we include life deposits in presenting growth in our life insurance business because new life deposits are an important component of production and key to our efforts to grow our business.

Net premiums written excluding merger-related underwriting actions, including additional reinsurance are non-GAAP performance measures. Since the acquisition of the Chubb Corporation, we have entered into reinsurance agreements with third-party reinsurers for the Legacy Chubb Corp businesses and have taken other merger-related underwriting actions, in conformity with our underwriting and risk diversification strategy. We believe that these measures are meaningful to evaluate trends in our production on a comparable basis to the prior year As If we were one company in 2015.

We acquired the Fireman’s Fund high net worth personal lines business in April 2015 and recognized as written premiums non-recurring unearned premiums reserves of $252 million. Due to the size of this non-recurring transfer, we believe that excluding this one-time benefit in 2015 will allow for comparability when assessing trends in our business. We present measures exclusive of Fireman’s Fund high net worth business from our 2016 and 2015 results in order to show its impact on our results and to highlight the impact of Fireman’s Fund low retention on our business.


Reconciliation Non-GAAP		Page 37

Chubb Limited

Non-GAAP Financial Measures - 2

(in millions of U.S. dollars)

(Unaudited)


Regulation G - Non-GAAP Financial Measures (continued)

Operating income

Operating income is a common performance measure for insurance companies and is presented throughout this report.

The following table presents the reconciliation of Net income to Operating income:

																Full Year			Full Year
	4Q-16			3Q-16			2Q-16			1Q-16			4Q-15			2016			2015
Net income, as reported	$	1,610		$	1,360		$	726		$	439		$	683		$	4,135		$	2,834
Amortization of fair value adjustment of acquired invested assets and long-term debt, pre-tax ⁽¹⁾		(88	)		(79	)		(95	)		(83	)		—			(345	)		—
Tax benefit on amortization adjustment		22			26			29			24			—			101			—
Chubb integration and related expenses, pre tax		(131	)		(115	)		(98	)		(155	)		(53	)		(499	)		(62	)
Tax benefit on Chubb integration and related expenses		37			30			27			49			18			143			20
Adjusted net realized gains (losses)		371			97			(214	)		(394	)		(57	)		(140	)		(411	)
Net realized gains (losses) related to unconsolidated entities ⁽²⁾		162			72			18			(25	)		(17	)		227			67
Tax (expense) benefit on adjusted net realized gains (losses)		(46	)		(27	)		1			4			12			(68	)		10

Operating income	$	1,283		$	1,356		$	1,058		$	1,019		$	780		$	4,716		$	3,210

(1)	Related to the acquisition of The Chubb Corporation.

(2)	Realized gains (losses) on partially-owned entities, which are investments where we hold more than an insignificant percentage of the investee’s shares. The net income or loss is included in other income (expense).

The following table presents the reconciliation of Net Income to P&C and Global P&C Underwriting Income:


																Full Year			Full Year
	4Q-16			3Q-16			2Q-16			1Q-16			4Q-15			2016			2015
Net Income	$	1,610		$	1,360		$	726		$	439		$	683		$	4,135		$	2,834
Income tax expense		259			277			155			124			67			815			462
Net realized (gains) losses related to unconsolidated entities		(162	)		(72	)		(18	)		25			17			(227	)		(67	)
Adjusted realized (gains) losses		(371	)		(97	)		214			394			57			140			411
Amortization of fair value adjustment of acquired invested assets and long-term debt		88			79			95			83			—			345			—
Chubb integration and related expenses		131			115			98			155			53			499			62
Adjusted interest expense		167			164			166			149			64			646			271
Pension curtailment benefit		(113	)		—			—			—			—			(113	)		—

Consolidated segment income		1,609			1,826			1,436			1,369			941			6,240			3,973
Less: Life Insurance segment income		60			69			74			60			59			263			276

P&C segment income		1,549			1,757			1,362			1,309			882			5,977			3,697
Less: amortization expense of purchased intangibles (excluding Life Insurance)		2			3			5			6			34			16			169
Less: other (income) expense - operating (excluding Life Insurance)		13			1			(11	)		(3	)		2			—			(7	)
Less: adjusted net investment income (excluding Life Insurance)		(769	)		(759	)		(747	)		(700	)		(465	)		(2,975	)		(1,929	)

P&C Underwriting Income (Including Corporate and excluding Life Insurance)		795			1,002			609			612			453			3,018			1,930
Less: Agricultural Insurance Underwriting income		184			90			14			53			56			341			197

Global P&C Underwriting Income (Including Corporate and excluding Agriculture)	$	611		$	912		$	595		$	559		$	397		$	2,677		$	1,733


Reconciliation Non-GAAP 2		Page 38

Chubb Limited

Non-GAAP Financial Measures - 3

(in millions of U.S. dollars, except ratios)

(Unaudited)

Regulation G - Non-GAAP Financial Measures (continued)

Operating ROE

Operating return on equity (ROE) or ROE calculated using operating income: The ROE numerator includes income adjusted to exclude after-tax adjusted net realized gains (losses), Chubb integration and related expenses, and the amortization of the fair value adjustment of acquired invested assets and long-term debt. The ROE denominator includes the average shareholders’ equity for the period adjusted to exclude unrealized gains (losses) on investments, net of tax. In addition, for the twelve months ended December 31, 2016, the denominator was adjusted to account for the weighted-average impact of the $15,527 million issuance of common shares and equity awards related to The Chubb Corp acquisition on January 14, 2016. Operating ROE is a useful measures as it enhances the understanding of the return on shareholders’ equity by highlighting the underlying profitability relative to shareholders’ equity excluding the effect of unrealized gains and losses on our investments.


							Full Year			Full Year
	4Q-16			4Q-15			2016			2015
Net income	$	1,610		$	683		$	4,135		$	2,834
Operating income	$	1,283		$	780		$	4,716		$	3,210

Equity - beginning of period, as reported	$	48,372		$	29,127		$	29,135		$	29,587
Add: weighted average impact of equity issuance (351 days)		—			—			14,931			—
Less: unrealized gains (losses) on investments, net of deferred tax		2,547			1,285			874			1,851

Equity - beginning of period, as adjusted	$	45,825		$	27,842		$	43,192		$	27,736

Equity - end of period, as reported	$	48,275		$	29,135		$	48,275		$	29,135
Less: weighted average impact of equity issuance (14 days)		—			—			596			—
Less: unrealized gains (losses) on investments, net of deferred tax		1,058			874			1,058			874

Equity - end of period, as adjusted	$	47,217		$	28,261		$	46,621		$	28,261

Weighted average equity, as reported	$	48,324		$	29,131		$	45,873		$	29,361
Weighted average equity, as adjusted	$	46,521		$	28,052		$	44,907		$	27,999
Operating ROE		11.0	%		11.1	%		10.5	%		11.5	%
ROE		13.3	%		9.4	%		9.0	%		9.7	%

Operating effective tax rate

The following table presents the reconciliation of effective tax rate to the operating effective tax rate:


																Full Year			Full Year
	4Q-16			3Q-16			2Q-16			1Q-16			4Q-15			2016			2015
Tax expense, as reported	$	259		$	277		$	155		$	124		$	67		$	815		$	462
Tax benefit on amortization of fair value of acquired invested assets and debt ⁽¹⁾		(22	)		(26	)		(29	)		(24	)		—			(101	)		—
Tax benefit on Chubb integration and related expenses		(37	)		(30	)		(27	)		(49	)		(18	)		(143	)		(20	)
Tax expense (benefit) on adjusted net realized gains (losses)		46			27			(1	)		(4	)		(12	)		68			(10	)

Tax expense, adjusted	$	272		$	306		$	212		$	201		$	97		$	991		$	492

Income before tax, as reported	$	1,869		$	1,637		$	881		$	563		$	750		$	4,950		$	3,296
Less: amortization of fair value of acquired invested assets and debt ⁽¹⁾		(88	)		(79	)		(95	)		(83	)		—			(345	)		—
Less: Chubb integration and related expenses		(131	)		(115	)		(98	)		(155	)		(53	)		(499	)		(62	)
Less: adjusted realized gains (losses)		371			97			(214	)		(394	)		(57	)		(140	)		(411	)
Less: realized gains (losses) related to unconsolidated entities		162			72			18			(25	)		(17	)		227			67

Operating income before tax	$	1,555		$	1,662		$	1,270		$	1,220		$	877		$	5,707		$	3,702

Effective tax rate		13.8	%		17.0	%		17.6	%		22.1	%		9.0	%		16.5	%		14.0	%
Adjustment for tax impact of amortization of fair value of acquired invested assets and debt ⁽¹⁾		0.5	%		0.7	%		1.1	%		0.9	%		—			0.8	%		—
Adjustment for tax impact of Chubb integration and related expenses		1.0	%		0.6	%		0.9	%		2.2	%		1.5	%		1.1	%		0.3	%
Adjustment for tax impact of adjusted net realized gains (losses)		2.3	%		0.1	%		-2.9	%		-8.7	%		0.6	%		-1.0	%		-1.0	%

Operating effective tax rate		17.6	%		18.4	%		16.7	%		16.5	%		11.1	%		17.4	%		13.3	%

(1)	Related to the acquisition of The Chubb Corporation


Reconciliation Non-GAAP 3		Page 39

Chubb Limited

Non-GAAP Financial Measures - 4

(in millions of U.S. dollars, except ratios)

(Unaudited)

Regulation G - Non-GAAP Financial Measures (continued)

Chubb integration and related expenses, net of tax

Chubb integration and related expenses is a non-GAAP financial measure and includes legal and professional fees and all other costs directly related to the integration activities of The Chubb Corp acquisition, including the pre-acquisition interest expense on the $5.3 billion senior notes issued in November 2015. We exclude Chubb integration expenses related to The Chubb Corp acquisition from operating income due to the size and complexity of this acquisition. We exclude the pre-acquisition interest expense from operating income because the operations for which the debt was issued were not part of our operating activities prior to the completion of the acquisition. Effective with the close of The Chubb Corp acquisition (January 14, 2016), the interest on this debt was considered a cost of our operations and is included within operating income. These integration and related expenses are distortive to our results and are not indicative of our underlying profitability. We believe that excluding these integration and related expenses facilitate the comparison of our financial results to our historical operating results. The following table presents the reconciliation of Chubb integration expenses on a GAAP basis to Chubb integration and related expenses.


											Full Year		Full Year
	4Q-16		3Q-16		2Q-16		1Q-16		4Q-15		2016		2015
Chubb integration expenses, net of tax	$	94	$	85	$	71	$	102	$	16	$	352	$	23
Add: pre-acquisition interest expense related to $5.3 billion senior notes, net of tax		—		—		—		4		19		4		19

Chubb integration and related expenses, net of tax		94		85		71		106		35		356		42
Tax benefit		37		30		27		49		18		143		20

Chubb integration and related expenses, pre- tax	$	131	$	115	$	98	$	155	$	53	$	499	$	62

P&C combined ratio

The following table presents the reconciliation of combined ratio to P&C combined ratio. The P&C combined ratio includes the impact of realized gains and losses on crop derivatives. These derivatives were purchased to provide economic benefit, in a manner similar to reinsurance protection, in the event that a significant decline in commodity pricing will impact underwriting results. We view gains and losses on these derivatives as part of the results of our underwriting operations. The P&C combined ratio also excludes the one-time pension curtailment benefit of $113 million recognized in the fourth quarter of 2016. We believe that excluding the impact of the one-time pension curtailment provides a better evaluation of our underwriting performance and enhances the understanding of the trends in our property & casualty business that may be obscured by this item.


																Full Year			Full Year
	4Q-16			3Q-16			2Q-16			1Q-16			4Q-15			2016			2015
Combined ratio		86.0	%		86.0	%		91.2	%		90.0	%		87.7	%		88.3	%		87.3	%
Less: impact of pension curtailment benefit		1.7	%		0.0	%		0.0	%		0.0	%		0.0	%		0.4	%		0.0	%
Add: impact of gains and losses on crop derivatives		0.1	%		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%		0.1	%

P&C combined ratio		87.8	%		86.0	%		91.2	%		90.0	%		87.7	%		88.7	%		87.4	%


Reconciliation Non-GAAP 4		Page 40

Chubb Limited

Non-GAAP Financial Measures - 5

(in millions of U.S. dollars)

(Unaudited)

Regulation G - Non-GAAP Financial Measures (continued)

As If Results

As If results presented throughout this document are prepared exclusive of purchase accounting adjustments in order to present the underlying profitability of our insurance business. We believe that excluding these adjustments provide visibility and comparability into our results. As If is defined as follows:

2016 As If results: The 2016 and 2015 As If underwriting results do not include any impact from purchase accounting adjustments. The first quarter and full year combined company results are inclusive of the first 14 days of January 2016.

The following presents the reconciliation of earnings per share to earnings per share, including the 14 day stub period for full year 2016:


	Full Year
Numerator	2016
Operating income as reported	$	4,716
Add: 14-day stub period income
Underwriting income		44
Net investment income		45
Interest expense		(9	)
Income tax expense		(20	)

Total 14-day stub period income		60

As If operating income, including 14 day stub period	$	4,776

Net income as reported	$	4,135
Add: 14-day stub period income from above		60

As If net income, including 14 day stub period	$	4,195


	Full Year
Denominator	2016
Weighted average shares outstanding and assumed conversions		465,949,399
Impact of shares issued in connection with Chubb Corp acquisition		5,030,548
As If adjusted weighted average shares outstanding		470,979,947

Diluted earnings per share, including 14 day stub period
Operating income per share	$	10.14

Net income per share	$	8.91

The following table presents the reconciliation of Q1 2016 As If underwriting income excluding purchase accounting adjustments and including 14 days prior to the acquisition (14 Day Stub Period) to Q1 2016 underwriting results.


			Purchase Accounting adjustments⁽¹⁾					14 Day Stub Period
	Total							North		North
	Consolidated		Acquisition			UPR		America		America		Overseas
	As If*		expense			intangible		Commercial P&C		Personal P&C		General		Global		Life					Total
	(Excluding Purchase Accounting)		elimination			amortization		Insurance		Insurance		Insurance		Reinsurance		Insurance		Corporate			Consolidated
Q1 2016
Net premiums written	$	6,850						$	519	$	100	$	215	$	20	$	1	$	—		$	5,995
Net premiums earned		6,988							208		109		72		—		2		—			6,597
Losses and loss expenses		3,896							127		53		42		—		—		—			3,674
Policy benefits		126							—		—		—		—		—		—			126
(Gains) losses from fair value changes in separate account assets		3							—		—		—		—		—		—			3
Policy acquisition costs		1,410		(506	)				33		14		13		—		1		—			843
Amortization of acquired UPR intangible		—					570		—		—		—		—		—		—			570
Administrative expenses		836							35		13		12		—		1		3			772

Adjusted underwriting income (loss)	$	717						$	13	$	29	$	5	$	—	$	—	$	(3	)	$	609

(1)

Purchase accounting adjustments include the amortization of the fair value adjustment related to unearned premiums at the date of purchase amortized over the remaining coverage period. In addition, as part of purchase accounting, we recognize a benefit (Acquisition expense elimination) associated with the acquired unearned premiums being recognized over the remaining coverage period with no expense for the historical acquisition costs.

*	2016 As If results: The 2016 and 2015 As If company underwriting results do not include any impact from purchase accounting adjustments. The Q1 2016 As If company results are inclusive of the first 14 days of January 2016.


Reconciliation Non-GAAP 5		Page 41

Chubb Limited

Non-GAAP Financial Measures - 6

(in millions of U.S. dollars)

(Unaudited)

Regulation G - Non-GAAP Financial Measures (continued)

The following presents the reconciliation of Q2 2016 As If underwriting income excluding purchase accounting adjustments to Q2 2016 underwriting results.


				Purchase Accounting adjustments ⁽¹⁾
	Total
	Consolidated			Acquisition			UPR
	As If*			expense			intangible		Total
	(Excluding Purchase Accounting)			elimination			amortization		Consolidated
Q2 2016
Net premiums written	$	7,639							$	7,639
Net premiums earned		7,405								7,405
Losses and loss expenses		4,256								4,256
Policy benefits		146								146
(Gains) losses from fair value changes in separate account assets		(3	)							(3	)
Policy acquisition costs		1,494			(459	)				1,035
Amortization of acquired UPR intangible		—						525		525
Administrative expenses		829								829

Adjusted underwriting income	$	683							$	617	⁽¹⁾

The following presents the reconciliation of Q3 2016 As If underwriting income excluding purchase accounting adjustments to Q3 2016 underwriting results.


				Purchase Accounting adjustments ⁽¹⁾
	Total
	Consolidated			Acquisition			UPR
	As If*			expense			intangible		Total
	(Excluding Purchase Accounting)			elimination			amortization		Consolidated
Q3 2016
Net premiums written	$	7,573							$	7,573
Net premiums earned		7,688								7,688
Losses and loss expenses		4,266								4,266
Policy benefits		155								155
(Gains) losses from fair value changes in separate account assets		(22	)							(22	)
Policy acquisition costs		1,475			(281	)				1,194
Amortization of acquired UPR intangible		—						320		320
Administrative expenses		772								772

Adjusted underwriting income	$	1,042							$	1,003	⁽¹⁾

(1)

*	2016 As If results: The 2016 and 2015 As If company underwriting results do not include any impact from purchase accounting adjustments.


Reconciliation Non-GAAP 6		Page 42

Chubb Limited

Non-GAAP Financial Measures - 7

(in millions of U.S. dollars)

(Unaudited)

Regulation G - Non-GAAP Financial Measures (continued)

The following presents the reconciliation of Q4 2016 As If underwriting income excluding purchase accounting adjustments to Q4 2016 underwriting results.


			Purchase Accounting adjustments ⁽¹⁾
	Total
	Consolidated		Acquisition			UPR
	As If*		expense			intangible		Total
	(Excluding Purchase Accounting)		elimination			amortization		Consolidated
Q4 2016
Net premiums written	$	6,938						$	6,938
Net premiums earned		7,059							7,059
Losses and loss expenses		3,884							3,884
Policy benefits		161							161
(Gains) losses from fair value changes in separate account assets		11							11
Policy acquisition costs		1,400		(127	)				1,273
Amortization of acquired UPR intangible		—					144		144
Administrative expenses		798							798

Adjusted underwriting income	$	805						$	788	⁽¹⁾

(1)

The following tables present the reconciliation of combined company underwriting income (“As If”) used throughout this report to Pro Forma results calculated in accordance with SEC guidance under Article 11:


												Purchase Accounting adjustments⁽¹⁾
						Accounting						Acquisition			UPR		SEC
						policy						expense			intangible		Pro Forma
	Legacy ACE			Legacy Chubb		alignment ⁽²⁾			As If*			elimination			amortization		2015 ⁽³⁾
Q4 2015
Net premiums written	$	4,144		$	3,047	$	18		$	7,209							$	7,209
Net premiums earned		4,207			3,114		22			7,343								7,343
Losses and loss expenses		2,305			1,693		8			4,006								4,006
Policy benefits		159			—		—			159								159
(Gains) losses from fair value changes in separate account assets		(13	)		—		—			(13	)							(13	)
Policy acquisition costs		736			652		80			1,468			(99	)				1,369
Amortization of acquired UPR intangible		—			—		—			—						99		99
Administrative expenses		570			334		(44	)		860								860

Underwriting income (loss)	$	450		$	435	$	(22	)	$	863							$	863

(1)

As if acquisition occurred on January 1, 2015. Purchase accounting adjustments include the amortization of the fair value adjustment related to unearned premiums at the date of purchase amortized over the remaining coverage period. In addition, as part of purchase accounting, we recognize a benefit (Acquisition expense elimination) associated with the acquired unearned premiums being recognized over the remaining coverage period with no expense for the historical acquisition costs.

(2)	Refer to the closing Form 8-K/A filed on March 24, 2016 for further information on these adjustments.

(3)	Based on SEC guidance under Article 11.

*	2016 As If results: The 2016 and 2015 As If company underwriting results do not include any impact from purchase accounting adjustments.


Reconciliation Non-GAAP 7		Page 43

Chubb Limited

Non-GAAP Financial Measures - 8

(in millions of U.S. dollars)

(Unaudited)

Regulation G - Non-GAAP Financial Measures (continued)

The following presents the reconciliation of full year 2016 As If underwriting income excluding purchase accounting adjustments and including 14 days prior to the acquisition (14 Day Stub Period) to full year as reported underwriting results.


				Purchase Accounting adjustments ⁽¹⁾					14 Day Stub Period
	Total								North		North
	Consolidated			Acquisition			UPR		America		America		Overseas
	As If*			expense			intangible		Commercial P&C		Personal P&C		General		Global		Life					Total
	(Excluding Purchase Accounting)			elimination			amortization		Insurance		Insurance		Insurance		Reinsurance		Insurance		Corporate			Consolidated
Full Year 2016
Net premiums written	$	29,000							$	519	$	100	$	215	$	20	$	1	$	—		$	28,145
Net premiums earned		29,140								208		109		72		—		2		—			28,749
Losses and loss expenses		16,302								127		53		42		—		—		—			16,080
Policy benefits		588								—		—		—		—		—		—			588
(Gains) losses from fair value changes in separate account assets		(11	)							—		—		—		—		—		—			(11	)
Policy acquisition costs		5,779			(1,373	)				33		14		13		—		1		—			4,345
Amortization of acquired UPR intangible		—						1,559		—		—		—		—		—		—			1,559
Administrative expenses		3,235								35		13		12		—		1		3			3,171

Adjusted underwriting income (loss)	$	3,247							$	13	$	29	$	5	$	—	$	—	$	(3	)	$	3,017	⁽¹⁾

(1)

The following table presents the reconciliation of underwriting income excluding purchase accounting adjustments, as used throughout this report (“As If”), to Pro Forma results calculated in accordance with SEC guidance under Article 11:


										Purchase Accounting adjustments⁽¹⁾
					Accounting					Acquisition			UPR		SEC
					policy					expense			intangible		Pro Forma
	Legacy ACE		Legacy Chubb		alignment ⁽²⁾			As If*		elimination			amortization		2015 ⁽³⁾
Full Year 2015
Net premiums written	$	17,713	$	12,633	$	77		$	30,423						$	30,423
Net premiums earned		17,213		12,518		55			29,786							29,786
Losses and loss expenses		9,493		6,953		18			16,464							16,464
Policy benefits		543		—		—			543							543
(Gains) losses from fair value changes in separate account assets		19		—		—			19							19
Policy acquisition costs		2,941		2,593		292			5,826		(1,284	)				4,542
Amortization of acquired UPR intangible		—		—		—			—					1,550		1,550
Administrative expenses		2,270		1,379		(184	)		3,465							3,465

Underwriting income (loss)	$	1,947	$	1,593	$	(71	)	$	3,469						$	3,203

(1)

(2)	Refer to the closing Form 8-K/A filed on March 24, 2016 for further information on these adjustments.

(3)	Based on SEC guidance under Article 11.

*	2016 As If results: The 2016 and 2015 As If company underwriting results do not include any impact from purchase accounting adjustments. The Q1 2016 and full year 2016 As If company results are inclusive of the first 14 days of January 2016.


Reconciliation Non-GAAP 8		Page 44

Chubb Limited

Glossary

Chubb Limited Consolidated comprises all segments including Corporate.

Book value per common share: Shareholders’ equity divided by the shares outstanding.

P&C combined ratio: The sum of the loss and loss expense ratio, acquisition cost ratio and the administrative expense ratio excluding both the life business and the one-time pension curtailment benefit and including realized gains and losses on crop derivatives.

Operating effective tax rate: Income tax expense excluding tax expense (benefit) on adjusted net realized gains (losses), tax benefit on amortization of fair value of acquired invested assets and debt, and tax benefit on Chubb integration and related expenses, divided by income excluding adjusted net realized gains (losses) before tax, amortization of fair value of acquired invested assets and debt before tax, and Chubb integration and related expenses before tax.

Tangible book value per common share: Shareholders’ equity less goodwill and other intangible assets divided by the shares outstanding.

Average market yield of fixed maturities: Weighted average yield to maturity of our fixed income portfolio based on the market prices of the holdings as of that date.

Average yield on invested assets: Net investment income divided by average cost of fixed maturities and other investments, and average market value of equity securities.

Tangible capital: Total capitalization less goodwill and other intangible assets.

Total capitalization: Short-term debt, long-term debt, trust preferreds, and shareholders’ equity.

NM: Not meaningful.

Chubb integration and related expenses: Chubb integration expenses comprise legal and professional fees and all other costs directly related to the integration activities of the Chubb Corp acquisition including the pre-acquisition interest expense on the $5.3 billion senior notes issued in November 2015. The pre-acquisition interest expense is included in operating income subsequent to January 14th, 2016, the date of the acquisition close. Chubb integration expenses are incurred by the overall company and are therefore included in Corporate. These costs are not related to the on-going business activities of the segments and are therefore excluded from our definition of segment income.


Glossary		Page 45

Chubb Ltd - FORM 8-K - EX-99.2 - January 31, 2017

Attached files

Chubb Ltd Reports