Chubb Ltd
For the period ended Jun 30, 2024. Filed Jul 26, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Jul 26, 2024
CB$365.02-1.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-04-26.
0000896159-24-000006
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsForward-Looking StatementsOverviewConsolidated Operating ResultsSegment Operating ResultsNet Realized and Unrealized Gains (Losses)Effective Income Tax RateNon-GAAP ReconciliationAmortization of Purchased Intangibles and Other AmortizationNet Investment IncomeInterest ExpenseInvestmentsUnpaid Losses and Loss ExpensesAsbestos and Environmental (A&E)Fair Value MeasurementsCatastrophe ManagementGlobal Property Catastrophe Reinsurance ProgramCapital ResourcesLiquidityInformation Provided In Connection With Outstanding Debt of SubsidiariesCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-07-26.
0000896159-24-000010
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsForward-Looking StatementsOverviewConsolidated Operating ResultsSegment Operating ResultsNet Realized and Unrealized Gains (Losses)Effective Income Tax RateNon-GAAP ReconciliationAmortization of Purchased Intangibles and Other AmortizationNet Investment IncomeInvestmentsUnpaid Losses and Loss ExpensesAsbestos and Environmental (A&E)Fair Value MeasurementsCatastrophe ManagementGlobal Property Catastrophe Reinsurance ProgramCapital ResourcesLiquidityInformation Provided In Connection With Outstanding Debt of SubsidiariesThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 248 previous paragraphs and 241 current paragraphs.
145 unchanged; 78 reworded; 18 added; 23 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 39 previous and 43 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (18)
Current report
•Consolidated net premiums earned were $12.3 billion, up 11.7 percent, or 12.3 percent in constant dollars.
Current report
•Operating cash flow was $4.1 billion compared with $2.5 billion in the prior year period.
Current report
Pre-tax net favorable PPD for the three months ended June 30, 2024, was $285 million in our active companies with 35 percent in long-tail lines, primarily in workers' compensation lines, partially offset by unfavorable development in commercial auto liability, and 65 percent in short-tail lines, primarily in marine and property lines. Our corporate run-off portfolio had adverse development of $93 million, which included molestation-related claims development of approximately $60 million.
Current report
Pre-tax net favorable PPD for the six months ended June 30, 2024, was $501 million in our active companies, principally in short-tail property and marine lines. Our corporate run-off portfolio had adverse development of $102 million, primarily for molestation-related claims development.
Current report
Pre-tax net favorable PPD for the three months ended June 30, 2023, was $200 million, including adverse development of $49 million for molestation-related claims development.
Current report
The P&C combined ratio increased for the three and six months ended June 30, 2024, reflecting higher catastrophe losses and a lower impact from favorable prior period development.
Current report
Policy benefits were $1,219 million and $830 million for the three months ended June 30, 2024 and 2023, respectively, and $2,399 million and $1,627 million for the six months ended June 30, 2024 and 2023, respectively. The increase in Policy benefits is primarily due to the consolidation of Huatai Group.
Current report
Net premiums earned increased $294 million, or 6.4 percent, and $805 million, or 9.0 percent, for the three and six months ended June 30, 2024, respectively, reflecting the growth in net premiums written described above.
Current report
The combined ratio increased for the three and six months ended June 30, 2024, reflecting higher catastrophe losses and lower favorable prior period development.
Current report
Net premiums earned increased $155 million, or 11.5 percent, and $306 million, or 11.5 percent, for the three and six months ended June 30, 2024, respectively, reflecting the growth in net premiums written described above.
Current report
The combined ratio improved for the three and six months ended June 30, 2024, reflecting higher favorable prior period development and a lower impact from catastrophe losses.
Current report
The combined ratio increased for the three months ended June 30, 2024, reflecting higher catastrophe losses and lower favorable prior period development. The combined ratio improved for the six months ended June 30, 2024, reflecting higher favorable prior period development, partially offset by higher catastrophe losses.
Current report
The CAY combined ratio excluding catastrophe losses increased for the three months ended June 30, 2024, primarily due to the unfavorable year-over-year impact of our crop commodity price hedge activity, which produced a loss this quarter versus a gain last year. The CAY combined ratio excluding catastrophe losses increased for the six months ended June 30, 2024, due to the crop commodity price hedge activity mentioned above. The policy acquisition cost ratio increased for the three months ended June 30, 2024, reflecting higher net premiums earned from our Agriculture P&C business that has a higher policy acquisition cost ratio.
Current report
•2024: Rio Grande storms, and International weather-related events.
Current report
Net premiums earned increased $439 million and $851 million, or $465 million and $867 million on a constant-dollar basis, for the three and six months ended June 30, 2024, respectively, reflecting the increase in net premiums written described above.
Current report
Net premiums written increased $118 million and $200 million for the three and six months ended June 30, 2024, respectively, primarily reflecting continued growth driven by strong new business. The increase in premium was most notably in property and casualty lines, which included a large one-off structured transaction in the current quarter. This transaction benefited growth by 12.5 and 6.5 percentage points for the three and six months ended June 30, 2024, respectively.
Current report
The combined ratio increased for the three and six months ended June 30, 2024, primarily reflecting the impact of lower favorable prior period development, as a percentage of net premiums earned. The CAY combined ratio excluding catastrophe losses increased for the three months ended June 30, 2024, primarily due to the impact of the large structured transaction, partially offset by growth in property lines, resulting in a lower expected loss ratio. The CAY combined ratio excluding catastrophe losses improved for the six months ended June 30, 2024, primarily due to favorable market conditions in catastrophe exposed property lines and favorable impact of higher net premiums earned on the administrative expense ratio, partially offset by the impact of the large structured transaction described above.
Current report
Net premiums written increased $310 million and $650 million, or $342 million and $716 million on a constant-dollar basis, for the three and six months ended June 30, 2024, respectively.
Removed paragraphs (23)
Previous report
•Consolidated net premiums earned were $11.6 billion, up 14.2 percent, or 14.5 percent in constant dollars.
Previous report
•Operating cash flow was $3.2 billion compared with $2.3 billion in the prior year period.
Previous report
Pre-tax net favorable PPD for the three months ended March 31, 2024, was $207 million including adverse development of $104 million in long-tail lines, principally in large account commercial excess and umbrella lines. Net favorable development of $311 million in short-tail lines is primarily in property and credit-related lines.
Previous report
The loss and loss expense ratio improved for the three months ended March 31, 2024, reflecting lower catastrophe losses, and higher favorable prior period development. The CAY loss ratio excluding catastrophe losses increased for the three months ended March 31, 2024, primarily from the unfavorable impact of a large structured transaction in North America and higher loss trends in certain casualty lines, partially offset by a higher percentage of net premiums earned from property lines, and the consolidation of Huatai Group's P&C business effective July 1, 2023, which has a lower loss ratio.
Previous report
The policy acquisition cost ratio increased for the three months ended March 31, 2024, primarily due to higher ceded commissions and the impact of the consolidation of Huatai, partially offset by the favorable impact of the large structured transaction written in the current year that generated minimal acquisition expenses.
Previous report
The administrative expense ratio was relatively flat for the three months ended March 31, 2024, as the impact of increased spending to support growth and the consolidation of Huatai were offset by the favorable impact of higher net premiums earned.
Previous report
For the three months ended March 31, 2024 and 2023, Policy benefits were $1,180 million and $797 million, respectively, which include (gains) losses from fair value changes in separate account liabilities that do not qualify for separate account reporting under U.S. GAAP of $10 million and $(25) million, respectively. The offsetting movements of these liabilities are recorded in Other (income) expense on the Consolidated statements of operations. Excluding the separate account gains and losses, Policy benefits were $1,170 million and $822 million for the three months ended March 31, 2024 and 2023, respectively.
Previous report
The policy acquisition cost ratio and the administrative expense ratio were relatively flat for the three months ended March 31, 2024, reflecting the favorable impact of the large structured transaction in the current year that generated minimal expenses, partially offset by a lower ceded commission benefit in the current year.
Previous report
Net premiums earned increased $151 million, or 11.4 percent, for the three months ended March 31, 2024, reflecting the growth in net premiums written described above.
Previous report
The policy acquisition cost ratio and the administrative expense ratio were relatively flat for the three months ended March 31, 2024.
Previous report
The loss and loss expense ratio improved for the three months ended March 31, 2024, reflecting higher favorable prior period development and lower catastrophe losses. The CAY loss ratio excluding catastrophe losses improved for the three months ended March 31, 2024, due to higher net premiums earned from our Agriculture P&C business that has a lower loss ratio, and earned rate exceeding loss trend in that business.
Previous report
The policy acquisition cost ratio increased for the three months ended March 31, 2024, reflecting the impact of the government profit share adjustment and agent commission adjustments relating to the 2023 crop year, and higher net premiums earned from our Agriculture P&C business that has a higher policy acquisition cost ratio.
Previous report
•2024: International weather-related events.
Previous report
Net premiums earned increased $412 million, or $402 million on a constant-dollar basis, for the three months ended March 31, 2024, reflecting the increase in net premiums written described above.
Previous report
Refer to Note 7 in the Consolidated Financial Statements for detail on prior period development.
Previous report
Net premiums written increased $82 million for the three months ended March 31, 2024, primarily reflecting continued growth, mainly in catastrophe exposed property lines.
Previous report
Net premiums earned increased $51 million for the three months ended March 31, 2024, primarily reflecting the increase in net premiums written described above.
Previous report
The loss and loss expense ratio increased for the three months ended March 31, 2024, mainly reflecting unfavorable prior period development compared with favorable development in the prior year. The CAY loss ratio excluding catastrophe losses improved for the three months ended March 31, 2024, primarily from a shift in the mix of business towards property lines, which generally has lower loss ratios excluding catastrophe losses.
Previous report
The policy acquisition cost ratio increased for the three months ended March 31, 2024, primarily due to a shift in the mix of business and the impact of a treaty written in the prior year with a lower acquisition cost ratio.
Previous report
Net premiums written increased $340 million, or $374 million on a constant-dollar basis, for the three months ended March 31, 2024.
Previous report
Pre-tax net realized losses of $101 million for the three months ended March 31, 2024 mainly comprised foreign exchange losses.
Previous report
Interest expense for the three months ended March 31, 2024, was $178 million comprising $183 million related to fixed expenses on existing debt obligations and variable expenses, and a $5 million benefit related to the amortization of the fair value of debt assumed in the Chubb Corp acquisition. The variable expenses relate to fees from the usage of certain facilities, including letters of credit, and interest on held collateral and repurchase agreements. Based on our existing debt obligations, including the new $1 billion of 5 percent senior notes issued on March 7, 2024, and projected variable expenses, we expect pre-tax interest expense to be approximately $561 million for the remainder of 2024, or $744 million for the full year. We also expect a $16 million benefit related to the amortization of the fair value of debt assumed in the Chubb Corp acquisition for the remainder of 2024. For more information on our debt obligations, refer to Note 11 to the Consolidated Financial Statements herein, and Note 13 to the Consolidated Financial Statements, under Item 8 in our 2023 Form 10-K.
Reworded paragraphs (78)
Previous wording
The following is a discussion of our results of operations, financial condition, and liquidity and capital resources as of and for the three months ended March 31, 2024.
Current wording
The following is a discussion of our results of operations, financial condition, and liquidity and capital resources as of and for the three and six months ended June 30, 2024.
Previous wording
Chubb Limited is the Swiss-incorporated holding company of the Chubb Group of Companies. Chubb Limited, which is headquartered in Zurich, Switzerland, and its direct and indirect subsidiaries (collectively, the Chubb Group of Companies, Chubb, we, us, or our) are a global insurance and reinsurance organization, serving the needs of a diverse group of clients worldwide. At March 31, 2024, we had total assets of $235 billion and total Chubb shareholders’ equity, which excludes noncontrolling interests, of $60.5 billion. Chubb was incorporated in 1985 at which time it opened its first business office in Bermuda and continues to maintain operations in Bermuda. 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. For more information on our segments refer to “Segment Information” under Item 1 in our 2023 Form 10-K.
Current wording
Chubb Limited is the Swiss-incorporated holding company of the Chubb Group of Companies. Chubb Limited, which is headquartered in Zurich, Switzerland, and its direct and indirect subsidiaries (collectively, the Chubb Group of Companies, Chubb, we, us, or our) are a global insurance and reinsurance organization, serving the needs of a diverse group of clients worldwide. At June 30, 2024, we had total assets of $239 billion and total Chubb shareholders’ equity, which excludes noncontrolling interests, of $61 billion. Chubb was incorporated in 1985 at which time it opened its first business office in Bermuda and continues to maintain operations in Bermuda. 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. For more information on our segments refer to “Segment Information” under Item 1 in our 2023 Form 10-K.
Previous wording
On July 1, 2023, we completed the acquisition of a controlling majority interest of Huatai Group. For the three months ended March 31, 2024, the results of operations of Huatai Group are reported at 100 percent in our consolidated results starting from the acquisition date, with amounts attributable to shareholders other than Chubb reflected under Noncontrolling interests. Huatai Group's life and asset management businesses are included in the Life Insurance segment, and Huatai Group's P&C business is included in the Overseas General Insurance segment. Results for Huatai Group's non-insurance operations, comprising real estate and holding company activity, are included in Corporate.
Current wording
On July 1, 2023, we completed the acquisition of a controlling majority interest of Huatai Group. For the three and six months ended June 30, 2024, the results of operations of Huatai Group are reported at 100 percent in our consolidated results starting from the acquisition date, with amounts attributable to shareholders other than Chubb reflected under Noncontrolling interests. Huatai Group's life and asset management businesses are included in the Life Insurance segment, and Huatai Group's P&C business is included in the Overseas General Insurance segment. Results for Huatai Group's non-insurance operations, comprising real estate and holding company activity, are included in Corporate.
Previous wording
Consolidated Operating Results – Three Months Ended March 31, 2024 and 2023
Current wording
Consolidated Operating Results – Three and Six Months Ended June 30, 2024 and 2023
Previous wording
•Net income attributable to Chubb was $2.1 billion compared with $1.9 billion in the prior year period. Net income in the current quarter was driven by strong P&C underwriting results, including growth in net premiums earned and net investment income. Net income included two discrete items: a deferred tax benefit of $55 million related to the Bermuda tax law enacted in December 2023, partially offset by a contribution to the Chubb Charitable Foundation of $30 million ($24 million after-tax).
Current wording
•Net income attributable to Chubb was $2.2 billion compared with $1.8 billion in the prior year period. Net income in the current quarter was driven by strong underwriting results and record net investment income.
Previous wording
•Consolidated net premiums written were $12.2 billion, up 14.1 percent. P&C net premiums written increased 12.4 percent, with commercial insurance up 10.0 percent and consumer insurance up 19.3 percent. Life Insurance segment net premiums written increased 26.3 percent due to the impact of the consolidation of Huatai Group on July 1, 2023.
Current wording
•Consolidated net premiums written were $13.4 billion, up 11.8 percent, or 12.3 percent in constant dollars. P&C net premiums written increased 10.3 percent, or 10.6 percent in constant dollars, with commercial insurance up 8.8 percent and consumer insurance up 15.9 percent. Life Insurance segment net premiums written increased 24.5 percent, or 27.6 percent in constant dollars, reflecting the impact of the consolidation of Huatai Group on July 1, 2023, and growth in existing business.
Previous wording
•Pre-tax net investment income was $1.4 billion compared with $1.1 billion in the prior year period, primarily due to strong operating cash flow, higher reinvestment rates on fixed maturities, and the consolidation of Huatai Group.
Current wording
•Pre-tax net investment income was a record $1.5 billion compared with $1.1 billion in the prior year period, primarily due to strong operating cash flow at higher reinvestment rates on fixed maturities, and the consolidation of Huatai Group.
Previous wording
•Total pre-tax and after-tax catastrophe losses, net of reinsurance and including reinstatement premiums, were $435 million (4.4 percentage points of the P&C combined ratio) and $347 million, respectively, compared with $458 million (5.1 percentage points of the P&C combined ratio) and $382 million, respectively, in the prior year period.
Current wording
•Total pre-tax and after-tax catastrophe losses, net of reinsurance and including reinstatement premiums, were $580 million (5.4 percentage points of the P&C combined ratio) and $482 million, respectively, compared with $400 million (4.1 percentage points of the P&C combined ratio) and $319 million, respectively, in the prior year period.
Previous wording
•Total pre-tax and after-tax favorable prior period development were $207 million and $168 million, respectively, compared with $196 million and $149 million, respectively, in the prior year period.
Current wording
•Total pre-tax and after-tax favorable prior period development were $192 million and $167 million, respectively, compared with $200 million and $155 million, respectively, in the prior year period.
Previous wording
•The P&C combined ratio was 86.0 percent compared with 86.3 percent in the prior year period. The current year ratio improved primarily due to lower catastrophe losses and higher favorable prior period development. The P&C current accident year (CAY) combined ratio excluding catastrophe losses was 83.7 percent compared with 83.4 percent in the prior year period.
Current wording
•The P&C combined ratio was 86.8 percent compared with 85.4 percent in the prior year period. The current year ratio increased primarily due to higher catastrophe losses and lower favorable prior period development. The P&C current accident year (CAY) combined ratio excluding catastrophe losses was 83.2 percent compared with 83.3 percent in the prior year period.
Previous wording
•Chubb shareholders' equity increased $1.0 billion in the quarter, primarily from net income attributable to Chubb of $2.1 billion, partially offset by total capital returned to shareholders of $666 million and net unrealized losses on our investment portfolio of $648 million, principally due to the mark-to-market impact in the fixed-income portfolio. Total capital returned to shareholders comprises dividends of $350 million, and share repurchases of $316 million at an average purchase price of $258.75 per share.
Current wording
•Chubb shareholders' equity increased $503 million in the quarter, primarily from net income attributable to Chubb of $2.2 billion, partially offset by total capital returned to shareholders of $939 million, net unrealized losses of $478 million related to cumulative foreign exchange translation, and net unrealized losses on our investment portfolio of $476 million, reflecting the mark-to-market impact in the fixed-income portfolio. Total capital returned to shareholders comprises share repurchases of $570 million at an average purchase price of $253.02 per share, and dividends of $369 million.
Previous wording
The increase in consolidated net premiums written for the three months ended March 31, 2024, reflects growth across most product lines driven by strong premium retention, including rate and exposure increases, and strong new business. The consolidation of Huatai Group's life and P&C businesses contributed $559 million, or 5.0 percentage points, for the three months ended March 31, 2024.
Current wording
The increase in consolidated net premiums written for the three and six months ended June 30, 2024, reflects growth across most product lines driven by strong premium retention, including rate and exposure increases, and strong new business. The consolidation of Huatai Group's life and P&C businesses contributed $445 million, or 3.6 percentage points, and $1,004 million, or 4.2 percentage points, for the three and six months ended June 30, 2024, respectively.
Previous wording
•Commercial casualty grew globally due to strong retention, including both rate and exposure increases, and strong new business which included a large structured transaction in North America for the current year.
Current wording
•Commercial casualty grew globally due to strong retention, including both rate and exposure increases, and strong new business.
Previous wording
•Financial lines declined in the quarter due to lost business due to a competitive market environment and lower retention.
Current wording
•Financial lines declined due to a competitive market environment and lower retention.
Previous wording
•Agriculture declined primarily due to a return of premium under the U.S. government risk-sharing formula related to the 2023 crop year and lower commodity prices in the current year.
Current wording
•Agriculture declined primarily due to lower commodity prices in the current year. The decrease in net premiums written for the six months ended June 30, 2024, also reflects a return of premium under the U.S. government risk-sharing formula related to the 2023 crop year.
Previous wording
•Personal lines grew globally due to strong new business and retention, including both rate and exposure increases, and the consolidation of Huatai.
Current wording
•Personal lines grew globally due to new business and renewal retention, as well as increases in both rate and exposure, and the consolidation of Huatai.
Previous wording
•Global A&H – P&C grew in Europe and Asia, with Asia benefiting from the consolidation of Huatai.
Current wording
•Global A&H – P&C grew in Europe and Asia, with Asia partially benefiting from the consolidation of Huatai.
Previous wording
•Reinsurance lines reflected continued growth, mainly in property lines.
Current wording
•Reinsurance lines reflected continued growth, mainly in property lines and a large one-off structured transaction in the three months ended June 30, 2024.
Previous wording
•Life Insurance grew principally due to the consolidation of Huatai Group and underlying growth in existing business in Asia. The consolidation of Huatai Group contributed $265.8 million, or 20.6 percentage points, to growth.
Current wording
•Life Insurance grew due to the consolidation of Huatai Group, and organic growth in Asia, Latin America, and in Combined Insurance North America. The consolidation of Huatai Group contributed $219 million, or 17.3 percentage points, and $485 million, or 18.9 percentage points, to growth for the three and six months ended June 30, 2024, respectively.
Previous wording
Net premiums earned for short-duration contracts, typically P&C contracts, generally reflect the portion of net premiums written that was recorded as revenues for the period as the exposure periods expire. Net premiums earned for long-duration contracts, typically traditional life contracts, generally are recognized as earned when due from policyholders. For the three months ended March 31, 2024, net premiums earned increased $1.4 billion, up 14.2 percent, or 14.5 percent in constant dollars. P&C net premiums earned increased 12.3 percent, or 12.2 percent in constant dollars, comprising growth in commercial andconsumer lines of 11.5 percent and 14.2 percent, respectively.
Current wording
Net premiums earned for short-duration contracts, typically P&C contracts, generally reflect the portion of net premiums written that was recorded as revenues for the period as the exposure periods expire. Net premiums earned for long-duration contracts, typically traditional life contracts, generally are recognized as earned when due from policyholders. For the three months ended June 30, 2024, net premiums earned increased $1.3 billion, up 11.7 percent, or 12.3 percent in constant dollars. P&C net premiums earned increased 10.1 percent, or 10.4 percent in constant dollars, comprising growth in commercial insurance andconsumer insurance of 8.8 percent and 15.1 percent, respectively. For the six months ended June 30, 2024, net premiums earned increased $2.7 billion, up 12.9 percent, or 13.4 percent in constant dollars. P&C net premiums earned increased 11.1 percent, or 11.3 percent in constant dollars, comprising growth in commercial insurance andconsumer insurance of 10.1 percent and 14.6 percent, respectively.
Previous wording
•2024: Severe weather-related events in the U.S and internationally.
Current wording
•2024: Severe weather-related events in the U.S. and internationally, including Rio Grande storms.
Previous wording
•2023: Severe weather-related events in the U.S. and internationally; and New Zealand storms.
Current wording
•2023: Severe weather-related events in the U.S. and internationally, including New Zealand storms.
Previous wording
Pre-tax net favorable PPD for the three months ended March 31, 2023, was $196 million including adverse development of $19 million in long-tail lines, principally from accident years 2013 through 2017. The net favorable development of $215 million in short-tail lines is primarily in surety and A&H lines.
Current wording
Pre-tax net favorable PPD for the six months ended June 30, 2023, was $396 million, including adverse development of $49 million for molestation claims. Excluding the adverse development, we had net favorable development of $445 million with 23 percent in long-tail lines, principally from accident years 2011 through 2019, and 77 percent in short-tail lines, primarily in A&H and surety lines.
Previous wording
The administrative expense ratio improved for the three months ended March 31, 2024, reflecting the favorable impact of higher net premiums earned, as described above.
Current wording
The P&C CAY combined ratio excluding catastrophe losses was relatively flat for the three and six months ended June 30, 2024, primarily reflecting the favorable impact of higher net premiums earned and a higher percentage of net premiums earned from property lines and homeowners. These factors were substantially offset by higher loss trends in certain casualty lines, price changes not keeping pace with loss trends in financial lines, and increased spending to support growth.
Previous wording
Policy benefits represent losses on contracts classified as long-duration and generally include accident and supplemental health products, term and whole life products, endowment products, and annuities. Policy benefits for the three months ended March 31, 2024, include the results of Huatai Group. Refer to the Life Insurance segment operating results section for further discussion.
Current wording
Policy benefits represent losses on contracts classified as long-duration and generally include accident and supplemental health products, term and whole life products, endowment products, and annuities. Policy benefits include (gains) losses from fair value changes in separate account liabilities that do not qualify for separate account treatment under U.S. GAAP. The offsetting movements of these liabilities are recorded in Other (income) expense in the Consolidated statements of operations. In addition, Policy benefits include the impact on the liabilities from (gains) losses on investment portfolios supporting certain participating policies. The offsetting movements of these liabilities are recorded in Realized gains (losses) in the Consolidated statements of operations. Policy benefits for the three and six months ended June 30, 2024, include the results of Huatai Group. Refer to the Life Insurance segment operating results section for further discussion.
Previous wording
Refer to the respective sections that follow for a discussion of Net investment income, Other (income) expense, Net realized gains (losses), Interest expense, Amortization of purchased intangibles, and Income tax expense. The increase in Policy benefits for 2024 is primarily due to the consolidation of Huatai Group.
Current wording
Refer to the respective sections that follow for a discussion of Net investment income, Other (income) expense, Net realized gains (losses), Interest expense, Amortization of purchased intangibles, and Income tax expense.
Previous wording
Segment Operating Results – Three Months Ended March 31, 2024 and 2023
Current wording
Segment Operating Results – Three and Six Months Ended June 30, 2024 and 2023
Previous wording
Net premiums written increased $401 million, or 9.4 percent, for the three months ended March 31, 2024, reflecting strong new business and retention, including rate and exposure increases. The increase in premiums was across most lines of business, most notably in property lines and casualty lines, which included a large structured transaction in the current year. This growth was partially offset by declines in financial lines, reflecting a competitive market environment and lower retention,
Current wording
Net premiums written increased $346 million, or 6.7 percent, and $747 million, or 7.9 percent, for the three and six months ended June 30, 2024, respectively, reflecting strong new business and retention, including rate and exposure increases. The increase in premiums was across most lines of business, most notably in property and casualty lines, partially offset by declines in financial lines, reflecting a competitive market environment and lower retention, and planned corrective underwriting actions in Major Accounts primary and excess casualty that adversely impacted growth.
Previous wording
The loss and loss expense ratio increased for the three months ended March 31, 2024, reflecting higher catastrophe losses and lower favorable prior period development. The CAY loss ratio excluding catastrophe losses increased for the three months ended March 31, 2024, driven by the unfavorable impact of the large structured transaction and higher loss trends in certain casualty lines, partially offset by a higher percentage of net premiums earned from property lines.
Current wording
The CAY combined ratio excluding catastrophe losses increased for the six months ended June 30, 2024, reflecting higher loss trends in certain casualty lines, which were mostly offset by a higher percentage of net premiums earned from property lines.
Previous wording
Net premiums written increased $160 million, or 12.3 percent, for the three months ended March 31, 2024, driven by strong new business and retention, including positive rate and exposure increases in all lines.
Current wording
Net premiums written increased $195 million, or 12.3 percent, and $355 million, or 12.3 percent, for the three and six months ended June 30, 2024, respectively, driven by strong new business and retention, including positive rate and exposure increases in all lines.
Previous wording
The loss and loss expense ratio improved for the three months ended March 31, 2024, reflecting a lower impact from catastrophe losses and favorable prior period development, compared with unfavorable development in the prior year period. The CAY loss ratio excluding catastrophe losses improved for the three months ended March 31, 2024, primarily reflecting an improvement in homeowners from earned rate and exposure growth, partly offset by an increase in excess liability and auto loss trends.
Current wording
The CAY combined ratio excluding catastrophe losses improved for the three and six months ended June 30, 2024, primarily reflecting an improvement in homeowners from earned rate and exposure growth, and a higher percentage of net premiums earned from homeowners, partly offset by an increase in excess liability and auto loss trends. Additionally, the improvement includes lower acquisition expenses due to commission reductions in our auto and excess lines, and a higher percentage of net premiums earned from excess and surplus homeowners lines, which carry a lower acquisition cost.
Previous wording
Catastrophe losses through both March 31, 2024 and 2023, were primarily from U.S. winter storm losses, flooding, hail, tornadoes, and wind events.
Current wording
Catastrophe losses through both June 30, 2024 and 2023, were primarily from U.S. flooding, hail, tornadoes, and wind events.
Previous wording
Net premiums written decreased $44 million, or 15.0 percent, for the three months ended March 31, 2024, primarily due to a return of premium of $41 million under the U.S. government risk-sharing formula related to the 2023 crop year and lower commodity prices in the current year. Under the profit-sharing agreement, we ceded more premium due to lower losses experienced in certain states. The decrease was partially offset by strong new business and rate increases in our Agriculture P&C business.
Current wording
Net premiums written decreased $9 million, or 1.2 percent, and $53 million, or 5.0 percent, for the three and six months ended June 30, 2024, primarily due lower commodity prices in the current year. The decrease in net premiums written for the six months ended June 30, 2024, also reflects a return of premium of $41 million under the U.S. government risk-sharing formula related to the 2023 crop year. Under the profit-sharing agreement, we ceded more premium due to lower losses experienced in certain states. The decrease was partially offset by strong new business and rate increases in our Agriculture P&C business.
Previous wording
Net premiums earned decreased $31 million, or 19.4 percent, for the three months ended March 31, 2024, reflecting the factors described above.
Current wording
Net premiums earned decreased $9 million, or 1.5 percent, and $40 million, or 5.1 percent, for the three and six months ended June 30, 2024, reflecting the factors described above.
Previous wording
•2023: Storms in New Zealand and international weather-related events.
Current wording
•2023: Storms in New Zealand, flooding in Italy, and international weather-related events.
Previous wording
Overall, net premiums written increased $572 million, or $549 million on a constant dollar basis, for the three months ended March 31, 2024 reflecting growth in commercial lines of 12.2 percent, or 11.4 percent on a constant-dollar basis, and growth in consumer lines of 27.1 percent, or 26.2 percent on a constant-dollar basis.
Current wording
Overall, net premiums written increased $449 million and $1,021 million, or $473 million and $1,022 million on a constant dollar basis, for the three and six months ended June 30, 2024, respectively, reflecting growth in commercial lines of 13.3 percent and 12.7 percent, or 13.9 percent and 12.5 percent on a constant-dollar basis, respectively, and growth in consumer lines of 19.1 percent and 23.1 percent, or 20.7 percent and 23.5 percent on a constant-dollar basis, respectively.
Previous wording
Europe increased for the three months ended March 31, 2024, supported by both our wholesale and retail divisions. The growth in commercial lines was driven by higher new business, and positive rate increases, primarily in commercial property and casualty lines. Consumer lines increased primarily due to new business from growth in our digital channels, including travel, and high net worth.
Current wording
Our European division increased for the three and six months ended June 30, 2024, supported by both our wholesale and retail divisions. The growth in commercial lines was driven by higher new business, and positive rate increases, primarily in commercial property and casualty lines. Consumer lines increased primarily due to new business growth in A&H and personal lines.
Previous wording
Asia increased for the three months ended March 31, 2024, reflecting the consolidation of Huatai Group's P&C business effective July 1, 2023, as well as higher new business, higher retention and positive rate increases in commercial lines. Consumer lines had strong growth in Southeast Asian countries with growth in new business for both A&H and personal lines, fueled in part by new digital distribution.
Current wording
Asia increased for the three and six months ended June 30, 2024, reflecting the consolidation of Huatai Group's P&C business effective July 1, 2023, as well as higher new business, higher retention and positive rate increases in commercial lines. Consumer lines had strong growth in Asia with growth in new business for both A&H and personal lines.
Previous wording
Latin America increased for the three months ended March 31, 2024, reflecting growth in commercial lines driven by growth in new business and positive rate increases across property and casualty lines. Our personal lines business, primarily automobile in Mexico, also continues to have strong growth.
Current wording
Latin America increased for the three and six months ended June 30, 2024, reflecting growth in commercial lines driven by growth in new business and positive rate increases across property and casualty lines. Our personal lines business including automobile in Mexico, also continues to have strong growth.
Previous wording
The combined ratio improved for the three months ended March 31, 2024, primarily reflecting lower catastrophe losses. The CAY combined ratio excluding catastrophe losses increased, principally related to the consolidation of Huatai.
Current wording
The combined ratio increased for the three months ended June 30, 2024, primarily reflecting higher catastrophe losses. The combined ratio increased for the six months ended June 30, 2024, primarily reflecting lower favorable prior period development and higher catastrophe losses. The CAY combined ratio excluding catastrophe losses increased for the six months ended June 30, 2024, principally related to the consolidation of Huatai.
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Previous report — wording carried elsewhere
and planned corrective underwriting actions in Major Accounts primary and excess casualty.
Previous report — wording carried elsewhere
Committee, comprising senior executives, including our Chief Financial Officer, our Chief Risk Officer, our Chief Investment Officer, and our Treasurer. We also have well-established, strict contractual investment rules requiring managers to maintain highly diversified exposures to individual issuers and closely monitor investment manager compliance with portfolio guidelines.