Chubb Ltd

Segment Operating Results – Years Ended December 31, 2023, 2022, and 2021

We operate through six 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. In addition, the results of our run-off Brandywine business, including all run-off asbestos and environmental (A&E) exposures, and the results of Westchester specialty operations for 1996 and prior years are presented within Corporate.

North America Commercial P&C Insurance

The North America Commercial P&C Insurance segment comprises operations that provide P&C insurance and services to large, middle market, and small commercial businesses in the U.S., Canada, and Bermuda. This segment includes our North America Major Accounts and Specialty Insurance division (large corporate accounts and wholesale business), and the North America Commercial Insurance division (principally middle market and small commercial accounts).

•2023: U.S. flooding, hail, tornadoes, wind events, winter storm losses, and Hawaii wildfires.

•2022: Hurricane Ian losses, winter storm Elliott losses, and other severe weather-related events in the U.S.

•2021: Hurricane Ida losses; winter storm losses and flooding; hail, tornados, and wind events in the U.S.

Net premiums written increased $1,348 million, or 7.5 percent, in 2023, reflecting rate and exposure increases, and strong new business. The increase in premiums was across most lines of business, most notably in property, but also in select casualty and commercial multiple peril lines.

Net premiums earned increased $1,309 million, or 7.7 percent, in 2023, reflecting the growth in net premiums written described above.

The loss and loss expense ratio and the CAY loss ratio excluding catastrophe losses improved in 2023, reflecting a higher percentage of premiums earned from lines that have a lower loss ratio, as well as earned rate and exposure exceeding loss trend in certain lines. The loss and loss expense ratio was also favorably impacted by lower catastrophe losses, partially offset by lower favorable prior period development.

The administrative expense ratio increased in 2023 primarily from higher pension expenses and higher employee-related expenses, partially offset by the favorable impact of higher net premiums earned. The increase in pension expense reflects the adverse impact of market conditions in 2022.

North America Personal P&C Insurance

The North America Personal P&C Insurance segment comprises operations that provide high net worth personal lines products, including homeowners and complementary products such as valuable articles, excess liability, automobile, and recreational marine insurance and services in the U.S. and Canada.

•2023: U.S. flooding, hail, tornadoes, wind events, winter storm losses, and Hawaii wildfires.

•2022: Hurricane Ian losses, winter storm Elliott losses, and other severe weather-related events in the U.S., including Colorado wildfires.

•2021: Hurricane Ida losses, winter storm losses, and flooding; hail, tornados, and wind events in the U.S.

Net premiums written increased $565 million, or 10.6 percent, for 2023, primarily driven by strong new business, and rate and exposure increases, across most lines, but most notably in homeowners.

Net premiums earned increased $356 million, or 6.9 percent, for 2023, reflecting the growth in net premiums written described above.

The CAY loss ratio excluding catastrophe losses increased in 2023, primarily reflecting higher auto and excess liability losses, partially offset by earned rate and exposure exceeding loss cost trends, as well as lower actual loss experience in homeowners. The loss and loss expense ratio increased in 2023, primarily due to the factors noted above and lower favorable prior period development.

The administrative expense ratio increased in 2023, primarily from higher pension expenses, partially offset by the favorable impact of higher net premiums earned. The increase in pension expense reflects the adverse impact of market conditions in 2022.

North America Agricultural Insurance

The North America Agricultural Insurance segment comprises our North American based businesses that provide a variety of coverages in the U.S. and Canada including crop insurance, primarily Multiple Peril Crop Insurance (MPCI) and crop-hail through Rain and Hail Insurance Service, Inc. (Rain and Hail) as well as farm and ranch and specialty P&C commercial insurance products and services through our Chubb Agribusiness unit.

Net catastrophe Losses and Prior Period Development

•2023: U.S. flooding, hail, tornadoes, and wind events.

•2022: Hurricane Ian losses, severe weather-related events in the Chubb Agribusiness, and winter storm losses in the U.S.

•2021: U.S. flooding, hail, tornados, and wind events.

Net premiums written increased $281 million, or 9.7 percent, in 2023, primarily reflecting lower premium cessions to the U.S. government of $386 million and strong new business in Chubb Agribusiness. Under the profit-sharing agreement, we retained more premium in 2023 because of higher losses experienced in certain states. In 2022, we returned additional premiums to the government because of lower losses experienced in certain states in 2021.

Net premiums earned increased $331 million, or 11.7 percent, in 2023 reflecting the growth in net premiums written described above.

The CAY loss ratio excluding catastrophe losses improved in 2023, primarily from a higher 2023 crop year margin, partly offset by the impact of the lower premium cessions to the U.S. government mentioned above, which had a corresponding impact in incurred losses. The loss and loss expense ratio increased in 2023, reflecting lower favorable prior period development, partially offset by lower catastrophe losses and the factors noted above.

The policy acquisition cost ratio increased in 2023, reflecting changes in mix of business away from products that have a lower acquisition cost ratio.

Overseas General Insurance

Overseas General Insurance segment comprises Chubb International and Chubb Global Markets (CGM). Chubb International comprises our international commercial P&C traditional and specialty lines serving large corporations, middle market and small customers; A&H and traditional and specialty personal lines business serving local territories outside the U.S., Bermuda, and Canada. CGM, our London-based international commercial P&C excess and surplus lines business, includes Lloyd's of London (Lloyd's) Syndicate 2488. Chubb provides funds at Lloyd's to support underwriting by Syndicate 2488 which is managed by Chubb Underwriting Agencies Limited. Effective July 1, 2023, the Overseas General Insurance segment includes 100 percent of the results of Huatai Group's P&C business as required under consolidation accounting. We previously included our share of Huatai results based on our equity method investment within Other (income) expense.

•2023: Storms in New Zealand, international weather-related events, and Hurricane Otis losses.

•2022: Hurricane Ian losses, international weather-related events, and storms in Australia.

•2021: Hurricane Ida losses, winter-related storms, international weather-related events, and flooding in Europe.

(1)2023 includes the consolidated results of Huatai P&C effective July 1, 2023.

(2)Includes the international supplemental A&H business of Combined Insurance and other international operations.

Overall, net premiums written increased $1,515 million in 2023, or $1,475 million on a constant-dollar basis, reflecting growth in commercial lines of 11.2 percent, or 11.8 percent on a constant-dollar basis, and growth in consumer lines of 17.8 percent, or 15.7 percent on a constant-dollar basis. The consolidation of Huatai Group's P&C business contributed $460 million, or 3.4 percentage points in 2023.

Our European division increased in 2023, supported by both our wholesale and retail divisions. The growth in commercial lines was primarily driven by higher new business, and positive rate increases, including commercial property and casualty lines. Consumer lines increased primarily due to increased travel volume in A&H.

Latin America increased in 2023, driven by growth in commercial lines due to exposure increases, positive rate increases, and new business, primarily property and casualty lines. Growth in consumer was driven by an increase in personal lines.

Asia Pacific increased in 2023, reflecting the consolidation of Huatai Group's P&C business effective July 1, 2023, higher new business, higher retention and positive rate increases in commercial lines, primarily property and casualty lines. Growth in consumer lines is attributable to the acquisition of Cigna's business in Asia effective July 1, 2022, as well as increased travel in A&H.

Japan increased in 2023, on a constant-dollar basis, primarily from higher new business in A&H.

Net premiums earned increased $1,428 million in 2023, or $1,339 million on a constant-dollar basis, reflecting the increase in net premiums written described above.

The loss and loss expense ratio increased in 2023 due to lower favorable prior period development. The CAY loss ratio excluding catastrophe losses increased in 2023, driven by higher losses in personal lines, principally in the automobile portfolio in Latin America.

The policy acquisition cost ratio improved in 2023, primarily due to a change in the mix of business, including higher premiums earned from commercial lines that have a lower acquisition cost ratio than consumer lines.

The Global Reinsurance segment represents our reinsurance operations comprising Chubb Tempest Re Bermuda, Chubb Tempest Re USA, Chubb Tempest Re International, and Chubb Tempest Re Canada. Global Reinsurance markets its reinsurance products worldwide primarily through reinsurance brokers under the Chubb Tempest Re brand name and provides a broad range of traditional and non-traditional reinsurance coverage to a diverse array of primary P&C companies.

•2023: Hurricane Idalia, and other severe weather-related events in the U.S.

•2022: Hurricane Ian losses, and other severe weather-related events in the U.S., Australia, and Canada.

•2021: Hurricane Ida losses, and other severe weather-related events in the U.S., Canada and Europe.

Net premiums written increased $75 million in 2023, reflecting continued growth in the portfolio, mainly in property lines, partially offset by the impact of catastrophe reinstatement premiums recognized in the prior year.

Net premiums earned increased $40 million in 2023, primarily reflecting the increase in net premiums written described above.

The loss and loss expense ratio improved in 2023, primarily due to lower catastrophe losses and favorable prior period development. The CAY loss ratio excluding catastrophe losses improved in 2023 primarily from an improvement in market conditions in several lines of business and a shift in the mix of business towards property lines, which generally has higher margins.

The policy acquisition cost ratio increased in 2023, primarily due to higher catastrophe reinstatement premiums recognized in the prior year, which have a lower acquisition cost.

Life Insurance

The Life Insurance segment comprises our international life operations, which commencing in the third quarter of 2022, includes Cigna's A&H and life business in Korea, Taiwan, New Zealand, Hong Kong, and Indonesia, acquired on July 1, 2022. Effective July 1, 2023, the Life Insurance segment includes 100 percent of the results of Huatai Group's life and asset management business as required under consolidation accounting. We previously included our share of Huatai results based on our equity method investment within Other (income) expense. The Life Insurance segment also includes Chubb Tempest Life Re (Chubb Life Re), and the North American supplemental A&H and life business of Combined Insurance. Results for the years ended December 31, 2022 and 2021, are adjusted to reflect the adoption of LDTI. Refer to Note 1 x).

NM - not meaningful

Net premiums written increased $1,857 million in 2023, or $1,843 million on a constant-dollar basis.

For our International Life operations, net premiums written increased 73.8 percent, of which 45.2 percentage points is from the acquisition of Cigna's business in Asia, effective July 1, 2022, and 10.3 percentage points from the consolidation of Huatai Group's life insurance business, effective July 1, 2023. The remaining 18.3 percentage points relates to underlying growth in existing business from Latin America bank distribution channels, and Asia agency and partnership channels.

Net premiums written in our North American Combined Insurance business declined 4.4 percent in 2023, as growth in the supplemental A&H business was more than offset by the non-renewal of a large program.

Deposits

The following table presents deposits collected on universal life and investment contracts:

Deposits collected on universal life and investment contracts (life deposits) are not reflected as revenues in our Consolidated statements of operations in accordance with U.S. GAAP. New life deposits are an important component of production, and although they do not significantly affect current period income from operations, they are key to our efforts to grow our business. Life deposits collected decreased $210 million, or $127 million on a constant-dollar basis, in 2023, primarily in Taiwan, reflecting challenging market conditions for investment linked products due to financial market volatility and a rapid increase in interest rates. The decrease in collections was partially offset by deposit growth from the consolidation of Huatai Group.

Life Insurance segment income

Life Insurance segment income increased $388 million in 2023, reflectingthe acquisition of Cigna's business in Asia and the consolidation of Huatai as noted above, and higher net investment income due to a higher invested asset base and fund dividends. In addition, other (income) expense increased $85 million in 2023, primarily reflecting the consolidation of Huatai’s asset management business which added $48 million mainly through management fees.

Corporate results primarily include the results of our non-insurance companies, income and expenses not attributable to reportable segments and loss and loss expenses of asbestos and environmental (A&E) liabilities and certain other non-A&E run-off exposures, including molestation. Effective July 1, 2023, 100 percent of Huatai Group’s non-insurance operations results, comprising real estate and holding company activity, are included in Corporate. Results for the years ended December 31, 2022 and 2021 are adjusted to reflect the adoption of LDTI. Refer to Note 1 x).

Losses and loss expenses decreased in 2023 primarily due to lower unfavorable prior period development for molestation claims partially offset by higher legacy asbestos and environmental claims.

Administrative expenses increased in 2023, primarily due to increased spending to support digital growth initiatives.

Cigna integration expenses of $69 million for 2023 principally comprised legal and professional fees and all other costs directly related to the integration activities of the Cigna acquisition. These expenses are one-time in nature and are not related to the on-going business activities of the segments. The Chief Executive Officer does not manage segment results or allocate resources to segments when considering these costs and they are therefore excluded from our definition of segment income.

Refer to the respective sections that follow for a discussion of Net realized gains (losses), Net investment income (loss), Amortization of purchased intangibles, and Income tax expense (benefit). Refer to Notes 11 and 18 to the Consolidated Financial Statements for additional information on Market risk benefits gains (losses) and Other (income) expense, respectively.