CHUBB CORP - FORM 8-K - EX-99.2

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8-K - FORM 8-K - CHUBB CORP	d910982d8k.htm
EX-99.1 - EX-99.1 - CHUBB CORP	d910982dex991.htm

Exhibit 99.2


The	Supplementary	March 31, 2015
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, 2015


	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)


	March 31						December 31
	2015						2014
				% of Total						% of Total
Invested Assets (at carrying value)
Short Term Investments	$	1,220			3	%	$	1,318			3	%
Fixed Maturities
Tax Exempt		20,415			47			19,772			45
Taxable		18,042			42			19,008			44
Equity Securities		1,964			5			1,964			5
Other Invested Assets		1,408			3			1,423			3

Total Invested Assets	$	43,049			100	%	$	43,485			100	%


Unrealized Appreciation of Investments
Fixed Maturities	$	1,974					$	1,822
Equity Securities		890						875

		2,864						2,697
Deferred Income Tax Liability		1,002						944

	$	1,862					$	1,753


Capitalization
Long Term Debt	$	3,300					$	3,300
Shareholders’ Equity		16,162						16,296

Total Capitalization	$	19,462					$	19,596


Debt as a Percentage of Total Capitalization		17.0	%					16.8	%

Actual Common Shares Outstanding		229.8						232.4

Book Value Per Common Share	$	70.33					$	70.12

Book Value Per Common Share, with Available-for-Sale Fixed Maturities at Amortized Cost	$	64.75					$	65.03

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, 2015		to March 31, 2015
Cost of Shares Repurchased	$	326	$	13,794

Average Cost Per Share	$	100.77	$	59.41

Shares Repurchased		3,234,526		232,200,915

During the period from December 2005 through January 2014, the Board of Directors periodically authorized share repurchase programs. Pursuant to these authorizations, approximately 229 million shares of the Corporation’s common stock were repurchased. No shares or funds remain available under these authorizations.

In January 2015, the Board of Directors authorized the repurchase of up to $1.3 billion of the Corporation’s common stock. The January 2015 authorization has no expiration date and, as of March 31, 2015, approximately $1,026 million remained under this authorization.

Page 2 of 12

THE CHUBB CORPORATION

SUMMARY OF INVESTED ASSETS

CORPORATE


	Cost or Amortized Cost				Carrying Value (a)
	Mar. 31		Dec. 31		Mar. 31		Dec. 31
	2015		2014		2015		2014
	(in millions)
Short Term Investments	$	471	$	585	$	471	$	585

Taxable Fixed Maturities		1,275		1,231		1,294		1,244


TOTAL	$	1,746	$	1,816	$	1,765	$	1,829

PROPERTY AND CASUALTY


	Cost or Amortized Cost				Carrying Value (a)
	Mar. 31		Dec. 31		Mar. 31		Dec. 31
	2015		2014		2015		2014
	(in millions)
Short Term Investments	$	749	$	733	$	749	$	733

Fixed Maturities

Tax Exempt		19,260		18,614		20,415		19,772

Taxable		15,948		17,113		16,748		17,764

Equity Securities		1,074		1,089		1,964		1,964

Other Invested Assets		1,408		1,423		1,408		1,423


TOTAL	$	38,439	$	38,972	$	41,284	$	41,656

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

Page 3 of 12

THE CHUBB CORPORATION

INVESTMENT INCOME AFTER TAXES


	Three Months Ended March 31
	2015			2014
	(in millions)

CORPORATE INVESTMENT INCOME	$	4		$	4


PROPERTY AND CASUALTY INVESTMENT INCOME

Tax Exempt Interest	$	164		$	166

Taxable Interest		92			104

Other		15			14

Investment Expenses		(7	)		(7	)


TOTAL	$	264		$	277


Effective Tax Rate		17.8	%		18.8	%

After-Tax Annualized Yield		2.65	%		2.80	%

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
	2015		2014		2014
	(in millions)

Estimated Statutory Policyholders’ Surplus	$	14,975	$	15,127	$	14,950

Rolling Year Statutory Net Premiums Written	$	12,631	$	12,593	$	12,222

Ratio of Statutory Net Premiums Written to Policyholders’ Surplus		0.84:1		0.83:1		0.82:1

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, 2015


	Net Unpaid Losses							IBNR Increase (Decrease)			All Other Unpaid Losses Increase (Decrease)
	Mar. 31 2015		Dec. 31 2014		Increase (Decrease)			IBNR Increase (Decrease)			All Other Unpaid Losses Increase (Decrease)
	(in millions)
Personal Insurance

Automobile	$	380	$	397	$	(17	)	$	(5	)	$	(12	)

Homeowners		951		748		203			168			35

Other		993		1,000		(7	)		11			(18	)


Total Personal		2,324		2,145		179			174			5


Commercial Insurance

Multiple Peril		1,760		1,750		10			17			(7	)

Casualty		6,419		6,514		(95	)		(22	)		(73	)

Workers’ Compensation		2,960		2,918		42			19			23

Property and Marine		883		883		—			12			(12	)


Total Commercial		12,022		12,065		(43	)		26			(69	)


Specialty Insurance

Professional Liability		6,244		6,480		(236	)		(168	)		(68	)

Surety		78		75		3			4			(1	)


Total Specialty		6,322		6,555		(233	)		(164	)		(69	)


Total Insurance		20,668		20,765		(97	)		36			(133	)

Reinsurance Assumed		264		274		(10	)		(2	)		(8	)


Total	$	20,932	$	21,039	$	(107	)	$	34		$	(141	)

Page 5 of 12

THE CHUBB CORPORATION — WORLDWIDE

PROPERTY AND CASUALTY UNDERWRITING RESULTS

FOR THE THREE MONTHS ENDED MARCH 31, 2015 AND 2014

(DOLLARS IN MILLIONS)


	Personal Automobile						Homeowners						Other Personal						Total Personal
	2015			2014			2015			2014			2015			2014			2015			2014
Net Premiums Written	$	176		$	173		$	600		$	592		$	260		$	248		$	1,036		$	1,013
Decrease (Increase) in Unearned Premiums		4			5			84			74			(11	)		(16	)		77			63


Net Premiums Earned		180			178			684			666			249			232			1,113			1,076


Net Losses Paid		115			121			325			378			122			112			562			611
Increase (Decrease) in Outstanding Losses		(6	)		4			217			99			12			8			223			111


Net Losses Incurred		109			125			542			477			134			120			785			722


Expenses Incurred		57			54			201			197			100			101			358			352

Dividends Incurred		—			—			—			—			—			—			—			—


Statutory Underwriting Income (Loss)	$	14		$	(1	)	$	(59	)	$	(8	)	$	15		$	11		$	(30	)	$	2


Ratios After Dividends to Policyholders:

Loss		60.5	%		70.2	%		79.2	%		71.6	%		53.8	%		51.7	%		70.5	%		67.1	%
Expense		32.4			31.2			33.5			33.3			38.5			40.7			34.6			34.7


Combined		92.9	%		101.4	%		112.7	%		104.9	%		92.3	%		92.4	%		105.1	%		101.8	%


Premiums Written as a % of Total		5.7	%		5.7	%		19.3	%		19.3	%		8.4	%		8.1	%		33.4	%		33.1	%

Page 6 of 12

THE CHUBB CORPORATION — WORLDWIDE

PROPERTY AND CASUALTY UNDERWRITING RESULTS

FOR THE THREE MONTHS ENDED MARCH 31, 2015 AND 2014

(DOLLARS IN MILLIONS)


	Commercial Multiple Peril						Commercial Casualty						Commercial Workers’ Compensation						Commercial Property and Marine						Total Commercial
	2015			2014			2015			2014			2015			2014			2015			2014			2015			2014
Net Premiums Written	$	269		$	261		$	423		$	446		$	343		$	310		$	414		$	408		$	1,449		$	1,425
Decrease (Increase) in Unearned Premiums		11			16			(17	)		(40	)		(48	)		(42	)		(53	)		(59	)		(107	)		(125	)


Net Premiums Earned		280			277			406			406			295			268			361			349			1,342			1,300


Net Losses Paid		134			130			263			269			127			136			183			209			707			744
Increase (Decrease) in Outstanding Losses		30			14			6			(15	)		52			24			18			(11	)		106			12


Net Losses Incurred		164			144			269			254			179			160			201			198			813			756


Expenses Incurred		103			104			116			121			72			67			138			132			429			424

Dividends Incurred		—			—			—			—			9			9			—			—			9			9


Statutory Underwriting Income (Loss)	$	13		$	29		$	21		$	31		$	35		$	32		$	22		$	19		$	91		$	111


Ratios After Dividends to Policyholders:

Loss		58.6	%		52.0	%		66.3	%		62.6	%		62.5	%		61.8	%		55.7	%		56.7	%		61.0	%		58.6	%
Expense		38.3			39.8			27.4			27.1			21.6			22.2			33.3			32.4			29.8			29.9


Combined		96.9	%		91.8	%		93.7	%		89.7	%		84.1	%		84.0	%		89.0	%		89.1	%		90.8	%		88.5	%


Premiums Written as a % of Total		8.7	%		8.5	%		13.6	%		14.6	%		11.0	%		10.1	%		13.3	%		13.3	%		46.6	%		46.5	%

Page 7 of 12

THE CHUBB CORPORATION — WORLDWIDE

PROPERTY AND CASUALTY UNDERWRITING RESULTS

FOR THE THREE MONTHS ENDED MARCH 31, 2015 AND 2014

(DOLLARS IN MILLIONS)


	Professional Liability						Surety						Total Specialty
	2015			2014			2015			2014			2015			2014
Net Premiums Written	$	545		$	552		$	76		$	72		$	621		$	624
Decrease (Increase) in Unearned Premiums		30			28			(1	)		1			29			29


Net Premiums Earned		575			580			75			73			650			653


Net Losses Paid		377			382			4			43			381			425
Increase (Decrease) in Outstanding Losses		(62	)		(69	)		3			11			(59	)		(58	)


Net Losses Incurred		315			313			7			54			322			367


Expenses Incurred		166			169			34			34			200			203

Dividends Incurred		—			—			1			1			1			1


Statutory Underwriting Income (Loss)	$	94		$	98		$	33		$	(16	)	$	127		$	82


Ratios After Dividends to Policyholders:

Loss		54.7	%		54.0	%		9.5	%		75.0	%		49.6	%		56.3	%
Expense		30.5			30.6			45.3			47.9			32.3			32.6


Combined		85.2	%		84.6	%		54.8	%		122.9	%		81.9	%		88.9	%


Premiums Written as a % of Total		17.6	%		18.0	%		2.4	%		2.4	%		20.0	%		20.4	%

Page 8 of 12

THE CHUBB CORPORATION — WORLDWIDE

PROPERTY AND CASUALTY UNDERWRITING RESULTS

FOR THE THREE MONTHS ENDED MARCH 31, 2015 AND 2014

(DOLLARS IN MILLIONS)


	Total Insurance						Reinsurance Assumed						Worldwide Total
	2015			2014			2015			2014			2015			2014
Net Premiums Written	$	3,106		$	3,062		$	—		$	—		$	3,106		$	3,062
Decrease (Increase) in Unearned Premiums		(1	)		(33	)		—			—			(1	)		(33	)


Net Premiums Earned		3,105			3,029			—			—			3,105			3,029


Net Losses Paid		1,650			1,780			10			14			1,660			1,794
Increase (Decrease) in Outstanding Losses		270			65			(10	)		(14	)		260			51


Net Losses Incurred		1,920			1,845			—			—			1,920			1,845


Expenses Incurred		987			979			—			—			987			979

Dividends Incurred		10			10			—			—			10			10


Statutory Underwriting Income (Loss)	$	188		$	195		$	—		$	—			188			195


Increase in Deferred Acquisition Costs														17			13


GAAP Underwriting Income													$	205		$	208


Ratios After Dividends to Policyholders:

Loss		62.0	%		61.1	%		*	%		*	%		62.0	%		61.1	%
Expense		31.9			32.1			*			*			31.9			32.1


Combined		93.9	%		93.2	%		*	%		*	%		93.9	%		93.2	%


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

*	Combined, loss and expense ratios are no longer presented for the Reinsurance Assumed business since it is in runoff.

Page 9 of 12

THE CHUBB CORPORATION — WORLDWIDE

PROPERTY AND CASUALTY UNDERWRITING RESULTS

FOR THE THREE MONTHS ENDED MARCH 31, 2015 AND 2014

(DOLLARS IN MILLIONS)


	United States						Outside the United States						Worldwide Total
	2015			2014			2015			2014			2015			2014

Net Premiums Written	$	2,286		$	2,199		$	820		$	863		$	3,106		$	3,062
Decrease (Increase) in Unearned Premiums		117			92			(118	)		(125	)		(1	)		(33	)


Net Premiums Earned		2,403			2,291			702			738			3,105			3,029


Net Losses Paid		1,281			1,344			379			450			1,660			1,794
Increase (Decrease) in Outstanding Losses		272			89			(12	)		(38	)		260			51


Net Losses Incurred		1,553			1,433			367			412			1,920			1,845


Expenses Incurred		692			661			295			318			987			979

Dividends Incurred		10			10			—			—			10			10


Statutory Underwriting Income (Loss)	$	148		$	187		$	40		$	8			188			195


Increase in Deferred Acquisition Costs														17			13


GAAP Underwriting Income													$	205		$	208


Ratios After Dividends to Policyholders:

Loss		64.9	%		62.8	%		52.3	%		55.8	%		62.0	%		61.1	%
Expense		30.4			30.2			36.0			36.8			31.9			32.1


Combined		95.3	%		93.0	%		88.3	%		92.6	%		93.9	%		93.2	%


Premiums Written as a % of Total		73.6	%		71.8	%		26.4	%		28.2	%		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, certain policy acquisition expenses are deferred and amortized over the period in which the related premiums are earned. Underwriting income (loss) determined in accordance with GAAP is defined as premiums earned less losses and loss expenses incurred and GAAP underwriting expenses incurred.

Property and Casualty Investment Income After Income Tax

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

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

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

Combined Loss and Expense Ratio or Combined Ratio

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

Page 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 or loss, the after-tax appreciation or depreciation, including unrealized other-than-temporary impairment losses, of the Corporation’s available-for-sale fixed maturities and equity securities, which are carried at fair value. The appreciation or depreciation of available-for-sale fixed maturities and equity securities is subject to fluctuation and could distort the analysis of trends. Average shareholders’ equity excluding the after-tax unrealized appreciation or depreciation of investments is the average of the beginning and all quarter-end balances within the period. Management uses operating return on equity, among other measures, to assess the overall performance of the Corporation.


	Three Months Ended March 31
	2015			2014
	(dollars in millions)
Annualized Net Income	$	1,500		$	1,796
Average Shareholders’ Equity	$	16,229		$	16,162

Return on Equity		9.2	%		11.1	%

Annualized Operating Income	$	1,468		$	1,496
Average Shareholders’ Equity Excluding Unrealized Appreciation or Depreciation	$	14,422		$	14,819

Operating Return on Equity		10.2	%		10.1	%

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Attached files

Table of Contents

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CHUBB CORP Reports

CHUBB CORP - FORM 8-K - EX-99.2 - April 23, 2015

Attached files

CHUBB CORP Reports