þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Switzerland
|
98-0091805
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
Large accelerated filer
þ
|
|
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Accelerated filer
¨
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Non-accelerated filer
¨
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(Do not check if a smaller reporting company)
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Smaller reporting company
¨
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||||
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Emerging growth company
¨
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Page
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Part I.
|
FINANCIAL INFORMATION
|
|
|
Item 1.
|
|
||
|
|||
|
|||
|
|||
|
|||
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||
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Note 1.
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||
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Note 2.
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Note 3.
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Note 4.
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Note 5.
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Note 6.
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Note 7.
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Note 8.
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Note 9.
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Note 10.
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Note 11.
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Note 12.
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Item 2.
|
|||
Item 3.
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|||
Item 4.
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|||
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Part II.
|
OTHER INFORMATION
|
|
|
Item 1.
|
|||
Item 1A.
|
|||
Item 2.
|
|||
Item 6.
|
ITEM 1. Financial Statements
|
|
June 30
|
|
|
December 31
|
|
||
(in millions of U.S. dollars, except share and per share data)
|
2017
|
|
|
2016
|
|
||
Assets
|
|
|
|
||||
Investments
|
|
|
|
||||
Fixed maturities available for sale, at fair value (amortized cost –
$80,363
and
$79,536
)
|
$
|
81,645
|
|
|
$
|
80,115
|
|
(includes hybrid financial instruments of
$2 and $2
)
|
|||||||
Fixed maturities held to maturity, at amortized cost (fair value –
$10,560
and
$10,670
)
|
10,371
|
|
|
10,644
|
|
||
Equity securities, at fair value (cost –
$697
and
$706
)
|
856
|
|
|
814
|
|
||
Short-term investments, at fair value and amortized cost
|
2,651
|
|
|
3,002
|
|
||
Other investments (cost –
$4,410
and
$4,270
)
|
4,685
|
|
|
4,519
|
|
||
Total investments
|
100,208
|
|
|
99,094
|
|
||
Cash
|
1,297
|
|
|
985
|
|
||
Securities lending collateral
|
1,545
|
|
|
1,092
|
|
||
Accrued investment income
|
901
|
|
|
918
|
|
||
Insurance and reinsurance balances receivable
|
9,662
|
|
|
8,970
|
|
||
Reinsurance recoverable on losses and loss expenses
|
13,358
|
|
|
13,577
|
|
||
Reinsurance recoverable on policy benefits
|
198
|
|
|
182
|
|
||
Deferred policy acquisition costs
|
4,546
|
|
|
4,314
|
|
||
Value of business acquired
|
337
|
|
|
355
|
|
||
Goodwill
|
15,434
|
|
|
15,332
|
|
||
Other intangible assets
|
6,579
|
|
|
6,763
|
|
||
Prepaid reinsurance premiums
|
2,592
|
|
|
2,448
|
|
||
Investments in partially-owned insurance companies
|
662
|
|
|
666
|
|
||
Other assets
|
5,669
|
|
|
5,090
|
|
||
Total assets
|
$
|
162,988
|
|
|
$
|
159,786
|
|
Liabilities
|
|
|
|
||||
Unpaid losses and loss expenses
|
$
|
60,394
|
|
|
$
|
60,540
|
|
Unearned premiums
|
15,289
|
|
|
14,779
|
|
||
Future policy benefits
|
5,190
|
|
|
5,036
|
|
||
Insurance and reinsurance balances payable
|
5,841
|
|
|
5,637
|
|
||
Securities lending payable
|
1,546
|
|
|
1,093
|
|
||
Accounts payable, accrued expenses, and other liabilities
|
8,952
|
|
|
8,617
|
|
||
Deferred tax liabilities
|
1,122
|
|
|
988
|
|
||
Repurchase agreements
|
1,408
|
|
|
1,403
|
|
||
Short-term debt
|
922
|
|
|
500
|
|
||
Long-term debt
|
11,667
|
|
|
12,610
|
|
||
Trust preferred securities
|
308
|
|
|
308
|
|
||
Total liabilities
|
112,639
|
|
|
111,511
|
|
||
Commitments and contingencies
|
|
|
|
||||
Shareholders’ equity
|
|
|
|
||||
Common Shares (CHF
24.15
par value;
479,783,864
shares issued;
465,375,141
and
465,968,716
shares outstanding)
|
11,121
|
|
|
11,121
|
|
||
Common Shares in treasury
(
14,408,723 and 13,815,148
shares)
|
(1,675
|
)
|
|
(1,480
|
)
|
||
Additional paid-in capital
|
14,522
|
|
|
15,335
|
|
||
Retained earnings
|
26,011
|
|
|
23,613
|
|
||
Accumulated other comprehensive income (loss) (AOCI)
|
370
|
|
|
(314
|
)
|
||
Total shareholders’ equity
|
50,349
|
|
|
48,275
|
|
||
Total liabilities and shareholders’ equity
|
$
|
162,988
|
|
|
$
|
159,786
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
||||||||||
|
June 30
|
|
|
June 30
|
|
||||||||||
(in millions of U.S. dollars, except per share data)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Net premiums written
|
$
|
7,581
|
|
|
$
|
7,639
|
|
|
$
|
14,291
|
|
|
$
|
13,634
|
|
Decrease (increase) in unearned premiums
|
(344
|
)
|
|
(234
|
)
|
|
(282
|
)
|
|
368
|
|
||||
Net premiums earned
|
7,237
|
|
|
7,405
|
|
|
14,009
|
|
|
14,002
|
|
||||
Net investment income
|
770
|
|
|
708
|
|
|
1,515
|
|
|
1,382
|
|
||||
Net realized gains (losses):
|
|
|
|
|
|
|
|
||||||||
Other-than-temporary impairment (OTTI) losses gross
|
(9
|
)
|
|
(16
|
)
|
|
(28
|
)
|
|
(87
|
)
|
||||
Portion of OTTI losses recognized in other comprehensive income (OCI)
|
1
|
|
|
—
|
|
|
1
|
|
|
8
|
|
||||
Net OTTI losses recognized in income
|
(8
|
)
|
|
(16
|
)
|
|
(27
|
)
|
|
(79
|
)
|
||||
Net realized gains (losses) excluding OTTI losses
|
109
|
|
|
(200
|
)
|
|
121
|
|
|
(531
|
)
|
||||
Total net realized gains (losses) (includes
$25, $2,
$17, and $(150)
reclassified from AOCI)
|
101
|
|
|
(216
|
)
|
|
94
|
|
|
(610
|
)
|
||||
Total revenues
|
8,108
|
|
|
7,897
|
|
|
15,618
|
|
|
14,774
|
|
||||
Expenses
|
|
|
|
|
|
|
|
||||||||
Losses and loss expenses
|
4,146
|
|
|
4,254
|
|
|
7,935
|
|
|
7,928
|
|
||||
Policy benefits
|
163
|
|
|
146
|
|
|
331
|
|
|
272
|
|
||||
Policy acquisition costs
|
1,449
|
|
|
1,560
|
|
|
2,846
|
|
|
2,973
|
|
||||
Administrative expenses
|
706
|
|
|
829
|
|
|
1,382
|
|
|
1,601
|
|
||||
Interest expense
|
147
|
|
|
153
|
|
|
301
|
|
|
299
|
|
||||
Other (income) expense
|
(145
|
)
|
|
(29
|
)
|
|
(215
|
)
|
|
(1
|
)
|
||||
Amortization of purchased intangibles
|
65
|
|
|
5
|
|
|
129
|
|
|
12
|
|
||||
Chubb integration expenses
|
72
|
|
|
98
|
|
|
183
|
|
|
246
|
|
||||
Total expenses
|
6,603
|
|
|
7,016
|
|
|
12,892
|
|
|
13,330
|
|
||||
Income before income tax
|
1,505
|
|
|
881
|
|
|
2,726
|
|
|
1,444
|
|
||||
Income tax expense (includes
$9, $6, $3
and
$5
on reclassified unrealized gains and losses)
|
200
|
|
|
155
|
|
|
328
|
|
|
279
|
|
||||
Net income
|
$
|
1,305
|
|
|
$
|
726
|
|
|
$
|
2,398
|
|
|
$
|
1,165
|
|
Other comprehensive income
|
|
|
|
|
|
|
|
||||||||
Unrealized appreciation
|
$
|
459
|
|
|
$
|
947
|
|
|
$
|
766
|
|
|
$
|
1,852
|
|
Reclassification adjustment for net realized (gains) losses included in net income
|
(25
|
)
|
|
(2
|
)
|
|
(17
|
)
|
|
150
|
|
||||
|
434
|
|
|
945
|
|
|
749
|
|
|
2,002
|
|
||||
Change in:
|
|
|
|
|
|
|
|
||||||||
Cumulative foreign currency translation adjustment
|
102
|
|
|
81
|
|
|
236
|
|
|
393
|
|
||||
Postretirement benefit liability adjustment
|
(35
|
)
|
|
1
|
|
|
(55
|
)
|
|
3
|
|
||||
Other comprehensive income, before income tax
|
501
|
|
|
1,027
|
|
|
930
|
|
|
2,398
|
|
||||
Income tax expense related to OCI items
|
(131
|
)
|
|
(213
|
)
|
|
(246
|
)
|
|
(482
|
)
|
||||
Other comprehensive income
|
370
|
|
|
814
|
|
|
684
|
|
|
1,916
|
|
||||
Comprehensive income
|
$
|
1,675
|
|
|
$
|
1,540
|
|
|
$
|
3,082
|
|
|
$
|
3,081
|
|
Earnings per share
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share
|
$
|
2.79
|
|
|
$
|
1.55
|
|
|
$
|
5.12
|
|
|
$
|
2.55
|
|
Diluted earnings per share
|
$
|
2.77
|
|
|
$
|
1.54
|
|
|
$
|
5.08
|
|
|
$
|
2.53
|
|
|
Six Months Ended
|
|
|||||
|
June 30
|
|
|||||
(in millions of U.S. dollars)
|
2017
|
|
|
2016
|
|
||
Common Shares
|
|
|
|
||||
Balance – beginning of period
|
$
|
11,121
|
|
|
$
|
7,833
|
|
Shares issued for Chubb Corp acquisition
|
—
|
|
|
3,288
|
|
||
Balance – end of period
|
11,121
|
|
|
11,121
|
|
||
Common Shares in treasury
|
|
|
|
||||
Balance – beginning of period
|
(1,480
|
)
|
|
(1,922
|
)
|
||
Common Shares repurchased
|
(475
|
)
|
|
—
|
|
||
Net shares redeemed under employee share-based compensation plans
|
280
|
|
|
345
|
|
||
Balance – end of period
|
(1,675
|
)
|
|
(1,577
|
)
|
||
Additional paid-in capital
|
|
|
|
||||
Balance – beginning of period
|
15,335
|
|
|
4,481
|
|
||
Shares issued for Chubb Corp acquisition
|
—
|
|
|
11,916
|
|
||
Equity awards assumed in Chubb Corp acquisition
|
—
|
|
|
323
|
|
||
Net shares redeemed under employee share-based compensation plans
|
(275
|
)
|
|
(358
|
)
|
||
Exercise of stock options
|
(38
|
)
|
|
(37
|
)
|
||
Share-based compensation expense and other
|
156
|
|
|
170
|
|
||
Funding of dividends declared to Retained earnings
|
(656
|
)
|
|
(637
|
)
|
||
Balance – end of period
|
14,522
|
|
|
15,858
|
|
||
Retained earnings
|
|
|
|
||||
Balance – beginning of period
|
23,613
|
|
|
19,478
|
|
||
Net income
|
2,398
|
|
|
1,165
|
|
||
Funding of dividends declared from Additional paid-in capital
|
656
|
|
|
637
|
|
||
Dividends declared on Common Shares
|
(656
|
)
|
|
(637
|
)
|
||
Balance – end of period
|
26,011
|
|
|
20,643
|
|
||
Accumulated other comprehensive income (loss)
|
|
|
|
||||
Net unrealized appreciation on investments
|
|
|
|
||||
Balance – beginning of period
|
1,058
|
|
|
874
|
|
||
Change in period, before reclassification from AOCI, net of income tax
expense of
$(259)
and
$(477)
|
507
|
|
|
1,375
|
|
||
Amounts reclassified from AOCI, net of income tax benefit of
$3
and
$5
|
(14
|
)
|
|
155
|
|
||
Change in period, net of income tax expense of
$(256)
and
$(472)
|
493
|
|
|
1,530
|
|
||
Balance – end of period
|
1,551
|
|
|
2,404
|
|
||
Cumulative foreign currency translation adjustment
|
|
|
|
||||
Balance – beginning of period
|
(1,663
|
)
|
|
(1,539
|
)
|
||
Change in period, net of income tax expense of
$(7)
and
$(11)
|
229
|
|
|
382
|
|
||
Balance – end of period
|
(1,434
|
)
|
|
(1,157
|
)
|
||
Postretirement benefit liability adjustment
|
|
|
|
||||
Balance – beginning of period
|
291
|
|
|
(70
|
)
|
||
Change in period, net of income tax benefit of
$17
and
$1
|
(38
|
)
|
|
4
|
|
||
Balance – end of period
|
253
|
|
|
(66
|
)
|
||
Accumulated other comprehensive income
|
370
|
|
|
1,181
|
|
||
Total shareholders’ equity
|
$
|
50,349
|
|
|
$
|
47,226
|
|
|
Six Months Ended June 30
|
|
|||||
(in millions of U.S. dollars)
|
2017
|
|
|
2016
|
|
||
Cash flows from operating activities
|
|
|
|
||||
Net income
|
$
|
2,398
|
|
|
$
|
1,165
|
|
Adjustments to reconcile net income to net cash flows from operating activities
|
|
|
|
||||
Net realized (gains) losses
|
(94
|
)
|
|
610
|
|
||
Amortization of premiums/discounts on fixed maturities
|
353
|
|
|
376
|
|
||
Amortization of UPR related to the Chubb Corp acquisition
|
—
|
|
|
1,095
|
|
||
Deferred income taxes
|
(112
|
)
|
|
48
|
|
||
Unpaid losses and loss expenses
|
(411
|
)
|
|
330
|
|
||
Unearned premiums
|
386
|
|
|
(382
|
)
|
||
Future policy benefits
|
134
|
|
|
106
|
|
||
Insurance and reinsurance balances payable
|
278
|
|
|
193
|
|
||
Accounts payable, accrued expenses, and other liabilities
|
(603
|
)
|
|
18
|
|
||
Income taxes payable
|
(103
|
)
|
|
67
|
|
||
Insurance and reinsurance balances receivable
|
(575
|
)
|
|
(238
|
)
|
||
Reinsurance recoverable on losses and loss expenses
|
312
|
|
|
(17
|
)
|
||
Reinsurance recoverable on policy benefits
|
(15
|
)
|
|
(11
|
)
|
||
Deferred policy acquisition costs
|
(179
|
)
|
|
(1,042
|
)
|
||
Prepaid reinsurance premiums
|
(139
|
)
|
|
12
|
|
||
Other
|
10
|
|
|
(177
|
)
|
||
Net cash flows from operating activities
|
1,640
|
|
|
2,153
|
|
||
Cash flows from investing activities
|
|
|
|
||||
Purchases of fixed maturities available for sale
|
(12,260
|
)
|
|
(17,077
|
)
|
||
Purchases of fixed maturities held to maturity
|
(212
|
)
|
|
(121
|
)
|
||
Purchases of equity securities
|
(82
|
)
|
|
(78
|
)
|
||
Sales of fixed maturities available for sale
|
6,873
|
|
|
11,868
|
|
||
Sales of equity securities
|
104
|
|
|
932
|
|
||
Maturities and redemptions of fixed maturities available for sale
|
5,169
|
|
|
3,910
|
|
||
Maturities and redemptions of fixed maturities held to maturity
|
408
|
|
|
443
|
|
||
Net change in short-term investments
|
354
|
|
|
11,711
|
|
||
Net derivative instruments settlements
|
(129
|
)
|
|
(93
|
)
|
||
Acquisition of subsidiaries (net of cash acquired of nil and $71)
|
—
|
|
|
(14,248
|
)
|
||
Other
|
(121
|
)
|
|
81
|
|
||
Net cash flows from (used for) investing activities
|
104
|
|
|
(2,672
|
)
|
||
Cash flows from financing activities
|
|
|
|
||||
Dividends paid on Common Shares
|
(646
|
)
|
|
(530
|
)
|
||
Common Shares repurchased
|
(475
|
)
|
|
—
|
|
||
Repayment of long-term debt
|
(500
|
)
|
|
—
|
|
||
Proceeds from issuance of repurchase agreements
|
1,343
|
|
|
904
|
|
||
Repayment of repurchase agreements
|
(1,338
|
)
|
|
(902
|
)
|
||
Proceeds from share-based compensation plans
|
89
|
|
|
92
|
|
||
Policyholder contract deposits
|
209
|
|
|
274
|
|
||
Policyholder contract withdrawals
|
(125
|
)
|
|
(103
|
)
|
||
Other
|
—
|
|
|
(4
|
)
|
||
Net cash flows used for financing activities
|
(1,443
|
)
|
|
(269
|
)
|
||
Effect of foreign currency rate changes on cash and cash equivalents
|
11
|
|
|
24
|
|
||
Net increase (decrease) in cash
|
312
|
|
|
(764
|
)
|
||
Cash – beginning of period
|
985
|
|
|
1,775
|
|
||
Cash – end of period
|
$
|
1,297
|
|
|
$
|
1,011
|
|
Supplemental cash flow information
|
|
|
|
||||
Taxes paid
|
$
|
510
|
|
|
$
|
259
|
|
Interest paid
|
$
|
327
|
|
|
$
|
319
|
|
(in millions of U.S. dollars)
|
Three Months Ended June 30, 2016
|
|
|
January 14, 2016 to June 30, 2016
|
|
||
Total revenues
|
$
|
2,745
|
|
|
$
|
5,232
|
|
Net income
|
$
|
326
|
|
|
$
|
581
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|||
(in millions of U.S. dollars, except per share data)
|
June 30, 2016
|
|
|
June 30, 2016
|
|
||
Total revenues
|
$
|
7,915
|
|
|
$
|
15,237
|
|
Net income
|
$
|
712
|
|
|
$
|
1,246
|
|
Earnings per share
|
|
|
|
||||
Basic earnings per share
|
$
|
1.52
|
|
|
$
|
2.67
|
|
Diluted earnings per share
|
$
|
1.51
|
|
|
$
|
2.65
|
|
June 30, 2017
|
Amortized
Cost
|
|
|
Gross
Unrealized
Appreciation
|
|
|
Gross
Unrealized
Depreciation
|
|
|
Fair
Value
|
|
|
OTTI Recognized
in AOCI
|
|
|||||
(in millions of U.S. dollars)
|
|
|
|
|
|||||||||||||||
Available for sale
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Treasury and agency
|
$
|
3,122
|
|
|
$
|
40
|
|
|
$
|
(26
|
)
|
|
$
|
3,136
|
|
|
$
|
—
|
|
Foreign
|
21,139
|
|
|
653
|
|
|
(82
|
)
|
|
21,710
|
|
|
(2
|
)
|
|||||
Corporate securities
|
24,744
|
|
|
714
|
|
|
(94
|
)
|
|
25,364
|
|
|
(7
|
)
|
|||||
Mortgage-backed securities
|
14,469
|
|
|
148
|
|
|
(144
|
)
|
|
14,473
|
|
|
(1
|
)
|
|||||
States, municipalities, and political subdivisions
|
16,889
|
|
|
138
|
|
|
(65
|
)
|
|
16,962
|
|
|
—
|
|
|||||
|
$
|
80,363
|
|
|
$
|
1,693
|
|
|
$
|
(411
|
)
|
|
$
|
81,645
|
|
|
$
|
(10
|
)
|
Held to maturity
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Treasury and agency
|
$
|
602
|
|
|
$
|
13
|
|
|
$
|
(2
|
)
|
|
$
|
613
|
|
|
$
|
—
|
|
Foreign
|
613
|
|
|
29
|
|
|
—
|
|
|
642
|
|
|
—
|
|
|||||
Corporate securities
|
2,645
|
|
|
62
|
|
|
(7
|
)
|
|
2,700
|
|
|
—
|
|
|||||
Mortgage-backed securities
|
1,268
|
|
|
37
|
|
|
(1
|
)
|
|
1,304
|
|
|
—
|
|
|||||
States, municipalities, and political subdivisions
|
5,243
|
|
|
66
|
|
|
(8
|
)
|
|
5,301
|
|
|
—
|
|
|||||
|
$
|
10,371
|
|
|
$
|
207
|
|
|
$
|
(18
|
)
|
|
$
|
10,560
|
|
|
$
|
—
|
|
December 31, 2016
|
Amortized
Cost
|
|
|
Gross
Unrealized
Appreciation
|
|
|
Gross
Unrealized
Depreciation
|
|
|
Fair
Value
|
|
|
OTTI Recognized
in AOCI
|
|
|||||
(in millions of U.S. dollars)
|
|
|
|
|
|||||||||||||||
Available for sale
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Treasury and agency
|
$
|
2,883
|
|
|
$
|
32
|
|
|
$
|
(45
|
)
|
|
$
|
2,870
|
|
|
$
|
—
|
|
Foreign
|
20,929
|
|
|
636
|
|
|
(125
|
)
|
|
21,440
|
|
|
(5
|
)
|
|||||
Corporate securities
|
23,736
|
|
|
580
|
|
|
(167
|
)
|
|
24,149
|
|
|
(8
|
)
|
|||||
Mortgage-backed securities
|
14,066
|
|
|
135
|
|
|
(194
|
)
|
|
14,007
|
|
|
(1
|
)
|
|||||
States, municipalities, and political subdivisions
|
17,922
|
|
|
72
|
|
|
(345
|
)
|
|
17,649
|
|
|
—
|
|
|||||
|
$
|
79,536
|
|
|
$
|
1,455
|
|
|
$
|
(876
|
)
|
|
$
|
80,115
|
|
|
$
|
(14
|
)
|
Held to maturity
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Treasury and agency
|
$
|
655
|
|
|
$
|
9
|
|
|
$
|
(3
|
)
|
|
$
|
661
|
|
|
$
|
—
|
|
Foreign
|
640
|
|
|
28
|
|
|
(1
|
)
|
|
667
|
|
|
—
|
|
|||||
Corporate securities
|
2,771
|
|
|
50
|
|
|
(26
|
)
|
|
2,795
|
|
|
—
|
|
|||||
Mortgage-backed securities
|
1,393
|
|
|
35
|
|
|
—
|
|
|
1,428
|
|
|
—
|
|
|||||
States, municipalities, and political subdivisions
|
5,185
|
|
|
26
|
|
|
(92
|
)
|
|
5,119
|
|
|
—
|
|
|||||
|
$
|
10,644
|
|
|
$
|
148
|
|
|
$
|
(122
|
)
|
|
$
|
10,670
|
|
|
$
|
—
|
|
|
|
|
June 30
|
|
|
|
|
December 31
|
|
||||||
|
|
|
2017
|
|
|
|
|
2016
|
|
||||||
(in millions of U.S. dollars)
|
Amortized Cost
|
|
|
Fair Value
|
|
|
Amortized Cost
|
|
|
Fair Value
|
|
||||
Available for sale
|
|
|
|
|
|
|
|
||||||||
Due in 1 year or less
|
$
|
3,799
|
|
|
$
|
3,823
|
|
|
$
|
3,892
|
|
|
$
|
3,913
|
|
Due after 1 year through 5 years
|
23,748
|
|
|
24,207
|
|
|
24,027
|
|
|
24,429
|
|
||||
Due after 5 years through 10 years
|
28,040
|
|
|
28,498
|
|
|
27,262
|
|
|
27,379
|
|
||||
Due after 10 years
|
10,307
|
|
|
10,644
|
|
|
10,289
|
|
|
10,387
|
|
||||
|
65,894
|
|
|
67,172
|
|
|
65,470
|
|
|
66,108
|
|
||||
Mortgage-backed securities
|
14,469
|
|
|
14,473
|
|
|
14,066
|
|
|
14,007
|
|
||||
|
$
|
80,363
|
|
|
$
|
81,645
|
|
|
$
|
79,536
|
|
|
$
|
80,115
|
|
Held to maturity
|
|
|
|
|
|
|
|
||||||||
Due in 1 year or less
|
$
|
807
|
|
|
$
|
814
|
|
|
$
|
430
|
|
|
$
|
435
|
|
Due after 1 year through 5 years
|
2,353
|
|
|
2,396
|
|
|
2,646
|
|
|
2,691
|
|
||||
Due after 5 years through 10 years
|
3,001
|
|
|
3,045
|
|
|
2,969
|
|
|
2,944
|
|
||||
Due after 10 years
|
2,942
|
|
|
3,001
|
|
|
3,206
|
|
|
3,172
|
|
||||
|
9,103
|
|
|
9,256
|
|
|
9,251
|
|
|
9,242
|
|
||||
Mortgage-backed securities
|
1,268
|
|
|
1,304
|
|
|
1,393
|
|
|
1,428
|
|
||||
|
$
|
10,371
|
|
|
$
|
10,560
|
|
|
$
|
10,644
|
|
|
$
|
10,670
|
|
|
June 30
|
|
|
December 31
|
|
||
(in millions of U.S. dollars)
|
2017
|
|
|
2016
|
|
||
Cost
|
$
|
697
|
|
|
$
|
706
|
|
Gross unrealized appreciation
|
164
|
|
|
129
|
|
||
Gross unrealized depreciation
|
(5
|
)
|
|
(21
|
)
|
||
Fair value
|
$
|
856
|
|
|
$
|
814
|
|
•
|
the amount of time a security has been in a loss position and the magnitude of the loss position;
|
•
|
the period in which cost is expected to be recovered, if at all, based on various criteria including economic conditions and other issuer-specific developments; and
|
•
|
our ability and intent to hold the security to the expected recovery period.
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
||||||||||
|
June 30
|
|
|
June 30
|
|
||||||||||
(in millions of U.S. dollars)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
OTTI on fixed maturities, gross
|
$
|
(5
|
)
|
|
$
|
(11
|
)
|
|
$
|
(11
|
)
|
|
$
|
(78
|
)
|
OTTI on fixed maturities recognized in OCI (pre-tax)
|
1
|
|
|
—
|
|
|
1
|
|
|
8
|
|
||||
OTTI on fixed maturities, net
|
(4
|
)
|
|
(11
|
)
|
|
(10
|
)
|
|
(70
|
)
|
||||
Gross realized gains excluding OTTI
|
45
|
|
|
37
|
|
|
79
|
|
|
102
|
|
||||
Gross realized losses excluding OTTI
|
(18
|
)
|
|
(19
|
)
|
|
(58
|
)
|
|
(215
|
)
|
||||
Total fixed maturities
|
23
|
|
|
7
|
|
|
11
|
|
|
(183
|
)
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
OTTI on equity securities
|
(3
|
)
|
|
(5
|
)
|
|
(8
|
)
|
|
(6
|
)
|
||||
Gross realized gains excluding OTTI
|
6
|
|
|
4
|
|
|
15
|
|
|
44
|
|
||||
Gross realized losses excluding OTTI
|
(1
|
)
|
|
(4
|
)
|
|
(1
|
)
|
|
(5
|
)
|
||||
Total equity securities
|
2
|
|
|
(5
|
)
|
|
6
|
|
|
33
|
|
||||
OTTI on other investments
|
(1
|
)
|
|
—
|
|
|
(9
|
)
|
|
(3
|
)
|
||||
Foreign exchange gains (losses)
|
14
|
|
|
(22
|
)
|
|
(5
|
)
|
|
17
|
|
||||
Investment and embedded derivative instruments
|
(16
|
)
|
|
(47
|
)
|
|
(10
|
)
|
|
(86
|
)
|
||||
Fair value adjustments on insurance derivative
|
118
|
|
|
(131
|
)
|
|
211
|
|
|
(359
|
)
|
||||
S&P put options and futures
|
(38
|
)
|
|
(28
|
)
|
|
(112
|
)
|
|
(43
|
)
|
||||
Other derivative instruments
|
(1
|
)
|
|
—
|
|
|
1
|
|
|
(2
|
)
|
||||
Other
|
—
|
|
|
10
|
|
|
1
|
|
|
16
|
|
||||
Net realized gains (losses)
|
$
|
101
|
|
|
$
|
(216
|
)
|
|
$
|
94
|
|
|
$
|
(610
|
)
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
||||||||||
|
June 30
|
|
|
June 30
|
|
||||||||||
(in millions of U.S. dollars)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Balance of credit losses related to securities still held – beginning of period
|
$
|
32
|
|
|
$
|
57
|
|
|
$
|
35
|
|
|
$
|
53
|
|
Additions where no OTTI was previously recorded
|
1
|
|
|
1
|
|
|
1
|
|
|
12
|
|
||||
Additions where an OTTI was previously recorded
|
—
|
|
|
6
|
|
|
1
|
|
|
12
|
|
||||
Reductions for securities sold during the period
|
(4
|
)
|
|
(13
|
)
|
|
(8
|
)
|
|
(26
|
)
|
||||
Balance of credit losses related to securities still held – end of period
|
$
|
29
|
|
|
$
|
51
|
|
|
$
|
29
|
|
|
$
|
51
|
|
|
0 – 12 Months
|
|
|
Over 12 Months
|
|
|
Total
|
|
|||||||||||||||
June 30, 2017
|
Fair Value
|
|
|
Gross
Unrealized
Loss
|
|
|
Fair Value
|
|
|
Gross
Unrealized
Loss
|
|
|
Fair Value
|
|
|
Gross
Unrealized
Loss
|
|
||||||
(in millions of U.S. dollars)
|
|
|
|
|
|
||||||||||||||||||
U.S. Treasury and agency
|
$
|
2,021
|
|
|
$
|
(28
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,021
|
|
|
$
|
(28
|
)
|
Foreign
|
4,381
|
|
|
(57
|
)
|
|
599
|
|
|
(25
|
)
|
|
4,980
|
|
|
(82
|
)
|
||||||
Corporate securities
|
4,410
|
|
|
(72
|
)
|
|
372
|
|
|
(29
|
)
|
|
4,782
|
|
|
(101
|
)
|
||||||
Mortgage-backed securities
|
7,657
|
|
|
(141
|
)
|
|
118
|
|
|
(4
|
)
|
|
7,775
|
|
|
(145
|
)
|
||||||
States, municipalities, and political subdivisions
|
9,049
|
|
|
(68
|
)
|
|
182
|
|
|
(5
|
)
|
|
9,231
|
|
|
(73
|
)
|
||||||
Total fixed maturities
|
27,518
|
|
|
(366
|
)
|
|
1,271
|
|
|
(63
|
)
|
|
28,789
|
|
|
(429
|
)
|
||||||
Equity securities
|
104
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
104
|
|
|
(5
|
)
|
||||||
Other investments
|
70
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
70
|
|
|
(4
|
)
|
||||||
Total
|
$
|
27,692
|
|
|
$
|
(375
|
)
|
|
$
|
1,271
|
|
|
$
|
(63
|
)
|
|
$
|
28,963
|
|
|
$
|
(438
|
)
|
|
0 – 12 Months
|
|
|
Over 12 Months
|
|
|
Total
|
|
|||||||||||||||
December 31, 2016
|
Fair Value
|
|
|
Gross
Unrealized
Loss
|
|
|
Fair Value
|
|
|
Gross
Unrealized
Loss
|
|
|
Fair Value
|
|
|
Gross
Unrealized
Loss
|
|
||||||
(in millions of U.S. dollars)
|
|
|
|
|
|
||||||||||||||||||
U.S. Treasury and agency
|
$
|
2,216
|
|
|
$
|
(48
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,216
|
|
|
$
|
(48
|
)
|
Foreign
|
5,918
|
|
|
(99
|
)
|
|
386
|
|
|
(27
|
)
|
|
6,304
|
|
|
(126
|
)
|
||||||
Corporate securities
|
7,021
|
|
|
(149
|
)
|
|
641
|
|
|
(44
|
)
|
|
7,662
|
|
|
(193
|
)
|
||||||
Mortgage-backed securities
|
8,638
|
|
|
(189
|
)
|
|
234
|
|
|
(5
|
)
|
|
8,872
|
|
|
(194
|
)
|
||||||
States, municipalities, and political subdivisions
|
19,448
|
|
|
(435
|
)
|
|
49
|
|
|
(2
|
)
|
|
19,497
|
|
|
(437
|
)
|
||||||
Total fixed maturities
|
43,241
|
|
|
(920
|
)
|
|
1,310
|
|
|
(78
|
)
|
|
44,551
|
|
|
(998
|
)
|
||||||
Equity securities
|
199
|
|
|
(21
|
)
|
|
—
|
|
|
—
|
|
|
199
|
|
|
(21
|
)
|
||||||
Other investments
|
201
|
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
201
|
|
|
(18
|
)
|
||||||
Total
|
$
|
43,641
|
|
|
$
|
(959
|
)
|
|
$
|
1,310
|
|
|
$
|
(78
|
)
|
|
$
|
44,951
|
|
|
$
|
(1,037
|
)
|
|
June 30
|
|
|
December 31
|
|
||
(in millions of U.S. dollars)
|
2017
|
|
|
2016
|
|
||
Trust funds
|
$
|
14,938
|
|
|
$
|
13,880
|
|
Deposits with U.S. regulatory authorities
|
2,325
|
|
|
2,203
|
|
||
Deposits with non-U.S. regulatory authorities
|
2,170
|
|
|
2,191
|
|
||
Assets pledged under repurchase agreements
|
1,472
|
|
|
1,461
|
|
||
Other pledged assets
|
371
|
|
|
435
|
|
||
|
$
|
21,276
|
|
|
$
|
20,170
|
|
•
|
Level 1 – Unadjusted quoted prices for identical assets or liabilities in active markets;
|
•
|
Level 2 – Includes, among other items, inputs other than quoted prices that are observable for the asset or liability such as
|
•
|
Level 3 – Inputs that are unobservable and reflect management’s judgments about assumptions that market participants
|
June 30, 2017
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
||||
(in millions of U.S. dollars)
|
|
|
|
||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Fixed maturities available for sale
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury and agency
|
$
|
2,486
|
|
|
$
|
650
|
|
|
$
|
—
|
|
|
$
|
3,136
|
|
Foreign
|
—
|
|
|
21,625
|
|
|
85
|
|
|
21,710
|
|
||||
Corporate securities
|
—
|
|
|
24,617
|
|
|
747
|
|
|
25,364
|
|
||||
Mortgage-backed securities
|
—
|
|
|
14,428
|
|
|
45
|
|
|
14,473
|
|
||||
States, municipalities, and political subdivisions
|
—
|
|
|
16,962
|
|
|
—
|
|
|
16,962
|
|
||||
|
2,486
|
|
|
78,282
|
|
|
877
|
|
|
81,645
|
|
||||
Equity securities
|
817
|
|
|
—
|
|
|
39
|
|
|
856
|
|
||||
Short-term investments
|
1,421
|
|
|
1,223
|
|
|
7
|
|
|
2,651
|
|
||||
Other investments
(1)
|
430
|
|
|
282
|
|
|
243
|
|
|
955
|
|
||||
Securities lending collateral
|
—
|
|
|
1,545
|
|
|
—
|
|
|
1,545
|
|
||||
Investment derivative instruments
|
12
|
|
|
—
|
|
|
—
|
|
|
12
|
|
||||
Other derivative instruments
|
9
|
|
|
—
|
|
|
—
|
|
|
9
|
|
||||
Separate account assets
|
2,147
|
|
|
101
|
|
|
—
|
|
|
2,248
|
|
||||
Total assets measured at fair value
(1)
|
$
|
7,322
|
|
|
$
|
81,433
|
|
|
$
|
1,166
|
|
|
$
|
89,921
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Investment derivative instruments
|
$
|
35
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
35
|
|
Other derivative instruments
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
||||
GLB
(2)
|
—
|
|
|
—
|
|
|
357
|
|
|
357
|
|
||||
Total liabilities measured at fair value
|
$
|
35
|
|
|
$
|
—
|
|
|
$
|
359
|
|
|
$
|
394
|
|
(1)
|
Excluded from the table above are partially-owned investments, investment funds, and limited partnerships of $
3,711 million
and other investments of $
19 million
at June 30, 2017 measured using NAV as a practical expedient.
|
(2)
|
Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the Consolidated balance sheets.
|
December 31, 2016
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
||||
(in millions of U.S. dollars)
|
|
|
|
||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Fixed maturities available for sale
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury and agency
|
$
|
2,175
|
|
|
$
|
695
|
|
|
$
|
—
|
|
|
$
|
2,870
|
|
Foreign
|
—
|
|
|
21,366
|
|
|
74
|
|
|
21,440
|
|
||||
Corporate securities
|
—
|
|
|
23,468
|
|
|
681
|
|
|
24,149
|
|
||||
Mortgage-backed securities
|
—
|
|
|
13,962
|
|
|
45
|
|
|
14,007
|
|
||||
States, municipalities, and political subdivisions
|
—
|
|
|
17,649
|
|
|
—
|
|
|
17,649
|
|
||||
|
2,175
|
|
|
77,140
|
|
|
800
|
|
|
80,115
|
|
||||
Equity securities
|
773
|
|
|
—
|
|
|
41
|
|
|
814
|
|
||||
Short-term investments
|
1,757
|
|
|
1,220
|
|
|
25
|
|
|
3,002
|
|
||||
Other investments
(1)
|
384
|
|
|
259
|
|
|
225
|
|
|
868
|
|
||||
Securities lending collateral
|
—
|
|
|
1,092
|
|
|
—
|
|
|
1,092
|
|
||||
Investment derivative instruments
|
31
|
|
|
—
|
|
|
—
|
|
|
31
|
|
||||
Other derivative instruments
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Separate account assets
|
1,784
|
|
|
95
|
|
|
—
|
|
|
1,879
|
|
||||
Total assets measured at fair value
(1)
|
$
|
6,907
|
|
|
$
|
79,806
|
|
|
$
|
1,091
|
|
|
$
|
87,804
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Investment derivative instruments
|
$
|
54
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
54
|
|
Other derivative instruments
|
—
|
|
|
—
|
|
|
13
|
|
|
13
|
|
||||
GLB
(2)
|
—
|
|
|
—
|
|
|
559
|
|
|
559
|
|
||||
Total liabilities measured at fair value
|
$
|
54
|
|
|
$
|
—
|
|
|
$
|
572
|
|
|
$
|
626
|
|
(1)
|
Excluded from the table above are partially-owned investments, investment funds, and limited partnerships of
$3,626 million
and other investments of
$25 million
at December 31, 2016 measured using NAV as a practical expedient.
|
(2)
|
Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the Consolidated balance sheets.
|
|
|
|
|
|
June 30
|
|
|
|
|
December 31
|
|
||||||
|
Expected
Liquidation
Period of Underlying Assets
|
|
|
|
2017
|
|
|
|
|
2016
|
|
||||||
(in millions of U.S. dollars)
|
Fair
Value
|
|
|
Maximum
Future Funding
Commitments
|
|
|
Fair
Value
|
|
|
Maximum
Future Funding
Commitments
|
|
||||||
Financial
|
5 to 9 Years
|
|
$
|
576
|
|
|
$
|
354
|
|
|
$
|
548
|
|
|
$
|
428
|
|
Real Assets
|
3 to 7 Years
|
|
622
|
|
|
181
|
|
|
536
|
|
|
230
|
|
||||
Distressed
|
5 to 9 Years
|
|
350
|
|
|
175
|
|
|
485
|
|
|
179
|
|
||||
Private Credit
|
3 to 7 Years
|
|
238
|
|
|
337
|
|
|
236
|
|
|
259
|
|
||||
Traditional
|
3 to 9 Years
|
|
1,646
|
|
|
805
|
|
|
1,550
|
|
|
930
|
|
||||
Vintage
|
1 to 2 Years
|
|
19
|
|
|
—
|
|
|
21
|
|
|
14
|
|
||||
Investment funds
|
Not Applicable
|
|
260
|
|
|
—
|
|
|
251
|
|
|
—
|
|
||||
|
|
|
$
|
3,711
|
|
|
$
|
1,852
|
|
|
$
|
3,627
|
|
|
$
|
2,040
|
|
Investment Category:
|
|
Consists of investments in private equity funds:
|
Financial
|
|
targeting financial services companies such as financial institutions and insurance services worldwide
|
Real Assets
|
|
targeting investments related to hard physical assets such as real estate, infrastructure and natural resources
|
Distressed
|
|
targeting distressed corporate debt/credit and equity opportunities in the U.S.
|
Private Credit
|
|
targeting privately originated corporate debt investments including senior secured loans and subordinated bonds
|
Traditional
|
|
employing traditional private equity investment strategies such as buyout and growth equity globally
|
Vintage
|
|
made before 2002 and where the funds’ commitment periods had already expired
|
(in millions of U.S. dollars, except for percentages)
|
Fair Value
|
|
|
Valuation
Technique
|
|
Significant
Unobservable Inputs
|
|
Ranges
|
|||||
June 30, 2017
|
|
|
December 31, 2016
|
|
|
|
|
||||||
GLB
(1)
|
$
|
357
|
|
|
$
|
559
|
|
|
Actuarial model
|
|
Lapse rate
|
|
3% – 34%
|
|
|
|
|
|
|
|
Annuitization rate
|
|
0% – 78%
|
(1)
|
Discussion of the most significant inputs used in the fair value measurement of GLB and the sensitivity of those assumptions is included within Note
4
a) Guaranteed living benefits.
|
|
Assets
|
|
|
Liabilities
|
|
|||||||||||||||||||||||
Three Months Ended
|
Available-for-Sale Debt Securities
|
Equity
securities
|
|
Short-term investments
|
|
Other
investments
|
|
|
Other
derivative
instruments
|
|
GLB
(1)
|
|
||||||||||||||||
June 30, 2017
|
Foreign
|
|
|
Corporate
securities
|
|
|
MBS
|
|
|
|
||||||||||||||||||
(in millions of U.S. dollars)
|
|
|
|
|
||||||||||||||||||||||||
Balance – beginning of period
|
$
|
80
|
|
|
$
|
737
|
|
|
$
|
45
|
|
|
$
|
41
|
|
$
|
21
|
|
$
|
233
|
|
|
$
|
11
|
|
$
|
466
|
|
Transfers into Level 3
|
—
|
|
|
28
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
9
|
|
||||||||
Transfers out of Level 3
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
(9
|
)
|
—
|
|
||||||||
Change in Net Unrealized Gains (Losses) included in OCI
|
3
|
|
|
—
|
|
|
—
|
|
|
1
|
|
—
|
|
(1
|
)
|
|
—
|
|
—
|
|
||||||||
Net Realized Gains/Losses
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
(118
|
)
|
||||||||
Purchases
|
19
|
|
|
65
|
|
|
—
|
|
|
6
|
|
7
|
|
16
|
|
|
—
|
|
—
|
|
||||||||
Sales
|
(19
|
)
|
|
(28
|
)
|
|
—
|
|
|
(9
|
)
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||||||
Settlements
|
—
|
|
|
(42
|
)
|
|
—
|
|
|
—
|
|
(21
|
)
|
(5
|
)
|
|
—
|
|
—
|
|
||||||||
Balance – end of period
|
$
|
85
|
|
|
$
|
747
|
|
|
$
|
45
|
|
|
$
|
39
|
|
$
|
7
|
|
$
|
243
|
|
|
$
|
2
|
|
$
|
357
|
|
Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
(118
|
)
|
(1)
|
Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the Consolidated balance sheets. The liability for GLB reinsurance was
$684 million
at June 30, 2017, and
$774 million
at March 31, 2017, which includes a fair value derivative adjustment of
$357 million
and
$466 million
, respectively.
|
|
|
|
|
Liabilities
|
|
|||||||||||||||||||||||
Three Months Ended
|
Available-for-Sale Debt Securities
|
|
|
Equity
securities |
|
Short-term investments
|
|
Other
investments |
|
|
Other derivative instruments
|
|
GLB
(1)
|
|
||||||||||||||
June 30, 2016
|
Foreign
|
|
|
Corporate
securities |
|
|
MBS
|
|
|
|
||||||||||||||||||
(in millions of U.S. dollars)
|
|
|
|
|
||||||||||||||||||||||||
Balance – beginning of period
|
$
|
62
|
|
|
$
|
261
|
|
|
$
|
48
|
|
|
$
|
29
|
|
$
|
—
|
|
$
|
211
|
|
|
$
|
10
|
|
$
|
839
|
|
Transfers into Level 3
|
3
|
|
|
2
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||||||
Change in Net Unrealized Gains (Losses) included in OCI
|
3
|
|
|
9
|
|
|
—
|
|
|
(1
|
)
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||||||
Net Realized Gains/Losses
|
(1
|
)
|
|
(2
|
)
|
|
—
|
|
|
1
|
|
—
|
|
—
|
|
|
—
|
|
132
|
|
||||||||
Purchases
|
27
|
|
|
31
|
|
|
1
|
|
|
10
|
|
50
|
|
8
|
|
|
—
|
|
—
|
|
||||||||
Sales
|
(7
|
)
|
|
(16
|
)
|
|
—
|
|
|
(2
|
)
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||||||
Settlements
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
—
|
|
(3
|
)
|
|
—
|
|
—
|
|
||||||||
Balance – end of period
|
$
|
87
|
|
|
$
|
281
|
|
|
$
|
49
|
|
|
$
|
37
|
|
$
|
50
|
|
$
|
216
|
|
|
$
|
10
|
|
$
|
971
|
|
Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
132
|
|
(1)
|
Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the Consolidated balance sheets. The liability for GLB reinsurance was
$1.3
billion at
June 30, 2016
, and
$1.1
billion at March 31, 2016, which includes a fair value derivative adjustment of
$971
million and
$839
million, respectively.
|
|
Assets
|
|
|
Liabilities
|
|
|||||||||||||||||||||||
Six Months Ended
|
Available-for-Sale Debt Securities
|
Equity
securities
|
|
Short-term investments
|
|
Other
investments
|
|
|
Other
derivative
instruments
|
|
GLB
(1)
|
|
||||||||||||||||
June 30, 2017
|
Foreign
|
|
|
Corporate
securities
|
|
|
MBS
|
|
|
|
||||||||||||||||||
(in millions of U.S. dollars)
|
|
|
|
|
||||||||||||||||||||||||
Balance – beginning of period
|
$
|
74
|
|
|
$
|
681
|
|
|
$
|
45
|
|
|
$
|
41
|
|
$
|
25
|
|
$
|
225
|
|
|
$
|
13
|
|
$
|
559
|
|
Transfers into Level 3
|
—
|
|
|
57
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
9
|
|
||||||||
Transfers out of Level 3
|
—
|
|
|
(67
|
)
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
(9
|
)
|
—
|
|
||||||||
Change in Net Unrealized Gains (Losses) included in OCI
|
2
|
|
|
(8
|
)
|
|
—
|
|
|
1
|
|
—
|
|
3
|
|
|
—
|
|
—
|
|
||||||||
Net Realized Gains/Losses
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
(2
|
)
|
(211
|
)
|
||||||||
Purchases
|
33
|
|
|
221
|
|
|
1
|
|
|
6
|
|
14
|
|
24
|
|
|
—
|
|
—
|
|
||||||||
Sales
|
(22
|
)
|
|
(55
|
)
|
|
(1
|
)
|
|
(9
|
)
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||||||
Settlements
|
(3
|
)
|
|
(81
|
)
|
|
—
|
|
|
—
|
|
(32
|
)
|
(9
|
)
|
|
—
|
|
—
|
|
||||||||
Balance – end of period
|
$
|
85
|
|
|
$
|
747
|
|
|
$
|
45
|
|
|
$
|
39
|
|
$
|
7
|
|
$
|
243
|
|
|
$
|
2
|
|
$
|
357
|
|
Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
$
|
(211
|
)
|
(1)
|
Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the Consolidated balance sheets. The liability for GLB reinsurance was
$684 million
at June 30, 2017, and
$853 million
at December 31, 2016, which includes a fair value derivative adjustment of
$357 million
and
$559 million
, respectively.
|
|
Assets
|
|
|
|
|
Liabilities
|
|
||||||||||||||||||||||||
Six Months Ended
|
Available-for-Sale Debt Securities
|
|
|
Equity
securities |
|
|
Short-term investments
|
|
|
Other
investments |
|
|
Other derivative instruments
|
|
|
GLB
(1)
|
|
||||||||||||||
June 30, 2016
|
Foreign
|
|
|
Corporate
securities |
|
|
MBS
|
|
|
|
|
|
|||||||||||||||||||
(in millions of U.S. dollars)
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Balance – beginning of period
|
$
|
57
|
|
|
$
|
174
|
|
|
$
|
53
|
|
|
$
|
16
|
|
|
$
|
—
|
|
|
$
|
212
|
|
|
$
|
6
|
|
|
$
|
609
|
|
Transfers into Level 3
|
9
|
|
|
18
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Transfers out of Level 3
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Change in Net Unrealized Gains (Losses) included in OCI
|
9
|
|
|
11
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Net Realized Gains/Losses
|
(6
|
)
|
|
(8
|
)
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
362
|
|
||||||||
Purchases
(2)
|
32
|
|
|
124
|
|
|
1
|
|
|
23
|
|
|
50
|
|
|
14
|
|
|
2
|
|
|
—
|
|
||||||||
Sales
|
(8
|
)
|
|
(30
|
)
|
|
(5
|
)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Settlements
|
(4
|
)
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
||||||||
Balance – end of period
|
$
|
87
|
|
|
$
|
281
|
|
|
$
|
49
|
|
|
$
|
37
|
|
|
$
|
50
|
|
|
$
|
216
|
|
|
$
|
10
|
|
|
$
|
971
|
|
Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date
|
$
|
(5
|
)
|
|
$
|
(7
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
362
|
|
(1)
|
Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the Consolidated balance sheets. The liability for GLB reinsurance was
$1.3
billion at
June 30, 2016
, and
$888 million
at December 31, 2015, which includes a fair value derivative adjustment of
$971
million and
$609 million
, respectively.
|
(2)
|
Includes acquired invested assets as a result of the Chubb Corp acquisition.
|
June 30, 2017
|
Fair Value
|
|
|
Carrying Value
|
|
||||||||||||||
(in millions of U.S. dollars)
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed maturities held to maturity
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Treasury and agency
|
$
|
528
|
|
|
$
|
85
|
|
|
$
|
—
|
|
|
$
|
613
|
|
|
$
|
602
|
|
Foreign
|
—
|
|
|
642
|
|
|
—
|
|
|
642
|
|
|
613
|
|
|||||
Corporate securities
|
—
|
|
|
2,688
|
|
|
12
|
|
|
2,700
|
|
|
2,645
|
|
|||||
Mortgage-backed securities
|
—
|
|
|
1,304
|
|
|
—
|
|
|
1,304
|
|
|
1,268
|
|
|||||
States, municipalities, and political subdivisions
|
—
|
|
|
5,301
|
|
|
—
|
|
|
5,301
|
|
|
5,243
|
|
|||||
Total assets
|
$
|
528
|
|
|
$
|
10,020
|
|
|
$
|
12
|
|
|
$
|
10,560
|
|
|
$
|
10,371
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Repurchase agreements
|
$
|
—
|
|
|
$
|
1,408
|
|
|
$
|
—
|
|
|
$
|
1,408
|
|
|
$
|
1,408
|
|
Short-term debt
|
—
|
|
|
931
|
|
|
—
|
|
|
931
|
|
|
922
|
|
|||||
Long-term debt
|
—
|
|
|
12,366
|
|
|
—
|
|
|
12,366
|
|
|
11,667
|
|
|||||
Trust preferred securities
|
—
|
|
|
462
|
|
|
—
|
|
|
462
|
|
|
308
|
|
|||||
Total liabilities
|
$
|
—
|
|
|
$
|
15,167
|
|
|
$
|
—
|
|
|
$
|
15,167
|
|
|
$
|
14,305
|
|
December 31, 2016
|
Fair Value
|
|
|
Carrying Value
|
|
||||||||||||||
(in millions of U.S. dollars)
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed maturities held to maturity
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Treasury and agency
|
$
|
555
|
|
|
$
|
106
|
|
|
$
|
—
|
|
|
$
|
661
|
|
|
$
|
655
|
|
Foreign
|
—
|
|
|
667
|
|
|
—
|
|
|
667
|
|
|
640
|
|
|||||
Corporate securities
|
—
|
|
|
2,782
|
|
|
13
|
|
|
2,795
|
|
|
2,771
|
|
|||||
Mortgage-backed securities
|
—
|
|
|
1,428
|
|
|
—
|
|
|
1,428
|
|
|
1,393
|
|
|||||
States, municipalities, and political subdivisions
|
—
|
|
|
5,119
|
|
|
—
|
|
|
5,119
|
|
|
5,185
|
|
|||||
Total assets
|
$
|
555
|
|
|
$
|
10,102
|
|
|
$
|
13
|
|
|
$
|
10,670
|
|
|
$
|
10,644
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Repurchase agreements
|
$
|
—
|
|
|
$
|
1,403
|
|
|
$
|
—
|
|
|
$
|
1,403
|
|
|
$
|
1,403
|
|
Short-term debt
|
—
|
|
|
503
|
|
|
—
|
|
|
503
|
|
|
500
|
|
|||||
Long-term debt
|
—
|
|
|
12,998
|
|
|
—
|
|
|
12,998
|
|
|
12,610
|
|
|||||
Trust preferred securities
|
—
|
|
|
456
|
|
|
—
|
|
|
456
|
|
|
308
|
|
|||||
Total liabilities
|
$
|
—
|
|
|
$
|
15,360
|
|
|
$
|
—
|
|
|
$
|
15,360
|
|
|
$
|
14,821
|
|
|
Six Months Ended June 30
|
|
||||||
(in millions of U.S. dollars)
|
2017
|
|
|
2016
|
|
|||
Gross unpaid losses and loss expenses – beginning of period
|
|
$
|
60,540
|
|
|
$
|
37,303
|
|
Reinsurance recoverable on unpaid losses
(1)
|
|
(12,708
|
)
|
|
(10,741
|
)
|
||
Net unpaid losses and loss expenses – beginning of period
|
|
47,832
|
|
|
26,562
|
|
||
Acquisition of subsidiaries
|
|
—
|
|
|
21,398
|
|
||
Total
|
|
47,832
|
|
|
47,960
|
|
||
Net losses and loss expenses incurred in respect of losses occurring in:
|
|
|
|
|
||||
Current year
|
|
8,396
|
|
|
8,529
|
|
||
Prior years
(2)
|
|
(461
|
)
|
|
(601
|
)
|
||
Total
|
|
7,935
|
|
|
7,928
|
|
||
Net losses and loss expenses paid in respect of losses occurring in:
|
|
|
|
|
||||
Current year
|
|
2,271
|
|
|
1,964
|
|
||
Prior years
|
|
5,758
|
|
|
5,541
|
|
||
Total
|
|
8,029
|
|
|
7,505
|
|
||
Foreign currency revaluation and other
|
|
171
|
|
|
40
|
|
||
Net unpaid losses and loss expenses – end of period
|
|
47,909
|
|
|
48,423
|
|
||
Reinsurance recoverable on unpaid losses
(1)
|
|
12,485
|
|
|
12,396
|
|
||
Gross unpaid losses and loss expenses – end of period
|
|
$
|
60,394
|
|
|
$
|
60,819
|
|
•
|
Net favorable development of
$101 million
in long-tail business, primarily from:
|
•
|
Net favorable development of
$83 million
in our workers’ compensation lines with favorable development of
$57 million
in the 2016 accident year related to our annual assessment of multi-claimant events including industrial accidents. Consistent with prior years, we reviewed these potential exposures after the close of the accident year to allow for late reporting or identification of significant losses. Favorable development of
$40 million
in accident years 2015 and prior was principally due to lower than expected loss experience and revision to development patterns used in our loss projection methods for select portfolios; and
|
•
|
Net favorable development of
$37 million
in our commercial-multi peril (CMP) and monoline general liability lines, driven by favorable paid and reported loss activity relative to prior expectations, principally in accident years 2008 through 2013.
|
•
|
Net favorable development of
$30 million
in short-tail business, primarily from favorable development of
$29 million
in our commercial property portfolios, driven by lower than expected loss emergence in the 2014 and 2016 accident years.
|
•
|
Net favorable development of
$200 million
in long-tail business, primarily from:
|
•
|
Net favorable development of
$84 million
in our workers’ compensation lines due to the same factors experienced for the three months ended June 30, 2017, as described above;
|
•
|
Net favorable development of
$74 million
in our commercial excess and umbrella portfolios, primarily in accident years 2010 and prior, driven by lower than expected reported loss activity, and an increase in weighting towards experience-based methods;
|
•
|
Net favorable development of
$37 million
in our commercial-multi peril (CMP) and monoline general liability lines, due to the same factors experienced for the three months ended June 30, 2017, as described above; and
|
•
|
Net favorable development of
$25 million
in our professional Errors and Omissions (E&O) portfolios, primarily in the 2012 and 2013 accident years, arising from lower than expected reported loss activity, partially offset by claim-specific adverse development.
|
•
|
Net favorable development of
$110 million
in short-tail business, primarily from:
|
•
|
Net favorable development of
$45 million
in our credit-related business, primarily due to lower than expected claims severity in the 2015 accident year;
|
•
|
Favorable development of
$33 million
in our property lines, primarily in our commercial property portfolios, due to the same factors experienced for the three months ended June 30, 2017 as described above; and
|
•
|
Net favorable development of
$24 million
in our accident & health (A&H) business, primarily due to lower than expected loss emergence in the 2015 and 2016 accident years.
|
•
|
Net favorable development of
$167 million
in long-tail business, primarily from:
|
•
|
Net favorable development of
$114 million
in our workers’ compensation lines with favorable development of
$40 million
in the 2015 accident year related to our annual assessment of multi-claimant events including industrial accidents. Consistent with prior years, we reviewed these potential exposures after the close of the accident year to allow for late reporting or identification of significant losses. Favorable development of
$59 million
driven by accident years 2011 and prior was principally due to lower than expected loss experience and revision to the basis for selecting development patterns used in our loss projection methods. Adverse development in accident years 2012 through 2015 was due to a small number of large claims in our excess business;
|
•
|
Net favorable development of
$50 million
in our commercial-multi peril (CMP) and monoline general liability lines, driven by favorable paid and reported loss activity relative to prior expectations, principally in accident years 2007 through 2014; and
|
•
|
Net favorable development of
$20 million
in our professional E&O portfolios, in the 2003 accident year due to a favorable development on a specific claim.
|
•
|
Net favorable development of
$309 million
in long-tail business, primarily from:
|
•
|
Favorable development of
$145 million
in our commercial excess and umbrella portfolios, driven by continued lower than expected reported loss activity in accident years 2010 and prior; in general, the severity of claims has been less than previously expected;
|
•
|
Net favorable development of
$114 million
on our workers’ compensation lines due to the same factors experienced for the three months ended June 30, 2016, as described above;
|
•
|
Favorable development of
$63 million
in our professional E&O portfolios, primarily impacting the 2012 and prior accident years and arising from both lower than expected reported loss activity and re-assessments of remaining claim-specific liabilities for the older accident years; and
|
•
|
Net favorable development of
$24 million
in our primary casualty and general liability portfolios was driven by
$50 million
favorable development in our CMP and monoline general liability lines as described above, and
$26 million
adverse development due to higher than expected reported loss activity, mainly associated with construction defect coverages.
|
•
|
Net favorable development of
$37 million
in short-tail business, primarily from favorable development of
$24 million
in our surety business, due to favorable claim emergence in the 2013 accident year.
|
•
|
Net favorable development of
$88 million
in short-tail business, primarily from:
|
•
|
Favorable development of
$37 million
in property and marine (excluding technical lines), primarily in accident years 2013 through 2015,driven mainly by favorable U.K. and Continental Europe loss emergence, including favorable claim-specific loss settlements;
|
•
|
Favorable development of
$26 million
in technical and energy lines, primarily from favorable loss emergence in accident years 2014 through 2016 primarily in offshore where experience has been better than expected; and
|
•
|
Favorable development of
$19 million
in A&H lines, primarily from favorable loss emergence in Asia Pacific and Continental Europe in accident years 2014 through 2016.
|
•
|
Net favorable development of
$108 million
in short-tail business, due primarily to the same factors experienced for the three months ended June 30, 2017 as described above; and
|
•
|
Net adverse development of
$32 million
in long-tail business, primarily in our casualty lines, driven by a change in the discount rate in the U.K. (Ogden rate) impacting the 2016 and prior accident years.
|
•
|
Net favorable development of
$84 million
in short-tail business, primarily from:
|
•
|
Favorable development of
$38 million
in property (excluding technical lines), primarily from favorable Continental Europe loss emergence in accident years 2013 through 2015; and
|
•
|
Favorable development of
$32 million
in energy lines, primarily from a claims review of catastrophe impacts on underwriting years 2004 through 2008, as well as favorable loss emergence in accident years 2010 through 2013, primarily in offshore where experience has been better than expected.
|
•
|
Net favorable development of
$36 million
in our casualty and professional liability lines, primarily impacting treaty years 2011 and prior, principally resulting from lower than expected loss emergence.
|
•
|
Net favorable development of
$27 million
, comprising
$36 million
in our casualty and professional liability lines as described above, as well as adverse development of
$9 million
in our motor and excess liability lines, driven by a change in the discount rate in the U.K. (Ogden rate) primarily impacting the 2015 and prior treaty years.
|
•
|
Favorable development of
$41 million
in casualty lines primarily impacting treaty years 2011 and prior, principally resulting from lower than expected loss emergence.
|
|
|
|
|
|
June 30, 2017
|
|
|
|
|
December 31, 2016
|
|
||||||||||||||
|
Consolidated
Balance Sheet
Location
|
|
Fair Value
|
|
|
Notional
Value/
Payment
Provision
|
|
|
Fair Value
|
|
|
Notional
Value/
Payment
Provision
|
|
||||||||||||
(in millions of U.S. dollars)
|
|
Derivative Asset
|
|
|
Derivative (Liability)
|
|
|
|
Derivative Asset
|
|
|
Derivative (Liability)
|
|
|
|||||||||||
Investment and embedded derivative instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency forward contracts
|
OA / (AP)
|
|
$
|
8
|
|
|
$
|
(30
|
)
|
|
$
|
2,201
|
|
|
$
|
25
|
|
|
$
|
(50
|
)
|
|
$
|
2,220
|
|
Cross-currency swaps
|
OA / (AP)
|
|
—
|
|
|
—
|
|
|
45
|
|
|
—
|
|
|
—
|
|
|
95
|
|
||||||
Options/Futures contracts on notes and bonds
|
OA / (AP)
|
|
4
|
|
|
(5
|
)
|
|
1,376
|
|
|
6
|
|
|
(4
|
)
|
|
2,344
|
|
||||||
Convertible securities
(1)
|
FM AFS / ES
|
|
2
|
|
|
—
|
|
|
7
|
|
|
2
|
|
|
—
|
|
|
7
|
|
||||||
|
|
|
$
|
14
|
|
|
$
|
(35
|
)
|
|
$
|
3,629
|
|
|
$
|
33
|
|
|
$
|
(54
|
)
|
|
$
|
4,666
|
|
Other derivative instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Futures contracts on equities
(2)
|
OA / (AP)
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
1,428
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1,316
|
|
Other
|
OA / (AP)
|
|
4
|
|
|
(2
|
)
|
|
249
|
|
|
2
|
|
|
(13
|
)
|
|
214
|
|
||||||
|
|
|
$
|
9
|
|
|
$
|
(2
|
)
|
|
$
|
1,677
|
|
|
$
|
3
|
|
|
$
|
(13
|
)
|
|
$
|
1,530
|
|
GLB
(3)
|
(AP) / (FPB)
|
|
$
|
—
|
|
|
$
|
(684
|
)
|
|
$
|
1,180
|
|
|
$
|
—
|
|
|
$
|
(853
|
)
|
|
$
|
1,264
|
|
(1)
|
Includes fair value of embedded derivatives.
|
(2)
|
Related to GMDB and GLB blocks of business.
|
(3)
|
Includes both future policy benefits reserves and fair value derivative adjustment. Note that the payment provision related to GLB is the net amount at risk. The concept of a notional value does not apply to the GLB reinsurance contracts.
|
(1)
|
The carrying value of the securities lending collateral held is $
1 million
lower than the securities lending payable at both June 30, 2017 and December 31, 2016, due to accrued interest recorded in the securities lending payable.
|
|
Remaining contractual maturity
|
|
|||||||||||||||||||||
|
June 30, 2017
|
|
|
December 31, 2016
|
|
||||||||||||||||||
|
30-90 Days
|
|
|
Greater than
90 Days
|
|
|
Total
|
|
|
Up to
30 Days
|
|
|
Greater than
90 Days
|
|
|
Total
|
|
||||||
(in millions of U.S. dollars)
|
|
|
|
|
|||||||||||||||||||
Collateral pledged under repurchase agreements:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
1
|
|
U.S. Treasury and agency
|
6
|
|
|
240
|
|
|
246
|
|
|
230
|
|
|
10
|
|
|
240
|
|
||||||
Mortgage-backed securities
|
495
|
|
|
731
|
|
|
1,226
|
|
|
339
|
|
|
881
|
|
|
1,220
|
|
||||||
|
$
|
501
|
|
|
$
|
971
|
|
|
$
|
1,472
|
|
|
$
|
569
|
|
|
$
|
892
|
|
|
$
|
1,461
|
|
Gross amount of recognized liabilities for repurchase agreements
|
|
|
|
|
$
|
1,408
|
|
|
|
|
|
|
$
|
1,403
|
|
||||||||
Difference
(1)
|
|
|
|
|
$
|
64
|
|
|
|
|
|
|
$
|
58
|
|
(1)
|
Per the repurchase agreements, the amount of collateral posted is required to exceed the amount of gross liability.
|
|
Three Months Ended
|
|
Six Months Ended
|
|
||||||||||
|
June 30
|
|
June 30
|
|
||||||||||
(in millions of U.S. dollars)
|
2017
|
|
|
2016
|
|
2017
|
|
|
2016
|
|
||||
Investment and embedded derivative instruments
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
$
|
(7
|
)
|
|
$
|
(10
|
)
|
$
|
7
|
|
|
$
|
(20
|
)
|
All other futures contracts and options
|
(9
|
)
|
|
(37
|
)
|
(17
|
)
|
|
(71
|
)
|
||||
Convertible securities
(1)
|
—
|
|
|
—
|
|
—
|
|
|
5
|
|
||||
Total investment and embedded derivative instruments
|
$
|
(16
|
)
|
|
$
|
(47
|
)
|
$
|
(10
|
)
|
|
$
|
(86
|
)
|
GLB and other derivative instruments
|
|
|
|
|
|
|
||||||||
GLB
(2)
|
$
|
118
|
|
|
$
|
(131
|
)
|
$
|
211
|
|
|
$
|
(359
|
)
|
Futures contracts on equities
(3)
|
(38
|
)
|
|
(28
|
)
|
(112
|
)
|
|
(43
|
)
|
||||
Other
|
(1
|
)
|
|
—
|
|
1
|
|
|
(2
|
)
|
||||
Total GLB and other derivative instruments
|
$
|
79
|
|
|
$
|
(159
|
)
|
$
|
100
|
|
|
$
|
(404
|
)
|
|
$
|
63
|
|
|
$
|
(206
|
)
|
$
|
90
|
|
|
$
|
(490
|
)
|
(1)
|
Includes embedded derivatives.
|
(2)
|
Excludes foreign exchange gains (losses) related to GLB.
|
(3)
|
Related to GMDB and GLB blocks of business.
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
||||||||||||||||||||||
|
June 30
|
|
|
June 30
|
|
||||||||||||||||||||||
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||||||||||||||
CHF
|
|
|
USD
|
|
|
CHF
|
|
|
USD
|
|
|
CHF
|
|
|
USD
|
|
|
CHF
|
|
|
USD
|
|
|||||
Total dividend distributions per common share
|
0.69
|
|
|
$
|
0.71
|
|
|
0.68
|
|
|
$
|
0.69
|
|
|
1.38
|
|
|
$
|
1.40
|
|
|
1.34
|
|
|
$
|
1.36
|
|
(in millions of U.S. dollars, except share data)
|
Three Months Ended
June 30, 2017
|
|
|
Six Months Ended
June 30, 2017
|
|
|
July 1, 2017
through
August 2, 2017
|
|
|||
|
|
||||||||||
Number of shares repurchased
|
2,381,566
|
|
|
3,417,630
|
|
|
501,872
|
|
|||
Cost of shares repurchased
|
$
|
335
|
|
|
$
|
475
|
|
|
$
|
72
|
|
Repurchase authorization remaining at end of period
|
$
|
525
|
|
|
$
|
525
|
|
|
$
|
453
|
|
|
Three Months Ended June 30
|
|
|||||||||||||||||||||
|
Pension Benefits
|
|
|
Other Postretirement Benefits
|
|
||||||||||||||||||
|
U.S. Plans
|
|
|
Non-U.S. Plans
|
|
|
Total
|
|
|
U.S. Plans
|
|
|
Non-U.S. Plans
|
|
|
Total
|
|
||||||
(in millions of U.S. dollars)
|
|
|
|
|
|
||||||||||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
16
|
|
|
$
|
4
|
|
|
$
|
20
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
2
|
|
Interest cost
|
26
|
|
|
7
|
|
|
33
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Expected return on plan assets
|
(48
|
)
|
|
(10
|
)
|
|
(58
|
)
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||||
Amortization of net actuarial loss
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of prior service cost
|
—
|
|
|
—
|
|
|
—
|
|
|
(23
|
)
|
|
—
|
|
|
(23
|
)
|
||||||
Curtailments
|
—
|
|
|
(8
|
)
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net periodic (benefit) cost
|
$
|
(6
|
)
|
|
$
|
(6
|
)
|
|
$
|
(12
|
)
|
|
$
|
(23
|
)
|
|
$
|
1
|
|
|
$
|
(22
|
)
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
20
|
|
|
$
|
4
|
|
|
$
|
24
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
3
|
|
Interest cost
|
27
|
|
|
8
|
|
|
35
|
|
|
4
|
|
|
—
|
|
|
4
|
|
||||||
Expected return on plan assets
|
(42
|
)
|
|
(10
|
)
|
|
(52
|
)
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
||||||
Amortization of net actuarial loss
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net periodic cost
|
$
|
5
|
|
|
$
|
3
|
|
|
$
|
8
|
|
|
$
|
4
|
|
|
$
|
1
|
|
|
$
|
5
|
|
|
Six Months Ended June 30
|
|
|||||||||||||||||||||
|
Pension Benefits
|
|
|
Other Postretirement Benefits
|
|
||||||||||||||||||
|
U.S. Plans
|
|
|
Non-U.S. Plans
|
|
|
Total
|
|
|
U.S. Plans
|
|
|
Non-U.S. Plans
|
|
|
Total
|
|
||||||
(in millions of U.S. dollars)
|
|
|
|
|
|
||||||||||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
32
|
|
|
$
|
8
|
|
|
$
|
40
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
2
|
|
Interest cost
|
52
|
|
|
14
|
|
|
66
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||
Expected return on plan assets
|
(95
|
)
|
|
(20
|
)
|
|
(115
|
)
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
||||||
Amortization of net actuarial loss
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of prior service cost
|
—
|
|
|
—
|
|
|
—
|
|
|
(46
|
)
|
|
—
|
|
|
(46
|
)
|
||||||
Curtailments
|
—
|
|
|
(8
|
)
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net periodic (benefit) cost
|
$
|
(11
|
)
|
|
$
|
(5
|
)
|
|
$
|
(16
|
)
|
|
$
|
(46
|
)
|
|
$
|
1
|
|
|
$
|
(45
|
)
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
37
|
|
|
$
|
9
|
|
|
$
|
46
|
|
|
$
|
4
|
|
|
$
|
1
|
|
|
$
|
5
|
|
Interest cost
|
54
|
|
|
16
|
|
|
70
|
|
|
9
|
|
|
—
|
|
|
9
|
|
||||||
Expected return on plan assets
|
(79
|
)
|
|
(20
|
)
|
|
(99
|
)
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
||||||
Amortization of net actuarial loss
|
—
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net periodic cost
|
$
|
12
|
|
|
$
|
7
|
|
|
$
|
19
|
|
|
$
|
9
|
|
|
$
|
1
|
|
|
$
|
10
|
|
|
North America Commercial P&C Insurance
|
|
|
North America Personal P&C Insurance
|
|
|
North America Agricultural Insurance
|
|
|
Overseas General Insurance
|
|
|
Global
Reinsurance
|
|
|
Life Insurance
|
|
|
Corporate
|
|
|
Chubb
Consolidated
|
|
||||||||
For the Three Months Ended
|
|
|
|
|
|
||||||||||||||||||||||||||
June 30, 2016
|
|
|
|
|
|
||||||||||||||||||||||||||
(in millions of U.S. dollars)
|
|
|
|
|
|
||||||||||||||||||||||||||
Net premiums written
|
$
|
3,245
|
|
|
$
|
1,231
|
|
|
$
|
375
|
|
|
$
|
2,031
|
|
|
$
|
230
|
|
|
$
|
527
|
|
|
$
|
—
|
|
|
$
|
7,639
|
|
Net premiums earned
|
3,148
|
|
|
1,140
|
|
|
327
|
|
|
2,093
|
|
|
185
|
|
|
512
|
|
|
—
|
|
|
7,405
|
|
||||||||
Losses and loss expenses
|
1,971
|
|
|
661
|
|
|
284
|
|
|
1,089
|
|
|
87
|
|
|
147
|
|
|
15
|
|
|
4,254
|
|
||||||||
Policy benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
146
|
|
|
—
|
|
|
146
|
|
||||||||
Policy acquisition costs
|
545
|
|
|
269
|
|
|
25
|
|
|
537
|
|
|
47
|
|
|
137
|
|
|
—
|
|
|
1,560
|
|
||||||||
Administrative expenses
|
299
|
|
|
98
|
|
|
2
|
|
|
277
|
|
|
14
|
|
|
77
|
|
|
62
|
|
|
829
|
|
||||||||
Underwriting income (loss)
|
333
|
|
|
112
|
|
|
16
|
|
|
190
|
|
|
37
|
|
|
5
|
|
|
(77
|
)
|
|
616
|
|
||||||||
Net investment income (loss)
|
468
|
|
|
55
|
|
|
5
|
|
|
147
|
|
|
65
|
|
|
69
|
|
|
(101
|
)
|
|
708
|
|
||||||||
Other (income) expense
|
(9
|
)
|
|
3
|
|
|
—
|
|
|
(5
|
)
|
|
(2
|
)
|
|
—
|
|
|
(16
|
)
|
|
(29
|
)
|
||||||||
Amortization expense (benefit) of purchased intangibles
|
—
|
|
|
4
|
|
|
8
|
|
|
13
|
|
|
—
|
|
|
—
|
|
|
(20
|
)
|
|
5
|
|
||||||||
Segment income (loss)
|
$
|
810
|
|
|
$
|
160
|
|
|
$
|
13
|
|
|
$
|
329
|
|
|
$
|
104
|
|
|
$
|
74
|
|
|
$
|
(142
|
)
|
|
$
|
1,348
|
|
Net realized gains (losses) including OTTI
|
|
|
|
|
|
|
|
|
|
|
|
|
(216
|
)
|
|
(216
|
)
|
||||||||||||||
Interest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
153
|
|
|
153
|
|
||||||||||||||
Chubb integration expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
98
|
|
|
98
|
|
||||||||||||||
Income tax expense
|
|
|
|
|
|
|
|
|
|
|
|
|
155
|
|
|
155
|
|
||||||||||||||
Net income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(764
|
)
|
|
$
|
726
|
|
|
North America Commercial P&C Insurance
|
|
|
North America Personal P&C Insurance
|
|
|
North America Agricultural Insurance
|
|
|
Overseas General Insurance
|
|
|
Global
Reinsurance
|
|
|
Life Insurance
|
|
|
Corporate
|
|
|
Chubb
Consolidated
|
|
||||||||
For the Six Months Ended
|
|
|
|
|
|
||||||||||||||||||||||||||
June 30, 2016
|
|
|
|
|
|
||||||||||||||||||||||||||
(in millions of U.S. dollars)
|
|
|
|
|
|
||||||||||||||||||||||||||
Net premiums written
|
$
|
5,547
|
|
|
$
|
2,102
|
|
|
$
|
439
|
|
|
$
|
4,072
|
|
|
$
|
431
|
|
|
$
|
1,043
|
|
|
$
|
—
|
|
|
$
|
13,634
|
|
Net premiums earned
|
6,044
|
|
|
2,164
|
|
|
350
|
|
|
4,048
|
|
|
387
|
|
|
1,009
|
|
|
—
|
|
|
14,002
|
|
||||||||
Losses and loss expenses
|
3,718
|
|
|
1,322
|
|
|
254
|
|
|
2,110
|
|
|
176
|
|
|
324
|
|
|
24
|
|
|
7,928
|
|
||||||||
Policy benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
272
|
|
|
—
|
|
|
272
|
|
||||||||
Policy acquisition costs
|
1,027
|
|
|
518
|
|
|
29
|
|
|
1,040
|
|
|
100
|
|
|
259
|
|
|
—
|
|
|
2,973
|
|
||||||||
Administrative expenses
|
565
|
|
|
186
|
|
|
(2
|
)
|
|
540
|
|
|
28
|
|
|
149
|
|
|
135
|
|
|
1,601
|
|
||||||||
Underwriting income (loss)
|
734
|
|
|
138
|
|
|
69
|
|
|
358
|
|
|
83
|
|
|
5
|
|
|
(159
|
)
|
|
1,228
|
|
||||||||
Net investment income (loss)
|
894
|
|
|
102
|
|
|
10
|
|
|
293
|
|
|
132
|
|
|
136
|
|
|
(185
|
)
|
|
1,382
|
|
||||||||
Other (income) expense
|
(9
|
)
|
|
4
|
|
|
—
|
|
|
(10
|
)
|
|
(3
|
)
|
|
6
|
|
|
11
|
|
|
(1
|
)
|
||||||||
Amortization expense (benefit) of purchased intangibles
|
—
|
|
|
12
|
|
|
15
|
|
|
24
|
|
|
—
|
|
|
1
|
|
|
(40
|
)
|
|
12
|
|
||||||||
Segment income (loss)
|
$
|
1,637
|
|
|
$
|
224
|
|
|
$
|
64
|
|
|
$
|
637
|
|
|
$
|
218
|
|
|
$
|
134
|
|
|
$
|
(315
|
)
|
|
$
|
2,599
|
|
Net realized gains (losses) including OTTI
|
|
|
|
|
|
|
|
|
|
|
|
|
(610
|
)
|
|
(610
|
)
|
||||||||||||||
Interest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
299
|
|
|
299
|
|
||||||||||||||
Chubb integration expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
246
|
|
|
246
|
|
||||||||||||||
Income tax expense
|
|
|
|
|
|
|
|
|
|
|
|
|
279
|
|
|
279
|
|
||||||||||||||
Net income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(1,749
|
)
|
|
$
|
1,165
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
||||||||||
|
June 30
|
|
|
June 30
|
|
||||||||||
(in millions of U.S. dollars, except share and per share data)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
1,305
|
|
|
$
|
726
|
|
|
$
|
2,398
|
|
|
$
|
1,165
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Denominator for basic earnings per share:
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares outstanding
|
467,981,077
|
|
|
467,701,328
|
|
|
468,244,458
|
|
|
457,102,802
|
|
||||
Denominator for diluted earnings per share:
|
|
|
|
|
|
|
|
||||||||
Share-based compensation plans
|
3,872,860
|
|
|
3,455,969
|
|
|
3,900,678
|
|
|
3,379,559
|
|
||||
Weighted-average shares outstanding and assumed conversions
|
471,853,937
|
|
|
471,157,297
|
|
|
472,145,136
|
|
|
460,482,361
|
|
||||
Basic earnings per share
|
$
|
2.79
|
|
|
$
|
1.55
|
|
|
$
|
5.12
|
|
|
$
|
2.55
|
|
Diluted earnings per share
|
$
|
2.77
|
|
|
$
|
1.54
|
|
|
$
|
5.08
|
|
|
$
|
2.53
|
|
Potential anti-dilutive share conversions
|
2,066,578
|
|
|
2,103,281
|
|
|
1,467,556
|
|
|
2,056,018
|
|
(in millions of U.S. dollars)
|
Chubb
Limited
(Parent
Guarantor)
|
|
|
Chubb INA
Holdings Inc.
(Subsidiary
Issuer)
|
|
|
Other Chubb
Limited
Subsidiaries
|
|
|
Consolidating
Adjustments and Eliminations
|
|
|
Chubb Limited
Consolidated
|
|
|||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Investments
|
$
|
23
|
|
|
$
|
305
|
|
|
$
|
99,880
|
|
|
$
|
—
|
|
|
$
|
100,208
|
|
Cash
(1)
|
—
|
|
|
167
|
|
|
1,323
|
|
|
(193
|
)
|
|
1,297
|
|
|||||
Insurance and reinsurance balances receivable
|
—
|
|
|
—
|
|
|
11,699
|
|
|
(2,037
|
)
|
|
9,662
|
|
|||||
Reinsurance recoverable on losses and loss expenses
|
—
|
|
|
—
|
|
|
24,118
|
|
|
(10,760
|
)
|
|
13,358
|
|
|||||
Reinsurance recoverable on policy benefits
|
—
|
|
|
—
|
|
|
1,205
|
|
|
(1,007
|
)
|
|
198
|
|
|||||
Value of business acquired
|
—
|
|
|
—
|
|
|
337
|
|
|
—
|
|
|
337
|
|
|||||
Goodwill and other intangible assets
|
—
|
|
|
—
|
|
|
22,013
|
|
|
—
|
|
|
22,013
|
|
|||||
Investments in subsidiaries
|
40,553
|
|
|
49,982
|
|
|
—
|
|
|
(90,535
|
)
|
|
—
|
|
|||||
Due from subsidiaries and affiliates, net
|
10,251
|
|
|
—
|
|
|
—
|
|
|
(10,251
|
)
|
|
—
|
|
|||||
Other assets
|
141
|
|
|
289
|
|
|
19,527
|
|
|
(4,042
|
)
|
|
15,915
|
|
|||||
Total assets
|
$
|
50,968
|
|
|
$
|
50,743
|
|
|
$
|
180,102
|
|
|
$
|
(118,825
|
)
|
|
$
|
162,988
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Unpaid losses and loss expenses
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
70,460
|
|
|
$
|
(10,066
|
)
|
|
$
|
60,394
|
|
Unearned premiums
|
—
|
|
|
—
|
|
|
18,876
|
|
|
(3,587
|
)
|
|
15,289
|
|
|||||
Future policy benefits
|
—
|
|
|
—
|
|
|
6,197
|
|
|
(1,007
|
)
|
|
5,190
|
|
|||||
Due to subsidiaries and affiliates, net
|
—
|
|
|
9,939
|
|
|
312
|
|
|
(10,251
|
)
|
|
—
|
|
|||||
Affiliated notional cash pooling programs
(1)
|
193
|
|
|
—
|
|
|
—
|
|
|
(193
|
)
|
|
—
|
|
|||||
Repurchase agreements
|
—
|
|
|
—
|
|
|
1,408
|
|
|
—
|
|
|
1,408
|
|
|||||
Short-term debt
|
—
|
|
|
922
|
|
|
—
|
|
|
—
|
|
|
922
|
|
|||||
Long-term debt
|
—
|
|
|
11,656
|
|
|
11
|
|
|
—
|
|
|
11,667
|
|
|||||
Trust preferred securities
|
—
|
|
|
308
|
|
|
—
|
|
|
—
|
|
|
308
|
|
|||||
Other liabilities
|
426
|
|
|
1,582
|
|
|
18,639
|
|
|
(3,186
|
)
|
|
17,461
|
|
|||||
Total liabilities
|
619
|
|
|
24,407
|
|
|
115,903
|
|
|
(28,290
|
)
|
|
112,639
|
|
|||||
Total shareholders’ equity
|
50,349
|
|
|
26,336
|
|
|
64,199
|
|
|
(90,535
|
)
|
|
50,349
|
|
|||||
Total liabilities and shareholders’ equity
|
$
|
50,968
|
|
|
$
|
50,743
|
|
|
$
|
180,102
|
|
|
$
|
(118,825
|
)
|
|
$
|
162,988
|
|
(1)
|
Chubb maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various Chubb entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual Chubb accounts are translated daily into a single currency and pooled on a notional basis. Individual Chubb entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At
June 30, 2017
, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.
|
|
|||||||||||||||||||
(in millions of U.S. dollars)
|
Chubb
Limited
(Parent
Guarantor)
|
|
|
Chubb INA
Holdings Inc.
(Subsidiary
Issuer)
|
|
|
Other Chubb
Limited
Subsidiaries
|
|
|
Consolidating
Adjustments and Eliminations
|
|
|
Chubb Limited
Consolidated
|
|
|||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Investments
|
$
|
27
|
|
|
$
|
485
|
|
|
$
|
98,582
|
|
|
$
|
—
|
|
|
$
|
99,094
|
|
Cash
(1)
|
1
|
|
|
1
|
|
|
1,965
|
|
|
(982
|
)
|
|
985
|
|
|||||
Insurance and reinsurance balances receivable
|
—
|
|
|
—
|
|
|
10,498
|
|
|
(1,528
|
)
|
|
8,970
|
|
|||||
Reinsurance recoverable on losses and loss expenses
|
—
|
|
|
—
|
|
|
24,496
|
|
|
(10,919
|
)
|
|
13,577
|
|
|||||
Reinsurance recoverable on policy benefits
|
—
|
|
|
—
|
|
|
1,153
|
|
|
(971
|
)
|
|
182
|
|
|||||
Value of business acquired
|
—
|
|
|
—
|
|
|
355
|
|
|
—
|
|
|
355
|
|
|||||
Goodwill and other intangible assets
|
—
|
|
|
—
|
|
|
22,095
|
|
|
—
|
|
|
22,095
|
|
|||||
Investments in subsidiaries
|
38,408
|
|
|
49,509
|
|
|
—
|
|
|
(87,917
|
)
|
|
—
|
|
|||||
Due from subsidiaries and affiliates, net
|
10,482
|
|
|
—
|
|
|
—
|
|
|
(10,482
|
)
|
|
—
|
|
|||||
Other assets
|
3
|
|
|
436
|
|
|
18,442
|
|
|
(4,353
|
)
|
|
14,528
|
|
|||||
Total assets
|
$
|
48,921
|
|
|
$
|
50,431
|
|
|
$
|
177,586
|
|
|
$
|
(117,152
|
)
|
|
$
|
159,786
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Unpaid losses and loss expenses
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
70,683
|
|
|
$
|
(10,143
|
)
|
|
$
|
60,540
|
|
Unearned premiums
|
—
|
|
|
—
|
|
|
18,538
|
|
|
(3,759
|
)
|
|
14,779
|
|
|||||
Future policy benefits
|
—
|
|
|
—
|
|
|
6,007
|
|
|
(971
|
)
|
|
5,036
|
|
|||||
Due to subsidiaries and affiliates, net
|
—
|
|
|
10,209
|
|
|
273
|
|
|
(10,482
|
)
|
|
—
|
|
|||||
Affiliated notional cash pooling programs
(1)
|
363
|
|
|
619
|
|
|
—
|
|
|
(982
|
)
|
|
—
|
|
|||||
Repurchase agreements
|
—
|
|
|
—
|
|
|
1,403
|
|
|
—
|
|
|
1,403
|
|
|||||
Short-term debt
|
—
|
|
|
500
|
|
|
—
|
|
|
—
|
|
|
500
|
|
|||||
Long-term debt
|
—
|
|
|
12,599
|
|
|
11
|
|
|
—
|
|
|
12,610
|
|
|||||
Trust preferred securities
|
—
|
|
|
308
|
|
|
—
|
|
|
—
|
|
|
308
|
|
|||||
Other liabilities
|
283
|
|
|
1,582
|
|
|
17,368
|
|
|
(2,898
|
)
|
|
16,335
|
|
|||||
Total liabilities
|
646
|
|
|
25,817
|
|
|
114,283
|
|
|
(29,235
|
)
|
|
111,511
|
|
|||||
Total shareholders’ equity
|
48,275
|
|
|
24,614
|
|
|
63,303
|
|
|
(87,917
|
)
|
|
48,275
|
|
|||||
Total liabilities and shareholders’ equity
|
$
|
48,921
|
|
|
$
|
50,431
|
|
|
$
|
177,586
|
|
|
$
|
(117,152
|
)
|
|
$
|
159,786
|
|
(1)
|
Chubb maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various Chubb entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual Chubb accounts are translated daily into a single currency and pooled on a notional basis. Individual Chubb entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At
December 31, 2016
, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.
|
For the Three Months Ended June 30, 2017
|
Chubb
Limited
(Parent
Guarantor)
|
|
|
Chubb INA
Holdings Inc.
(Subsidiary
Issuer)
|
|
|
Other Chubb
Limited
Subsidiaries
|
|
|
Consolidating
Adjustments and Eliminations
|
|
|
Chubb
Limited
Consolidated
|
|
|||||
(in millions of U.S. dollars)
|
|
|
|
|
|||||||||||||||
Net premiums written
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,581
|
|
|
$
|
—
|
|
|
$
|
7,581
|
|
Net premiums earned
|
—
|
|
|
—
|
|
|
7,237
|
|
|
—
|
|
|
7,237
|
|
|||||
Net investment income
|
2
|
|
|
4
|
|
|
764
|
|
|
—
|
|
|
770
|
|
|||||
Equity in earnings of subsidiaries
|
1,253
|
|
|
665
|
|
|
—
|
|
|
(1,918
|
)
|
|
—
|
|
|||||
Net realized gains (losses) including OTTI
|
(2
|
)
|
|
(1
|
)
|
|
104
|
|
|
—
|
|
|
101
|
|
|||||
Losses and loss expenses
|
—
|
|
|
—
|
|
|
4,146
|
|
|
—
|
|
|
4,146
|
|
|||||
Policy benefits
|
—
|
|
|
—
|
|
|
163
|
|
|
—
|
|
|
163
|
|
|||||
Policy acquisition costs and administrative expenses
|
18
|
|
|
(2
|
)
|
|
2,139
|
|
|
—
|
|
|
2,155
|
|
|||||
Interest (income) expense
|
(84
|
)
|
|
212
|
|
|
19
|
|
|
—
|
|
|
147
|
|
|||||
Other (income) expense
|
4
|
|
|
10
|
|
|
(159
|
)
|
|
—
|
|
|
(145
|
)
|
|||||
Amortization of purchased intangibles
|
—
|
|
|
—
|
|
|
65
|
|
|
—
|
|
|
65
|
|
|||||
Chubb integration expenses
|
6
|
|
|
4
|
|
|
62
|
|
|
—
|
|
|
72
|
|
|||||
Income tax expense (benefit)
|
4
|
|
|
(87
|
)
|
|
283
|
|
|
—
|
|
|
200
|
|
|||||
Net income
|
$
|
1,305
|
|
|
$
|
531
|
|
|
$
|
1,387
|
|
|
$
|
(1,918
|
)
|
|
$
|
1,305
|
|
Comprehensive income
|
$
|
1,675
|
|
|
$
|
920
|
|
|
$
|
1,756
|
|
|
$
|
(2,676
|
)
|
|
$
|
1,675
|
|
For the Three Months Ended June 30, 2016
|
Chubb
Limited
(Parent
Guarantor)
|
|
|
Chubb INA
Holdings Inc.
(Subsidiary
Issuer)
|
|
|
Other Chubb
Limited
Subsidiaries
|
|
|
Consolidating
Adjustments and Eliminations
|
|
|
Chubb
Limited
Consolidated
|
|
|||||
(in millions of U.S. dollars)
|
|
|
|
|
|||||||||||||||
Net premiums written
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,639
|
|
|
$
|
—
|
|
|
$
|
7,639
|
|
Net premiums earned
|
—
|
|
|
—
|
|
|
7,405
|
|
|
—
|
|
|
7,405
|
|
|||||
Net investment income
|
1
|
|
|
3
|
|
|
704
|
|
|
—
|
|
|
708
|
|
|||||
Equity in earnings of subsidiaries
|
664
|
|
|
549
|
|
|
—
|
|
|
(1,213
|
)
|
|
—
|
|
|||||
Net realized gains (losses) including OTTI
|
(1
|
)
|
|
(1
|
)
|
|
(214
|
)
|
|
—
|
|
|
(216
|
)
|
|||||
Losses and loss expenses
|
—
|
|
|
—
|
|
|
4,254
|
|
|
—
|
|
|
4,254
|
|
|||||
Policy benefits
|
—
|
|
|
—
|
|
|
146
|
|
|
—
|
|
|
146
|
|
|||||
Policy acquisition costs and administrative expenses
|
16
|
|
|
96
|
|
|
2,277
|
|
|
—
|
|
|
2,389
|
|
|||||
Interest (income) expense
|
(93
|
)
|
|
233
|
|
|
13
|
|
|
—
|
|
|
153
|
|
|||||
Other (income) expense
|
(4
|
)
|
|
10
|
|
|
(35
|
)
|
|
—
|
|
|
(29
|
)
|
|||||
Amortization of purchased intangibles
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
|||||
Chubb integration expenses
|
14
|
|
|
(97
|
)
|
|
181
|
|
|
—
|
|
|
98
|
|
|||||
Income tax expense (benefit)
|
5
|
|
|
(37
|
)
|
|
187
|
|
|
—
|
|
|
155
|
|
|||||
Net income
|
$
|
726
|
|
|
$
|
346
|
|
|
$
|
867
|
|
|
$
|
(1,213
|
)
|
|
$
|
726
|
|
Comprehensive income
|
$
|
1,540
|
|
|
$
|
1,004
|
|
|
$
|
1,681
|
|
|
$
|
(2,685
|
)
|
|
$
|
1,540
|
|
For the Six Months Ended June 30, 2017
|
Chubb
Limited
(Parent
Guarantor)
|
|
|
Chubb INA
Holdings Inc.
(Subsidiary
Issuer)
|
|
|
Other Chubb
Limited
Subsidiaries
|
|
|
Consolidating
Adjustments and Eliminations
|
|
|
Chubb
Limited
Consolidated
|
|
|||||
(in millions of U.S. dollars)
|
|
|
|
|
|||||||||||||||
Net premiums written
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14,291
|
|
|
$
|
—
|
|
|
$
|
14,291
|
|
Net premiums earned
|
—
|
|
|
—
|
|
|
14,009
|
|
|
—
|
|
|
14,009
|
|
|||||
Net investment income
|
2
|
|
|
7
|
|
|
1,506
|
|
|
—
|
|
|
1,515
|
|
|||||
Equity in earnings of subsidiaries
|
2,280
|
|
|
1,366
|
|
|
—
|
|
|
(3,646
|
)
|
|
—
|
|
|||||
Net realized gains (losses) including OTTI
|
(2
|
)
|
|
(14
|
)
|
|
110
|
|
|
—
|
|
|
94
|
|
|||||
Losses and loss expenses
|
—
|
|
|
—
|
|
|
7,935
|
|
|
—
|
|
|
7,935
|
|
|||||
Policy benefits
|
—
|
|
|
—
|
|
|
331
|
|
|
—
|
|
|
331
|
|
|||||
Policy acquisition costs and administrative expenses
|
36
|
|
|
12
|
|
|
4,180
|
|
|
—
|
|
|
4,228
|
|
|||||
Interest (income) expense
|
(168
|
)
|
|
433
|
|
|
36
|
|
|
—
|
|
|
301
|
|
|||||
Other (income) expense
|
(2
|
)
|
|
25
|
|
|
(238
|
)
|
|
—
|
|
|
(215
|
)
|
|||||
Amortization of purchased intangibles
|
—
|
|
|
—
|
|
|
129
|
|
|
—
|
|
|
129
|
|
|||||
Chubb integration expenses
|
6
|
|
|
53
|
|
|
124
|
|
|
—
|
|
|
183
|
|
|||||
Income tax expense (benefit)
|
10
|
|
|
(199
|
)
|
|
517
|
|
|
—
|
|
|
328
|
|
|||||
Net income
|
$
|
2,398
|
|
|
$
|
1,035
|
|
|
$
|
2,611
|
|
|
$
|
(3,646
|
)
|
|
$
|
2,398
|
|
Comprehensive income
|
$
|
3,082
|
|
|
$
|
1,711
|
|
|
$
|
3,294
|
|
|
$
|
(5,005
|
)
|
|
$
|
3,082
|
|
For the Six Months Ended June 30, 2016
|
Chubb
Limited
(Parent
Guarantor)
|
|
|
Chubb INA
Holdings Inc.
(Subsidiary
Issuer)
|
|
|
Other Chubb
Limited
Subsidiaries
|
|
|
Consolidating
Adjustments and Eliminations
|
|
|
Chubb
Limited
Consolidated
|
|
|||||
(in millions of U.S. dollars)
|
|
|
|
|
|||||||||||||||
Net premiums written
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13,634
|
|
|
$
|
—
|
|
|
$
|
13,634
|
|
Net premiums earned
|
—
|
|
|
—
|
|
|
14,002
|
|
|
—
|
|
|
14,002
|
|
|||||
Net investment income
|
2
|
|
|
7
|
|
|
1,373
|
|
|
—
|
|
|
1,382
|
|
|||||
Equity in earnings of subsidiaries
|
1,039
|
|
|
1,055
|
|
|
—
|
|
|
(2,094
|
)
|
|
—
|
|
|||||
Net realized gains (losses) including OTTI
|
(1
|
)
|
|
(1
|
)
|
|
(608
|
)
|
|
—
|
|
|
(610
|
)
|
|||||
Losses and loss expenses
|
—
|
|
|
—
|
|
|
7,928
|
|
|
—
|
|
|
7,928
|
|
|||||
Policy benefits
|
—
|
|
|
—
|
|
|
272
|
|
|
—
|
|
|
272
|
|
|||||
Policy acquisition costs and administrative expenses
|
33
|
|
|
132
|
|
|
4,409
|
|
|
—
|
|
|
4,574
|
|
|||||
Interest (income) expense
|
(173
|
)
|
|
448
|
|
|
24
|
|
|
—
|
|
|
299
|
|
|||||
Other (income) expense
|
(13
|
)
|
|
20
|
|
|
(8
|
)
|
|
—
|
|
|
(1
|
)
|
|||||
Amortization of purchased intangibles
|
—
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
|||||
Chubb integration expenses
|
17
|
|
|
40
|
|
|
189
|
|
|
—
|
|
|
246
|
|
|||||
Income tax expense (benefit)
|
11
|
|
|
(187
|
)
|
|
455
|
|
|
—
|
|
|
279
|
|
|||||
Net income
|
$
|
1,165
|
|
|
$
|
608
|
|
|
$
|
1,486
|
|
|
$
|
(2,094
|
)
|
|
$
|
1,165
|
|
Comprehensive income
|
$
|
3,081
|
|
|
$
|
2,060
|
|
|
$
|
3,402
|
|
|
$
|
(5,462
|
)
|
|
$
|
3,081
|
|
Six Months Ended June 30, 2017
|
Chubb
Limited
(Parent
Guarantor)
|
|
|
Chubb INA
Holdings Inc.
(Subsidiary
Issuer)
|
|
|
Other Chubb
Limited Subsidiaries |
|
|
Consolidating
Adjustments and Eliminations
|
|
|
Chubb
Limited
Consolidated
|
|
|||||
(in millions of U.S. dollars)
|
|
|
|
|
|||||||||||||||
Net cash flows from operating activities
|
$
|
551
|
|
|
$
|
1,444
|
|
|
$
|
1,686
|
|
|
$
|
(2,041
|
)
|
|
$
|
1,640
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of fixed maturities available for sale
|
—
|
|
|
(5
|
)
|
|
(12,255
|
)
|
|
—
|
|
|
(12,260
|
)
|
|||||
Purchases of fixed maturities held to maturity
|
—
|
|
|
—
|
|
|
(212
|
)
|
|
—
|
|
|
(212
|
)
|
|||||
Purchases of equity securities
|
—
|
|
|
—
|
|
|
(82
|
)
|
|
—
|
|
|
(82
|
)
|
|||||
Sales of fixed maturities available for sale
|
—
|
|
|
—
|
|
|
6,873
|
|
|
—
|
|
|
6,873
|
|
|||||
Sales of equity securities
|
—
|
|
|
—
|
|
|
104
|
|
|
—
|
|
|
104
|
|
|||||
Maturities and redemptions of fixed maturities available for sale
|
—
|
|
|
13
|
|
|
5,156
|
|
|
—
|
|
|
5,169
|
|
|||||
Maturities and redemptions of fixed maturities held to maturity
|
—
|
|
|
—
|
|
|
408
|
|
|
—
|
|
|
408
|
|
|||||
Net change in short-term investments
|
—
|
|
|
166
|
|
|
188
|
|
|
—
|
|
|
354
|
|
|||||
Net derivative instruments settlements
|
—
|
|
|
(7
|
)
|
|
(122
|
)
|
|
—
|
|
|
(129
|
)
|
|||||
Other
|
—
|
|
|
2
|
|
|
(123
|
)
|
|
—
|
|
|
(121
|
)
|
|||||
Net cash flows from (used for) investing activities
|
—
|
|
|
169
|
|
|
(65
|
)
|
|
—
|
|
|
104
|
|
|||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Dividends paid on Common Shares
|
(646
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(646
|
)
|
|||||
Common Shares repurchased
|
—
|
|
|
—
|
|
|
(475
|
)
|
|
—
|
|
|
(475
|
)
|
|||||
Repayment of long-term debt
|
—
|
|
|
(500
|
)
|
|
—
|
|
|
—
|
|
|
(500
|
)
|
|||||
Proceeds from issuance of repurchase agreements
|
—
|
|
|
—
|
|
|
1,343
|
|
|
—
|
|
|
1,343
|
|
|||||
Repayment of repurchase agreements
|
—
|
|
|
—
|
|
|
(1,338
|
)
|
|
—
|
|
|
(1,338
|
)
|
|||||
Proceeds from share-based compensation plans
|
—
|
|
|
—
|
|
|
89
|
|
|
—
|
|
|
89
|
|
|||||
Dividend to parent company
|
—
|
|
|
—
|
|
|
(2,041
|
)
|
|
2,041
|
|
|
—
|
|
|||||
Advances (to) from affiliates
|
264
|
|
|
(328
|
)
|
|
64
|
|
|
—
|
|
|
—
|
|
|||||
Net payments to affiliated notional cash pooling programs
(1)
|
(170
|
)
|
|
(619
|
)
|
|
—
|
|
|
789
|
|
|
—
|
|
|||||
Policyholder contract deposits
|
—
|
|
|
—
|
|
|
209
|
|
|
—
|
|
|
209
|
|
|||||
Policyholder contract withdrawals
|
—
|
|
|
—
|
|
|
(125
|
)
|
|
—
|
|
|
(125
|
)
|
|||||
Net cash flows used for financing activities
|
(552
|
)
|
|
(1,447
|
)
|
|
(2,274
|
)
|
|
2,830
|
|
|
(1,443
|
)
|
|||||
Effect of foreign currency rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
11
|
|
|||||
Net increase (decrease) in cash
|
(1
|
)
|
|
166
|
|
|
(642
|
)
|
|
789
|
|
|
312
|
|
|||||
Cash – beginning of period
(1)
|
1
|
|
|
1
|
|
|
1,965
|
|
|
(982
|
)
|
|
985
|
|
|||||
Cash – end of period
(1)
|
$
|
—
|
|
|
$
|
167
|
|
|
$
|
1,323
|
|
|
$
|
(193
|
)
|
|
$
|
1,297
|
|
(1)
|
Chubb maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various Chubb entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual Chubb accounts are translated daily into a single currency and pooled on a notional basis. Individual Chubb entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At
June 30, 2017
and December 31, 2016, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.
|
Six Months Ended June 30, 2016
|
Chubb
Limited
(Parent
Guarantor)
|
|
|
Chubb INA
Holdings Inc.
(Subsidiary
Issuer)
|
|
|
Other Chubb
Limited
Subsidiaries
|
|
|
Consolidating
Adjustments and Eliminations
|
|
|
Chubb
Limited
Consolidated
|
|
|||||
(in millions of U.S. dollars)
|
|
|
|
|
|||||||||||||||
Net cash flows from operating activities
|
$
|
3,213
|
|
|
$
|
4,050
|
|
|
$
|
2,262
|
|
|
$
|
(7,372
|
)
|
|
$
|
2,153
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of fixed maturities available for sale
|
—
|
|
|
(83
|
)
|
|
(16,994
|
)
|
|
—
|
|
|
(17,077
|
)
|
|||||
Purchases of fixed maturities held to maturity
|
—
|
|
|
—
|
|
|
(121
|
)
|
|
—
|
|
|
(121
|
)
|
|||||
Purchases of equity securities
|
—
|
|
|
—
|
|
|
(78
|
)
|
|
—
|
|
|
(78
|
)
|
|||||
Sales of fixed maturities available for sale
|
—
|
|
|
—
|
|
|
11,868
|
|
|
—
|
|
|
11,868
|
|
|||||
Sales of equity securities
|
—
|
|
|
—
|
|
|
932
|
|
|
—
|
|
|
932
|
|
|||||
Maturities and redemptions of fixed maturities
available for sale
|
—
|
|
|
—
|
|
|
3,910
|
|
|
—
|
|
|
3,910
|
|
|||||
Maturities and redemptions of fixed maturities held to maturity
|
—
|
|
|
—
|
|
|
443
|
|
|
—
|
|
|
443
|
|
|||||
Net change in short-term investments
|
—
|
|
|
7,829
|
|
|
3,882
|
|
|
—
|
|
|
11,711
|
|
|||||
Net derivative instruments settlements
|
—
|
|
|
(10
|
)
|
|
(83
|
)
|
|
—
|
|
|
(93
|
)
|
|||||
Acquisition of subsidiaries (net of cash acquired of $71)
|
—
|
|
|
(14,282
|
)
|
|
34
|
|
|
—
|
|
|
(14,248
|
)
|
|||||
Capital contribution
|
(2,330
|
)
|
|
—
|
|
|
(2,330
|
)
|
|
4,660
|
|
|
—
|
|
|||||
Other
|
—
|
|
|
(3
|
)
|
|
84
|
|
|
—
|
|
|
81
|
|
|||||
Net cash flows from (used for) investing activities
|
(2,330
|
)
|
|
(6,549
|
)
|
|
1,547
|
|
|
4,660
|
|
|
(2,672
|
)
|
|||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Dividends paid on Common Shares
|
(530
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(530
|
)
|
|||||
Proceeds from issuance of repurchase agreements
|
—
|
|
|
—
|
|
|
904
|
|
|
—
|
|
|
904
|
|
|||||
Repayment of repurchase agreements
|
—
|
|
|
—
|
|
|
(902
|
)
|
|
—
|
|
|
(902
|
)
|
|||||
Proceeds from share-based compensation plans, including windfall tax benefits
|
—
|
|
|
—
|
|
|
92
|
|
|
—
|
|
|
92
|
|
|||||
Dividend to parent company
|
—
|
|
|
—
|
|
|
(7,372
|
)
|
|
7,372
|
|
|
—
|
|
|||||
Advances (to) from affiliates
|
(247
|
)
|
|
221
|
|
|
26
|
|
|
—
|
|
|
—
|
|
|||||
Capital contribution
|
—
|
|
|
2,330
|
|
|
2,330
|
|
|
(4,660
|
)
|
|
—
|
|
|||||
Net proceeds from (payments to) affiliated notional cash pooling programs
(1)
|
(106
|
)
|
|
157
|
|
|
—
|
|
|
(51
|
)
|
|
—
|
|
|||||
Policyholder contract deposits
|
—
|
|
|
—
|
|
|
274
|
|
|
—
|
|
|
274
|
|
|||||
Policyholder contract withdrawals
|
—
|
|
|
—
|
|
|
(103
|
)
|
|
—
|
|
|
(103
|
)
|
|||||
Other
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|||||
Net cash flows from (used for) financing activities
|
(883
|
)
|
|
2,704
|
|
|
(4,751
|
)
|
|
2,661
|
|
|
(269
|
)
|
|||||
Effect of foreign currency rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
24
|
|
|
—
|
|
|
24
|
|
|||||
Net increase (decrease) in cash
|
—
|
|
|
205
|
|
|
(918
|
)
|
|
(51
|
)
|
|
(764
|
)
|
|||||
Cash – beginning of period
(1)
|
1
|
|
|
2
|
|
|
2,743
|
|
|
(971
|
)
|
|
1,775
|
|
|||||
Cash – end of period
(1)
|
$
|
1
|
|
|
$
|
207
|
|
|
$
|
1,825
|
|
|
$
|
(1,022
|
)
|
|
$
|
1,011
|
|
(1)
|
Chubb maintains two notional multicurrency cash pools (Pools) with a third-party bank. Various Chubb entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual Chubb accounts are translated daily into a single currency and pooled on a notional basis. Individual Chubb entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero. At
June 30, 2016
and December 31, 2015, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.
|
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
|
MD&A Index
|
Page
|
Forward-Looking Statements
|
•
|
losses arising out of natural or man-made catastrophes such as hurricanes, typhoons, earthquakes, floods, climate change (including effects on weather patterns; greenhouse gases; sea; land and air temperatures; sea levels; and rain and snow), nuclear accidents, or terrorism which could be affected by:
|
•
|
the number of insureds and ceding companies affected;
|
•
|
the amount and timing of losses actually incurred and reported by insureds;
|
•
|
the impact of these losses on our reinsurers and the amount and timing of reinsurance recoverable actually received;
|
•
|
the cost of building materials and labor to reconstruct properties or to perform environmental remediation following a catastrophic event; and
|
•
|
complex coverage and regulatory issues such as whether losses occurred from storm surge or flooding and related lawsuits;
|
•
|
actions that rating agencies may take from time to time, such as financial strength or credit ratings downgrades or placing these ratings on credit watch negative or the equivalent;
|
•
|
the ability to collect reinsurance recoverable, credit developments of reinsurers, and any delays with respect thereto and changes in the cost, quality, or availability of reinsurance;
|
•
|
actual loss experience from insured or reinsured events and the timing of claim payments;
|
•
|
the uncertainties of the loss-reserving and claims-settlement processes, including the difficulties associated with assessing environmental damage and asbestos-related latent injuries, the impact of aggregate-policy-coverage limits, the impact of bankruptcy protection sought by various asbestos producers and other related businesses, and the timing of loss payments;
|
•
|
changes to our assessment as to whether it is more likely than not that we will be required to sell, or have the intent to sell, available for sale fixed maturity investments before their anticipated recovery;
|
•
|
infection rates and severity of pandemics and their effects on our business operations and claims activity;
|
•
|
developments in global financial markets, including changes in interest rates, stock markets, and other financial markets, increased government involvement or intervention in the financial services industry, the cost and availability of financing, and foreign currency exchange rate fluctuations (which we refer to in this report as foreign exchange and foreign currency exchange), which could affect our statement of operations, investment portfolio, financial condition, and financing plans;
|
•
|
general economic and business conditions resulting from volatility in the stock and credit markets and the depth and duration of potential recession;
|
•
|
global political conditions, the occurrence of any terrorist attacks, including any nuclear, radiological, biological, or chemical events, or the outbreak and effects of war, and possible business disruption or economic contraction that may result from such events;
|
•
|
the potential impact of the United Kingdom’s vote to withdraw from the European Union, including political, regulatory, social, and economic uncertainty and market and exchange rate volatility;
|
•
|
judicial decisions and rulings, new theories of liability, legal tactics, and settlement terms;
|
•
|
the effects of public company bankruptcies and/or accounting restatements, as well as disclosures by and investigations of public companies relating to possible accounting irregularities, and other corporate governance issues, including the effects of such events on:
|
•
|
the capital markets;
|
•
|
the markets for directors and officers (D&O) and errors and omissions (E&O) insurance; and
|
•
|
claims and litigation arising out of such disclosures or practices by other companies;
|
•
|
uncertainties relating to governmental, legislative and regulatory policies, developments, actions, investigations, and treaties, which, among other things, could subject us to insurance regulation or taxation in additional jurisdictions or affect our current operations;
|
•
|
the actual amount of new and renewal business, market acceptance of our products, and risks associated with the introduction of new products and services and entering new markets, including regulatory constraints on exit strategies;
|
•
|
the competitive environment in which we operate, including trends in pricing or in policy terms and conditions, which may differ from our projections and changes in market conditions that could render our business strategies ineffective or obsolete;
|
•
|
acquisitions made by us performing differently than expected, our failure to realize anticipated expense-related efficiencies or growth from acquisitions, the impact of acquisitions on our pre-existing organization, or announced acquisitions not closing;
|
•
|
risks and uncertainties relating to our acquisition of The Chubb Corporation (Chubb Corp acquisition) including our ability to successfully integrate the acquired company;
|
•
|
risks associated with being a Swiss corporation, including reduced flexibility with respect to certain aspects of capital management and the potential for additional regulatory burdens;
|
•
|
the potential impact from government-mandated insurance coverage for acts of terrorism;
|
•
|
the availability of borrowings and letters of credit under our credit facilities;
|
•
|
the adequacy of collateral supporting funded high deductible programs;
|
•
|
changes in the distribution or placement of risks due to increased consolidation of insurance and reinsurance brokers;
|
•
|
material differences between actual and expected assessments for guaranty funds and mandatory pooling arrangements;
|
•
|
the effects of investigations into market practices in the property and casualty (P&C) industry;
|
•
|
changing rates of inflation and other economic conditions, for example, recession;
|
•
|
the amount of dividends received from subsidiaries;
|
•
|
loss of the services of any of our executive officers without suitable replacements being recruited in a reasonable time frame;
|
•
|
the ability of our technology resources, including information systems and security, to perform as anticipated such as with respect to preventing material information technology failures or third-party infiltrations or hacking resulting in consequences adverse to Chubb or its customers or partners; and
|
•
|
management’s response to these factors and actual events (including, but not limited to, those described above).
|
Overview
|
Financial Highlights for the Three Months Ended June 30, 2017
|
•
|
Net income was $1,305 million compared with $726 million in the prior year period.
|
•
|
Total company and P&C net premiums written were $7.6 billion and $7.1 billion, respectively, both down 0.8 percent.
|
•
|
Since the acquisition of Chubb Corp, we have entered into new reinsurance agreements with third-party reinsurers for certain legacy Chubb Corp business, and have taken other merger-related underwriting actions, including exiting certain types of business that do not meet our underwriting standards or adhere to our risk diversification strategy. Together, these items adversely impacted P&C net premiums written growth by $198 million in the quarter. Excluding these items, P&C net premiums written were up 2.6 percent in constant dollars.
|
•
|
P&C combined ratio was 88.0 percent compared with 91.2 percent in the prior year period which included 1.0 percentage point from the unfavorable impact of initial year purchase accounting adjustments related to the Chubb Corp acquisition. The P&C combined ratio in the current year reflects favorable impacts from integration-related savings, post-retirement benefit savings, a favorable release of unallocated claims handling expense reserves and merger-related underwriting actions. These benefits reduced the expense ratio by 1.7 percentage points and the loss and loss expense ratio by 1.0 percentage point. Partially offsetting this decline is an increase in the underlying loss and loss expense ratio.
|
•
|
Total incremental integration-related savings recognized in the quarter were $105 million pre-tax. Refer to the Integration-Related Savings section below for additional information on the impact of these savings by income statement line item and segment.
|
•
|
Total pre-tax and after-tax catastrophe losses were $200 million (3.0 percentage points of the combined ratio) and $152 million, respectively, compared with $390 million (5.7 percentage points of the combined ratio) and $311 million, respectively, last year.
|
•
|
Total pre-tax and after-tax favorable prior period development was $170 million (2.5 percentage points of the combined ratio) and $144 million, respectively, compared with $301 million (4.4 percentage points of the combined ratio) and $241 million, respectively, last year.
|
•
|
Net investment income was $770 million compared with $708 million in the prior year period. Excluding the amortization of the fair value adjustment on acquired invested assets of Chubb Corp, net investment income was $855 million, compared with $816 million, up 4.8 percent.
|
•
|
Share repurchases totaled $335 million, or approximately 2.4 million shares, during the quarter.
|
|
|
|
|
|
|
Actual
|
|
|
Expected
|
|
||||||||||||||
(in millions of U.S. dollars)
|
|
2015
|
|
|
2016
|
|
|
YTD 2017
|
|
|
2017
|
|
|
2018
|
|
|
Total
|
|
||||||
Cumulative Chubb integration-related savings
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Annualized savings
|
|
|
|
$
|
578
|
|
|
$
|
775
|
|
|
$
|
825
|
|
|
$
|
875
|
|
|
$
|
875
|
|
||
Realized savings
|
|
|
|
$
|
325
|
|
|
$
|
554
|
|
|
$
|
710
|
|
|
$
|
845
|
|
|
$
|
875
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Chubb integration and merger-related expenses
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
One-time integration expenses related to savings
|
|
$
|
22
|
|
|
$
|
299
|
|
|
$
|
144
|
|
|
$
|
233
|
|
|
$
|
18
|
|
|
$
|
572
|
|
Other one-time merger-related expenses
|
|
11
|
|
|
193
|
|
|
39
|
|
|
116
|
|
|
12
|
|
|
331
|
|
||||||
Total expected integration and merger-related expenses
|
|
$
|
33
|
|
|
$
|
492
|
|
|
$
|
183
|
|
|
$
|
349
|
|
|
$
|
30
|
|
|
$
|
903
|
|
Cumulative annualized post-retirement benefit savings
|
|
|
|
$
|
15
|
|
|
$
|
95
|
|
|
$
|
115
|
|
|
$
|
115
|
|
|
$
|
115
|
|
Consolidated Operating Results – Three and Six Months Ended June 30, 2017 and 2016
|
|
Three Months Ended
|
|
|
|
|
Six Months Ended
|
|
|
|
||||||||||||
|
June 30
|
|
|
% Change
|
|
|
June 30
|
|
|
% Change
|
|
||||||||||
(in millions of U.S. dollars, except for percentages)
|
2017
|
|
|
2016
|
|
|
Q-17 vs.
Q-16 |
|
|
2017
|
|
|
2016
|
|
|
YTD-17 vs.
YTD-16 |
|
||||
Net premiums written
(1)
|
$
|
7,581
|
|
|
$
|
7,639
|
|
|
(0.8
|
)%
|
|
$
|
14,291
|
|
|
$
|
13,634
|
|
|
4.8
|
%
|
Net premiums earned
(1)
|
7,237
|
|
|
7,405
|
|
|
(2.3
|
)%
|
|
14,009
|
|
|
14,002
|
|
|
0.1
|
%
|
||||
Net investment income
|
770
|
|
|
708
|
|
|
8.8
|
%
|
|
1,515
|
|
|
1,382
|
|
|
9.6
|
%
|
||||
Net realized gains (losses)
|
101
|
|
|
(216
|
)
|
|
NM
|
|
|
94
|
|
|
(610
|
)
|
|
NM
|
|
||||
Total revenues
|
8,108
|
|
|
7,897
|
|
|
2.7
|
%
|
|
15,618
|
|
|
14,774
|
|
|
5.7
|
%
|
||||
Losses and loss expenses
|
4,146
|
|
|
4,254
|
|
|
(2.5
|
)%
|
|
7,935
|
|
|
7,928
|
|
|
0.1
|
%
|
||||
Policy benefits
|
163
|
|
|
146
|
|
|
11.6
|
%
|
|
331
|
|
|
272
|
|
|
21.7
|
%
|
||||
Policy acquisition costs
|
1,449
|
|
|
1,560
|
|
|
(7.1
|
)%
|
|
2,846
|
|
|
2,973
|
|
|
(4.3
|
)%
|
||||
Administrative expenses
|
706
|
|
|
829
|
|
|
(14.8
|
)%
|
|
1,382
|
|
|
1,601
|
|
|
(13.7
|
)%
|
||||
Interest expense
|
147
|
|
|
153
|
|
|
(3.9
|
)%
|
|
301
|
|
|
299
|
|
|
0.7
|
%
|
||||
Other (income) expense
|
(145
|
)
|
|
(29
|
)
|
|
NM
|
|
|
(215
|
)
|
|
(1
|
)
|
|
NM
|
|
||||
Amortization of purchased intangibles
|
65
|
|
|
5
|
|
|
NM
|
|
|
129
|
|
|
12
|
|
|
NM
|
|
||||
Chubb integration expenses
|
72
|
|
|
98
|
|
|
(26.5
|
)%
|
|
183
|
|
|
246
|
|
|
(25.6
|
)%
|
||||
Total expenses
|
6,603
|
|
|
7,016
|
|
|
(5.9
|
)%
|
|
12,892
|
|
|
13,330
|
|
|
(3.3
|
)%
|
||||
Income before income tax
|
1,505
|
|
|
881
|
|
|
70.9
|
%
|
|
2,726
|
|
|
1,444
|
|
|
88.8
|
%
|
||||
Income tax expense
|
200
|
|
|
155
|
|
|
29.0
|
%
|
|
328
|
|
|
279
|
|
|
17.6
|
%
|
||||
Net income
|
$
|
1,305
|
|
|
$
|
726
|
|
|
79.6
|
%
|
|
$
|
2,398
|
|
|
$
|
1,165
|
|
|
105.8
|
%
|
NM – not meaningful
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
On a constant-dollar basis for the three and six months ended
June 30, 2017
, net premiums written
decreased
$17 million
, or
0.2
percent, and
increased
$721 million
, or
5.3
percent, respectively, and net premiums earned
decreased
$131 million
and
increased
$45 million
, respectively. Amounts are calculated by translating prior period results using the same local currency exchange rates as the comparable current period.
|
•
|
Net premiums written in our North America Commercial P&C Insurance segment
decreased
$41
million for the three months ended
June 30, 2017
primarily due to merger-related underwriting actions (
$84 million
). Excluding these actions, net premiums written increased $43 million as growth in our Major Accounts Risk Management and Wholesale businesses was offset by declines in our property, casualty and select components of our financial lines businesses due to competitive market conditions. Net premiums written increased
$399
million for the six months ended
June 30, 2017
primarily reflecting the 14-day stub period ($519 million). On a comparative basis, which includes the 14-day stub period, net premiums written declined $120 million driven by merger-related underwriting actions (
$168 million
). Excluding these items, net premiums written increased $48 million, or 0.8 percent, due to the same factors driving the increase in the quarter as described above.
|
•
|
Net premiums written in our North America Personal P&C Insurance segment increased $24 million and $137 million for the three and six months ended June 30, 2017, respectively, reflecting growth across most lines. In addition, the increase in net premiums written for the six months ended June 30, 2017 reflected the favorable impact of the 14-day stub period ($100 million). Offsetting this growth were merger-related underwriting actions of $75 million and $126 million for the three and six months ended June 30, 2017, respectively. Excluding these items, net premiums written increased $99 million and $163 million for the three
and six months ended
June 30, 2017
, respectively, reflecting growth across most lines, primarily in homeowners and complementary products such as automobiles and valuables. Additionally, the non-renewal of a quota share treaty ($46 million) and a one-time favorable impact from the change in timing of premium registration favorably impacted growth in the quarter and year-to-date periods.
|
•
|
Net premiums written in our North America Agricultural Insurance segment
increased
$28
million and
$25
million for the three
and six months ended
June 30, 2017
, respectively, primarily due to higher commodity base prices in our 2017 policy pricing and growth in our Chubb Agribusiness unit driven by new business written and strong retention.
|
•
|
Net premiums written in our Overseas General Insurance segment
decreased
$25 million
or
increased
$7 million
on a constant-dollar basis, for the three months ended
June 30, 2017
, as growth in personal lines business and property and casualty (P&C) lines were offset by merger-related underwriting actions (
$39 million
). Net premiums written
increased
$134 million
, or
$196 million
on a constant-dollar basis, for the six months ended
June 30, 2017
, primarily reflecting the 14-day stub period ($215 million). On a comparative constant-dollar basis, which includes the 14-day stub period, net premiums written declined $19 million for the six months ended
June 30, 2017
reflecting merger-related underwriting actions (
$81 million
) and the impact of a merger-related accounting policy adjustment in the fourth quarter of 2016 to align the timing of premium recognition ($73 million). Excluding these items, net premiums written increased $135 million on a constant-dollar basis, due to growth in personal lines and P&C lines.
|
•
|
Net premiums written in our Global Reinsurance segment decreased $
40
million and
$42
million for the three
and six months ended
June 30, 2017
, respectively, as we maintained underwriting discipline in an environment of declining rates and increasing competition.
|
•
|
Net premiums written in our Life Insurance segment decreased $
4
million and increased
$4
million for the three
and six months ended
June 30, 2017
, respectively. For the quarter, growth in our Combined Insurance supplemental A&H program business and our Asian international life operations was more than offset by merger-related underwriting actions (
$8 million
). For the six months ended
June 30, 2017
, growth in these businesses more than offset the declines related to merger-related underwriting actions (
$24 million
). Both periods were adversely impacted by our life reinsurance business, which continues to decline as no new business is currently being written.
|
|
|
Three Months Ended
|
|||||||||||||||||||
|
|
|
|
June 30
|
|||||||||||||||||
(in millions of U.S. dollars, except for percentages)
|
2017
|
|
|
2016
|
|
|
% Change Q-17 vs.
Q-16 |
|
|
C$
(1)
2016
|
|
|
C$
(1)
%
Change Q-17 vs. Q-16
|
|
|
Impact of Merger Actions
(2)
|
|||||
Commercial multiple peril
(3)
|
$
|
227
|
|
|
$
|
236
|
|
|
(3.8
|
)%
|
|
$
|
236
|
|
|
(3.8
|
)%
|
|
(1.3
|
)
|
pts
|
Commercial casualty
|
961
|
|
|
893
|
|
|
7.6
|
%
|
|
892
|
|
|
7.7
|
%
|
|
(3.7
|
)
|
pts
|
|||
Workers' compensation
|
478
|
|
|
548
|
|
|
(12.8
|
)%
|
|
547
|
|
|
(12.6
|
)%
|
|
(5.1
|
)
|
pts
|
|||
Professional liability
|
913
|
|
|
927
|
|
|
(1.5
|
)%
|
|
912
|
|
|
0.1
|
%
|
|
(0.7
|
)
|
pts
|
|||
Surety
|
153
|
|
|
149
|
|
|
2.7
|
%
|
|
148
|
|
|
3.4
|
%
|
|
—
|
|
pts
|
|||
Property and other short-tail lines
|
1,054
|
|
|
1,097
|
|
|
(3.9
|
)%
|
|
1,093
|
|
|
(3.6
|
)%
|
|
(1.4
|
)
|
pts
|
|||
International other casualty
|
248
|
|
|
247
|
|
|
0.4
|
%
|
|
241
|
|
|
2.9
|
%
|
|
(0.8
|
)
|
pts
|
|||
Total Commercial P&C
|
4,034
|
|
|
4,097
|
|
|
(1.5
|
)%
|
|
4,069
|
|
|
(0.9
|
)%
|
|
(2.2
|
)
|
pts
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Agriculture
|
403
|
|
|
375
|
|
|
7.7
|
%
|
|
375
|
|
|
7.7
|
%
|
|
—
|
|
pts
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Personal automobile - North America
|
209
|
|
|
190
|
|
|
10.0
|
%
|
|
190
|
|
|
10.0
|
%
|
|
—
|
|
pts
|
|||
Personal automobile - International
|
188
|
|
|
165
|
|
|
13.9
|
%
|
|
162
|
|
|
16.0
|
%
|
|
—
|
|
pts
|
|||
Personal homeowners
|
925
|
|
|
929
|
|
|
(0.4
|
)%
|
|
928
|
|
|
(0.3
|
)%
|
|
(8.1
|
)
|
pts
|
|||
Personal other
|
363
|
|
|
363
|
|
|
—
|
|
|
360
|
|
|
0.8
|
%
|
|
(6.1
|
)
|
pts
|
|||
Total Personal lines
|
1,685
|
|
|
1,647
|
|
|
2.3
|
%
|
|
1,640
|
|
|
2.7
|
%
|
|
(6.0
|
)
|
pts
|
|||
Total Property and Casualty lines
|
6,122
|
|
|
6,119
|
|
|
—
|
|
|
6,084
|
|
|
0.6
|
%
|
|
(3.0
|
)
|
pts
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Global A&H lines
(4)
|
1,025
|
|
|
1,029
|
|
|
(0.4
|
)%
|
|
1,022
|
|
|
0.3
|
%
|
|
(1.4
|
)
|
pts
|
|||
Reinsurance lines
|
190
|
|
|
230
|
|
|
(17.7
|
)%
|
|
227
|
|
|
(16.5
|
)%
|
|
—
|
|
pts
|
|||
Life
|
244
|
|
|
261
|
|
|
(6.5
|
)%
|
|
265
|
|
|
(7.9
|
)%
|
|
(3.0
|
)
|
pts
|
|||
Total consolidated
|
$
|
7,581
|
|
|
$
|
7,639
|
|
|
(0.8
|
)%
|
|
$
|
7,598
|
|
|
(0.2
|
)%
|
|
(2.7
|
)
|
pts
|
(1)
|
On a constant-dollar basis. Amounts are calculated by translating prior period results using the same local currency exchange rates as the comparable current period.
|
(2)
|
Reflects the impact to growth of merger-related underwriting actions.
|
(3)
|
Commercial multiple peril represents retail package business (property and general liability)
|
(4)
|
For purposes of this schedule only, A&H results from our Combined North America and International businesses, normally included in the Life Insurance and Overseas General Insurance segments, respectively, as well as the A&H results of our North America Commercial P&C segment, are included in Global A&H lines above.
|
|
|
Six Months Ended
|
|||||||||||||||||||
|
|
|
|
June 30
|
|||||||||||||||||
(in millions of U.S. dollars, except for percentages)
|
2017
|
|
|
2016
|
|
|
% Change YTD-17
vs.
YTD-16 |
|
|
C$
(1)
2016
including stub period
|
|
|
C$
(1)
%
Change YTD-17 vs. YTD-16 including stub period
|
|
|
Impact of Merger Actions and accounting policy alignment
(2)
|
|||||
Commercial multiple peril
(3)
|
$
|
428
|
|
|
$
|
368
|
|
|
16.3
|
%
|
|
$
|
448
|
|
|
(4.5
|
)%
|
|
(1.2
|
)
|
pts
|
Commercial casualty
|
1,688
|
|
|
1,536
|
|
|
9.9
|
%
|
|
1,653
|
|
|
2.1
|
%
|
|
(3.4
|
)
|
pts
|
|||
Workers' compensation
|
1,066
|
|
|
996
|
|
|
7.0
|
%
|
|
1,134
|
|
|
(6.0
|
)%
|
|
(3.6
|
)
|
pts
|
|||
Professional liability
|
1,694
|
|
|
1,605
|
|
|
5.5
|
%
|
|
1,730
|
|
|
(2.1
|
)%
|
|
(2.2
|
)
|
pts
|
|||
Surety
|
303
|
|
|
283
|
|
|
7.1
|
%
|
|
291
|
|
|
4.1
|
%
|
|
(1.1
|
)
|
pts
|
|||
Property and other short-tail lines
|
2,086
|
|
|
2,030
|
|
|
2.8
|
%
|
|
2,157
|
|
|
(3.3
|
)%
|
|
(4.0
|
)
|
pts
|
|||
International other casualty
|
564
|
|
|
532
|
|
|
6.0
|
%
|
|
564
|
|
|
—
|
|
|
(3.5
|
)
|
pts
|
|||
Total Commercial P&C
|
7,829
|
|
|
7,350
|
|
|
6.5
|
%
|
|
7,977
|
|
|
(1.9
|
)%
|
|
(3.2
|
)
|
pts
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Agriculture
|
464
|
|
|
439
|
|
|
5.9
|
%
|
|
439
|
|
|
5.9
|
%
|
|
—
|
|
pts
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Personal automobile - North America
|
374
|
|
|
332
|
|
|
12.7
|
%
|
|
346
|
|
|
8.1
|
%
|
|
—
|
|
pts
|
|||
Personal automobile - International
|
374
|
|
|
345
|
|
|
8.4
|
%
|
|
337
|
|
|
11.0
|
%
|
|
—
|
|
pts
|
|||
Personal homeowners
|
1,622
|
|
|
1,569
|
|
|
3.4
|
%
|
|
1,636
|
|
|
(0.9
|
)%
|
|
(7.7
|
)
|
pts
|
|||
Personal other
|
725
|
|
|
681
|
|
|
6.5
|
%
|
|
712
|
|
|
1.8
|
%
|
|
(7.8
|
)
|
pts
|
|||
Total Personal lines
|
3,095
|
|
|
2,927
|
|
|
5.7
|
%
|
|
3,031
|
|
|
2.1
|
%
|
|
(6.0
|
)
|
pts
|
|||
Total Property and Casualty lines
|
11,388
|
|
|
10,716
|
|
|
6.3
|
%
|
|
11,447
|
|
|
(0.5
|
)%
|
|
(3.7
|
)
|
pts
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Global A&H lines
(4)
|
2,019
|
|
|
1,965
|
|
|
2.7
|
%
|
|
2,005
|
|
|
0.7
|
%
|
|
(1.0
|
)
|
pts
|
|||
Reinsurance lines
|
389
|
|
|
431
|
|
|
(9.9
|
)%
|
|
445
|
|
|
(12.7
|
)%
|
|
(2.2
|
)
|
pts
|
|||
Life
|
495
|
|
|
522
|
|
|
(5.2
|
)%
|
|
528
|
|
|
(6.3
|
)%
|
|
(4.6
|
)
|
pts
|
|||
Total consolidated
|
$
|
14,291
|
|
|
$
|
13,634
|
|
|
4.8
|
%
|
|
$
|
14,425
|
|
|
(0.9
|
)%
|
|
(3.3
|
)
|
pts
|
(1)
|
On a constant-dollar basis. Amounts are calculated by translating prior period results using the same local currency exchange rates as the comparable current period.
|
(2)
|
Reflects the impact to growth of merger-related underwriting actions and accounting policy alignment, including the 14-day stub period.
|
(3)
|
Commercial multiple peril represents retail package business (property and general liability)
|
(4)
|
For purposes of this schedule only, A&H results from our Combined North America and International businesses, normally included in the Life Insurance and Overseas General Insurance segments, respectively, as well as the A&H results of our North America Commercial P&C segment, are included in Global A&H lines above.
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
||||||
|
June 30
|
|
|
June 30
|
|
||||||
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Loss and loss expense ratio
|
59.0
|
%
|
|
59.6
|
%
|
|
58.2
|
%
|
|
58.5
|
%
|
Policy acquisition cost ratio
|
19.6
|
%
|
|
20.6
|
%
|
|
20.0
|
%
|
|
20.9
|
%
|
Administrative expense ratio
|
9.4
|
%
|
|
11.0
|
%
|
|
9.6
|
%
|
|
11.2
|
%
|
Combined Ratio
|
88.0
|
%
|
|
91.2
|
%
|
|
87.8
|
%
|
|
90.6
|
%
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
||||||||||
|
June 30
|
|
|
June 30
|
|
||||||||||
(in millions of U.S dollars)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Catastrophe losses, pre-tax
|
$
|
200
|
|
|
$
|
396
|
|
|
$
|
406
|
|
|
$
|
654
|
|
Favorable prior period development net of related reinstatement premiums, pre-tax
|
$
|
170
|
|
|
$
|
301
|
|
|
$
|
401
|
|
|
$
|
548
|
|
•
|
2017
: severe weather-related events in the U.S., Cyclone Debbie in Australia and flooding in Latin America
|
•
|
2016
: severe weather-related events in the U.S. and Europe, a wildfire in Canada, and an earthquake in Ecuador
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
||||||
|
June 30
|
|
|
June 30
|
|
||||||
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Loss and loss expense ratio
|
59.0
|
%
|
|
59.6
|
%
|
|
58.2
|
%
|
|
58.5
|
%
|
Catastrophe losses
|
(3.0
|
)%
|
|
(5.7
|
)%
|
|
(3.1
|
)%
|
|
(5.0
|
)%
|
Prior period development net of related reinstatement premiums
|
2.6
|
%
|
|
4.5
|
%
|
|
3.3
|
%
|
|
4.4
|
%
|
Loss and loss expense ratio, adjusted
|
58.6
|
%
|
|
58.4
|
%
|
|
58.4
|
%
|
|
57.9
|
%
|
|
Three Months Ended June 30
|
|
|||||||||||||||||||||||||||||
|
North America Commercial P&C Insurance
|
|
|
North America Personal P&C Insurance
|
|
|
Overseas General Insurance
|
|
|
Global Reinsurance
|
|
|
Corporate
|
|
|
Total P&C
|
|
|
Life Insurance
|
|
|
Consolidated
|
|
||||||||
2017
|
|||||||||||||||||||||||||||||||
(in millions of U.S. dollars)
|
|||||||||||||||||||||||||||||||
Losses and loss expenses
|
$
|
21
|
|
|
$
|
10
|
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
44
|
|
|
$
|
—
|
|
|
$
|
44
|
|
Policy acquisition costs
|
9
|
|
|
2
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
—
|
|
|
17
|
|
||||||||
Administrative expenses
|
36
|
|
|
17
|
|
|
42
|
|
|
—
|
|
|
18
|
|
|
113
|
|
|
1
|
|
|
114
|
|
||||||||
Net investment income
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||||||
Total
|
$
|
67
|
|
|
$
|
30
|
|
|
$
|
61
|
|
|
$
|
—
|
|
|
$
|
18
|
|
|
$
|
176
|
|
|
$
|
1
|
|
|
$
|
177
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Losses and loss expenses
|
$
|
9
|
|
|
$
|
6
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
18
|
|
Policy acquisition costs
|
4
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
||||||||
Administrative expenses
|
18
|
|
|
10
|
|
|
11
|
|
|
—
|
|
|
7
|
|
|
46
|
|
|
—
|
|
|
46
|
|
||||||||
Net investment income
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||||||
Total
|
$
|
32
|
|
|
$
|
17
|
|
|
$
|
16
|
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
72
|
|
|
$
|
—
|
|
|
$
|
72
|
|
Incremental Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Losses and loss expenses
|
$
|
12
|
|
|
$
|
4
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
26
|
|
|
$
|
—
|
|
|
$
|
26
|
|
Policy acquisition costs
|
5
|
|
|
2
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
11
|
|
||||||||
Administrative expenses
|
18
|
|
|
7
|
|
|
31
|
|
|
—
|
|
|
11
|
|
|
67
|
|
|
1
|
|
|
68
|
|
||||||||
Net investment income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total
|
$
|
35
|
|
|
$
|
13
|
|
|
$
|
45
|
|
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
104
|
|
|
$
|
1
|
|
|
$
|
105
|
|
|
Six Months Ended June 30
|
|
|||||||||||||||||||||||||||||
|
North America Commercial P&C Insurance
|
|
|
North America Personal P&C Insurance
|
|
|
Overseas General Insurance
|
|
|
Global Reinsurance
|
|
|
Corporate
|
|
|
Total P&C
|
|
|
Life Insurance
|
|
|
Consolidated
|
|
||||||||
2017
|
|||||||||||||||||||||||||||||||
(in millions of U.S. dollars)
|
|||||||||||||||||||||||||||||||
Losses and loss expenses
|
$
|
37
|
|
|
$
|
15
|
|
|
$
|
20
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
72
|
|
|
$
|
—
|
|
|
$
|
72
|
|
Policy acquisition costs
|
17
|
|
|
4
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
31
|
|
|
—
|
|
|
31
|
|
||||||||
Administrative expenses
|
78
|
|
|
32
|
|
|
80
|
|
|
1
|
|
|
32
|
|
|
223
|
|
|
1
|
|
|
224
|
|
||||||||
Net investment income
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||||||
Total
|
$
|
133
|
|
|
$
|
52
|
|
|
$
|
110
|
|
|
$
|
1
|
|
|
$
|
32
|
|
|
$
|
328
|
|
|
$
|
1
|
|
|
$
|
329
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Losses and loss expenses
|
$
|
9
|
|
|
$
|
6
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
18
|
|
Policy acquisition costs
|
4
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
||||||||
Administrative expenses
|
32
|
|
|
15
|
|
|
17
|
|
|
—
|
|
|
10
|
|
|
74
|
|
|
—
|
|
|
74
|
|
||||||||
Net investment income
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||||||
Total
|
$
|
46
|
|
|
$
|
22
|
|
|
$
|
22
|
|
|
$
|
—
|
|
|
$
|
10
|
|
|
$
|
100
|
|
|
$
|
—
|
|
|
$
|
100
|
|
Incremental Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Losses and loss expenses
|
$
|
28
|
|
|
$
|
9
|
|
|
$
|
17
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
54
|
|
|
$
|
—
|
|
|
$
|
54
|
|
Policy acquisition costs
|
13
|
|
|
4
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|
—
|
|
|
25
|
|
||||||||
Administrative expenses
|
46
|
|
|
17
|
|
|
63
|
|
|
1
|
|
|
22
|
|
|
149
|
|
|
1
|
|
|
150
|
|
||||||||
Net investment income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total
|
$
|
87
|
|
|
$
|
30
|
|
|
$
|
88
|
|
|
$
|
1
|
|
|
$
|
22
|
|
|
$
|
228
|
|
|
$
|
1
|
|
|
$
|
229
|
|
|
Three Months Ended June 30
|
|
|
Six Months Ended June 30
|
|
||||||||||||||||||
(in millions of U.S. dollars)
|
Long-tail
|
|
|
Short-tail
|
|
|
Total
|
|
|
Long-tail
|
|
|
Short-tail
|
|
|
Total
|
|
||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
North America Commercial P&C Insurance
|
$
|
(101
|
)
|
|
$
|
(30
|
)
|
|
$
|
(131
|
)
|
|
$
|
(200
|
)
|
|
$
|
(110
|
)
|
|
$
|
(310
|
)
|
North America Personal P&C Insurance
|
20
|
|
|
17
|
|
|
37
|
|
|
20
|
|
|
14
|
|
|
34
|
|
||||||
North America Agricultural Insurance
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(79
|
)
|
|
(79
|
)
|
||||||
Overseas General Insurance
|
—
|
|
|
(88
|
)
|
|
(88
|
)
|
|
32
|
|
|
(108
|
)
|
|
(76
|
)
|
||||||
Global Reinsurance
|
(36
|
)
|
|
5
|
|
|
(31
|
)
|
|
(28
|
)
|
|
5
|
|
|
(23
|
)
|
||||||
Corporate
|
43
|
|
|
—
|
|
|
43
|
|
|
53
|
|
|
—
|
|
|
53
|
|
||||||
Total
|
$
|
(74
|
)
|
|
$
|
(96
|
)
|
|
$
|
(170
|
)
|
|
$
|
(123
|
)
|
|
$
|
(278
|
)
|
|
$
|
(401
|
)
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
North America Commercial P&C Insurance
|
$
|
(167
|
)
|
|
$
|
(1
|
)
|
|
$
|
(168
|
)
|
|
$
|
(309
|
)
|
|
$
|
(37
|
)
|
|
$
|
(346
|
)
|
North America Personal P&C Insurance
|
(4
|
)
|
|
(11
|
)
|
|
(15
|
)
|
|
(4
|
)
|
|
(14
|
)
|
|
(18
|
)
|
||||||
North America Agricultural Insurance
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(41
|
)
|
|
(41
|
)
|
||||||
Overseas General Insurance
|
(1
|
)
|
|
(84
|
)
|
|
(85
|
)
|
|
(1
|
)
|
|
(114
|
)
|
|
(115
|
)
|
||||||
Global Reinsurance
|
(47
|
)
|
|
—
|
|
|
(47
|
)
|
|
(49
|
)
|
|
(1
|
)
|
|
(50
|
)
|
||||||
Corporate
|
14
|
|
|
—
|
|
|
14
|
|
|
22
|
|
|
—
|
|
|
22
|
|
||||||
Total
|
$
|
(205
|
)
|
|
$
|
(96
|
)
|
|
$
|
(301
|
)
|
|
$
|
(341
|
)
|
|
$
|
(207
|
)
|
|
$
|
(548
|
)
|
Segment Operating Results – Three and Six Months Ended June 30, 2017 and 2016
|
|
Three Months Ended
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
||||||||||||||
|
June 30
|
|
|
% Change
|
|
|
June 30
|
|
|
% Change
|
|
||||||||||||||
(in millions of U.S. dollars, except for percentages)
|
2017
|
|
|
2016
|
|
|
Q-17 vs.
Q-16 |
|
|
2017
|
|
|
2016
|
|
|
YTD-17 vs.
YTD-16 |
|
||||||||
Net premiums written
|
$
|
3,204
|
|
|
$
|
3,245
|
|
|
(1.3
|
)%
|
|
$
|
5,946
|
|
|
$
|
5,547
|
|
|
7.2
|
%
|
||||
Net premiums earned
|
3,099
|
|
|
3,148
|
|
|
(1.6
|
)%
|
|
6,140
|
|
|
6,044
|
|
|
1.6
|
%
|
||||||||
Losses and loss expenses
|
1,936
|
|
|
1,971
|
|
|
(1.8
|
)%
|
|
3,796
|
|
|
3,718
|
|
|
2.1
|
%
|
||||||||
Policy acquisition costs
|
464
|
|
|
545
|
|
|
(14.9
|
)%
|
|
951
|
|
|
1,027
|
|
|
(7.4
|
)%
|
||||||||
Administrative expenses
|
241
|
|
|
299
|
|
|
(19.4
|
)%
|
|
472
|
|
|
565
|
|
|
(16.5
|
)%
|
||||||||
Underwriting income
|
458
|
|
|
333
|
|
|
37.5
|
%
|
|
921
|
|
|
734
|
|
|
25.5
|
%
|
||||||||
Net investment income
|
490
|
|
|
468
|
|
|
4.7
|
%
|
|
968
|
|
|
894
|
|
|
8.3
|
%
|
||||||||
Other (income) expense
|
(4
|
)
|
|
(9
|
)
|
|
(55.6
|
)%
|
|
—
|
|
|
(9
|
)
|
|
NM
|
|
||||||||
Segment income
|
$
|
952
|
|
|
$
|
810
|
|
|
17.5
|
%
|
|
$
|
1,889
|
|
|
$
|
1,637
|
|
|
15.4
|
%
|
||||
Loss and loss expense ratio
|
62.5
|
%
|
|
62.6
|
%
|
|
(0.1
|
)
|
pts
|
|
|
61.8
|
%
|
|
61.5
|
%
|
|
0.3
|
|
pts
|
|
||||
Policy acquisition cost ratio
|
15.0
|
%
|
|
17.3
|
%
|
|
(2.3
|
)
|
pts
|
|
|
15.5
|
%
|
|
17.0
|
%
|
|
(1.5
|
)
|
pts
|
|
||||
Administrative expense ratio
|
7.7
|
%
|
|
9.6
|
%
|
|
(1.9
|
)
|
pts
|
|
|
7.7
|
%
|
|
9.4
|
%
|
|
(1.7
|
)
|
pts
|
|
||||
Combined ratio
|
85.2
|
%
|
|
89.5
|
%
|
|
(4.3
|
)
|
pts
|
|
|
85.0
|
%
|
|
87.9
|
%
|
|
(2.9
|
)
|
pts
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
||||||||||
|
June 30
|
|
|
June 30
|
|
||||||||||
(in millions of U.S. dollars)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Catastrophe losses, pre-tax
|
$
|
102
|
|
|
$
|
160
|
|
|
$
|
185
|
|
|
$
|
241
|
|
Favorable prior period development net of related reinstatement premiums, pre-tax
|
$
|
131
|
|
|
$
|
168
|
|
|
$
|
310
|
|
|
$
|
346
|
|
•
|
2017: Severe weather-related events in the U.S.
|
•
|
2016: Severe weather-related events in the U.S. and a wildfire in Canada.
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
||||||
|
June 30
|
|
|
June 30
|
|
||||||
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Loss and loss expense ratio
|
62.5
|
%
|
|
62.6
|
%
|
|
61.8
|
%
|
|
61.5
|
%
|
Catastrophe losses
|
(3.3
|
)%
|
|
(5.1
|
)%
|
|
(3.0
|
)%
|
|
(4.0
|
)%
|
Prior period development net of related reinstatement premiums
|
4.2
|
%
|
|
5.4
|
%
|
|
5.1
|
%
|
|
5.8
|
%
|
Loss and loss expense ratio, adjusted
|
63.4
|
%
|
|
62.9
|
%
|
|
63.9
|
%
|
|
63.3
|
%
|
|
Three Months Ended
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
||||||||||||||
|
June 30
|
|
|
% Change
|
|
|
June 30
|
|
|
% Change
|
|
||||||||||||||
(in millions of U.S. dollars, except for percentages)
|
2017
|
|
|
2016
|
|
|
Q-17 vs.
Q-16 |
|
|
2017
|
|
|
2016
|
|
|
YTD-17 vs.
YTD-16 |
|
||||||||
Net premiums written
|
$
|
1,255
|
|
|
$
|
1,231
|
|
|
2.0
|
%
|
|
$
|
2,239
|
|
|
$
|
2,102
|
|
|
6.5
|
%
|
||||
Net premiums earned
|
1,093
|
|
|
1,140
|
|
|
(4.0
|
)%
|
|
2,179
|
|
|
2,164
|
|
|
0.7
|
%
|
||||||||
Losses and loss expenses
|
683
|
|
|
661
|
|
|
3.3
|
%
|
|
1,316
|
|
|
1,322
|
|
|
(0.5
|
)%
|
||||||||
Policy acquisition costs
|
230
|
|
|
269
|
|
|
(14.5
|
)%
|
|
447
|
|
|
518
|
|
|
(13.7
|
)%
|
||||||||
Administrative expenses
|
66
|
|
|
98
|
|
|
(32.7
|
)%
|
|
131
|
|
|
186
|
|
|
(29.6
|
)%
|
||||||||
Underwriting income
|
114
|
|
|
112
|
|
|
1.8
|
%
|
|
285
|
|
|
138
|
|
|
106.5
|
%
|
||||||||
Net investment income
|
56
|
|
|
55
|
|
|
1.8
|
%
|
|
111
|
|
|
102
|
|
|
8.8
|
%
|
||||||||
Other (income) expense
|
1
|
|
|
3
|
|
|
(66.7
|
)%
|
|
2
|
|
|
4
|
|
|
(50.0
|
)%
|
||||||||
Amortization of purchased intangibles
|
5
|
|
|
4
|
|
|
25.0
|
%
|
|
8
|
|
|
12
|
|
|
(33.3
|
)%
|
||||||||
Segment income
|
$
|
164
|
|
|
$
|
160
|
|
|
2.5
|
%
|
|
$
|
386
|
|
|
$
|
224
|
|
|
72.3
|
%
|
||||
Loss and loss expense ratio
|
62.4
|
%
|
|
58.0
|
%
|
|
4.4
|
|
pts
|
|
|
60.4
|
%
|
|
61.1
|
%
|
|
(0.7
|
)
|
pts
|
|
||||
Policy acquisition cost ratio
|
21.1
|
%
|
|
23.6
|
%
|
|
(2.5
|
)
|
pts
|
|
|
20.5
|
%
|
|
23.9
|
%
|
|
(3.4
|
)
|
pts
|
|
||||
Administrative expense ratio
|
6.1
|
%
|
|
8.5
|
%
|
|
(2.4
|
)
|
pts
|
|
|
6.0
|
%
|
|
8.6
|
%
|
|
(2.6
|
)
|
pts
|
|
||||
Combined ratio
|
89.6
|
%
|
|
90.1
|
%
|
|
(0.5
|
)
|
pts
|
|
|
86.9
|
%
|
|
93.6
|
%
|
|
(6.7
|
)
|
pts
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
||||||||||
|
June 30
|
|
|
June 30
|
|
||||||||||
(in millions of U.S. dollars)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Catastrophe losses, pre-tax
|
$
|
77
|
|
|
$
|
97
|
|
|
$
|
145
|
|
|
$
|
253
|
|
Favorable (unfavorable) prior period development, pre-tax
|
$
|
(37
|
)
|
|
$
|
15
|
|
|
$
|
(34
|
)
|
|
$
|
18
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
||||||
|
June 30
|
|
|
June 30
|
|
||||||
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Loss and loss expense ratio
|
62.4
|
%
|
|
58.0
|
%
|
|
60.4
|
%
|
|
61.1
|
%
|
Catastrophe losses
|
(7.0
|
)%
|
|
(8.5
|
)%
|
|
(6.7
|
)%
|
|
(11.7
|
)%
|
Prior period development
|
(3.3
|
)%
|
|
1.4
|
%
|
|
(1.5
|
)%
|
|
0.9
|
%
|
Loss and loss expense ratio, adjusted
|
52.1
|
%
|
|
50.9
|
%
|
|
52.2
|
%
|
|
50.3
|
%
|
|
Three Months Ended
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
||||||||||||||
|
June 30
|
|
|
% Change
|
|
|
June 30
|
|
|
% Change
|
|
||||||||||||||
(in millions of U.S. dollars, except for percentages)
|
2017
|
|
|
2016
|
|
|
Q-17 vs.
Q-16 |
|
|
2017
|
|
|
2016
|
|
|
YTD-17 vs.
YTD-16 |
|
||||||||
Net premiums written
|
$
|
403
|
|
|
$
|
375
|
|
|
7.7
|
%
|
|
$
|
464
|
|
|
$
|
439
|
|
|
5.9
|
%
|
||||
Net premiums earned
|
344
|
|
|
327
|
|
|
5.4
|
%
|
|
358
|
|
|
350
|
|
|
2.3
|
%
|
||||||||
Losses and loss expenses
|
292
|
|
|
286
|
|
|
2.1
|
%
|
|
219
|
|
|
256
|
|
|
(14.5
|
)%
|
||||||||
Policy acquisition costs
|
27
|
|
|
25
|
|
|
8.0
|
%
|
|
26
|
|
|
29
|
|
|
(10.3
|
)%
|
||||||||
Administrative expenses
|
2
|
|
|
2
|
|
|
—
|
|
|
(3
|
)
|
|
(2
|
)
|
|
50.0
|
%
|
||||||||
Underwriting income
|
23
|
|
|
14
|
|
|
64.3
|
%
|
|
116
|
|
|
67
|
|
|
73.1
|
%
|
||||||||
Net investment income
|
6
|
|
|
5
|
|
|
20.0
|
%
|
|
12
|
|
|
10
|
|
|
20.0
|
%
|
||||||||
Other (income) expense
|
1
|
|
|
—
|
|
|
NM
|
|
|
1
|
|
|
—
|
|
|
NM
|
|
||||||||
Amortization of purchased intangibles
|
7
|
|
|
8
|
|
|
(12.5
|
)%
|
|
14
|
|
|
15
|
|
|
(6.7
|
)%
|
||||||||
Segment income
|
$
|
21
|
|
|
$
|
11
|
|
|
90.9
|
%
|
|
$
|
113
|
|
|
$
|
62
|
|
|
82.3
|
%
|
||||
Loss and loss expense ratio
|
85.2
|
%
|
|
87.5
|
%
|
|
(2.3
|
)
|
pts
|
|
|
61.3
|
%
|
|
73.3
|
%
|
|
(12.0
|
)
|
pts
|
|||||
Policy acquisition cost ratio
|
7.7
|
%
|
|
7.7
|
%
|
|
—
|
|
|
|
7.2
|
%
|
|
8.2
|
%
|
|
(1.0
|
)
|
pts
|
||||||
Administrative expense ratio
|
0.4
|
%
|
|
0.7
|
%
|
|
(0.3
|
)
|
pts
|
|
|
(0.8
|
)%
|
|
(0.5
|
)%
|
|
(0.3
|
)
|
pts
|
|||||
Combined ratio
|
93.3
|
%
|
|
95.9
|
%
|
|
(2.6
|
)
|
pts
|
|
|
67.7
|
%
|
|
81.0
|
%
|
|
(13.3
|
)
|
pts
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
||||||||||
|
June 30
|
|
|
June 30
|
|
||||||||||
(in millions of U.S. dollars)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Catastrophe losses, pre-tax
|
$
|
8
|
|
|
$
|
14
|
|
|
$
|
13
|
|
|
$
|
16
|
|
Favorable prior period development, pre-tax
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
79
|
|
|
$
|
41
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
||||||
|
June 30
|
|
|
June 30
|
|
||||||
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Loss and loss expense ratio
|
85.2
|
%
|
|
87.5
|
%
|
|
61.3
|
%
|
|
73.3
|
%
|
Catastrophe losses
|
(2.2
|
)%
|
|
(4.2
|
)%
|
|
(3.5
|
)%
|
|
(4.5
|
)%
|
Prior period development
|
—
|
|
|
—
|
|
|
23.9
|
%
|
|
13.0
|
%
|
Loss and loss expense ratio, adjusted
|
83.0
|
%
|
|
83.3
|
%
|
|
81.7
|
%
|
|
81.8
|
%
|
(1)
|
For the three
and six months ended
June 30, 2017
, net premiums written
increased
$7 million
and
$196 million
, or
0.3
percent and
4.9
percent, respectively, on a constant-dollar basis. Amounts are calculated by translating prior period results using the same local currency exchange rates as the comparable current period.
|
(2)
|
For the three
and six months ended
June 30, 2017
, underwriting income
increased
$64 million
and
decreased
$11 million
, or
33.9
percent and
2.9
percent, respectively, on a constant-dollar basis. Amounts are calculated by translating prior period results using the same local currency exchange rates as the comparable current period.
|
|
Three Months Ended June 30
|
|
|
% Change
|
|
||||||||||||||||||
(in millions of U.S. dollars, except for percentages)
|
2017
|
|
|
2017
% of Total |
|
|
2016
|
|
|
2016
% of Total
|
|
|
C$
(1)
2016 |
|
|
Q-17 vs.
Q-16 |
|
|
C$
(1)
Q-17 vs.
Q-16 |
|
|||
Region
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Europe
|
$
|
726
|
|
|
36
|
%
|
|
$
|
807
|
|
|
40
|
%
|
|
$
|
763
|
|
|
(10.0
|
)%
|
|
(4.8
|
)%
|
Latin America
|
508
|
|
|
25
|
%
|
|
483
|
|
|
24
|
%
|
|
502
|
|
|
5.2
|
%
|
|
1.2
|
%
|
|||
Asia
|
673
|
|
|
34
|
%
|
|
641
|
|
|
31
|
%
|
|
639
|
|
|
5.0
|
%
|
|
5.3
|
%
|
|||
Other
(2)
|
99
|
|
|
5
|
%
|
|
100
|
|
|
5
|
%
|
|
95
|
|
|
(1.0
|
)%
|
|
4.2
|
%
|
|||
Net premiums written
|
$
|
2,006
|
|
|
100
|
%
|
|
$
|
2,031
|
|
|
100
|
%
|
|
$
|
1,999
|
|
|
(1.2
|
)%
|
|
0.3
|
%
|
|
Six Months Ended June 30
|
|
|
% Change
|
|
||||||||||||||||||
(in millions of U.S. dollars, except for percentages)
|
2017
|
|
|
2017
% of Total |
|
|
2016
|
|
|
2016
% of Total |
|
|
C$
(1)
2016 |
|
|
YTD-17 vs.
YTD-16 |
|
|
C$
(1)
YTD-17 vs.
YTD-16 |
|
|||
Region
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Europe
|
$
|
1,756
|
|
|
42
|
%
|
|
$
|
1,706
|
|
|
42
|
%
|
|
$
|
1,611
|
|
|
2.9
|
%
|
|
9.0
|
%
|
Latin America
|
1,005
|
|
|
24
|
%
|
|
965
|
|
|
24
|
%
|
|
992
|
|
|
4.1
|
%
|
|
1.3
|
%
|
|||
Asia
|
1,250
|
|
|
30
|
%
|
|
1,211
|
|
|
30
|
%
|
|
1,223
|
|
|
3.2
|
%
|
|
2.2
|
%
|
|||
Other
(2)
|
195
|
|
|
4
|
%
|
|
190
|
|
|
4
|
%
|
|
184
|
|
|
2.6
|
%
|
|
6.0
|
%
|
|||
Net premiums written
|
$
|
4,206
|
|
|
100
|
%
|
|
$
|
4,072
|
|
|
100
|
%
|
|
$
|
4,010
|
|
|
3.3
|
%
|
|
4.9
|
%
|
|
Three Months Ended June 30
|
|
|
Six Months Ended June 30
|
|
||||||||||
(in millions of U.S. dollars)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Catastrophe losses, pre-tax
|
$
|
10
|
|
|
$
|
73
|
|
|
$
|
60
|
|
|
$
|
91
|
|
Favorable prior period development, pre-tax
|
$
|
88
|
|
|
$
|
85
|
|
|
$
|
76
|
|
|
$
|
115
|
|
•
|
2017
: Cyclone Debbie in Australia and flooding in Latin America
|
•
|
2016
: Severe weather related events in Europe and an earthquake in Ecuador
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
||||||
|
June 30
|
|
|
June 30
|
|
||||||
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Loss and loss expense ratio
|
47.8
|
%
|
|
52.1
|
%
|
|
51.5
|
%
|
|
52.1
|
%
|
Catastrophe losses
|
(0.5
|
)%
|
|
(3.5
|
)%
|
|
(1.6
|
)%
|
|
(2.2
|
)%
|
Prior period development
|
4.3
|
%
|
|
4.1
|
%
|
|
2.0
|
%
|
|
2.9
|
%
|
Loss and loss expense ratio, adjusted
|
51.6
|
%
|
|
52.7
|
%
|
|
51.9
|
%
|
|
52.8
|
%
|
|
Three Months Ended
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
||||||||||||
|
June 30
|
|
|
% Change
|
|
|
June 30
|
|
|
% Change
|
|
||||||||||||
(in millions of U.S. dollars, except for percentages)
|
2017
|
|
|
2016
|
|
|
Q-17 vs.
Q-16 |
|
|
2017
|
|
|
2016
|
|
|
YTD-17 vs.
YTD-16 |
|
||||||
Net premiums written
|
$
|
190
|
|
|
$
|
230
|
|
|
(17.7
|
)%
|
|
$
|
389
|
|
|
$
|
431
|
|
|
(9.9
|
)%
|
||
Net premiums earned
|
168
|
|
|
185
|
|
|
(9.6
|
)%
|
|
357
|
|
|
387
|
|
|
(7.9
|
)%
|
||||||
Losses and loss expenses
|
46
|
|
|
87
|
|
|
(47.1
|
)%
|
|
140
|
|
|
176
|
|
|
(20.5
|
)%
|
||||||
Policy acquisition costs
|
43
|
|
|
47
|
|
|
(8.5
|
)%
|
|
94
|
|
|
100
|
|
|
(6.0
|
)%
|
||||||
Administrative expenses
|
12
|
|
|
14
|
|
|
(14.3
|
)%
|
|
22
|
|
|
28
|
|
|
(21.4
|
)%
|
||||||
Underwriting income
|
67
|
|
|
37
|
|
|
81.1
|
%
|
|
101
|
|
|
83
|
|
|
21.7
|
%
|
||||||
Net investment income
|
65
|
|
|
65
|
|
|
—
|
|
|
127
|
|
|
132
|
|
|
(3.8
|
)%
|
||||||
Other (income) expense
|
1
|
|
|
(2
|
)
|
|
NM
|
|
|
1
|
|
|
(3
|
)
|
|
NM
|
|
||||||
Segment income
|
$
|
131
|
|
|
$
|
104
|
|
|
26.0
|
%
|
|
$
|
227
|
|
|
$
|
218
|
|
|
4.1
|
%
|
||
Loss and loss expense ratio
|
27.8
|
%
|
|
46.9
|
%
|
|
(19.1)
|
pts
|
|
|
39.3
|
%
|
|
45.5
|
%
|
|
(6.2)
|
pts
|
|
||||
Policy acquisition cost ratio
|
25.7
|
%
|
|
25.5
|
%
|
|
0.2
|
pts
|
|
|
26.3
|
%
|
|
25.9
|
%
|
|
0.4
|
pts
|
|
||||
Administrative expense ratio
|
6.7
|
%
|
|
7.4
|
%
|
|
(0.7)
|
pts
|
|
|
6.2
|
%
|
|
7.1
|
%
|
|
(0.9)
|
pts
|
|
||||
Combined ratio
|
60.2
|
%
|
|
79.8
|
%
|
|
(19.6)
|
pts
|
|
|
71.8
|
%
|
|
78.5
|
%
|
|
(6.7)
|
pts
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
||||||||||
|
June 30
|
|
|
June 30
|
|
||||||||||
(in millions of U.S dollars)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Catastrophe losses, pre-tax
|
$
|
3
|
|
|
$
|
52
|
|
|
$
|
3
|
|
|
$
|
53
|
|
Favorable prior period development net of related reinstatement premiums, pre-tax
|
$
|
31
|
|
|
$
|
47
|
|
|
$
|
23
|
|
|
$
|
50
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
||||||||||
|
June 30
|
|
|
June 30
|
|
||||||||||
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Loss and loss expense ratio
|
27.8
|
%
|
|
46.9
|
%
|
|
39.3
|
%
|
|
45.5
|
%
|
||||
Catastrophe losses and related reinstatement premiums
|
(1.9
|
)%
|
|
(27.8
|
)%
|
|
(0.8
|
)%
|
|
(13.3
|
)%
|
||||
Prior period development net of related reinstatement premiums
(1)
|
18.5
|
%
|
|
26.9
|
%
|
|
5.3
|
%
|
|
13.6
|
%
|
||||
Loss and loss expense ratio, adjusted
|
44.4
|
%
|
|
46.0
|
%
|
|
43.8
|
%
|
|
45.8
|
%
|
||||
(1)
Reinstatement premiums expensed (collected) on prior period development - pre-tax
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(7
|
)
|
|
$
|
—
|
|
|
Three Months Ended
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
||||||||||
|
June 30
|
|
|
% Change
|
|
|
June 30
|
|
|
% Change
|
|
||||||||||
(in millions of U.S. dollars, except for percentages)
|
2017
|
|
|
2016
|
|
|
Q-17 vs.
Q-16 |
|
|
2017
|
|
|
2016
|
|
|
YTD-17 vs.
YTD-16 |
|
||||
Net premiums written
|
$
|
523
|
|
|
$
|
527
|
|
|
(0.7
|
)%
|
|
$
|
1,047
|
|
|
$
|
1,043
|
|
|
0.4
|
%
|
Net premiums earned
|
515
|
|
|
512
|
|
|
0.8
|
%
|
|
1,021
|
|
|
1,009
|
|
|
1.2
|
%
|
||||
Losses and loss expenses
|
182
|
|
|
147
|
|
|
23.8
|
%
|
|
375
|
|
|
324
|
|
|
15.7
|
%
|
||||
Policy benefits
(1)
|
163
|
|
|
146
|
|
|
11.6
|
%
|
|
331
|
|
|
272
|
|
|
21.7
|
%
|
||||
(Gains) losses from fair value changes in separate account assets
(1)
|
(16
|
)
|
|
(3
|
)
|
|
NM
|
|
|
(46
|
)
|
|
—
|
|
|
NM
|
|
||||
Policy acquisition costs
|
130
|
|
|
137
|
|
|
(5.1
|
)%
|
|
244
|
|
|
259
|
|
|
(5.8
|
)%
|
||||
Administrative expenses
|
77
|
|
|
77
|
|
|
—
|
|
|
149
|
|
|
149
|
|
|
—
|
|
||||
Net investment income
|
77
|
|
|
69
|
|
|
11.6
|
%
|
|
152
|
|
|
136
|
|
|
11.8
|
%
|
||||
Life Insurance underwriting income
|
56
|
|
|
77
|
|
|
(27.3
|
)%
|
|
120
|
|
|
141
|
|
|
(14.9
|
)%
|
||||
Other (income) expense
(1)
|
4
|
|
|
3
|
|
|
33.3
|
%
|
|
5
|
|
|
6
|
|
|
(16.7
|
)%
|
||||
Amortization of purchased intangibles
|
—
|
|
|
—
|
|
|
NM
|
|
|
1
|
|
|
1
|
|
|
—
|
|
||||
Segment income
|
$
|
52
|
|
|
$
|
74
|
|
|
(29.7
|
)%
|
|
$
|
114
|
|
|
$
|
134
|
|
|
(14.9
|
)%
|
(1)
|
(Gains) losses from fair value changes in separate account assets that do not qualify for separate account reporting under GAAP have been reclassified from Other income (expense) for purposes of presenting Life Insurance underwriting income. The offsetting movement in the separate account liabilities is included in Policy benefits.
|
|
Three Months Ended
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
|
|
||||||||||||||||||||
|
June 30
|
|
|
% Change
|
|
|
June 30
|
|
|
% Change
|
|
||||||||||||||||||||||||
(in millions of U.S. dollars, except for percentages)
|
2017
|
|
|
2016
|
|
|
C$
(1)
2016
|
|
|
Q-17 vs.
Q-16 |
|
|
C$
(1)
Q-17 vs.
Q-16 |
|
|
2017
|
|
|
2016
|
|
|
C$
(1)
2016
|
|
|
Y-17 vs. Y-16
|
|
|
C$
(1)
Y-17 vs. Y-16
|
|
||||||
Deposits collected on Universal life and investment contracts
|
$
|
316
|
|
|
$
|
262
|
|
|
$
|
270
|
|
|
20.5
|
%
|
|
16.8
|
%
|
|
$
|
626
|
|
|
$
|
475
|
|
|
$
|
488
|
|
|
31.8
|
%
|
|
28.3
|
%
|
|
Three Months Ended
|
|
|
|
|
Six Months Ended
|
|
|
|
||||||||||||
|
June 30
|
|
|
% Change
|
|
|
June 30
|
|
|
% Change
|
|
||||||||||
(in millions of U.S. dollars, except for percentages)
|
2017
|
|
|
2016
|
|
|
Q-17 vs.
Q-16 |
|
|
2017
|
|
|
2016
|
|
|
YTD-16 vs.
YTD-15
|
|
||||
Losses and loss expenses
|
$
|
45
|
|
|
$
|
15
|
|
|
200.0
|
%
|
|
$
|
56
|
|
|
$
|
24
|
|
|
133.3
|
%
|
Administrative expenses
|
65
|
|
|
62
|
|
|
4.8
|
%
|
|
123
|
|
|
135
|
|
|
(8.9
|
)%
|
||||
Underwriting loss
|
110
|
|
|
77
|
|
|
42.9
|
%
|
|
179
|
|
|
159
|
|
|
12.6
|
%
|
||||
Net investment income (loss)
|
(72
|
)
|
|
(101
|
)
|
|
(28.7
|
)%
|
|
(151
|
)
|
|
(185
|
)
|
|
(18.4
|
)%
|
||||
Interest expense
|
147
|
|
|
153
|
|
|
(3.9
|
)%
|
|
301
|
|
|
299
|
|
|
0.7
|
%
|
||||
Net realized gains (losses)
|
101
|
|
|
(216
|
)
|
|
NM
|
|
|
94
|
|
|
(610
|
)
|
|
NM
|
|
||||
Other (income) expense
|
(129
|
)
|
|
(16
|
)
|
|
NM
|
|
|
(174
|
)
|
|
11
|
|
|
NM
|
|
||||
Amortization expense (benefit) of purchased intangibles
|
42
|
|
|
(20
|
)
|
|
NM
|
|
|
84
|
|
|
(40
|
)
|
|
NM
|
|
||||
Chubb integration expenses
|
72
|
|
|
98
|
|
|
(26.5
|
)%
|
|
183
|
|
|
246
|
|
|
(25.6
|
)%
|
||||
Income tax expense
|
200
|
|
|
155
|
|
|
29.0
|
%
|
|
328
|
|
|
279
|
|
|
17.6
|
%
|
||||
Net loss
|
$
|
(413
|
)
|
|
$
|
(764
|
)
|
|
(45.9
|
)%
|
|
$
|
(958
|
)
|
|
$
|
(1,749
|
)
|
|
(45.2
|
)%
|
•
|
Other income in 2017 of $143 million and $204 million, respectively, from our share of net realized gains and losses from partially-owned investment companies, compared to realized gains (losses) in 2016 of $18 million and $(7) million, respectively, primarily reflecting the change in market value of these investments.
|
•
|
Other expense in 2017 of $(14) million and $(21) million, respectively, compared to other expense in 2016 of $(2) million and $(4) million, respectively. The higher expense in 2017 was primarily due to an increase in capital taxes resulting from a higher equity base after the Chubb Corp acquisition.
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
||||||||||
|
June 30
|
|
|
June 30
|
|
||||||||||
(in millions of U.S dollars)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Personnel-related expenses
|
$
|
34
|
|
|
$
|
41
|
|
|
$
|
115
|
|
|
$
|
116
|
|
Leases and real estate termination costs
|
12
|
|
|
6
|
|
|
22
|
|
|
13
|
|
||||
Consulting fees
|
7
|
|
|
15
|
|
|
14
|
|
|
24
|
|
||||
Rebranding
|
6
|
|
|
18
|
|
|
6
|
|
|
21
|
|
||||
Advisor fees
|
—
|
|
|
—
|
|
|
—
|
|
|
38
|
|
||||
Other
|
13
|
|
|
18
|
|
|
26
|
|
|
34
|
|
||||
Totals
|
$
|
72
|
|
|
$
|
98
|
|
|
$
|
183
|
|
|
$
|
246
|
|
Other Income and Expense Items
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
||||||||||
|
June 30
|
|
|
June 30
|
|
||||||||||
(in millions of U.S. dollars)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Equity in net (income) loss of partially-owned entities
|
$
|
(146
|
)
|
|
$
|
(31
|
)
|
|
$
|
(199
|
)
|
|
$
|
(16
|
)
|
(Gains) losses from fair value changes in separate account assets
(1)
|
(16
|
)
|
|
(3
|
)
|
|
(46
|
)
|
|
—
|
|
||||
Federal excise and capital taxes
|
15
|
|
|
5
|
|
|
18
|
|
|
6
|
|
||||
Other
|
2
|
|
|
—
|
|
|
12
|
|
|
9
|
|
||||
Other (income) expense
|
$
|
(145
|
)
|
|
$
|
(29
|
)
|
|
$
|
(215
|
)
|
|
$
|
(1
|
)
|
(1)
|
Related to (gains) losses from fair value changes in separate account assets that do not qualify for separate account reporting under GAAP.
|
Amortization of purchased intangibles and Other amortization
|
|
Associated with the Chubb Corp Acquisition
|
|
|
|
|
|
|||||||||||||||||
For the Years Ending December 31
(in millions of U.S. dollars) |
Agency distribution relationships and renewal rights
|
|
|
Internally developed technology
|
|
|
Fair value adjustment on Unpaid losses and loss expenses
|
|
|
Total
(1)
|
|
|
Other intangible assets
(2)
|
|
|
Total
Amortization of purchased intangibles
|
|
||||||
Third quarter of 2017
|
$
|
74
|
|
|
$
|
8
|
|
|
$
|
(40
|
)
|
|
$
|
42
|
|
|
$
|
21
|
|
|
$
|
63
|
|
Fourth quarter of 2017
|
74
|
|
|
8
|
|
|
(40
|
)
|
|
42
|
|
|
21
|
|
|
63
|
|
||||||
2018
|
323
|
|
|
32
|
|
|
(101
|
)
|
|
254
|
|
|
78
|
|
|
332
|
|
||||||
2019
|
281
|
|
|
—
|
|
|
(62
|
)
|
|
219
|
|
|
68
|
|
|
287
|
|
||||||
2020
|
239
|
|
|
—
|
|
|
(35
|
)
|
|
204
|
|
|
62
|
|
|
266
|
|
||||||
2021
|
217
|
|
|
—
|
|
|
(20
|
)
|
|
197
|
|
|
53
|
|
|
250
|
|
||||||
2022
|
197
|
|
|
—
|
|
|
(15
|
)
|
|
182
|
|
|
49
|
|
|
231
|
|
||||||
Total
|
$
|
1,405
|
|
|
$
|
48
|
|
|
$
|
(313
|
)
|
|
$
|
1,140
|
|
|
$
|
352
|
|
|
$
|
1,492
|
|
(1)
|
Recorded in Corporate.
|
(2)
|
Recorded in applicable segment(s) that acquired the intangible assets.
|
For the Years Ending December 31
(in millions of U.S. dollars) |
Reduction of deferred tax liability associated with intangible assets related to the Chubb Corp acquisition
|
|
|
Third quarter of 2017
|
$
|
29
|
|
Fourth quarter of 2017
|
29
|
|
|
2018
|
124
|
|
|
2019
|
98
|
|
|
2020
|
84
|
|
|
2021
|
76
|
|
|
2022
|
69
|
|
|
Total
|
$
|
509
|
|
|
Amortization (expense) benefit of the fair value adjustment on
|
|
|||||
For the Years Ending December 31
(in millions of U.S. dollars) |
Acquired invested assets
(1)
|
|
|
Assumed long-term debt
(2)
|
|
||
Third quarter of 2017
|
$
|
(85
|
)
|
|
$
|
12
|
|
Fourth quarter of 2017
|
(85
|
)
|
|
12
|
|
||
2018
|
(320
|
)
|
|
31
|
|
||
2019
|
(320
|
)
|
|
19
|
|
||
2020
|
(238
|
)
|
|
19
|
|
||
2021
|
—
|
|
|
19
|
|
||
2022
|
—
|
|
|
19
|
|
||
Total
|
$
|
(1,048
|
)
|
|
$
|
131
|
|
(1)
|
Recorded as a reduction to Net investment income in the Consolidated statements of operations.
|
(2)
|
Recorded as a reduction to Interest expense in the Consolidated statements of operations.
|
Net Investment Income
|
|
Three Months Ended
|
|
Six Months Ended
|
|
||||||||||
|
June 30
|
|
June 30
|
|
||||||||||
(in millions of U.S. dollars)
|
2017
|
|
|
2016
|
|
2017
|
|
|
2016
|
|
||||
Fixed maturities
|
$
|
741
|
|
|
$
|
686
|
|
$
|
1,471
|
|
|
$
|
1,329
|
|
Short-term investments
|
31
|
|
|
22
|
|
57
|
|
|
45
|
|
||||
Equity securities
|
13
|
|
|
9
|
|
22
|
|
|
21
|
|
||||
Other investments
|
24
|
|
|
26
|
|
43
|
|
|
53
|
|
||||
Gross investment income
(1)
|
809
|
|
|
743
|
|
1,593
|
|
|
1,448
|
|
||||
Investment expenses
|
(39
|
)
|
|
(35
|
)
|
(78
|
)
|
|
(66
|
)
|
||||
Net investment income
(1)
|
$
|
770
|
|
|
$
|
708
|
|
$
|
1,515
|
|
|
$
|
1,382
|
|
(1)
Includes amortization expense related to fair value adjustment of acquired invested assets related to the Chubb Corp acquisition
|
$
|
(85
|
)
|
|
$
|
(108
|
)
|
$
|
(176
|
)
|
|
$
|
(201
|
)
|
Net Realized and Unrealized Gains (Losses)
|
|
Three Months Ended June 30, 2017
|
|
|
Three Months Ended June 30, 2016
|
|
||||||||||||||||||
(in millions of U.S. dollars)
|
Net
Realized
Gains
(Losses)
|
|
|
Net
Unrealized
Gains
(Losses)
|
|
|
Net
Impact
|
|
|
Net
Realized
Gains
(Losses)
|
|
|
Net
Unrealized
Gains
(Losses)
|
|
|
Net
Impact
|
|
||||||
Fixed maturities
|
$
|
23
|
|
|
$
|
423
|
|
|
$
|
446
|
|
|
$
|
7
|
|
|
$
|
954
|
|
|
$
|
961
|
|
Fixed income derivatives
|
(16
|
)
|
|
—
|
|
|
(16
|
)
|
|
(47
|
)
|
|
—
|
|
|
(47
|
)
|
||||||
Public equity
|
2
|
|
|
15
|
|
|
17
|
|
|
(5
|
)
|
|
33
|
|
|
28
|
|
||||||
Private equity
|
(1
|
)
|
|
(4
|
)
|
|
(5
|
)
|
|
13
|
|
|
(42
|
)
|
|
(29
|
)
|
||||||
Total investment portfolio
(1)
|
8
|
|
|
434
|
|
|
442
|
|
|
(32
|
)
|
|
945
|
|
|
913
|
|
||||||
Variable annuity reinsurance derivative transactions, net of applicable hedges
|
80
|
|
|
—
|
|
|
80
|
|
|
(159
|
)
|
|
—
|
|
|
(159
|
)
|
||||||
Other derivatives
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Foreign exchange
|
14
|
|
|
102
|
|
|
116
|
|
|
(22
|
)
|
|
81
|
|
|
59
|
|
||||||
Other
|
—
|
|
|
(35
|
)
|
|
(35
|
)
|
|
(3
|
)
|
|
1
|
|
|
(2
|
)
|
||||||
Net gains (losses) before tax
|
$
|
101
|
|
|
$
|
501
|
|
|
$
|
602
|
|
|
$
|
(216
|
)
|
|
$
|
1,027
|
|
|
$
|
811
|
|
(1)
|
For the three months ended
June 30, 2017
, other-than-temporary impairments in Net realized gains (losses) included
$4 million
for fixed maturities,
$3 million
for public equity, and
$1 million
for private equity. For the three months ended
June 30, 2016
, other-than-temporary impairments in Net realized gains (losses) included
$11 million
for fixed maturities and
$5 million
for public equity.
|
|
Six Months Ended June 30, 2017
|
|
|
Six Months Ended June 30, 2016
|
|
||||||||||||||||||
(in millions of U.S. dollars)
|
Net
Realized
Gains
(Losses)
|
|
|
Net
Unrealized
Gains
(Losses)
|
|
|
Net
Impact
|
|
|
Net
Realized
Gains
(Losses)
|
|
|
Net
Unrealized
Gains
(Losses)
|
|
|
Net
Impact
|
|
||||||
Fixed maturities
|
$
|
11
|
|
|
$
|
679
|
|
|
$
|
690
|
|
|
$
|
(183
|
)
|
|
$
|
2,042
|
|
|
$
|
1,859
|
|
Fixed income derivatives
|
(10
|
)
|
|
—
|
|
|
(10
|
)
|
|
(86
|
)
|
|
—
|
|
|
(86
|
)
|
||||||
Public equity
|
6
|
|
|
43
|
|
|
49
|
|
|
33
|
|
|
29
|
|
|
62
|
|
||||||
Private equity
|
(8
|
)
|
|
27
|
|
|
19
|
|
|
16
|
|
|
(69
|
)
|
|
(53
|
)
|
||||||
Total investment portfolio
(1)
|
(1
|
)
|
|
749
|
|
|
748
|
|
|
(220
|
)
|
|
2,002
|
|
|
1,782
|
|
||||||
Variable annuity reinsurance derivative transactions, net of applicable hedges
|
99
|
|
|
—
|
|
|
99
|
|
|
(402
|
)
|
|
—
|
|
|
(402
|
)
|
||||||
Other derivatives
|
1
|
|
|
—
|
|
|
1
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
||||||
Foreign exchange
|
(5
|
)
|
|
236
|
|
|
231
|
|
|
17
|
|
|
393
|
|
|
410
|
|
||||||
Other
|
—
|
|
|
(55
|
)
|
|
(55
|
)
|
|
(3
|
)
|
|
3
|
|
|
—
|
|
||||||
Net gains (losses) before tax
|
$
|
94
|
|
|
$
|
930
|
|
|
$
|
1,024
|
|
|
$
|
(610
|
)
|
|
$
|
2,398
|
|
|
$
|
1,788
|
|
(1)
|
For the six months ended
June 30, 2017
, other-than-temporary impairments in Net realized gains (losses) included
$10 million
for fixed maturities,
$8 million
for public equity, and
$9 million
for private equity. For the six months ended
June 30, 2016
, other-than-temporary impairments in Net realized gains (losses) included
$70 million
for fixed maturities,
$6 million
for public equity, and
$3 million
for private equity.
|
Investments
|
|
June 30, 2017
|
|
|
December 31, 2016
|
|
||||||||||
(in millions of U.S. dollars)
|
Fair
Value
|
|
|
Cost/
Amortized
Cost
|
|
|
Fair
Value
|
|
|
Cost/
Amortized
Cost
|
|
||||
Fixed maturities available for sale
|
$
|
81,645
|
|
|
$
|
80,363
|
|
|
$
|
80,115
|
|
|
$
|
79,536
|
|
Fixed maturities held to maturity
|
10,560
|
|
|
10,371
|
|
|
10,670
|
|
|
10,644
|
|
||||
Short-term investments
|
2,651
|
|
|
2,651
|
|
|
3,002
|
|
|
3,002
|
|
||||
|
94,856
|
|
|
93,385
|
|
|
93,787
|
|
|
93,182
|
|
||||
Equity securities
|
856
|
|
|
697
|
|
|
814
|
|
|
706
|
|
||||
Other investments
|
4,685
|
|
|
4,410
|
|
|
4,519
|
|
|
4,270
|
|
||||
Total investments
|
$
|
100,397
|
|
|
$
|
98,492
|
|
|
$
|
99,120
|
|
|
$
|
98,158
|
|
|
June 30, 2017
|
|
|
December 31, 2016
|
|
||||||||
(in millions of U.S. dollars, except for percentages)
|
Market
Value
|
|
|
% of Total
|
|
|
Market
Value
|
|
|
% of Total
|
|
||
Treasury
|
$
|
3,117
|
|
|
3
|
%
|
|
$
|
2,832
|
|
|
3
|
%
|
Agency
|
632
|
|
|
1
|
%
|
|
699
|
|
|
1
|
%
|
||
Corporate and asset-backed securities
|
28,064
|
|
|
30
|
%
|
|
26,944
|
|
|
29
|
%
|
||
Mortgage-backed securities
|
15,777
|
|
|
17
|
%
|
|
15,435
|
|
|
16
|
%
|
||
Municipal
|
22,263
|
|
|
23
|
%
|
|
22,768
|
|
|
24
|
%
|
||
Non-U.S.
|
22,352
|
|
|
23
|
%
|
|
22,107
|
|
|
24
|
%
|
||
Short-term investments
|
2,651
|
|
|
3
|
%
|
|
3,002
|
|
|
3
|
%
|
||
Total
|
$
|
94,856
|
|
|
100
|
%
|
|
$
|
93,787
|
|
|
100
|
%
|
AAA
|
$
|
15,411
|
|
|
16
|
%
|
|
$
|
15,746
|
|
|
17
|
%
|
AA
|
36,107
|
|
|
38
|
%
|
|
36,235
|
|
|
39
|
%
|
||
A
|
18,011
|
|
|
19
|
%
|
|
17,519
|
|
|
19
|
%
|
||
BBB
|
12,513
|
|
|
13
|
%
|
|
12,237
|
|
|
13
|
%
|
||
BB
|
7,151
|
|
|
8
|
%
|
|
6,993
|
|
|
7
|
%
|
||
B
|
5,390
|
|
|
6
|
%
|
|
4,814
|
|
|
5
|
%
|
||
Other
|
273
|
|
|
—
|
%
|
|
243
|
|
|
—
|
%
|
||
Total
|
$
|
94,856
|
|
|
100
|
%
|
|
$
|
93,787
|
|
|
100
|
%
|
(in millions of U.S. dollars)
|
Market Value
|
|
|
Wells Fargo & Co
|
$
|
588
|
|
JP Morgan Chase & Co
|
533
|
|
|
Goldman Sachs Group Inc
|
464
|
|
|
Anheuser-Busch InBev NV
|
433
|
|
|
General Electric Co
|
394
|
|
|
Morgan Stanley
|
363
|
|
|
Verizon Communications Inc
|
356
|
|
|
Bank of America Corp
|
349
|
|
|
AT&T Inc
|
345
|
|
|
HSBC Holdings Plc
|
318
|
|
|
S&P Credit Rating
|
|
|
Market
Value
|
|
|
Amortized Cost
|
|
|||||||||||||||||||
June 30, 2017 (in millions of U.S. dollars)
|
AAA
|
|
|
AA
|
|
|
A
|
|
|
BBB
|
|
|
BB and
below
|
|
|
Total
|
|
|
Total
|
|
|||||||
Agency residential mortgage-backed (RMBS)
|
$
|
—
|
|
|
$
|
12,765
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,765
|
|
|
$
|
12,749
|
|
Non-agency RMBS
|
1
|
|
|
5
|
|
|
60
|
|
|
3
|
|
|
28
|
|
|
97
|
|
|
105
|
|
|||||||
Commercial mortgage-backed
|
2,902
|
|
|
13
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,915
|
|
|
2,883
|
|
|||||||
Total mortgage-backed securities
|
$
|
2,903
|
|
|
$
|
12,783
|
|
|
$
|
60
|
|
|
$
|
3
|
|
|
$
|
28
|
|
|
$
|
15,777
|
|
|
$
|
15,737
|
|
(in millions of U.S. dollars)
|
Market Value
|
|
|
Amortized Cost
|
|
||
United Kingdom
|
$
|
1,406
|
|
|
$
|
1,367
|
|
Republic of Korea
|
1,058
|
|
|
962
|
|
||
Canada
|
869
|
|
|
872
|
|
||
Federative Republic of Brazil
|
798
|
|
|
790
|
|
||
Province of Ontario
|
629
|
|
|
623
|
|
||
United Mexican States
|
506
|
|
|
506
|
|
||
Province of Quebec
|
499
|
|
|
494
|
|
||
Kingdom of Thailand
|
482
|
|
|
459
|
|
||
Germany
|
389
|
|
|
381
|
|
||
Australia
|
351
|
|
|
341
|
|
||
Other Non-U.S. Government Securities
(1)
|
4,229
|
|
|
4,126
|
|
||
Total
|
$
|
11,216
|
|
|
$
|
10,921
|
|
(1)
|
There are no investments in Portugal, Ireland, Italy, Greece or Spain.
|
(in millions of U.S. dollars)
|
Market Value
|
|
|
Amortized Cost
|
|
||
United Kingdom
|
$
|
2,070
|
|
|
$
|
1,985
|
|
Canada
|
1,373
|
|
|
1,350
|
|
||
United States
(1)
|
906
|
|
|
882
|
|
||
France
|
837
|
|
|
810
|
|
||
Netherlands
|
714
|
|
|
692
|
|
||
Australia
|
713
|
|
|
700
|
|
||
Germany
|
621
|
|
|
606
|
|
||
Japan
|
348
|
|
|
347
|
|
||
Switzerland
|
335
|
|
|
325
|
|
||
China
|
285
|
|
|
280
|
|
||
Other Non-U.S. Corporate Securities
|
2,934
|
|
|
2,853
|
|
||
Total
|
$
|
11,136
|
|
|
$
|
10,830
|
|
Critical Accounting Estimates
|
|
June 30
|
|
|
December 31
|
|
||
(in millions of U.S. dollars)
|
2017
|
|
|
2016
|
|
||
Reinsurance recoverable on unpaid losses and loss expenses
(1)
|
$
|
12,485
|
|
|
$
|
12,708
|
|
Reinsurance recoverable on paid losses and loss expenses
(1)
|
873
|
|
|
869
|
|
||
Reinsurance recoverable on losses and loss expenses
(1)
|
$
|
13,358
|
|
|
$
|
13,577
|
|
Reinsurance recoverable on policy benefits
(1)
|
$
|
198
|
|
|
$
|
182
|
|
(1)
|
Net of provision for uncollectible reinsurance
|
(in millions of U.S. dollars)
|
Gross
Losses
|
|
|
Reinsurance
Recoverable
(1)
|
|
|
Net
Losses
|
|
|||
Balance at December 31, 2016
|
$
|
60,540
|
|
|
$
|
12,708
|
|
|
$
|
47,832
|
|
Losses and loss expenses incurred
|
9,768
|
|
|
1,833
|
|
|
7,935
|
|
|||
Losses and loss expenses paid
|
(10,186
|
)
|
|
(2,157
|
)
|
|
(8,029
|
)
|
|||
Foreign currency revaluation and other
|
272
|
|
|
101
|
|
|
171
|
|
|||
Balance at June 30, 2017
|
$
|
60,394
|
|
|
$
|
12,485
|
|
|
$
|
47,909
|
|
(1)
|
Net of provision for uncollectible reinsurance
|
Catastrophe management
|
|
|
Modeled Annual Aggregate Net PML
|
||||||||||||||||||||||||||
|
|
U.S. Hurricane
|
|
California Earthquake
|
||||||||||||||||||||||||
|
|
June 30
|
|
|
June 30
|
|
|
June 30
|
|
|
June 30
|
|
||||||||||||||||
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||||||||||||||
(in millions of U.S. dollars, except for percentages)
|
|
Chubb
|
|
% of Total
Shareholders’
Equity
|
|
% of
Industry
|
|
Chubb
|
|
Chubb
|
|
% of Total
Shareholders’
Equity
|
|
% of
Industry
|
|
Chubb
|
||||||||||||
1-in-100
|
|
$
|
2,919
|
|
|
5.8
|
%
|
|
2.0
|
%
|
|
$
|
3,310
|
|
|
$
|
1,436
|
|
|
2.9
|
%
|
|
3.7
|
%
|
|
$
|
1,504
|
|
1-in-250
|
|
$
|
5,033
|
|
|
10.0
|
%
|
|
2.5
|
%
|
|
$
|
5,717
|
|
|
$
|
1,891
|
|
|
3.8
|
%
|
|
3.1
|
%
|
|
$
|
2,114
|
|
Natural Catastrophe Property Reinsurance Program
|
Crop Insurance
|
Liquidity
|
Capital Resources
|
|
June 30
|
|
|
December 31
|
|
||
(in millions of U.S. dollars, except for ratios)
|
2017
|
|
|
2016
|
|
||
Short-term debt
|
$
|
922
|
|
|
$
|
500
|
|
Long-term debt
|
11,667
|
|
|
12,610
|
|
||
Total financial debt
|
12,589
|
|
|
13,110
|
|
||
Trust preferred securities
|
308
|
|
|
308
|
|
||
Total shareholders’ equity
|
50,349
|
|
|
48,275
|
|
||
Total capitalization
|
$
|
63,246
|
|
|
$
|
61,693
|
|
Ratio of financial debt to total capitalization
|
19.9
|
%
|
|
21.3
|
%
|
||
Ratio of financial debt plus trust preferred securities to total capitalization
|
20.4
|
%
|
|
21.8
|
%
|
Shareholders of record as of:
|
|
Dividends paid as of:
|
|
|
December 30, 2016
|
|
January 20, 2017
|
|
$0.69 (CHF 0.69)
|
March 31, 2017
|
|
April 21, 2017
|
|
$0.69 (CHF 0.69)
|
June 30, 2017
|
|
July 21, 2017
|
|
$0.71 (CHF 0.69)
|
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk
|
•
|
No changes to the benefit ratio used to establish benefit reserves at
June 30, 2017
|
•
|
Equity shocks impact all global equity markets equally
|
•
|
Our liabilities are sensitive to global equity markets in the following proportions:
75
percent—
85
percent U.S. equity,
10
percent—
20
percent international equity ex-Japan, up to
10
percent Japan equity.
|
•
|
Our current hedge portfolio is sensitive to global equity markets in the following proportions:
100 percent
U.S. equity.
|
•
|
We would suggest using the S&P 500 index as a proxy for U.S. equity, the MSCI EAFE index as a proxy for international equity, and the TOPIX as a proxy for Japan equity.
|
•
|
Interest rate shocks assume a parallel shift in the U.S. yield curve
|
•
|
Our liabilities are also sensitive to global interest rates at various points on the yield curve, mainly the U.S. Treasury curve in the following proportions: up to
10
percent short-term rates (maturing in less than 5 years),
15
percent—
25
percent medium-term rates (maturing between 5 years and 10 years, inclusive), and
70
percent—
80
percent long-term rates (maturing beyond 10 years).
|
•
|
A change in AA-rated credit spreads (AA-rated credit spreads are a proxy for both our own credit spreads and the credit spreads of the ceding insurers) impacts the rate used to discount cash flows in the fair value model.
|
•
|
The hedge sensitivity is from
June 30, 2017
market levels.
|
•
|
The sensitivities are not directly additive because changes in one factor will affect the sensitivity to changes in other factors. The sensitivities do not scale linearly and may be proportionally greater for larger movements in the market factors. The sensitivities may also vary due to foreign exchange rate fluctuations. The calculation of the FVL is based on internal models that include assumptions regarding future policyholder behavior, including lapse, annuitization, and asset allocation. These assumptions impact both the absolute level of the FVL as well as the sensitivities to changes in market factors shown below. Actual sensitivity of our net income may differ from those disclosed in the tables below due to differences between short-term market movements and management judgment regarding the long-term assumptions implicit in our benefit ratios. Furthermore, the sensitivities below could vary by multiples of the sensitivities in the tables below.
|
•
|
In addition, the tables below do not reflect the expected quarterly run rate of net income generated by the variable annuity guarantee reinsurance portfolio if markets remain unchanged during the period. All else equal, if markets remain unchanged during the period, the Gross FVL will increase, resulting in a realized loss. The realized loss occurs primarily because, during the period, we will collect premium on the full population while only
69
percent of that population has become eligible to annuitize and generate a claim (since approximately
31
percent of policies are not eligible to annuitize until after
June 30, 2017
). This increases the Gross FVL because future premiums are lower by the amount collected in the quarter, and also because future claims are discounted for a shorter period. We refer to this increase in Gross FVL as “timing
|
Interest Rate Shock
|
Worldwide Equity Shock
|
|||||||||||||||||||||||
(in millions of U.S. dollars)
|
+10%
|
|
Flat
|
|
-10%
|
|
-20%
|
|
-30%
|
|
-40%
|
|||||||||||||
+100 bps
|
(Increase)/decrease in Gross FVL
|
$
|
330
|
|
|
$
|
228
|
|
|
$
|
38
|
|
|
$
|
(221
|
)
|
|
$
|
(538
|
)
|
|
$
|
(909
|
)
|
|
Increase/(decrease) in hedge value
|
(142
|
)
|
|
—
|
|
|
142
|
|
|
285
|
|
|
427
|
|
|
570
|
|
||||||
|
Increase/(decrease) in net income
|
$
|
188
|
|
|
$
|
228
|
|
|
$
|
180
|
|
|
$
|
64
|
|
|
$
|
(111
|
)
|
|
$
|
(339
|
)
|
Flat
|
(Increase)/decrease in Gross FVL
|
$
|
190
|
|
|
$
|
—
|
|
|
$
|
(242
|
)
|
|
$
|
(546
|
)
|
|
$
|
(906
|
)
|
|
$
|
(1,315
|
)
|
|
Increase/(decrease) in hedge value
|
(142
|
)
|
|
—
|
|
|
142
|
|
|
285
|
|
|
427
|
|
|
570
|
|
||||||
|
Increase/(decrease) in net income
|
$
|
48
|
|
|
$
|
—
|
|
|
$
|
(100
|
)
|
|
$
|
(261
|
)
|
|
$
|
(479
|
)
|
|
$
|
(745
|
)
|
-100 bps
|
(Increase)/decrease in Gross FVL
|
$
|
(88
|
)
|
|
$
|
(319
|
)
|
|
$
|
(604
|
)
|
|
$
|
(947
|
)
|
|
$
|
(1,341
|
)
|
|
$
|
(1,770
|
)
|
|
Increase/(decrease) in hedge value
|
(142
|
)
|
|
—
|
|
|
142
|
|
|
285
|
|
|
427
|
|
|
570
|
|
||||||
|
Increase/(decrease) in net income
|
$
|
(230
|
)
|
|
$
|
(319
|
)
|
|
$
|
(462
|
)
|
|
$
|
(662
|
)
|
|
$
|
(914
|
)
|
|
$
|
(1,200
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Sensitivities to Other Economic Variables
|
AA-rated Credit Spreads
|
|
Interest Rate Volatility
|
|
Equity Volatility
|
|||||||||||||||||||
(in millions of U.S. dollars)
|
+100 bps
|
|
|
-100 bps
|
|
+2%
|
|
-2%
|
|
+2%
|
|
-2%
|
||||||||||||
(Increase)/decrease in Gross FVL
|
$
|
73
|
|
|
$
|
(83
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(10
|
)
|
|
$
|
9
|
|
|
Increase/(decrease) in hedge value
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Increase/(decrease) in net income
|
$
|
73
|
|
|
$
|
(83
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(10
|
)
|
|
$
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Sensitivities to Actuarial Assumptions
|
|
|
|
|
Mortality
|
|||||||||||||||||||
(in millions of U.S. dollars)
|
|
|
|
|
+20%
|
|
+10%
|
|
-10%
|
|
-20%
|
|||||||||||||
(Increase)/decrease in Gross FVL
|
|
|
|
|
$
|
29
|
|
|
$
|
14
|
|
|
$
|
(15
|
)
|
|
$
|
(30
|
)
|
|||||
Increase/(decrease) in hedge value
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Increase/(decrease) in net income
|
|
|
|
|
$
|
29
|
|
|
$
|
14
|
|
|
$
|
(15
|
)
|
|
$
|
(30
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
Lapses
|
||||||||||||||||||
(in millions of U.S. dollars)
|
|
|
|
|
+50%
|
|
+25%
|
|
-25%
|
|
-50%
|
|||||||||||||
(Increase)/decrease in Gross FVL
|
|
|
|
|
$
|
110
|
|
|
$
|
58
|
|
|
$
|
(64
|
)
|
|
$
|
(136
|
)
|
|||||
Increase/(decrease) in hedge value
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Increase/(decrease) in net income
|
|
|
|
|
$
|
110
|
|
|
$
|
58
|
|
|
$
|
(64
|
)
|
|
$
|
(136
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
Annuitization
|
||||||||||||||||||
(in millions of U.S. dollars)
|
|
|
|
|
+50%
|
|
+25%
|
|
-25%
|
|
-50%
|
|||||||||||||
(Increase)/decrease in Gross FVL
|
|
|
|
|
$
|
(413
|
)
|
|
$
|
(223
|
)
|
|
$
|
227
|
|
|
$
|
415
|
|
|||||
Increase/(decrease) in hedge value
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Increase/(decrease) in net income
|
|
|
|
|
$
|
(413
|
)
|
|
$
|
(223
|
)
|
|
$
|
227
|
|
|
$
|
415
|
|
ITEM 4. Controls and Procedures
|
ITEM 1. Legal Proceedings
|
ITEM 1A. Risk Factors
|
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds and Issuer Repurchases of Equity Securities
|
Period
|
Total
Number of
Shares
Purchased
(1)
|
|
|
Average Price
Paid per Share
|
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plan
(2)
|
|
|
Approximate Dollar Value of Shares that May Yet be Purchased Under the Plan
(3)
|
|
||
April 1 through April 30
|
586,714
|
|
|
$
|
137.41
|
|
|
544,301
|
|
|
$
|
786
|
million
|
May 1 through May 31
|
1,174,101
|
|
|
$
|
138.96
|
|
|
1,056,924
|
|
|
$
|
639
|
million
|
June 1 through June 30
|
787,154
|
|
|
$
|
145.22
|
|
|
780,341
|
|
|
$
|
525
|
million
|
Total
|
2,547,969
|
|
|
$
|
140.54
|
|
|
2,381,566
|
|
|
|
(1)
|
This column represents open market share repurchases and the surrender to Chubb of Common Shares to satisfy tax withholding obligations in connection with the vesting of restricted stock issued to employees and the exercising of options by employees.
|
ITEM 6. Exhibits
|
SIGNATURES
|
|
CHUBB LIMITED
|
|
(Registrant)
|
|
|
August 3, 2017
|
/s/ Evan G. Greenberg
|
|
Evan G. Greenberg
|
|
Chairman, President and Chief Executive Officer
|
|
|
August 3, 2017
|
/s/ Philip V. Bancroft
|
|
Philip V. Bancroft
|
|
Executive Vice President and Chief Financial Officer
|
(a)
|
The “Participant” is
[Insert Name]
.
|
(b)
|
The “Grant Date” is
[Insert Date]
.
|
(c)
|
The number of “Covered Shares” is
[Insert Number]
.
|
(a)
|
The Restricted Period shall end upon the Date of Termination, if the Date of Termination occurs by reason of the Participant's death.
|
(b)
|
The Restricted Period shall end upon the Date of Termination, if the Date of Termination occurs by reason of the Participant’s Long-Term Disability.
|
(c)
|
The Restricted Period shall end upon a Change in Control, provided that such Change in Control occurs on or before the Date of Termination.
|
(b)
|
Date of Termination
. The “Date of Termination” means the date the Director resigns or otherwise ceases to perform services as a Director for the Company or a Related Company for any reason.
|
(c)
|
Director
. The term “Director” means a member of the Board who is not an employee of the Company or a Related Company.
|
(d)
|
Long-Term Disability
. A Participant shall be considered to have a “Long-Term Disability” if the Committee determines, using standards comparable to those used in any long-term disability plan of the Company, that the Participant would be eligible for long-term disability benefits if he or she participated in such plan.
|
(e)
|
Plan Definitions
. Except where the context clearly implies or indicates the contrary, a word, term, or phrase used in the Plan is similarly used in these Restricted Stock Award Terms.
|
1)
|
I have reviewed this quarterly report on Form 10-Q of Chubb Limited;
|
2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4)
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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5)
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):
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/s/ Evan G. Greenberg
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Evan G. Greenberg
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Chairman, President and Chief Executive Officer
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1)
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I have reviewed this quarterly report on Form 10-Q of Chubb Limited;
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2)
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3)
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4)
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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5)
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):
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/s/ Philip V. Bancroft
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Philip V. Bancroft
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Executive Vice President and Chief Financial Officer
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Dated: August 3, 2017
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/s/ Evan G. Greenberg
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Evan G. Greenberg
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Chairman, President and Chief Executive Officer
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Dated: August 3, 2017
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/s/ Philip V. Bancroft
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Philip V. Bancroft
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Executive Vice President and Chief Financial Officer
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