Chubb Ltd. Files Q2 2024 10-Q Financial Report

TL;DR

Chubb's Q2 2024 10-Q is in: financials look solid, check revenues & OCI.

AI Summary

Chubb Ltd. filed its 10-Q for the period ending June 30, 2024. The filing provides financial details for the second quarter of 2024, including revenues and other comprehensive income data. The company, incorporated in V8 with its principal office in Zurich, Switzerland, operates in the Fire, Marine & Casualty Insurance sector.

Why It Matters

This filing provides investors and analysts with the latest financial performance data for Chubb Ltd., crucial for understanding the company's current health and future prospects in the insurance market.

Risk Assessment

Risk Level: low — This is a routine quarterly financial filing with no immediate red flags or significant new risks disclosed.

Key Numbers

• 2024 Q2 — Reporting Period (Financials for the second quarter of 2024 are detailed.)

Key Players & Entities

• Chubb Ltd. (company) — Filer of the 10-Q
• 20240630 (date) — Conformed period of report
• 20240726 (date) — Filed as of date
• FIRE, MARINE & CASUALTY INSURANCE [6331] (industry) — Standard Industrial Classification
• Zurich (location) — City of business and mail address

FAQ

Filing Documents

• cb-20240630.htm (10-Q) — 5669KB
• cb-6302024xex101.htm (EX-10.1) — 95KB
• cb-6302024xex221.htm (EX-22.1) — 8KB
• cb-6302024xex311.htm (EX-31.1) — 9KB
• cb-6302024xex312.htm (EX-31.2) — 9KB
• cb-6302024xex321.htm (EX-32.1) — 4KB
• cb-6302024xex322.htm (EX-32.2) — 4KB
• 0000896159-24-000010.txt ( ) — 25200KB
• cb-20240630.xsd (EX-101.SCH) — 75KB
• cb-20240630_cal.xml (EX-101.CAL) — 131KB
• cb-20240630_def.xml (EX-101.DEF) — 664KB
• cb-20240630_lab.xml (EX-101.LAB) — 1103KB
• cb-20240630_pre.xml (EX-101.PRE) — 889KB
• cb-20240630_htm.xml (XML) — 6215KB

FINANCIAL INFORMATION Page

Part I. FINANCIAL INFORMATION Page

Financial Statements

Item 1. Financial Statements: Consolidated Balance Sheets (Unaudited) June 30 , 2024 and December 31, 2023 3 Consolidated Statements of Operations and Comprehensive Income (Unaudited) Three and Six Months Ended June 30 , 2024 and 2023 4 Consolidated Statements of Shareholders' Equity (Unaudited) Three and Six Months Ended June 30 , 2024 and 2023 5 Consolidated Statements of Cash Flows (Unaudited) Six Months Ended June 30 , 2024 and 2023 6

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) Note 1. General and significant accounting policies 7 Note 2. Acquisitions 8 Note 3. Investments 10 Note 4. Fair value measurements 15 Note 5. Reinsurance 22 Note 6. Deferred policy acquisition costs 23 Note 7. Goodwill 24 Note 8. Unpaid losses and loss expenses 24 Note 9. Future policy benefits 26 Note 10. Policyholders' account balances, Separate accounts, and Unearned revenue liabilities 30 Note 11. Market risk benefits 34 Note 12. Commitments, contingencies, and guarantees 35 Note 13. Shareholders' equity 40 Note 14. Share-based compensation 43 Note 15. Postretirement benefits 44 Note 16. Other income and expense 45 Note 17. Segment information 46 Note 18. Earnings per share 49

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 51

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 87

Controls and Procedures

Item 4. Controls and Procedures 90

OTHER INFORMATION

Part II. OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 91

Risk Factors

Item 1A. Risk Factors 91

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 91

Other Information

Item 5. Other Information 91

Exhibits

Item 6. Exhibits 92 2 Table of Contents

FINANCIAL INFORMATION

PART I FINANCIAL INFORMATION

Financial Statements

ITEM 1. Financial Statements CONSOLIDATED BALANCE SHEETS (Unaudited) Chubb Limited and Subsidiaries June 30 December 31 (in millions of U.S. dollars, except share and per share data) 2024 2023 Assets Investments Short-term investments, at fair value (amortized cost – $ 4,547 and $ 4,551 ) (includes variable interest entities (VIE) balances of $ 42 and $ 217 ) $ 4,546 $ 4,551 Fixed maturities available-for-sale, at fair value, net of valuation allowance - $ 122 and $ 156 (amortized cost – $ 113,529 and $ 111,128 ) 107,840 106,571 Private debt held-for-investment, at amortized cost, net of valuation allowance - $ 5 and $ 4 2,680 2,553 Equity securities, at fair value (includes VIE balances of $ 1,064 and $ 1,078 ) 3,792 3,455 Private equities (includes VIE balances of $ 22 and $ 21 ) 14,365 14,078 Other investments (includes VIE balances of $ 3,955 and $ 3,773 ) 7,513 5,527 Total investments 140,736 136,735 Cash, including restricted cash $ 168 and $ 172 (includes VIE balances of $ 113 and $ 117 ) 2,568 2,621 Securities lending collateral 1,889 1,299 Accrued investment income 1,130 1,086 Insurance and reinsurance balances receivable, net of valuation allowance - $ 54 and $ 53 15,929 13,379 Reinsurance recoverable on losses and loss expenses, net of valuation allowance - $ 381 and $ 367 19,355 19,952 Reinsurance recoverable on policy benefits 291 280 Deferred policy acquisition costs 7,812 7,152 Value of business acquired 3,434 3,674 Goodwill 19,833 19,686 Other intangible assets 6,619 6,775 Deferred tax assets 1,690 1,741 Prepaid reinsurance premiums 3,747 3,221 Separate account assets 5,834 5,573 Other assets (includes VIE balances of $ 46 and $ 33 ) 7,684 7,508 Total assets $ 238,551 $ 230,682 Liabilities Unpaid losses and loss expenses $ 82,191 $ 80,122 Unearned premiums 24,102 22,051 Future policy benefits 14,663 13,888 Market risk benefits 576 771 Policyholders' account balances 7,787 7,462 Separate account liabi

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Chubb Limited and Subsidiaries 1. General and significant accounting policies a) Basis of presentation Chubb Limited is a holding company incorporated in Zurich, Switzerland. Chubb Limited, through its subsidiaries, provides a broad range of insurance and reinsurance products to insureds worldwide. Our results are reported through the following 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. Refer to Note 17 for additional information. The interim unaudited Consolidated Financial Statements include the accounts of Chubb Limited and its subsidiaries (collectively, Chubb, we, us, or our), over which Chubb exercises control, including Huatai Group, our majority-owned subsidiary, and minority-owned entities such as variable interest entities (VIEs) in which Chubb is considered the primary beneficiary. Noncontrolling interests on the Consolidated Financial Statements represent the portion of majority-owned subsidiaries and VIEs in which we do not have direct equity ownership. These interim unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and, in the opinion of management, reflect all adjustments necessary for a fair statement of the results and financial position for such periods. All significant intercompany accounts and transactions, including internal reinsurance transactions, have been eliminated. On July 1, 2023, Chubb discontinued equity method accounting for its investment in Huatai Group upon obtaining a controlling interest and applied consolidation accounting. Therefore, effective July 1, 2023, business activity for, and the financial position of, Huatai Group is reported at 100 percent on the Consolidated Financial Statements. A

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited) Chubb Limited and Subsidiaries Improvements to Income Tax Disclosures In December 2023, the FASB issued guidance that requires expanded income tax disclosures, including the disaggregation of existing disclosures related to the tax rate reconciliation and income taxes paid. The guidance is effective for annual periods beginning after December 15, 2024. Prospective application is required, with retrospective application permitted. We are currently evaluating the impact of this disclosure-only requirement. 2. Acquisitions Healthy Paws On May 31, 2024, we acquired the business of Healthy Paws Pet Insurance LLC, a managing general agent specializing in pet insurance, from Aon plc for approximately $ 300 million in cash. We recognized goodwill of $ 256 million and intangible assets of $ 39 million from this acquisition. Chubb has been the exclusive underwriter of Healthy Paws since 2013. The transaction positions Chubb to expand in a niche market with substantial growth potential. This business is assigned to the North America Commercial Insurance segment. Huatai Group Huatai Insurance Group Co., Ltd. (Huatai Group) is a Chinese financial services holding company and the parent company of, among others, Huatai Property & Casualty Insurance Co., Ltd. (Huatai P&C), Huatai Life Insurance Co., Ltd. (Huatai Life), Huatai Asset Management Co., Ltd., and Huatai Baoxing Fund Management Co., Ltd., of which Huatai Group owns 100 percent, 80 percent, 91 percent, and 85 percent, respectively (collectively, Huatai). On July 1, 2023, Chubb increased ownership interest from approximately 64.2 percent to approximately 69.6 percent. At that time, Chubb discontinued the equity method of accounting and applied consolidation accounting. Refer to Note 2 to the Consolidated Financial Statements in our 2023 Form 10-K for additional information. In the first quarter of 2024, we closed on incremental ownership int

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited) Chubb Limited and Subsidiaries Huatai Group assets and liabilities consolidated July 1 (in millions of U.S. dollars) 2023 Assets Investments and Cash $ 13,346 Accrued investment income 60 Insurance and reinsurance balances receivable 277 Reinsurance recoverable on losses and loss expenses 581 Reinsurance recoverable on future policy benefits 27 Value of business acquired 309 Goodwill and intangible assets 5,113 Other assets 748 Total assets $ 20,461 Liabilities Unpaid losses and loss expenses $ 831 Unearned premiums 800 Future policy benefits 2,351 Policyholders' account balances 4,014 Insurance and reinsurance balances payable 644 Accounts payable, accrued expenses, and other liabilities 682 Deferred tax liabilities 232 Repurchase agreements 1,269 Total liabilities $ 10,823 Net acquired assets, including goodwill, attributable to Chubb 4,428 Net acquired assets, attributable to noncontrolling interests 5,210 Net acquired assets, including goodwill $ 9,638 The following table presents supplemental unaudited pro forma consolidated information for the periods indicated as though the acquisition of a controlling majority interest in Huatai Group that occurred on July 1, 2023, had instead occurred on January 1, 2022. The unaudited pro forma consolidated financial information is presented for informational purposes only and is not necessarily indicative of the operating results that would have occurred had the acquisition of a controlling majority interest been consummated on January 1, 2022, nor is it necessarily indicative of future operating results. Significant assumptions used to determine pro forma operating results include amortization of VOBA and other intangible assets. Three Months Ended Six Months Ended Pro forma: June 30 June 30 (in millions of U.S. dollars) 2023 2023 Net premiums earned $ 11,378 $ 21,931 Total revenues $ 12,305 $ 23,834 Net income $ 1,7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited) Chubb Limited and Subsidiaries 3. Investments a) Fixed maturities June 30, 2024 Amortized Cost Valuation Allowance Gross Unrealized Appreciation Gross Unrealized Depreciation Fair Value (in millions of U.S. dollars) Available-for-sale U.S. Treasury / Agency $ 2,906 $ — $ 3 $ ( 168 ) $ 2,741 Non-U.S. 35,933 ( 45 ) 482 ( 1,452 ) 34,918 Corporate and asset-backed securities 45,952 ( 76 ) 255 ( 2,511 ) 43,620 Mortgage-backed securities 26,632 ( 1 ) 75 ( 2,092 ) 24,614 Municipal 2,106 — 8 ( 167 ) 1,947 $ 113,529 $ ( 122 ) $ 823 $ ( 6,390 ) $ 107,840 December 31, 2023 Amortized Cost Valuation Allowance Gross Unrealized Appreciation Gross Unrealized Depreciation Fair Value (in millions of U.S. dollars) Available-for-sale U.S. Treasury / Agency $ 3,721 $ — $ 13 $ ( 144 ) $ 3,590 Non-U.S. 35,918 ( 49 ) 592 ( 1,297 ) 35,164 Corporate and asset-backed securities 44,695 ( 104 ) 390 ( 2,151 ) 42,830 Mortgage-backed securities 23,720 ( 3 ) 143 ( 1,802 ) 22,058 Municipal 3,074 — 10 ( 155 ) 2,929 $ 111,128 $ ( 156 ) $ 1,148 $ ( 5,549 ) $ 106,571 The following table presents fixed maturities by contractual maturity: June 30, 2024 December 31, 2023 (in millions of U.S. dollars) Net Carrying Value Fair Value Net Carrying Value Fair Value Available-for-sale Due in 1 year or less $ 4,730 $ 4,730 $ 4,729 $ 4,729 Due after 1 year through 5 years 34,107 34,107 33,573 33,573 Due after 5 years through 10 years 26,766 26,766 28,480 28,480 Due after 10 years 17,623 17,623 17,731 17,731 83,226 83,226 84,513 84,513 Mortgage-backed securities 24,614 24,614 22,058 22,058 $ 107,840 $ 107,840 $ 106,571 $ 106,571 Expected maturities could differ from contractual maturities because borrowers may have the right to call or prepay obligations, with or without call or prepayment penalties. b) Gross unrealized loss Fixed maturities in an unrealized loss position at June 30, 2024, and December 31, 2

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited) Chubb Limited and Subsidiaries The following tables present, for available-for-sale (AFS) fixed maturities in an unrealized loss position (including securities on loan) that are not deemed to have expected credit losses, the aggregate fair value and gross unrealized loss by length of time the security has continuously been in an unrealized loss position: 0 – 12 Months Over 12 Months Total June 30, 2024 Fair Value Gross Unrealized Loss Fair Value Gross Unrealized Loss Fair Value Gross Unrealized Loss (in millions of U.S. dollars) U.S. Treasury / Agency $ 509 $ ( 4 ) $ 2,050 $ ( 164 ) $ 2,559 $ ( 168 ) Non-U.S. 5,388 ( 94 ) 15,668 ( 1,095 ) 21,056 ( 1,189 ) Corporate and asset-backed securities 5,903 ( 68 ) 19,214 ( 1,476 ) 25,117 ( 1,544 ) Mortgage-backed securities 5,439 ( 57 ) 14,205 ( 1,999 ) 19,64

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