CHUBB CORP - FORM 8-K - EX-99.2

Attached files

file	filename
EX-99.1 - EX-99.1 - CHUBB CORP	y90921exv99w1.htm
8-K - FORM 8-K - CHUBB CORP	y90921e8vk.htm

Exhibit 99.2


The	Supplementary	March 31, 2011
Chubb	Investor
Corporation	Information



This report is for informational purposes only. It should be read in conjunction with documents filed by The Chubb Corporation with the Securities and Exchange Commission, including the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

THE CHUBB CORPORATION
SUPPLEMENTARY INVESTOR INFORMATION
TABLE OF CONTENTS
MARCH 31, 2011


		Page
The Chubb Corporation:
Consolidated Balance Sheet Highlights		1
Share Repurchase Activity		2

Summary of Invested Assets:
Corporate		3
Property and Casualty		3

Investment Income After Taxes:
Corporate		4
Property and Casualty		4

Property and Casualty Insurance Group:
Statutory Policyholders’ Surplus		4
Change in Net Unpaid Losses		5
Underwriting Results		6-10

Definitions of Key Terms		11-12

THE CHUBB CORPORATION

CONSOLIDATED BALANCE SHEET HIGHLIGHTS

(in millions, except per share amounts)


	Mar. 31						Dec. 31
	2011						2010
				% of Total						% of Total
Invested Assets (at carrying value)
Short Term Investments	$	2,075			5	%	$	1,905			4	%
Fixed Maturities
Tax Exempt		19,806			47			19,774			47
Taxable		16,668			39			16,745			40
Equity Securities		1,661			4			1,550			4
Other Invested Assets		2,318			5			2,239			5

Total Invested Assets	$	42,528			100	%	$	42,213			100	%


Unrealized Appreciation of Investments
Fixed Maturities	$	1,281					$	1,458
Equity Securities		356						265

		1,637						1,723
Deferred Income Tax Liability		573						603

	$	1,064					$	1,120


Capitalization
Long Term Debt	$	3,975					$	3,975
Shareholders’ Equity		15,579						15,530

Total Capitalization	$	19,554					$	19,505


Debt as a Percentage of Total Capitalization		20.3	%					20.4	%

Actual Common Shares Outstanding		292.5						297.3

Book Value Per Common Share	$	53.26					$	52.24

Book Value Per Common Share, with Available-for-Sale Fixed Maturities at Amortized Cost	$	50.41					$	49.05

Page 1 of 12

THE CHUBB CORPORATION

SHARE REPURCHASE ACTIVITY

(dollars in millions, except per share amounts)


	Three Months		From
	Ended		December 2005
	March 31, 2011		to March 31, 2011
Cost of Shares Repurchased		$387		$8,347
Average Cost Per Share		$58.91		$51.18
Shares Repurchased		6,563,253		163,070,957

In December 2005 and December 2006, the Board of Directors authorized the repurchase of up to 28,000,000 shares and 20,000,000 shares, respectively, of the Corporation’s common stock. In March 2007, the Board of Directors authorized an increase of 20,000,000 shares to the authorization approved in December 2006. In December 2007, 2008 and 2009 the Board of Directors authorized the repurchase of up to 28,000,000 shares, 20,000,000 shares and 25,000,000 shares, respectively, of the Corporation’s common stock. In June 2010, the Board of Directors authorized an increase of 14,000,000 shares to the authorization approved in December 2009. No shares remain under these share repurchase authorizations.

In December 2010, the Board of Directors authorized the repurchase of up to 30,000,000 shares of the Corporation’s common stock. The authorization has no expiration date. As of March 31, 2011, 21,929,043 shares remained under the share repurchase authorization.

Page 2 of 12

THE CHUBB CORPORATION

SUMMARY OF INVESTED ASSETS

CORPORATE


	Cost or				Carrying
	Amortized Cost				Value (a)
	Mar. 31		Dec. 31		Mar. 31		Dec. 31
	2011		2010		2011		2010
	(in millions)
Short Term Investments	$	975	$	817	$	975	$	817
Taxable Fixed Maturities		1,116		1,154		1,154		1,197
Equity Securities		200		205		170		171
Other Invested Assets		25		23		25		23


TOTAL	$	2,316	$	2,199	$	2,324	$	2,208

PROPERTY AND CASUALTY


	Cost or				Carrying
	Amortized Cost				Value (a)
	Mar. 31		Dec. 31		Mar. 31		Dec. 31
	2011		2010		2011		2010
	(in millions)
Short Term Investments	$	1,100	$	1,088	$	1,100	$	1,088
Fixed Maturities
Tax Exempt		19,156		19,072		19,806		19,774
Taxable		14,921		14,835		15,514		15,548
Equity Securities		1,105		1,080		1,491		1,379
Other Invested Assets		2,293		2,216		2,293		2,216


TOTAL	$	38,575	$	38,291	$	40,204	$	40,005


(a)		Short term investments are carried at amortized cost, which approximates fair value. Fixed maturities and equity securities are carried at fair value. Other invested assets include private equity limited partnerships carried at Chubb’s equity in the net assets of the partnerships.

Page 3 of 12

THE CHUBB CORPORATION

INVESTMENT INCOME AFTER TAXES


	Three Months Ended
	March 31
	2011			2010
	(in millions)
CORPORATE INVESTMENT INCOME	$	8		$	8


PROPERTY AND CASUALTY INVESTMENT INCOME
Tax Exempt Interest	$	192		$	189
Taxable Interest		116			121
Other		9			9
Investment Expenses		(7	)		(6	)


TOTAL	$	310		$	313


Effective Tax Rate		18.6	%		19.1	%
After-Tax Annualized Yield		3.20	%		3.27	%

After-tax annualized yield is based on the average invested assets for the periods presented, with fixed maturities at amortized cost and equity securities at fair value.

STATUTORY POLICYHOLDERS’ SURPLUS


	Mar. 31		Dec. 31		Mar. 31
	2011		2010		2010
	(in millions)
Estimated Statutory Policyholders’ Surplus	$	14,600	$	14,539	$	14,780
Rolling Year Statutory Net Premiums Written	$	11,360	$	11,262	$	11,105
Ratio of Statutory Net Premiums Written to Policyholders’ Surplus		0.78:1		0.77:1		0.75:1

Statutory Policyholders’ Surplus and Net Premiums Written include all domestic and foreign property and casualty subsidiaries.

Page 4 of 12

THE CHUBB CORPORATION

PROPERTY AND CASUALTY

CHANGE IN NET UNPAID LOSSES
THREE MONTHS ENDED MARCH 31, 2011


	Net Unpaid Losses										All Other
								IBNR			Unpaid Losses
					Increase			Increase			Increase
	3/31/11		12/31/10		(Decrease)			(Decrease)			(Decrease)
	(in millions)
Personal Insurance
Automobile	$	402	$	395	$	7		$	(1	)	$	8
Homeowners		740		692		48			37			11
Other		883		877		6			7			(1	)

Total Personal		2,025		1,964		61			43			18


Commercial Insurance
Multiple Peril		1,750		1,705		45			32			13
Casualty		6,244		6,141		103			92			11
Workers’ Compensation		2,269		2,234		35			44			(9	)
Property and Marine		978		819		159			139			20

Total Commercial		11,241		10,899		342			307			35


Specialty Insurance
Professional Liability		7,439		7,388		51			12			39
Surety		67		58		9			1			8

Total Specialty		7,506		7,446		60			13			47

Total Insurance		20,772		20,309		463			363			100
Reinsurance Assumed		562		592		(30	)		(37	)		7


Total	$	21,334	$	20,901	$	433		$	326		$	107

Page 5 of 12

THE CHUBB CORPORATION — WORLDWIDE
PROPERTY AND CASUALTY UNDERWRITING RESULTS
FOR THE THREE MONTHS ENDED MARCH 31, 2011 AND 2010
(DOLLARS IN MILLIONS)


	Personal												Other						Total
	Automobile						Homeowners						Personal						Personal
	2011			2010			2011			2010			2011			2010			2011			2010
Net Premiums Written	$	162		$	146		$	533		$	517		$	199		$	211		$	894		$	874
Decrease (Increase) in Unearned Premiums		1			4			68			73			(6	)		(26	)		63			51


Net Premiums Earned		163			150			601			590			193			185			957			925


Net Losses Paid		96			94			309			276			108			99			513			469
Increase (Decrease) in Outstanding Losses		5			(3	)		44			185			1			5			50			187


Net Losses Incurred		101			91			353			461			109			104			563			656


Expenses Incurred		50			45			192			182			71			66			313			293

Dividends Incurred		—			—			—			—			—			—			—			—


Statutory Underwriting Income (Loss)	$	12		$	14		$	56		$	(53	)	$	13		$	15		$	81		$	(24	)


Ratios After Dividends to Policyholders:

Loss		62.0	%		60.7	%		58.8	%		78.1	%		56.5	%		56.2	%		58.8	%		70.9	%
Expense		30.8			30.8			36.0			35.2			35.7			31.3			35.0			33.5


Combined		92.8	%		91.5	%		94.8	%		113.3	%		92.2	%		87.5	%		93.8	%		104.4	%


Premiums Written as a % of Total		5.7	%		5.3	%		18.6	%		18.7	%		7.0	%		7.6	%		31.3	%		31.6	%

Page 6 of 12

THE CHUBB CORPORATION — WORLDWIDE
PROPERTY AND CASUALTY UNDERWRITING RESULTS
FOR THE THREE MONTHS ENDED MARCH 31, 2011 AND 2010
(DOLLARS IN MILLIONS)


													Commercial						Commercial
	Commercial						Commercial						Workers’						Property						Total
	Multiple Peril						Casualty						Compensation						and Marine						Commercial
	2011			2010			2011			2010			2011			2010			2011			2010			2011			2010
Net Premiums Written	$	267		$	254		$	436		$	414		$	243		$	222		$	380		$	353		$	1,326		$	1,243
Decrease (Increase) in Unearned Premiums		15			15			(36	)		(28	)		(46	)		(36	)		(50	)		(42	)		(117	)		(91	)


Net Premiums Earned		282			269			400			386			197			186			330			311			1,209			1,152


Net Losses Paid		150			129			159			175			98			93			153			139			560			536
Increase (Decrease) in Outstanding Losses		41			67			64			59			31			29			153			34			289			189


Net Losses Incurred		191			196			223			234			129			122			306			173			849			725


Expenses Incurred		102			101			121			115			51			48			123			113			397			377

Dividends Incurred		—			—			—			—			7			7			—			—			7			7


Statutory Underwriting Income (Loss)	$	(11	)	$	(28	)	$	56		$	37		$	10		$	9		$	(99	)	$	25		$	(44	)	$	43


Ratios After Dividends to Policyholders:

Loss		67.7	%		72.9	%		55.7	%		60.6	%		67.9	%		68.2	%		92.7	%		55.6	%		70.6	%		63.3	%
Expense		38.2			39.7			27.8			27.8			21.6			22.3			32.4			32.0			30.1			30.5


Combined		105.9	%		112.6	%		83.5	%		88.4	%		89.5	%		90.5	%		125.1	%		87.6	%		100.7	%		93.8	%


Premiums Written as a % of Total		9.3	%		9.2	%		15.3	%		15.0	%		8.5	%		8.0	%		13.3	%		12.8	%		46.4	%		45.0	%

Page 7 of 12

THE CHUBB CORPORATION — WORLDWIDE
PROPERTY AND CASUALTY UNDERWRITING RESULTS
FOR THE THREE MONTHS ENDED MARCH 31, 2011 AND 2010
(DOLLARS IN MILLIONS)


	Professional												Total
	Liability						Surety						Specialty
	2011			2010			2011			2010			2011			2010
Net Premiums Written	$	551		$	570		$	88		$	76		$	639		$	646
Decrease (Increase) in Unearned Premiums		53			50			(5	)		5			48			55


Net Premiums Earned		604			620			83			81			687			701


Net Losses Paid		362			387			6			5			368			392
Increase (Decrease) in Outstanding Losses		(20	)		(29	)		9			(3	)		(11	)		(32	)


Net Losses Incurred		342			358			15			2			357			360


Expenses Incurred		166			162			28			28			194			190

Dividends Incurred		—			—			1			1			1			1


Statutory Underwriting Income (Loss)	$	96		$	100		$	39		$	50		$	135		$	150


Ratios After Dividends to Policyholders:

Loss		56.6	%		57.8	%		18.3	%		2.5	%		52.0	%		51.4	%
Expense		30.2			28.4			32.2			37.3			30.4			29.5


Combined		86.8	%		86.2	%		50.5	%		39.8	%		82.4	%		80.9	%


Premiums Written as a % of Total		19.3	%		20.6	%		3.0	%		2.7	%		22.3	%		23.3	%

Page 8 of 12

THE CHUBB CORPORATION — WORLDWIDE

PROPERTY AND CASUALTY UNDERWRITING RESULTS
FOR THE THREE MONTHS ENDED MARCH 31, 2011 AND 2010
(DOLLARS IN MILLIONS)


	Total						Reinsurance						Worldwide
	Insurance						Assumed						Total
	2011			2010			2011			2010			2011			2010
Net Premiums Written	$	2,859		$	2,763		$	—		$	2		$	2,859		$	2,765
Decrease (Increase) in Unearned Premiums		(6	)		15			1			2			(5	)		17


Net Premiums Earned		2,853			2,778			1			4			2,854			2,782


Net Losses Paid		1,441			1,397			26			35			1,467			1,432
Increase (Decrease) in Outstanding Losses		328			344			(30	)		(46	)		298			298


Net Losses Incurred		1,769			1,741			(4	)		(11	)		1,765			1,730


Expenses Incurred		904			860			—			2			904			862

Dividends Incurred		8			8			—			—			8			8


Statutory Underwriting Income (Loss)	$	172		$	169		$	5		$	13			177			182


Increase in Deferred Acquisition Costs														25			22


GAAP Underwriting Income													$	202		$	204


Ratios After Dividends to Policyholders:

Loss		62.2	%		62.9	%		*	%		*	%		62.0	%		62.3	%
Expense		31.7			31.2			*			*			31.7			31.3


Combined		93.9	%		94.1	%		*	%		*	%		93.7	%		93.6	%


Premiums Written as a % of Total		100.0	%		99.9	%		0.0	%		0.1	%		100.0	%		100.0	%


*		Combined, loss and expense ratios are no longer presented for Reinsurance Assumed since this business is in run-off.

Page 9 of 12

THE CHUBB CORPORATION — WORLDWIDE

PROPERTY AND CASUALTY UNDERWRITING RESULTS
FOR THE THREE MONTHS ENDED MARCH 31, 2011 AND 2010
(DOLLARS IN MILLIONS)


							Outside
							the						Worldwide
	United States						United States						Total
	2011			2010			2011			2010			2011			2010
Net Premiums Written	$	1,962		$	1,948		$	897		$	817		$	2,859		$	2,765
Decrease (Increase) in Unearned Premiums		125			148			(130	)		(131	)		(5	)		17


Net Premiums Earned		2,087			2,096			767			686			2,854			2,782


Net Losses Paid		1,145			1,106			322			326			1,467			1,432
Increase (Decrease) in Outstanding Losses		96			253			202			45			298			298


Net Losses Incurred		1,241			1,359			524			371			1,765			1,730


Expenses Incurred		597			589			307			273			904			862

Dividends Incurred		8			8			—			—			8			8


Statutory Underwriting Income (Loss)	$	241		$	140		$	(64	)	$	42			177			182


Increase in Deferred Acquisition Costs														25			22


GAAP Underwriting Income													$	202		$	204


Ratios After Dividends to Policyholders:

Loss		59.7	%		65.1	%		68.3	%		54.1	%		62.0	%		62.3	%
Expense		30.5			30.4			34.2			33.4			31.7			31.3


Combined		90.2	%		95.5	%		102.5	%		87.5	%		93.7	%		93.6	%


Premiums Written as a % of Total		68.6	%		70.5	%		31.4	%		29.5	%		100.0	%		100.0	%

Page 10 of 12

THE CHUBB CORPORATION

Definitions of Key Terms

Underwriting Income (Loss)

Management evaluates underwriting results separately from investment results. The underwriting operations consist of four separate business units: personal insurance, commercial insurance, specialty insurance and reinsurance assumed. Performance of the business units is measured based on statutory underwriting results. Statutory accounting principles applicable to property and casualty insurance companies differ in certain respects from generally accepted accounting principles (GAAP). Under statutory accounting principles, policy acquisition and other underwriting expenses are recognized immediately, not at the time premiums are earned. Statutory underwriting income (loss) is arrived at by reducing premiums earned by losses and loss expenses incurred and statutory underwriting expenses incurred.

Management uses underwriting results determined in accordance with GAAP, among other measures, to assess the overall performance of the underwriting operations. To convert statutory underwriting results to a GAAP basis, policy acquisition expenses are deferred and amortized over the period in which the related premiums are earned. Underwriting income (loss) determined in accordance with GAAP is defined as premiums earned less losses and loss expenses incurred and GAAP underwriting expenses incurred.

Property and Casualty Investment Income After Income Tax

Management uses property and casualty investment income after income tax, a non-GAAP financial measure, to evaluate its investment performance because it reflects the impact of any change in the proportion of the investment portfolio invested in tax exempt securities and is therefore more meaningful for analysis purposes than investment income before income taxes.

Book Value per Common Share with Available-for-Sale Fixed Maturities at Amortized Cost

Book value per common share represents the portion of consolidated shareholders’ equity attributable to one share of common stock outstanding as of the balance sheet date. Consolidated shareholders’ equity includes, as part of accumulated other comprehensive income (loss), the after-tax appreciation or depreciation, including unrealized other-than-temporary impairment losses, of the Corporation’s available-for-sale fixed maturities, which are carried at fair value. The appreciation or depreciation of available-for-sale fixed maturities is subject to fluctuation due to changes in interest rates and therefore could distort the analysis of trends. Management believes that book value per common share with available-for-sale fixed maturities at amortized cost, a non-GAAP financial measure, is an important measure of the underlying equity attributable to one share of common stock.

Combined Loss and Expense Ratio or Combined Ratio

The combined loss and expense ratio, expressed as a percentage, is the key measure of underwriting profitability. Management uses the combined loss and expense ratio calculated in accordance with statutory accounting principles applicable to property and casualty insurance companies to evaluate the performance of the underwriting operations. It is the sum of the ratio of losses and loss expenses to premiums earned (loss ratio) plus the ratio of statutory underwriting expenses to premiums written (expense ratio) after reducing both premium amounts by dividends to policyholders.

Page 11 of 12

THE CHUBB CORPORATION

Definitions of Key Terms

Operating Income

Operating income, a non-GAAP financial measure, is net income excluding after-tax realized investment gains and losses. Management uses operating income, among other measures, to evaluate its performance because the realization of investment gains and losses in any given period is largely discretionary as to timing and can fluctuate significantly, which could distort the analysis of trends.

Return on Equity and Operating Return on Equity

Return on equity is the ratio of annualized net income divided by average shareholders’ equity. Average shareholders’ equity is the average of the beginning and all quarter-end balances within the period.

Operating return on equity, a non-GAAP measure, is the ratio of annualized operating income divided by average shareholders’ equity excluding the after-tax unrealized appreciation or depreciation of investments. Consolidated shareholders’ equity includes, as part of accumulated other comprehensive income (loss), the after-tax appreciation or depreciation, including unrealized other-than-temporary impairment losses, of the Corporation’s available-for-sale fixed maturities and equity securities, which are carried at fair value. The appreciation or depreciation of available-for-sale fixed maturities and equity securities is subject to fluctuation and could distort the analysis of trends. Average shareholders’ equity excluding the after-tax unrealized appreciation or depreciation of investments is the average of the beginning and all quarter-end balances within the period. Management uses operating return on equity, among other measures, to assess the overall performance of the Corporation.


	Three Months Ended
	March 31
	2011			2010
	(dollars in millions)
Annualized Net Income	$	2,036		$	1,856
Average Shareholders’ Equity	$	15,555		$	15,688

Return on Equity		13.1	%		11.8	%

Annualized Operating Income	$	1,620		$	1,524
Average Shareholders’ Equity Excluding Unrealized Appreciation or Depreciation	$	14,463		$	14,589

Operating Return on Equity		11.2	%		10.4	%

Page 12 of 12

CHUBB CORP - FORM 8-K - EX-99.2 - April 21, 2011

Attached files

CHUBB CORP Reports