Chubb Ltd

Segment Operating Results – Three and Six Months Ended June 30, 2024 and 2023

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.

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).

Catastrophe losses through both June 30, 2024 and 2023, were primarily from U.S. flooding, hail, tornadoes, wind events, and winter storm losses.

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.

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.

The combined ratio increased for the three and six months ended June 30, 2024, reflecting higher catastrophe losses and lower favorable prior period development.

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.

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.

NM - Not meaningful

Catastrophe losses through both June 30, 2024 and 2023, were primarily from U.S. flooding, hail, tornadoes, wind events, and winter storm losses.

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.

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.

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.

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.

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 Agriculture P&C business.

NM - Not meaningful

Catastrophe losses through both June 30, 2024 and 2023, were primarily from U.S. flooding, hail, tornadoes, and wind events.

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.

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.

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.

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.

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.

Net Catastrophe Losses and Prior Period Development

Catastrophe losses through June 30, 2024 and 2023, were primarily from the following events:

•2024: Rio Grande storms, and International weather-related events.

•2023: Storms in New Zealand, flooding in Italy, and international weather-related events.

(1)2024 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 $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.

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.

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.

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.

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.

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.

Global Reinsurance

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.

Net Catastrophe Losses and Prior Period Development

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.

Net premiums earned increased $102 million and $153 million for the three and six months ended June 30, 2024, respectively, reflecting the increase in net premiums written described above, including the large structured transaction, which was fully earned when written.

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.

Life Insurance

The Life Insurance segment comprises our international life operations. 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.

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.

For our international life operations, net premiums written increased 27.8 percent and 29.6 percent for the three and six months ended June 30, 2024, substantially due to the consolidation of Huatai Group's life business which contributed $219 million and $485 million or 21.3 and 23.4 percentage points, respectively. The remaining increase in net premiums written is primarily driven by growth in North and Southeast Asia as well as by higher new business in Latin America.

Net premiums written in our North American Combined Insurance business increased 11.8 percent and 8.6 percent, for the three and six months ended June 30, 2024, respectively, due to growth in its worksite business of 28.7 percent and 24.6 percent partially 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 increased $147 million and $438 million for the three and six months ended June 30, 2024, respectively, primarily from the consolidation of Huatai Life business.

Life Insurance segment income

Life Insurance segment income increased $22 million and $46 million for the three and six months ended June 30, 2024, reflecting the growth in premiums described above, as well as higher net investment income from fund investments and fixed income yield.

Corporate

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.

Administrative expenses increased $4 million and $14 million for the three and six months ended June 30, 2024, respectively, primarily due to increased spending to support growth.

Cigna integration expenses 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 16 to the Consolidated Financial Statements for additional information on Market risk benefits gains (losses) and Other (income) expense, respectively.