þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Switzerland
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98-0091805
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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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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Emerging growth company
¨
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Part I.
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FINANCIAL INFORMATION
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Page
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Item 1.
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Note 1.
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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.
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Item 3.
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Item 4.
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Part II.
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OTHER INFORMATION
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Item 1.
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|||
Item 1A.
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Item 2.
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Item 5.
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Item 6.
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ITEM 1. Financial Statements
|
|
March 31
|
|
|
December 31
|
|
||
(in millions of U.S. dollars, except share and per share data)
|
2018
|
|
|
2017
|
|
||
Assets
|
|
|
|
||||
Investments
|
|
|
|
||||
Fixed maturities available for sale, at fair value (amortized cost –
$79,208
and
$77,835
)
|
$
|
79,111
|
|
|
$
|
78,939
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|
(includes hybrid financial instruments of
$7 and $5
)
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|||||||
Fixed maturities held to maturity, at amortized cost (fair value –
$14,122
and
$14,474
)
|
14,253
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|
14,335
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Equity securities, at fair value (cost –
$948
and
$737
)
|
948
|
|
|
937
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|
||
Short-term investments, at fair value and amortized cost
|
2,874
|
|
|
3,561
|
|
||
Other investments (cost –
$4,919
and
$4,417
)
|
4,919
|
|
|
4,672
|
|
||
Total investments
|
102,105
|
|
|
102,444
|
|
||
Cash
|
1,988
|
|
|
728
|
|
||
Restricted cash
|
125
|
|
|
123
|
|
||
Securities lending collateral
|
2,039
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|
|
1,737
|
|
||
Accrued investment income
|
895
|
|
|
909
|
|
||
Insurance and reinsurance balances receivable
|
9,570
|
|
|
9,334
|
|
||
Reinsurance recoverable on losses and loss expenses
|
14,982
|
|
|
15,034
|
|
||
Reinsurance recoverable on policy benefits
|
181
|
|
|
184
|
|
||
Deferred policy acquisition costs
|
4,843
|
|
|
4,723
|
|
||
Value of business acquired
|
321
|
|
|
326
|
|
||
Goodwill
|
15,686
|
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|
15,541
|
|
||
Other intangible assets
|
6,437
|
|
|
6,513
|
|
||
Prepaid reinsurance premiums
|
2,600
|
|
|
2,529
|
|
||
Investments in partially-owned insurance companies
|
664
|
|
|
662
|
|
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Other assets
|
6,345
|
|
|
6,235
|
|
||
Total assets
|
$
|
168,781
|
|
|
$
|
167,022
|
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Liabilities
|
|
|
|
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Unpaid losses and loss expenses
|
$
|
63,139
|
|
|
$
|
63,179
|
|
Unearned premiums
|
15,495
|
|
|
15,216
|
|
||
Future policy benefits
|
5,412
|
|
|
5,321
|
|
||
Insurance and reinsurance balances payable
|
6,148
|
|
|
5,868
|
|
||
Securities lending payable
|
2,039
|
|
|
1,737
|
|
||
Accounts payable, accrued expenses, and other liabilities
|
8,618
|
|
|
9,545
|
|
||
Deferred tax liabilities
|
468
|
|
|
699
|
|
||
Repurchase agreements
|
1,412
|
|
|
1,408
|
|
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Short-term debt
|
1,669
|
|
|
1,013
|
|
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Long-term debt
|
12,786
|
|
|
11,556
|
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Trust preferred securities
|
308
|
|
|
308
|
|
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Total liabilities
|
117,494
|
|
|
115,850
|
|
||
Commitments and contingencies
|
|
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|
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Shareholders’ equity
|
|
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|
||||
Common Shares (CHF
24.15
par value;
479,783,864
shares issued;
465,831,486
and
463,833,179
shares outstanding)
|
11,121
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11,121
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Common Shares in treasury
(
13,952,378 and 15,950,685
shares)
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(1,727
|
)
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|
(1,944
|
)
|
||
Additional paid-in capital
|
13,430
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|
13,978
|
|
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Retained earnings
|
28,965
|
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|
27,474
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|
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Accumulated other comprehensive income (loss) (AOCI)
|
(502
|
)
|
|
543
|
|
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Total shareholders’ equity
|
51,287
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|
|
51,172
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|
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Total liabilities and shareholders’ equity
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$
|
168,781
|
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$
|
167,022
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|
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Three Months Ended
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|
|||||
|
March 31
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|
|||||
(in millions of U.S. dollars, except per share data)
|
2018
|
|
|
2017
|
|
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Revenues
|
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|
||||
Net premiums written
|
$
|
7,104
|
|
|
$
|
6,710
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(Increase) decrease in unearned premiums
|
(77
|
)
|
|
62
|
|
||
Net premiums earned
|
7,027
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|
6,772
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Net investment income
|
806
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|
745
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Net realized gains (losses):
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Other-than-temporary impairment (OTTI) losses gross
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(1
|
)
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|
(19
|
)
|
||
Portion of OTTI losses recognized in other comprehensive income (OCI)
|
—
|
|
|
—
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Net OTTI losses recognized in income
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(1
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)
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(19
|
)
|
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Net realized gains (losses) excluding OTTI losses
|
(1
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)
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12
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Total net realized gains (losses) (includes
$(23) and $(8)
reclassified from AOCI)
|
(2
|
)
|
|
(7
|
)
|
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Total revenues
|
7,831
|
|
|
7,510
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Expenses
|
|
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|
||||
Losses and loss expenses
|
4,102
|
|
|
3,789
|
|
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Policy benefits
|
151
|
|
|
168
|
|
||
Policy acquisition costs
|
1,464
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|
|
1,397
|
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||
Administrative expenses
|
692
|
|
|
676
|
|
||
Interest expense
|
157
|
|
|
154
|
|
||
Other (income) expense
|
(47
|
)
|
|
(70
|
)
|
||
Amortization of purchased intangibles
|
85
|
|
|
64
|
|
||
Chubb integration expenses
|
10
|
|
|
111
|
|
||
Total expenses
|
6,614
|
|
|
6,289
|
|
||
Income before income tax
|
1,217
|
|
|
1,221
|
|
||
Income tax expense (benefit) (includes $(3) and
$(6)
on reclassified unrealized losses)
|
135
|
|
|
128
|
|
||
Net income
|
$
|
1,082
|
|
|
$
|
1,093
|
|
Other comprehensive income (loss)
|
|
|
|
||||
Unrealized appreciation (depreciation)
|
$
|
(1,234
|
)
|
|
$
|
307
|
|
Reclassification adjustment for net realized losses included in net income
|
23
|
|
|
8
|
|
||
|
(1,211
|
)
|
|
315
|
|
||
Change in:
|
|
|
|
||||
Cumulative foreign currency translation adjustment
|
397
|
|
|
134
|
|
||
Postretirement benefit liability adjustment
|
(23
|
)
|
|
(20
|
)
|
||
Other comprehensive income (loss), before income tax
|
(837
|
)
|
|
429
|
|
||
Income tax (expense) benefit related to OCI items
|
208
|
|
|
(115
|
)
|
||
Other comprehensive income (loss)
|
(629
|
)
|
|
314
|
|
||
Comprehensive income
|
$
|
453
|
|
|
$
|
1,407
|
|
Earnings per share
|
|
|
|
||||
Basic earnings per share
|
$
|
2.32
|
|
|
$
|
2.33
|
|
Diluted earnings per share
|
$
|
2.30
|
|
|
$
|
2.31
|
|
|
Three Months Ended
|
|
|||||
|
March 31
|
|
|||||
(in millions of U.S. dollars)
|
2018
|
|
|
2017
|
|
||
Common Shares
|
|
|
|
||||
Balance – beginning and end of period
|
$
|
11,121
|
|
|
$
|
11,121
|
|
Common Shares in treasury
|
|
|
|
||||
Balance – beginning of period
|
(1,944
|
)
|
|
(1,480
|
)
|
||
Common Shares repurchased
|
—
|
|
|
(140
|
)
|
||
Net shares redeemed under employee share-based compensation plans
|
217
|
|
|
222
|
|
||
Balance – end of period
|
(1,727
|
)
|
|
(1,398
|
)
|
||
Additional paid-in capital
|
|
|
|
||||
Balance – beginning of period
|
13,978
|
|
|
15,335
|
|
||
Net shares redeemed under employee share-based compensation plans
|
(262
|
)
|
|
(260
|
)
|
||
Exercise of stock options
|
(16
|
)
|
|
(21
|
)
|
||
Share-based compensation expense
|
62
|
|
|
65
|
|
||
Funding of dividends declared to Retained earnings
|
(332
|
)
|
|
(324
|
)
|
||
Balance – end of period
|
13,430
|
|
|
14,795
|
|
||
Retained earnings
|
|
|
|
||||
Balance – beginning of period
|
27,474
|
|
|
23,613
|
|
||
Cumulative effect of adoption of accounting guidance (refer to Note 1)
|
409
|
|
|
—
|
|
||
Balance – beginning of period, as adjusted
|
27,883
|
|
|
23,613
|
|
||
Net income
|
1,082
|
|
|
1,093
|
|
||
Funding of dividends declared from Additional paid-in capital
|
332
|
|
|
324
|
|
||
Dividends declared on Common Shares
|
(332
|
)
|
|
(324
|
)
|
||
Balance – end of period
|
28,965
|
|
|
24,706
|
|
||
Accumulated other comprehensive income
|
|
|
|
||||
Net unrealized appreciation on investments
|
|
|
|
||||
Balance – beginning of period
|
1,450
|
|
|
1,058
|
|
||
Cumulative effect of adoption of accounting guidance (refer to Note 1)
|
(416
|
)
|
|
—
|
|
||
Balance – beginning of period, as adjusted
|
1,034
|
|
|
1,058
|
|
||
Change in period, before reclassification from AOCI, net of income tax
benefit (expense) of
$226
and
$(102)
|
(1,008
|
)
|
|
205
|
|
||
Amounts reclassified from AOCI, net of income tax expense of
$(3)
and
$(6)
|
20
|
|
|
2
|
|
||
Change in period, net of income tax benefit (expense) of
$223
and
$(108)
|
(988
|
)
|
|
207
|
|
||
Balance – end of period
|
46
|
|
|
1,265
|
|
||
Cumulative foreign currency translation adjustment
|
|
|
|
||||
Balance – beginning of period
|
(1,187
|
)
|
|
(1,663
|
)
|
||
Change in period, net of income tax expense of
$(19)
and
$(3)
|
378
|
|
|
131
|
|
||
Balance – end of period
|
(809
|
)
|
|
(1,532
|
)
|
||
Postretirement benefit liability adjustment
|
|
|
|
||||
Balance – beginning of period
|
280
|
|
|
291
|
|
||
Change in period, net of income tax benefit (expense) of
$4
and
$(4)
|
(19
|
)
|
|
(24
|
)
|
||
Balance – end of period
|
261
|
|
|
267
|
|
||
Accumulated other comprehensive income (loss)
|
(502
|
)
|
|
—
|
|
||
Total shareholders’ equity
|
$
|
51,287
|
|
|
$
|
49,224
|
|
|
Three Months Ended March 31
|
|
|||||
(in millions of U.S. dollars)
|
2018
|
|
|
2017
|
|
||
Cash flows from operating activities
|
|
|
|
||||
Net income
|
$
|
1,082
|
|
|
$
|
1,093
|
|
Adjustments to reconcile net income to net cash flows from operating activities
|
|
|
|
||||
Net realized (gains) losses
|
2
|
|
|
7
|
|
||
Amortization of premiums/discounts on fixed maturities
|
155
|
|
|
184
|
|
||
Amortization of purchased intangibles
|
85
|
|
|
64
|
|
||
Deferred income taxes
|
(2
|
)
|
|
(127
|
)
|
||
Unpaid losses and loss expenses
|
(420
|
)
|
|
(154
|
)
|
||
Unearned premiums
|
111
|
|
|
17
|
|
||
Future policy benefits
|
58
|
|
|
40
|
|
||
Insurance and reinsurance balances payable
|
250
|
|
|
252
|
|
||
Accounts payable, accrued expenses, and other liabilities
|
(724
|
)
|
|
(491
|
)
|
||
Income taxes payable
|
88
|
|
|
191
|
|
||
Insurance and reinsurance balances receivable
|
(174
|
)
|
|
30
|
|
||
Reinsurance recoverable on losses and loss expenses
|
138
|
|
|
(122
|
)
|
||
Reinsurance recoverable on policy benefits
|
3
|
|
|
(5
|
)
|
||
Deferred policy acquisition costs
|
(75
|
)
|
|
(59
|
)
|
||
Prepaid reinsurance premiums
|
(42
|
)
|
|
(81
|
)
|
||
Other
|
16
|
|
|
174
|
|
||
Net cash flows from operating activities
|
551
|
|
|
1,013
|
|
||
Cash flows from investing activities
|
|
|
|
||||
Purchases of fixed maturities available for sale
|
(5,972
|
)
|
|
(6,250
|
)
|
||
Purchases of fixed maturities held to maturity
|
(162
|
)
|
|
(157
|
)
|
||
Purchases of equity securities
|
(55
|
)
|
|
(37
|
)
|
||
Sales of fixed maturities available for sale
|
2,562
|
|
|
3,395
|
|
||
Sales of equity securities
|
40
|
|
|
46
|
|
||
Maturities and redemptions of fixed maturities available for sale
|
1,865
|
|
|
2,543
|
|
||
Maturities and redemptions of fixed maturities held to maturity
|
255
|
|
|
240
|
|
||
Net change in short-term investments
|
731
|
|
|
232
|
|
||
Net derivative instruments settlements
|
39
|
|
|
(89
|
)
|
||
Private equity contributions
|
(353
|
)
|
|
(198
|
)
|
||
Private equity distributions
|
201
|
|
|
315
|
|
||
Other
|
(32
|
)
|
|
(106
|
)
|
||
Net cash flows used for investing activities
|
(881
|
)
|
|
(66
|
)
|
||
Cash flows from financing activities
|
|
|
|
||||
Dividends paid on Common Shares
|
(330
|
)
|
|
(324
|
)
|
||
Common Shares repurchased
|
(29
|
)
|
|
(128
|
)
|
||
Proceeds from issuance of long-term debt
|
2,175
|
|
|
—
|
|
||
Repayment of long-term debt
|
(300
|
)
|
|
(500
|
)
|
||
Proceeds from issuance of repurchase agreements
|
408
|
|
|
753
|
|
||
Repayment of repurchase agreements
|
(404
|
)
|
|
(752
|
)
|
||
Proceeds from share-based compensation plans
|
34
|
|
|
42
|
|
||
Policyholder contract deposits
|
118
|
|
|
109
|
|
||
Policyholder contract withdrawals
|
(105
|
)
|
|
(58
|
)
|
||
Net cash flows from (used for) financing activities
|
1,567
|
|
|
(858
|
)
|
||
Effect of foreign currency rate changes on cash and restricted cash
|
25
|
|
|
(17
|
)
|
||
Net increase in cash and restricted cash
|
1,262
|
|
|
72
|
|
||
Cash and restricted cash – beginning of period
|
851
|
|
|
1,088
|
|
||
Cash and restricted cash – end of period
|
$
|
2,113
|
|
|
$
|
1,160
|
|
Supplemental cash flow information
|
|
|
|
||||
Taxes paid
|
$
|
93
|
|
|
$
|
54
|
|
Interest paid
|
$
|
82
|
|
|
$
|
75
|
|
|
March 31
|
|
|
December 31
|
|
||
(in millions of U.S. dollars)
|
2018
|
|
|
2017
|
|
||
Cash
|
$
|
1,988
|
|
|
$
|
728
|
|
Restricted cash
|
125
|
|
|
123
|
|
||
Total cash and restricted cash shown in the consolidated statements of cash flows
|
$
|
2,113
|
|
|
$
|
851
|
|
March 31, 2018
|
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
|
$
|
3,893
|
|
|
$
|
22
|
|
|
$
|
(77
|
)
|
|
$
|
3,838
|
|
|
$
|
—
|
|
Foreign
|
21,705
|
|
|
513
|
|
|
(187
|
)
|
|
22,031
|
|
|
—
|
|
|||||
Corporate securities
|
23,509
|
|
|
332
|
|
|
(274
|
)
|
|
23,567
|
|
|
(4
|
)
|
|||||
Mortgage-backed securities
|
16,116
|
|
|
53
|
|
|
(349
|
)
|
|
15,820
|
|
|
(1
|
)
|
|||||
States, municipalities, and political subdivisions
|
13,985
|
|
|
61
|
|
|
(191
|
)
|
|
13,855
|
|
|
—
|
|
|||||
|
$
|
79,208
|
|
|
$
|
981
|
|
|
$
|
(1,078
|
)
|
|
$
|
79,111
|
|
|
$
|
(5
|
)
|
Held to maturity
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Treasury and agency
|
$
|
1,037
|
|
|
$
|
9
|
|
|
$
|
(14
|
)
|
|
$
|
1,032
|
|
|
$
|
—
|
|
Foreign
|
1,754
|
|
|
17
|
|
|
(20
|
)
|
|
1,751
|
|
|
—
|
|
|||||
Corporate securities
|
3,026
|
|
|
26
|
|
|
(55
|
)
|
|
2,997
|
|
|
—
|
|
|||||
Mortgage-backed securities
|
2,681
|
|
|
11
|
|
|
(45
|
)
|
|
2,647
|
|
|
—
|
|
|||||
States, municipalities, and political subdivisions
|
5,755
|
|
|
18
|
|
|
(78
|
)
|
|
5,695
|
|
|
—
|
|
|||||
|
$
|
14,253
|
|
|
$
|
81
|
|
|
$
|
(212
|
)
|
|
$
|
14,122
|
|
|
$
|
—
|
|
December 31, 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
|
$
|
3,701
|
|
|
$
|
32
|
|
|
$
|
(35
|
)
|
|
$
|
3,698
|
|
|
$
|
—
|
|
Foreign
|
20,514
|
|
|
622
|
|
|
(106
|
)
|
|
21,030
|
|
|
(1
|
)
|
|||||
Corporate securities
|
23,453
|
|
|
638
|
|
|
(95
|
)
|
|
23,996
|
|
|
(4
|
)
|
|||||
Mortgage-backed securities
|
15,279
|
|
|
111
|
|
|
(100
|
)
|
|
15,290
|
|
|
(1
|
)
|
|||||
States, municipalities, and political subdivisions
|
14,888
|
|
|
125
|
|
|
(88
|
)
|
|
14,925
|
|
|
—
|
|
|||||
|
$
|
77,835
|
|
|
$
|
1,528
|
|
|
$
|
(424
|
)
|
|
$
|
78,939
|
|
|
$
|
(6
|
)
|
Held to maturity
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Treasury and agency
|
$
|
908
|
|
|
$
|
12
|
|
|
$
|
(5
|
)
|
|
$
|
915
|
|
|
$
|
—
|
|
Foreign
|
1,738
|
|
|
27
|
|
|
(8
|
)
|
|
1,757
|
|
|
—
|
|
|||||
Corporate securities
|
3,159
|
|
|
67
|
|
|
(7
|
)
|
|
3,219
|
|
|
—
|
|
|||||
Mortgage-backed securities
|
2,724
|
|
|
23
|
|
|
(5
|
)
|
|
2,742
|
|
|
—
|
|
|||||
States, municipalities, and political subdivisions
|
5,806
|
|
|
50
|
|
|
(15
|
)
|
|
5,841
|
|
|
—
|
|
|||||
|
$
|
14,335
|
|
|
$
|
179
|
|
|
$
|
(40
|
)
|
|
$
|
14,474
|
|
|
$
|
—
|
|
|
|
|
March 31
|
|
|
|
|
December 31
|
|
||||||
|
|
|
2018
|
|
|
|
|
2017
|
|
||||||
(in millions of U.S. dollars)
|
Amortized Cost
|
|
|
Fair Value
|
|
|
Amortized Cost
|
|
|
Fair Value
|
|
||||
Available for sale
|
|
|
|
|
|
|
|
||||||||
Due in 1 year or less
|
$
|
3,735
|
|
|
$
|
3,746
|
|
|
$
|
3,164
|
|
|
$
|
3,182
|
|
Due after 1 year through 5 years
|
25,140
|
|
|
25,251
|
|
|
24,749
|
|
|
25,068
|
|
||||
Due after 5 years through 10 years
|
25,243
|
|
|
25,097
|
|
|
25,388
|
|
|
25,704
|
|
||||
Due after 10 years
|
8,974
|
|
|
9,197
|
|
|
9,255
|
|
|
9,695
|
|
||||
|
63,092
|
|
|
63,291
|
|
|
62,556
|
|
|
63,649
|
|
||||
Mortgage-backed securities
|
16,116
|
|
|
15,820
|
|
|
15,279
|
|
|
15,290
|
|
||||
|
$
|
79,208
|
|
|
$
|
79,111
|
|
|
$
|
77,835
|
|
|
$
|
78,939
|
|
Held to maturity
|
|
|
|
|
|
|
|
||||||||
Due in 1 year or less
|
$
|
838
|
|
|
$
|
840
|
|
|
$
|
743
|
|
|
$
|
746
|
|
Due after 1 year through 5 years
|
2,684
|
|
|
2,678
|
|
|
2,669
|
|
|
2,688
|
|
||||
Due after 5 years through 10 years
|
4,713
|
|
|
4,635
|
|
|
4,744
|
|
|
4,756
|
|
||||
Due after 10 years
|
3,337
|
|
|
3,322
|
|
|
3,455
|
|
|
3,542
|
|
||||
|
11,572
|
|
|
11,475
|
|
|
11,611
|
|
|
11,732
|
|
||||
Mortgage-backed securities
|
2,681
|
|
|
2,647
|
|
|
2,724
|
|
|
2,742
|
|
||||
|
$
|
14,253
|
|
|
$
|
14,122
|
|
|
$
|
14,335
|
|
|
$
|
14,474
|
|
|
Three Months Ended
|
|
|||||
|
March 31
|
|
|||||
(in millions of U.S. dollars)
|
2018
|
|
|
2017
|
|
||
Fixed maturities:
|
|
|
|
||||
OTTI on fixed maturities, gross
|
$
|
(1
|
)
|
|
$
|
(6
|
)
|
OTTI on fixed maturities recognized in OCI (pre-tax)
|
—
|
|
|
—
|
|
||
OTTI on fixed maturities, net
|
(1
|
)
|
|
(6
|
)
|
||
Gross realized gains excluding OTTI
|
66
|
|
|
34
|
|
||
Gross realized losses excluding OTTI
|
(88
|
)
|
|
(40
|
)
|
||
Total fixed maturities
|
(23
|
)
|
|
(12
|
)
|
||
Equity securities:
|
|
|
|
||||
OTTI on equity securities
|
—
|
|
|
(5
|
)
|
||
Gross realized gains excluding OTTI
|
10
|
|
|
9
|
|
||
Gross realized losses excluding OTTI
|
(21
|
)
|
|
—
|
|
||
Total equity securities
|
(11
|
)
|
|
4
|
|
||
OTTI on other investments
|
—
|
|
|
(8
|
)
|
||
Other investments
|
29
|
|
|
—
|
|
||
Foreign exchange losses
|
(77
|
)
|
|
(19
|
)
|
||
Investment and embedded derivative instruments
|
17
|
|
|
6
|
|
||
Fair value adjustments on insurance derivative
|
38
|
|
|
93
|
|
||
S&P put options and futures
|
22
|
|
|
(74
|
)
|
||
Other derivative instruments
|
2
|
|
|
2
|
|
||
Other
|
1
|
|
|
1
|
|
||
Net realized gains (losses)
|
$
|
(2
|
)
|
|
$
|
(7
|
)
|
|
Three Months Ended
|
|
|||||
|
March 31
|
|
|||||
(in millions of U.S. dollars)
|
2018
|
|
|
2017
|
|
||
Balance of credit losses related to securities still held – beginning of period
|
$
|
22
|
|
|
$
|
35
|
|
Additions where no OTTI was previously recorded
|
—
|
|
|
—
|
|
||
Additions where an OTTI was previously recorded
|
—
|
|
|
1
|
|
||
Reductions for securities sold during the period
|
(7
|
)
|
|
(4
|
)
|
||
Balance of credit losses related to securities still held – end of period
|
$
|
15
|
|
|
$
|
32
|
|
|
Three Months Ended
|
|
|||||
|
March 31, 2018
|
|
|||||
(in millions of U.S. dollars)
|
Equity Securities
|
|
|
Other Investments
|
|
||
Net gains (losses) recognized during the period
|
$
|
(11
|
)
|
|
$
|
29
|
|
Less: Net gains (losses) recognized from sales of securities
|
10
|
|
|
—
|
|
||
Unrealized gains (losses) recognized for securities still held at reporting date
|
$
|
(21
|
)
|
|
$
|
29
|
|
|
0 – 12 Months
|
|
|
Over 12 Months
|
|
|
Total
|
|
|||||||||||||||
March 31, 2018
|
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
|
$
|
2,869
|
|
|
$
|
(55
|
)
|
|
$
|
1,314
|
|
|
$
|
(36
|
)
|
|
$
|
4,183
|
|
|
$
|
(91
|
)
|
Foreign
|
8,715
|
|
|
(155
|
)
|
|
1,643
|
|
|
(52
|
)
|
|
10,358
|
|
|
(207
|
)
|
||||||
Corporate securities
|
12,355
|
|
|
(260
|
)
|
|
1,501
|
|
|
(69
|
)
|
|
13,856
|
|
|
(329
|
)
|
||||||
Mortgage-backed securities
|
12,313
|
|
|
(257
|
)
|
|
3,033
|
|
|
(137
|
)
|
|
15,346
|
|
|
(394
|
)
|
||||||
States, municipalities, and political subdivisions
|
15,030
|
|
|
(218
|
)
|
|
1,343
|
|
|
(51
|
)
|
|
16,373
|
|
|
(269
|
)
|
||||||
Total fixed maturities
|
$
|
51,282
|
|
|
$
|
(945
|
)
|
|
$
|
8,834
|
|
|
$
|
(345
|
)
|
|
$
|
60,116
|
|
|
$
|
(1,290
|
)
|
|
0 – 12 Months
|
|
|
Over 12 Months
|
|
|
Total
|
|
|||||||||||||||
December 31, 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
|
$
|
2,172
|
|
|
$
|
(14
|
)
|
|
$
|
1,249
|
|
|
$
|
(26
|
)
|
|
$
|
3,421
|
|
|
$
|
(40
|
)
|
Foreign
|
5,657
|
|
|
(65
|
)
|
|
1,693
|
|
|
(49
|
)
|
|
7,350
|
|
|
(114
|
)
|
||||||
Corporate securities
|
5,210
|
|
|
(56
|
)
|
|
1,332
|
|
|
(46
|
)
|
|
6,542
|
|
|
(102
|
)
|
||||||
Mortgage-backed securities
|
6,194
|
|
|
(31
|
)
|
|
3,209
|
|
|
(74
|
)
|
|
9,403
|
|
|
(105
|
)
|
||||||
States, municipalities, and political subdivisions
|
9,259
|
|
|
(71
|
)
|
|
1,402
|
|
|
(32
|
)
|
|
10,661
|
|
|
(103
|
)
|
||||||
Total fixed maturities
|
28,492
|
|
|
(237
|
)
|
|
8,885
|
|
|
(227
|
)
|
|
37,377
|
|
|
(464
|
)
|
||||||
Equity securities
|
115
|
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
115
|
|
|
(12
|
)
|
||||||
Other investments
|
78
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
78
|
|
|
(8
|
)
|
||||||
Total
|
$
|
28,685
|
|
|
$
|
(257
|
)
|
|
$
|
8,885
|
|
|
$
|
(227
|
)
|
|
$
|
37,570
|
|
|
$
|
(484
|
)
|
|
March 31
|
|
|
December 31
|
|
||
(in millions of U.S. dollars)
|
2018
|
|
|
2017
|
|
||
Trust funds
|
$
|
17,029
|
|
|
$
|
17,011
|
|
Deposits with U.S. regulatory authorities
|
2,463
|
|
|
2,345
|
|
||
Deposits with non-U.S. regulatory authorities
|
2,290
|
|
|
2,250
|
|
||
Assets pledged under repurchase agreements
|
1,460
|
|
|
1,434
|
|
||
Other pledged assets
|
433
|
|
|
414
|
|
||
|
$
|
23,675
|
|
|
$
|
23,454
|
|
•
|
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
|
March 31, 2018
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
||||
(in millions of U.S. dollars)
|
|
|
|
||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Fixed maturities available for sale
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury and agency
|
$
|
3,094
|
|
|
$
|
744
|
|
|
$
|
—
|
|
|
$
|
3,838
|
|
Foreign
|
—
|
|
|
21,855
|
|
|
176
|
|
|
22,031
|
|
||||
Corporate securities
|
—
|
|
|
22,494
|
|
|
1,073
|
|
|
23,567
|
|
||||
Mortgage-backed securities
|
—
|
|
|
15,737
|
|
|
83
|
|
|
15,820
|
|
||||
States, municipalities, and political subdivisions
|
—
|
|
|
13,855
|
|
|
—
|
|
|
13,855
|
|
||||
|
3,094
|
|
|
74,685
|
|
|
1,332
|
|
|
79,111
|
|
||||
Equity securities
|
884
|
|
|
—
|
|
|
64
|
|
|
948
|
|
||||
Short-term investments
|
1,735
|
|
|
1,127
|
|
|
12
|
|
|
2,874
|
|
||||
Other investments
(1)
|
451
|
|
|
318
|
|
|
270
|
|
|
1,039
|
|
||||
Securities lending collateral
|
—
|
|
|
2,039
|
|
|
—
|
|
|
2,039
|
|
||||
Investment derivative instruments
|
25
|
|
|
—
|
|
|
—
|
|
|
25
|
|
||||
Other derivative instruments
|
78
|
|
|
—
|
|
|
—
|
|
|
78
|
|
||||
Separate account assets
|
2,774
|
|
|
100
|
|
|
—
|
|
|
2,874
|
|
||||
Total assets measured at fair value
(1)
|
$
|
9,041
|
|
|
$
|
78,269
|
|
|
$
|
1,678
|
|
|
$
|
88,988
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Investment derivative instruments
|
$
|
29
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
29
|
|
Other derivative instruments
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
||||
GLB
(2)
|
—
|
|
|
—
|
|
|
167
|
|
|
167
|
|
||||
Total liabilities measured at fair value
|
$
|
29
|
|
|
$
|
—
|
|
|
$
|
169
|
|
|
$
|
198
|
|
(1)
|
Excluded from the table above are partially-owned investments, investment funds, and limited partnerships of $
3,866 million
and other investments of $
14 million
at March 31, 2018 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, 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
|
$
|
3,129
|
|
|
$
|
569
|
|
|
$
|
—
|
|
|
$
|
3,698
|
|
Foreign
|
—
|
|
|
20,937
|
|
|
93
|
|
|
21,030
|
|
||||
Corporate securities
|
—
|
|
|
22,959
|
|
|
1,037
|
|
|
23,996
|
|
||||
Mortgage-backed securities
|
—
|
|
|
15,212
|
|
|
78
|
|
|
15,290
|
|
||||
States, municipalities, and political subdivisions
|
—
|
|
|
14,925
|
|
|
—
|
|
|
14,925
|
|
||||
|
3,129
|
|
|
74,602
|
|
|
1,208
|
|
|
78,939
|
|
||||
Equity securities
|
893
|
|
|
—
|
|
|
44
|
|
|
937
|
|
||||
Short-term investments
|
2,309
|
|
|
1,252
|
|
|
—
|
|
|
3,561
|
|
||||
Other investments
(1)
|
466
|
|
|
305
|
|
|
263
|
|
|
1,034
|
|
||||
Securities lending collateral
|
—
|
|
|
1,737
|
|
|
—
|
|
|
1,737
|
|
||||
Investment derivative instruments
|
18
|
|
|
—
|
|
|
—
|
|
|
18
|
|
||||
Other derivative instruments
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Separate account assets
|
2,635
|
|
|
99
|
|
|
—
|
|
|
2,734
|
|
||||
Total assets measured at fair value
(1)
|
$
|
9,451
|
|
|
$
|
77,995
|
|
|
$
|
1,515
|
|
|
$
|
88,961
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Investment derivative instruments
|
$
|
30
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
30
|
|
Other derivative instruments
|
21
|
|
|
—
|
|
|
2
|
|
|
23
|
|
||||
GLB
(2)
|
—
|
|
|
—
|
|
|
204
|
|
|
204
|
|
||||
Total liabilities measured at fair value
|
$
|
51
|
|
|
$
|
—
|
|
|
$
|
206
|
|
|
$
|
257
|
|
(1)
|
Excluded from the table above are partially-owned investments, investment funds, and limited partnerships of
$3,623 million
and other investments of
$15 million
at December 31, 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.
|
|
|
|
|
|
March 31
|
|
|
|
|
December 31
|
|
||||||
|
Expected
Liquidation
Period of Underlying Assets
|
|
|
|
2018
|
|
|
|
|
2017
|
|
||||||
(in millions of U.S. dollars)
|
Fair
Value
|
|
|
Maximum
Future Funding
Commitments
|
|
|
Fair
Value
|
|
|
Maximum
Future Funding
Commitments
|
|
||||||
Financial
|
5 to 9 Years
|
|
$
|
538
|
|
|
$
|
327
|
|
|
$
|
540
|
|
|
$
|
330
|
|
Real Assets
|
3 to 7 Years
|
|
656
|
|
|
210
|
|
|
651
|
|
|
114
|
|
||||
Distressed
|
3 to 7 Years
|
|
295
|
|
|
131
|
|
|
289
|
|
|
141
|
|
||||
Private Credit
|
3 to 7 Years
|
|
173
|
|
|
320
|
|
|
187
|
|
|
327
|
|
||||
Traditional
|
3 to 15 Years
|
|
1,901
|
|
|
2,858
|
|
|
1,656
|
|
|
3,149
|
|
||||
Vintage
|
1 to 2 Years
|
|
27
|
|
|
—
|
|
|
30
|
|
|
—
|
|
||||
Investment funds
|
Not Applicable
|
|
276
|
|
|
—
|
|
|
270
|
|
|
—
|
|
||||
|
|
|
$
|
3,866
|
|
|
$
|
3,846
|
|
|
$
|
3,623
|
|
|
$
|
4,061
|
|
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 or 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
|
|||||
March 31, 2018
|
|
|
December 31, 2017
|
|
|
|
|
||||||
GLB
(1)
|
$
|
167
|
|
|
$
|
204
|
|
|
Actuarial model
|
|
Lapse rate
|
|
3% – 33%
|
|
|
|
|
|
|
|
Annuitization rate
|
|
0% – 100%
|
(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
3
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
(2)
|
|
||||||||||||||||
March 31, 2018
|
Foreign
|
|
|
Corporate
securities
(1)
|
|
|
MBS
|
|
|
|
|||||||||||||||||||||
(in millions of U.S. dollars)
|
|
|
|
|
|||||||||||||||||||||||||||
Balance – beginning of period
|
$
|
93
|
|
|
$
|
1,037
|
|
|
$
|
78
|
|
|
$
|
44
|
|
|
$
|
—
|
|
|
$
|
263
|
|
|
$
|
2
|
|
|
$
|
204
|
|
Transfers into Level 3
|
7
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Transfers out of Level 3
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Change in Net Unrealized Gains (Losses) included in OCI, including Foreign Exchange
|
9
|
|
|
(3
|
)
|
|
—
|
|
|
1
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||||||
Net Realized Gains/Losses
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(37
|
)
|
||||||||
Purchases
|
87
|
|
|
139
|
|
|
4
|
|
|
17
|
|
|
8
|
|
|
14
|
|
|
—
|
|
|
—
|
|
||||||||
Sales
|
(19
|
)
|
|
(51
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Settlements
|
(1
|
)
|
|
(39
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
||||||||
Balance – end of period
|
$
|
176
|
|
|
$
|
1,073
|
|
|
$
|
83
|
|
|
$
|
64
|
|
|
$
|
12
|
|
|
$
|
270
|
|
|
$
|
2
|
|
|
$
|
167
|
|
Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(37
|
)
|
(1)
|
Purchases in Level 3 primarily consist of privately-placed fixed income securities.
|
(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. The liability for GLB reinsurance was
$529 million
at March 31, 2018, and
$550 million
at December 31, 2017, which includes a fair value derivative adjustment of
$167 million
and
$204 million
, respectively.
|
|
Assets
|
|
|
|
|
Liabilities
|
|
||||||||||||||||||||||||
Three Months Ended
|
Available-for-Sale Debt Securities
|
|
|
Equity
securities |
|
|
Short-term investments
|
|
|
Other
investments |
|
|
Other derivative instruments
|
|
|
GLB
(1)
|
|
||||||||||||||
March 31, 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
|
—
|
|
|
29
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Transfers out of Level 3
|
—
|
|
|
(54
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Change in Net Unrealized Gains (Losses) included in OCI
|
(1
|
)
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
||||||||
Net Realized Gains/Losses
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(93
|
)
|
||||||||
Purchases
|
14
|
|
|
156
|
|
|
1
|
|
|
—
|
|
|
7
|
|
|
8
|
|
|
—
|
|
|
—
|
|
||||||||
Sales
|
(3
|
)
|
|
(27
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Settlements
|
(3
|
)
|
|
(39
|
)
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
||||||||
Balance – end of period
|
$
|
80
|
|
|
$
|
737
|
|
|
$
|
45
|
|
|
$
|
41
|
|
|
$
|
21
|
|
|
$
|
233
|
|
|
$
|
11
|
|
|
$
|
466
|
|
Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
(93
|
)
|
(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
$774
million at March 31, 2017, and
$853
million at December 31, 2016, which includes a fair value derivative adjustment of
$466
million and
$559
million, respectively.
|
March 31, 2018
|
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
|
$
|
977
|
|
|
$
|
55
|
|
|
$
|
—
|
|
|
$
|
1,032
|
|
|
$
|
1,037
|
|
Foreign
|
—
|
|
|
1,751
|
|
|
—
|
|
|
1,751
|
|
|
1,754
|
|
|||||
Corporate securities
|
—
|
|
|
2,964
|
|
|
33
|
|
|
2,997
|
|
|
3,026
|
|
|||||
Mortgage-backed securities
|
—
|
|
|
2,647
|
|
|
—
|
|
|
2,647
|
|
|
2,681
|
|
|||||
States, municipalities, and political subdivisions
|
—
|
|
|
5,695
|
|
|
—
|
|
|
5,695
|
|
|
5,755
|
|
|||||
Total assets
|
$
|
977
|
|
|
$
|
13,112
|
|
|
$
|
33
|
|
|
$
|
14,122
|
|
|
$
|
14,253
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Repurchase agreements
|
$
|
—
|
|
|
$
|
1,412
|
|
|
$
|
—
|
|
|
$
|
1,412
|
|
|
$
|
1,412
|
|
Short-term debt
|
—
|
|
|
1,704
|
|
|
—
|
|
|
1,704
|
|
|
1,669
|
|
|||||
Long-term debt
|
—
|
|
|
13,023
|
|
|
—
|
|
|
13,023
|
|
|
12,786
|
|
|||||
Trust preferred securities
|
—
|
|
|
466
|
|
|
—
|
|
|
466
|
|
|
308
|
|
|||||
Total liabilities
|
$
|
—
|
|
|
$
|
16,605
|
|
|
$
|
—
|
|
|
$
|
16,605
|
|
|
$
|
16,175
|
|
December 31, 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
|
$
|
857
|
|
|
$
|
58
|
|
|
$
|
—
|
|
|
$
|
915
|
|
|
$
|
908
|
|
Foreign
|
—
|
|
|
1,757
|
|
|
—
|
|
|
1,757
|
|
|
1,738
|
|
|||||
Corporate securities
|
—
|
|
|
3,184
|
|
|
35
|
|
|
3,219
|
|
|
3,159
|
|
|||||
Mortgage-backed securities
|
—
|
|
|
2,742
|
|
|
—
|
|
|
2,742
|
|
|
2,724
|
|
|||||
States, municipalities, and political subdivisions
|
—
|
|
|
5,841
|
|
|
—
|
|
|
5,841
|
|
|
5,806
|
|
|||||
Total assets
|
$
|
857
|
|
|
$
|
13,582
|
|
|
$
|
35
|
|
|
$
|
14,474
|
|
|
$
|
14,335
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Repurchase agreements
|
$
|
—
|
|
|
$
|
1,408
|
|
|
$
|
—
|
|
|
$
|
1,408
|
|
|
$
|
1,408
|
|
Short-term debt
|
—
|
|
|
1,013
|
|
|
—
|
|
|
1,013
|
|
|
1,013
|
|
|||||
Long-term debt
|
—
|
|
|
12,332
|
|
|
—
|
|
|
12,332
|
|
|
11,556
|
|
|||||
Trust preferred securities
|
—
|
|
|
468
|
|
|
—
|
|
|
468
|
|
|
308
|
|
|||||
Total liabilities
|
$
|
—
|
|
|
$
|
15,221
|
|
|
$
|
—
|
|
|
$
|
15,221
|
|
|
$
|
14,285
|
|
|
Three Months Ended March 31
|
|
|||||
(in millions of U.S. dollars)
|
2018
|
|
|
2017
|
|
||
Gross unpaid losses and loss expenses – beginning of period
|
$
|
63,179
|
|
|
$
|
60,540
|
|
Reinsurance recoverable on unpaid losses - beginning of period
(1)
|
(14,014
|
)
|
|
(12,708
|
)
|
||
Net unpaid losses and loss expenses – beginning of period
|
49,165
|
|
|
47,832
|
|
||
Net losses and loss expenses incurred in respect of losses occurring in:
|
|
|
|
||||
Current year
|
4,358
|
|
|
4,078
|
|
||
Prior years
(2)
|
(256
|
)
|
|
(289
|
)
|
||
Total
|
4,102
|
|
|
3,789
|
|
||
Net losses and loss expenses paid in respect of losses occurring in:
|
|
|
|
||||
Current year
|
809
|
|
|
798
|
|
||
Prior years
|
3,433
|
|
|
3,109
|
|
||
Total
|
4,242
|
|
|
3,907
|
|
||
Foreign currency revaluation and other
|
292
|
|
|
54
|
|
||
Net unpaid losses and loss expenses – end of period
|
49,317
|
|
|
47,768
|
|
||
Reinsurance recoverable on unpaid losses
(3)
|
13,822
|
|
|
12,811
|
|
||
Gross unpaid losses and loss expenses – end of period
|
$
|
63,139
|
|
|
$
|
60,579
|
|
(1)
|
Net of provision for uncollectible reinsurance of
$321 million
and
$300 million
at December 31, 2017 and 2016, respectively.
|
(2)
|
Relates to prior period loss reserve development only and excludes prior period development related to reinstatement premiums, expense adjustments, and earned premiums totaling
$47 million
and
$58 million
for the three months ended
March 31, 2018
and 2017, respectively.
|
(3)
|
Net of provision for uncollectible reinsurance of
$320 million
and
$334 million
at March 31, 2018 and 2017, respectively.
|
|
Three Months Ended March 31
|
|
|||||||||
(in millions of U.S. dollars)
|
Long-tail
|
|
|
Short-tail
|
|
|
Total
|
|
|||
2018
|
|
|
|
|
|
||||||
North America Commercial P&C Insurance
|
$
|
8
|
|
|
$
|
(109
|
)
|
|
$
|
(101
|
)
|
North America Personal P&C Insurance
|
—
|
|
|
(6
|
)
|
|
(6
|
)
|
|||
North America Agricultural Insurance
|
—
|
|
|
(76
|
)
|
|
(76
|
)
|
|||
Overseas General Insurance
|
—
|
|
|
(22
|
)
|
|
(22
|
)
|
|||
Global Reinsurance
|
—
|
|
|
(14
|
)
|
|
(14
|
)
|
|||
Corporate
|
10
|
|
|
—
|
|
|
10
|
|
|||
Total
|
$
|
18
|
|
|
$
|
(227
|
)
|
|
$
|
(209
|
)
|
2017
|
|
|
|
|
|
||||||
North America Commercial P&C Insurance
|
$
|
(94
|
)
|
|
$
|
(85
|
)
|
|
$
|
(179
|
)
|
North America Personal P&C Insurance
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
|||
North America Agricultural Insurance
|
—
|
|
|
(79
|
)
|
|
(79
|
)
|
|||
Overseas General Insurance
|
32
|
|
|
(20
|
)
|
|
12
|
|
|||
Global Reinsurance
|
8
|
|
|
—
|
|
|
8
|
|
|||
Corporate
|
10
|
|
|
—
|
|
|
10
|
|
|||
Total
|
$
|
(44
|
)
|
|
$
|
(187
|
)
|
|
$
|
(231
|
)
|
•
|
Net adverse development of
$8 million
in long-tail business, primarily from:
|
•
|
Net favorable development of
$29 million
in commercial excess and umbrella portfolios, driven by the 2012 and prior accident years where the cumulative emergence over time has been less than expected overall and an increase in weighting towards experience-based methods, partly offset by several large settlements; additionally there was adverse claim activity in the 2014 and 2015 accident years which led to reserve strengthening in those years;
|
•
|
Net favorable development of
$3 million
on several lines of business due to favorable claim development on the 2017 natural catastrophes; and
|
•
|
Net adverse development of
$40 million
, mainly in 2015, 2016 and some older accident years, partially offset by favorable development in other periods, particularly in the 2014 accident year. This net adverse development consisted of several underlying favorable and adverse movements by portfolio, principally including
$16 million
of adverse development in wholesale general liability lines.
|
•
|
Net favorable development of
$109 million
in short-tail business, primarily from:
|
•
|
Net favorable development of
$75 million
in commercial property and marine businesses due to favorable claim development on the 2017 natural catastrophes; and
|
•
|
Net favorable development of
$34 million
, principally including
$19 million
in surety business. The remainder was due to several underlying favorable and adverse movements, none of which were significant individually or in the aggregate.
|
•
|
Net favorable development of
$94 million
in long-tail business, primarily from:
|
•
|
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; and
|
•
|
Net favorable development of
$32 million
in our professional Errors and Omissions (E&O) portfolios, primarily in the 2011 through 2013 accident years, arising from lower than expected reported loss activity, partially offset by claim-specific adverse development.
|
•
|
Net favorable development of
$85 million
in short-tail business, primarily from:
|
•
|
Net favorable development of
$45 million
in our surety business, primarily due to lower than expected claims severity in the 2015 accident year; and
|
•
|
Net favorable development of
$24 million
in accident & health (A&H) lines, primarily due to lower than expected loss emergence in the 2015 and 2016 accident years.
|
•
|
Adverse development of
$32 million
in long-tail business, 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
$20 million
in short-tail business, which was the net result of several underlying favorable and adverse movements, none of which were significant individually or in the aggregate.
|
|
|
|
|
|
March 31, 2018
|
|
|
|
|
December 31, 2017
|
|
||||||||||||||
|
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)
|
|
$
|
19
|
|
|
$
|
(17
|
)
|
|
$
|
2,125
|
|
|
$
|
14
|
|
|
$
|
(27
|
)
|
|
$
|
2,064
|
|
Cross-currency swaps
|
OA / (AP)
|
|
—
|
|
|
—
|
|
|
45
|
|
|
—
|
|
|
—
|
|
|
45
|
|
||||||
Options/Futures contracts on notes and bonds
|
OA / (AP)
|
|
6
|
|
|
(12
|
)
|
|
1,093
|
|
|
4
|
|
|
(3
|
)
|
|
1,007
|
|
||||||
Convertible securities
(1)
|
FM AFS / ES
|
|
7
|
|
|
—
|
|
|
8
|
|
|
5
|
|
|
—
|
|
|
6
|
|
||||||
|
|
|
$
|
32
|
|
|
$
|
(29
|
)
|
|
$
|
3,271
|
|
|
$
|
23
|
|
|
$
|
(30
|
)
|
|
$
|
3,122
|
|
Other derivative instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Futures contracts on equities
(2)
|
OA / (AP)
|
|
$
|
71
|
|
|
$
|
—
|
|
|
$
|
1,625
|
|
|
$
|
—
|
|
|
$
|
(21
|
)
|
|
$
|
1,553
|
|
Other
|
OA / (AP)
|
|
7
|
|
|
(2
|
)
|
|
326
|
|
|
1
|
|
|
(2
|
)
|
|
75
|
|
||||||
|
|
|
$
|
78
|
|
|
$
|
(2
|
)
|
|
$
|
1,951
|
|
|
$
|
1
|
|
|
$
|
(23
|
)
|
|
$
|
1,628
|
|
GLB
(3)
|
(AP) / (FPB)
|
|
$
|
—
|
|
|
$
|
(529
|
)
|
|
$
|
1,175
|
|
|
$
|
—
|
|
|
$
|
(550
|
)
|
|
$
|
1,083
|
|
(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.
|
|
|
Remaining contractual maturity
|
|
|||||
|
|
March 31
|
|
|
December 31
|
|
||
|
|
2018
|
|
|
2017
|
|
||
(in millions of U.S. dollars)
|
|
Overnight and Continuous
|
|
|||||
Collateral held under securities lending agreements:
|
|
|
|
|
||||
Cash
|
|
$
|
826
|
|
|
$
|
828
|
|
U.S. Treasury and agency
|
|
40
|
|
|
36
|
|
||
Foreign
|
|
869
|
|
|
712
|
|
||
Corporate securities
|
|
8
|
|
|
—
|
|
||
Mortgage-backed securities
|
|
59
|
|
|
74
|
|
||
Equity securities
|
|
237
|
|
|
87
|
|
||
|
|
$
|
2,039
|
|
|
$
|
1,737
|
|
Gross amount of recognized liability for securities lending payable
|
|
$
|
2,039
|
|
|
$
|
1,737
|
|
|
Remaining contractual maturity
|
|
|||||||||||||||||||||
|
March 31, 2018
|
|
|
December 31, 2017
|
|
||||||||||||||||||
|
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:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury and agency
|
$
|
—
|
|
|
$
|
243
|
|
|
$
|
243
|
|
|
$
|
9
|
|
|
$
|
230
|
|
|
$
|
239
|
|
Mortgage-backed securities
|
486
|
|
|
731
|
|
|
1,217
|
|
|
369
|
|
|
826
|
|
|
1,195
|
|
||||||
|
$
|
486
|
|
|
$
|
974
|
|
|
$
|
1,460
|
|
|
$
|
378
|
|
|
$
|
1,056
|
|
|
$
|
1,434
|
|
Gross amount of recognized liabilities for repurchase agreements
|
|
|
|
|
$
|
1,412
|
|
|
|
|
|
|
$
|
1,408
|
|
||||||||
Difference
(1)
|
|
|
|
|
$
|
48
|
|
|
|
|
|
|
$
|
26
|
|
(1)
|
Per the repurchase agreements, the amount of collateral posted is required to exceed the amount of gross liability.
|
|
Three Months Ended
|
|
|||||
|
March 31
|
|
|||||
(in millions of U.S. dollars)
|
2018
|
|
|
2017
|
|
||
Investment and embedded derivative instruments:
|
|
|
|
||||
Foreign currency forward contracts
|
$
|
4
|
|
|
$
|
14
|
|
All other futures contracts and options
|
13
|
|
|
(8
|
)
|
||
Total investment and embedded derivative instruments
|
$
|
17
|
|
|
$
|
6
|
|
GLB and other derivative instruments:
|
|
|
|
||||
GLB
(1)
|
$
|
38
|
|
|
$
|
93
|
|
Futures contracts on equities
(2)
|
22
|
|
|
(74
|
)
|
||
Other
|
2
|
|
|
2
|
|
||
Total GLB and other derivative instruments
|
$
|
62
|
|
|
$
|
21
|
|
|
$
|
79
|
|
|
$
|
27
|
|
(1)
|
Excludes foreign exchange gains (losses) related to GLB.
|
(2)
|
Related to GMDB and GLB blocks of business.
|
|
Three Months Ended
March 31
|
|
|||||
(in millions of U.S. dollars, except share data)
|
2018
|
|
|
2017
|
|
||
Number of shares repurchased
|
—
|
|
|
1,036,064
|
|
||
Cost of shares repurchased
|
$
|
—
|
|
|
$
|
140
|
|
Repurchase authorization remaining at end of period
|
$
|
1,000
|
|
|
$
|
860
|
|
|
Pension Benefits
|
|
|
Other Postretirement Benefits
|
|
||||||||||||||||||
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
||||||||||||
Three Months Ended March 31
|
U.S. Plans
|
|
|
Non-U.S. Plans
|
|
|
U.S. Plans
|
|
|
Non-U.S. Plans
|
|
|
|
|
|
||||||||
(in millions of U.S. dollars)
|
|
|
|
|
|||||||||||||||||||
Service cost
|
$
|
14
|
|
|
$
|
3
|
|
|
$
|
16
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
26
|
|
|
7
|
|
|
26
|
|
|
7
|
|
|
1
|
|
|
1
|
|
||||||
Expected return on plan assets
|
(53
|
)
|
|
(13
|
)
|
|
(47
|
)
|
|
(10
|
)
|
|
(1
|
)
|
|
(1
|
)
|
||||||
Amortization of prior service cost
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21
|
)
|
|
(23
|
)
|
||||||
Net periodic (benefit) cost
|
$
|
(13
|
)
|
|
$
|
(3
|
)
|
|
$
|
(5
|
)
|
|
$
|
1
|
|
|
$
|
(21
|
)
|
|
$
|
(23
|
)
|
|
North America Commercial P&C Insurance
(1)
|
|
|
North America Personal P&C Insurance
|
|
|
North America Agricultural Insurance
|
|
|
Overseas General Insurance
(1)
|
|
|
Global
Reinsurance
|
|
|
Life Insurance
|
|
|
Corporate
|
|
|
Chubb
Consolidated
|
|
||||||||
For the Three Months Ended
|
|
|
|
|
|
||||||||||||||||||||||||||
March 31, 2017
|
|
|
|
|
|
||||||||||||||||||||||||||
(in millions of U.S. dollars)
|
|
|
|
|
|
||||||||||||||||||||||||||
Net premiums written
|
$
|
2,730
|
|
|
$
|
984
|
|
|
$
|
61
|
|
|
$
|
2,212
|
|
|
$
|
199
|
|
|
$
|
524
|
|
|
$
|
—
|
|
|
$
|
6,710
|
|
Net premiums earned
|
3,041
|
|
|
1,086
|
|
|
14
|
|
|
1,936
|
|
|
189
|
|
|
506
|
|
|
—
|
|
|
6,772
|
|
||||||||
Losses and loss expenses
|
1,860
|
|
|
633
|
|
|
(73
|
)
|
|
1,071
|
|
|
94
|
|
|
193
|
|
|
11
|
|
|
3,789
|
|
||||||||
Policy benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
168
|
|
|
—
|
|
|
168
|
|
||||||||
Policy acquisition costs
|
487
|
|
|
217
|
|
|
(1
|
)
|
|
529
|
|
|
51
|
|
|
114
|
|
|
—
|
|
|
1,397
|
|
||||||||
Administrative expenses
|
231
|
|
|
65
|
|
|
(5
|
)
|
|
245
|
|
|
10
|
|
|
72
|
|
|
58
|
|
|
676
|
|
||||||||
Underwriting income (loss)
|
463
|
|
|
171
|
|
|
93
|
|
|
91
|
|
|
34
|
|
|
(41
|
)
|
|
(69
|
)
|
|
742
|
|
||||||||
Net investment income (loss)
|
478
|
|
|
55
|
|
|
6
|
|
|
148
|
|
|
62
|
|
|
75
|
|
|
(79
|
)
|
|
745
|
|
||||||||
Other (income) expense
|
4
|
|
|
1
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(29
|
)
|
|
(45
|
)
|
|
(70
|
)
|
||||||||
Amortization expense of purchased intangibles
|
—
|
|
|
3
|
|
|
7
|
|
|
11
|
|
|
—
|
|
|
1
|
|
|
42
|
|
|
64
|
|
||||||||
Segment income (loss)
|
$
|
937
|
|
|
$
|
222
|
|
|
$
|
92
|
|
|
$
|
229
|
|
|
$
|
96
|
|
|
$
|
62
|
|
|
$
|
(145
|
)
|
|
$
|
1,493
|
|
Net realized gains (losses) including OTTI
|
|
|
|
|
|
|
|
|
|
|
|
|
(7
|
)
|
|
(7
|
)
|
||||||||||||||
Interest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
154
|
|
|
154
|
|
||||||||||||||
Chubb integration expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
111
|
|
|
111
|
|
||||||||||||||
Income tax expense
|
|
|
|
|
|
|
|
|
|
|
|
|
128
|
|
|
128
|
|
||||||||||||||
Net income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(545
|
)
|
|
$
|
1,093
|
|
|
Three Months Ended
|
|
|||||
|
March 31
|
|
|||||
(in millions of U.S. dollars, except share and per share data)
|
2018
|
|
|
2017
|
|
||
Numerator:
|
|
|
|
||||
Net income
|
$
|
1,082
|
|
|
$
|
1,093
|
|
Denominator:
|
|
|
|
||||
Denominator for basic earnings per share:
|
|
|
|
||||
Weighted-average shares outstanding
|
465,703,240
|
|
|
468,903,086
|
|
||
Denominator for diluted earnings per share:
|
|
|
|
||||
Share-based compensation plans
|
3,770,351
|
|
|
3,828,604
|
|
||
Weighted-average shares outstanding and assumed conversions
|
469,473,591
|
|
|
472,731,690
|
|
||
Basic earnings per share
|
$
|
2.32
|
|
|
$
|
2.33
|
|
Diluted earnings per share
|
$
|
2.30
|
|
|
$
|
2.31
|
|
Potential anti-dilutive share conversions
|
2,116,188
|
|
|
969,654
|
|
(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
|
$
|
—
|
|
|
$
|
186
|
|
|
$
|
101,919
|
|
|
$
|
—
|
|
|
$
|
102,105
|
|
Cash
(1)
|
1
|
|
|
864
|
|
|
1,523
|
|
|
(400
|
)
|
|
1,988
|
|
|||||
Restricted cash
|
—
|
|
|
—
|
|
|
125
|
|
|
—
|
|
|
125
|
|
|||||
Insurance and reinsurance balances receivable
|
—
|
|
|
—
|
|
|
10,308
|
|
|
(738
|
)
|
|
9,570
|
|
|||||
Reinsurance recoverable on losses and loss expenses
|
—
|
|
|
—
|
|
|
26,093
|
|
|
(11,111
|
)
|
|
14,982
|
|
|||||
Reinsurance recoverable on policy benefits
|
—
|
|
|
—
|
|
|
1,181
|
|
|
(1,000
|
)
|
|
181
|
|
|||||
Value of business acquired
|
—
|
|
|
—
|
|
|
321
|
|
|
—
|
|
|
321
|
|
|||||
Goodwill and other intangible assets
|
—
|
|
|
—
|
|
|
22,123
|
|
|
—
|
|
|
22,123
|
|
|||||
Investments in subsidiaries
|
43,032
|
|
|
51,930
|
|
|
—
|
|
|
(94,962
|
)
|
|
—
|
|
|||||
Due from subsidiaries and affiliates, net
|
8,980
|
|
|
—
|
|
|
251
|
|
|
(9,231
|
)
|
|
—
|
|
|||||
Other assets
|
4
|
|
|
386
|
|
|
18,459
|
|
|
(1,463
|
)
|
|
17,386
|
|
|||||
Total assets
|
$
|
52,017
|
|
|
$
|
53,366
|
|
|
$
|
182,303
|
|
|
$
|
(118,905
|
)
|
|
$
|
168,781
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Unpaid losses and loss expenses
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
74,299
|
|
|
$
|
(11,160
|
)
|
|
$
|
63,139
|
|
Unearned premiums
|
—
|
|
|
—
|
|
|
16,563
|
|
|
(1,068
|
)
|
|
15,495
|
|
|||||
Future policy benefits
|
—
|
|
|
—
|
|
|
6,412
|
|
|
(1,000
|
)
|
|
5,412
|
|
|||||
Due to subsidiaries and affiliates, net
|
—
|
|
|
9,231
|
|
|
—
|
|
|
(9,231
|
)
|
|
—
|
|
|||||
Affiliated notional cash pooling programs
(1)
|
400
|
|
|
—
|
|
|
—
|
|
|
(400
|
)
|
|
—
|
|
|||||
Repurchase agreements
|
—
|
|
|
—
|
|
|
1,412
|
|
|
—
|
|
|
1,412
|
|
|||||
Short-term debt
|
—
|
|
|
1,669
|
|
|
—
|
|
|
—
|
|
|
1,669
|
|
|||||
Long-term debt
|
—
|
|
|
12,775
|
|
|
11
|
|
|
—
|
|
|
12,786
|
|
|||||
Trust preferred securities
|
—
|
|
|
308
|
|
|
—
|
|
|
—
|
|
|
308
|
|
|||||
Other liabilities
|
330
|
|
|
1,537
|
|
|
16,490
|
|
|
(1,084
|
)
|
|
17,273
|
|
|||||
Total liabilities
|
730
|
|
|
25,520
|
|
|
115,187
|
|
|
(23,943
|
)
|
|
117,494
|
|
|||||
Total shareholders’ equity
|
51,287
|
|
|
27,846
|
|
|
67,116
|
|
|
(94,962
|
)
|
|
51,287
|
|
|||||
Total liabilities and shareholders’ equity
|
$
|
52,017
|
|
|
$
|
53,366
|
|
|
$
|
182,303
|
|
|
$
|
(118,905
|
)
|
|
$
|
168,781
|
|
(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
March 31, 2018
, 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
|
$
|
—
|
|
|
$
|
168
|
|
|
$
|
102,276
|
|
|
$
|
—
|
|
|
$
|
102,444
|
|
Cash
(1)
|
3
|
|
|
1
|
|
|
839
|
|
|
(115
|
)
|
|
728
|
|
|||||
Restricted cash
|
—
|
|
|
—
|
|
|
123
|
|
|
—
|
|
|
123
|
|
|||||
Insurance and reinsurance balances receivable
|
—
|
|
|
—
|
|
|
10,820
|
|
|
(1,486
|
)
|
|
9,334
|
|
|||||
Reinsurance recoverable on losses and loss expenses
|
—
|
|
|
—
|
|
|
27,514
|
|
|
(12,480
|
)
|
|
15,034
|
|
|||||
Reinsurance recoverable on policy benefits
|
—
|
|
|
—
|
|
|
1,194
|
|
|
(1,010
|
)
|
|
184
|
|
|||||
Value of business acquired
|
—
|
|
|
—
|
|
|
326
|
|
|
—
|
|
|
326
|
|
|||||
Goodwill and other intangible assets
|
—
|
|
|
—
|
|
|
22,054
|
|
|
—
|
|
|
22,054
|
|
|||||
Investments in subsidiaries
|
41,909
|
|
|
51,165
|
|
|
—
|
|
|
(93,074
|
)
|
|
—
|
|
|||||
Due from subsidiaries and affiliates, net
|
9,639
|
|
|
—
|
|
|
—
|
|
|
(9,639
|
)
|
|
—
|
|
|||||
Other assets
|
3
|
|
|
287
|
|
|
20,578
|
|
|
(4,073
|
)
|
|
16,795
|
|
|||||
Total assets
|
$
|
51,554
|
|
|
$
|
51,621
|
|
|
$
|
185,724
|
|
|
$
|
(121,877
|
)
|
|
$
|
167,022
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Unpaid losses and loss expenses
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
74,767
|
|
|
$
|
(11,588
|
)
|
|
$
|
63,179
|
|
Unearned premiums
|
—
|
|
|
—
|
|
|
18,875
|
|
|
(3,659
|
)
|
|
15,216
|
|
|||||
Future policy benefits
|
—
|
|
|
—
|
|
|
6,331
|
|
|
(1,010
|
)
|
|
5,321
|
|
|||||
Due to subsidiaries and affiliates, net
|
—
|
|
|
9,432
|
|
|
207
|
|
|
(9,639
|
)
|
|
—
|
|
|||||
Affiliated notional cash pooling programs
(1)
|
—
|
|
|
115
|
|
|
—
|
|
|
(115
|
)
|
|
—
|
|
|||||
Repurchase agreements
|
—
|
|
|
—
|
|
|
1,408
|
|
|
—
|
|
|
1,408
|
|
|||||
Short-term debt
|
—
|
|
|
1,013
|
|
|
—
|
|
|
—
|
|
|
1,013
|
|
|||||
Long-term debt
|
—
|
|
|
11,546
|
|
|
10
|
|
|
—
|
|
|
11,556
|
|
|||||
Trust preferred securities
|
—
|
|
|
308
|
|
|
—
|
|
|
—
|
|
|
308
|
|
|||||
Other liabilities
|
382
|
|
|
1,411
|
|
|
18,848
|
|
|
(2,792
|
)
|
|
17,849
|
|
|||||
Total liabilities
|
382
|
|
|
23,825
|
|
|
120,446
|
|
|
(28,803
|
)
|
|
115,850
|
|
|||||
Total shareholders’ equity
|
51,172
|
|
|
27,796
|
|
|
65,278
|
|
|
(93,074
|
)
|
|
51,172
|
|
|||||
Total liabilities and shareholders’ equity
|
$
|
51,554
|
|
|
$
|
51,621
|
|
|
$
|
185,724
|
|
|
$
|
(121,877
|
)
|
|
$
|
167,022
|
|
(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, 2017
, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.
|
For the Three Months Ended March 31, 2018
|
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
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,104
|
|
|
$
|
—
|
|
|
$
|
7,104
|
|
Net premiums earned
|
—
|
|
|
—
|
|
|
7,027
|
|
|
—
|
|
|
7,027
|
|
|||||
Net investment income
|
2
|
|
|
4
|
|
|
800
|
|
|
—
|
|
|
806
|
|
|||||
Equity in earnings of subsidiaries
|
1,022
|
|
|
885
|
|
|
—
|
|
|
(1,907
|
)
|
|
—
|
|
|||||
Net realized gains (losses) including OTTI
|
(2
|
)
|
|
(24
|
)
|
|
24
|
|
|
—
|
|
|
(2
|
)
|
|||||
Losses and loss expenses
|
—
|
|
|
—
|
|
|
4,102
|
|
|
—
|
|
|
4,102
|
|
|||||
Policy benefits
|
—
|
|
|
—
|
|
|
151
|
|
|
—
|
|
|
151
|
|
|||||
Policy acquisition costs and administrative expenses
|
18
|
|
|
22
|
|
|
2,116
|
|
|
—
|
|
|
2,156
|
|
|||||
Interest (income) expense
|
(80
|
)
|
|
209
|
|
|
28
|
|
|
—
|
|
|
157
|
|
|||||
Other (income) expense
|
(5
|
)
|
|
8
|
|
|
(50
|
)
|
|
—
|
|
|
(47
|
)
|
|||||
Amortization of purchased intangibles
|
—
|
|
|
—
|
|
|
85
|
|
|
—
|
|
|
85
|
|
|||||
Chubb integration expenses
|
2
|
|
|
1
|
|
|
7
|
|
|
—
|
|
|
10
|
|
|||||
Income tax expense (benefit)
|
5
|
|
|
(59
|
)
|
|
189
|
|
|
—
|
|
|
135
|
|
|||||
Net income
|
$
|
1,082
|
|
|
$
|
684
|
|
|
$
|
1,223
|
|
|
$
|
(1,907
|
)
|
|
$
|
1,082
|
|
Comprehensive income
|
$
|
453
|
|
|
$
|
216
|
|
|
$
|
614
|
|
|
$
|
(830
|
)
|
|
$
|
453
|
|
For the Three Months Ended March 31, 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
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,710
|
|
|
$
|
—
|
|
|
$
|
6,710
|
|
Net premiums earned
|
—
|
|
|
—
|
|
|
6,772
|
|
|
—
|
|
|
6,772
|
|
|||||
Net investment income
|
—
|
|
|
3
|
|
|
742
|
|
|
—
|
|
|
745
|
|
|||||
Equity in earnings of subsidiaries
|
1,027
|
|
|
701
|
|
|
—
|
|
|
(1,728
|
)
|
|
—
|
|
|||||
Net realized gains (losses) including OTTI
|
—
|
|
|
(13
|
)
|
|
6
|
|
|
—
|
|
|
(7
|
)
|
|||||
Losses and loss expenses
|
—
|
|
|
—
|
|
|
3,789
|
|
|
—
|
|
|
3,789
|
|
|||||
Policy benefits
|
—
|
|
|
—
|
|
|
168
|
|
|
—
|
|
|
168
|
|
|||||
Policy acquisition costs and administrative expenses
|
18
|
|
|
14
|
|
|
2,041
|
|
|
—
|
|
|
2,073
|
|
|||||
Interest (income) expense
|
(84
|
)
|
|
221
|
|
|
17
|
|
|
—
|
|
|
154
|
|
|||||
Other (income) expense
|
(6
|
)
|
|
15
|
|
|
(79
|
)
|
|
—
|
|
|
(70
|
)
|
|||||
Amortization of purchased intangibles
|
—
|
|
|
—
|
|
|
64
|
|
|
—
|
|
|
64
|
|
|||||
Chubb integration expenses
|
—
|
|
|
49
|
|
|
62
|
|
|
—
|
|
|
111
|
|
|||||
Income tax expense (benefit)
|
6
|
|
|
(112
|
)
|
|
234
|
|
|
—
|
|
|
128
|
|
|||||
Net income
|
$
|
1,093
|
|
|
$
|
504
|
|
|
$
|
1,224
|
|
|
$
|
(1,728
|
)
|
|
$
|
1,093
|
|
Comprehensive income
|
$
|
1,407
|
|
|
$
|
791
|
|
|
$
|
1,538
|
|
|
$
|
(2,329
|
)
|
|
$
|
1,407
|
|
For the Three Months Ended March 31, 2018
|
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
|
$
|
24
|
|
|
$
|
2,727
|
|
|
$
|
800
|
|
|
$
|
(3,000
|
)
|
|
$
|
551
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of fixed maturities available for sale
|
—
|
|
|
(8
|
)
|
|
(5,964
|
)
|
|
—
|
|
|
(5,972
|
)
|
|||||
Purchases of fixed maturities held to maturity
|
—
|
|
|
—
|
|
|
(162
|
)
|
|
—
|
|
|
(162
|
)
|
|||||
Purchases of equity securities
|
—
|
|
|
—
|
|
|
(55
|
)
|
|
—
|
|
|
(55
|
)
|
|||||
Sales of fixed maturities available for sale
|
—
|
|
|
—
|
|
|
2,562
|
|
|
—
|
|
|
2,562
|
|
|||||
Sales of equity securities
|
—
|
|
|
—
|
|
|
40
|
|
|
—
|
|
|
40
|
|
|||||
Maturities and redemptions of fixed maturities available for sale
|
—
|
|
|
3
|
|
|
1,862
|
|
|
—
|
|
|
1,865
|
|
|||||
Maturities and redemptions of fixed maturities held to maturity
|
—
|
|
|
—
|
|
|
255
|
|
|
—
|
|
|
255
|
|
|||||
Net change in short-term investments
|
—
|
|
|
(14
|
)
|
|
745
|
|
|
—
|
|
|
731
|
|
|||||
Net derivative instruments settlements
|
—
|
|
|
(7
|
)
|
|
46
|
|
|
—
|
|
|
39
|
|
|||||
Private equity contributions
|
—
|
|
|
—
|
|
|
(353
|
)
|
|
—
|
|
|
(353
|
)
|
|||||
Private equity distributions
|
—
|
|
|
—
|
|
|
201
|
|
|
—
|
|
|
201
|
|
|||||
Capital contribution
|
(750
|
)
|
|
(3,500
|
)
|
|
—
|
|
|
4,250
|
|
|
—
|
|
|||||
Other
|
—
|
|
|
(3
|
)
|
|
(29
|
)
|
|
—
|
|
|
(32
|
)
|
|||||
Net cash flows used for investing activities
|
(750
|
)
|
|
(3,529
|
)
|
|
(852
|
)
|
|
4,250
|
|
|
(881
|
)
|
|||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Dividends paid on Common Shares
|
(330
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(330
|
)
|
|||||
Common Shares repurchased
|
—
|
|
|
—
|
|
|
(29
|
)
|
|
—
|
|
|
(29
|
)
|
|||||
Proceeds from issuance of long-term debt
|
—
|
|
|
2,175
|
|
|
—
|
|
|
—
|
|
|
2,175
|
|
|||||
Repayment of long-term debt
|
—
|
|
|
(300
|
)
|
|
—
|
|
|
—
|
|
|
(300
|
)
|
|||||
Proceeds from issuance of repurchase agreements
|
—
|
|
|
—
|
|
|
408
|
|
|
—
|
|
|
408
|
|
|||||
Repayment of repurchase agreements
|
—
|
|
|
—
|
|
|
(404
|
)
|
|
—
|
|
|
(404
|
)
|
|||||
Proceeds from share-based compensation plans
|
—
|
|
|
—
|
|
|
34
|
|
|
—
|
|
|
34
|
|
|||||
Dividend to parent company
|
—
|
|
|
—
|
|
|
(3,000
|
)
|
|
3,000
|
|
|
—
|
|
|||||
Advances (to) from affiliates
|
656
|
|
|
(95
|
)
|
|
(561
|
)
|
|
—
|
|
|
—
|
|
|||||
Capital contribution
|
—
|
|
|
—
|
|
|
4,250
|
|
|
(4,250
|
)
|
|
—
|
|
|||||
Net proceeds from (payments to) affiliated notional cash pooling programs
(1)
|
400
|
|
|
(115
|
)
|
|
—
|
|
|
(285
|
)
|
|
—
|
|
|||||
Policyholder contract deposits
|
—
|
|
|
—
|
|
|
118
|
|
|
—
|
|
|
118
|
|
|||||
Policyholder contract withdrawals
|
—
|
|
|
—
|
|
|
(105
|
)
|
|
—
|
|
|
(105
|
)
|
|||||
Net cash flows from financing activities
|
726
|
|
|
1,665
|
|
|
711
|
|
|
(1,535
|
)
|
|
1,567
|
|
|||||
Effect of foreign currency rate changes on cash and restricted cash
|
(2
|
)
|
|
—
|
|
|
27
|
|
|
—
|
|
|
25
|
|
|||||
Net increase (decrease) in cash and restricted cash
|
(2
|
)
|
|
863
|
|
|
686
|
|
|
(285
|
)
|
|
1,262
|
|
|||||
Cash and restricted cash – beginning of period
(1)
|
3
|
|
|
1
|
|
|
962
|
|
|
(115
|
)
|
|
851
|
|
|||||
Cash and restricted cash – end of period
(1)
|
$
|
1
|
|
|
$
|
864
|
|
|
$
|
1,648
|
|
|
$
|
(400
|
)
|
|
$
|
2,113
|
|
(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
March 31, 2018
and December 31, 2017, the cash balance of one or more entities was negative; however, the overall Pool balances were positive.
|
For the Three Months Ended March 31, 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 (used for) operating activities
|
$
|
584
|
|
|
$
|
(156
|
)
|
|
$
|
1,081
|
|
|
$
|
(496
|
)
|
|
$
|
1,013
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of fixed maturities available for sale
|
—
|
|
|
(4
|
)
|
|
(6,246
|
)
|
|
—
|
|
|
(6,250
|
)
|
|||||
Purchases of fixed maturities held to maturity
|
—
|
|
|
—
|
|
|
(157
|
)
|
|
—
|
|
|
(157
|
)
|
|||||
Purchases of equity securities
|
—
|
|
|
—
|
|
|
(37
|
)
|
|
—
|
|
|
(37
|
)
|
|||||
Sales of fixed maturities available for sale
|
—
|
|
|
—
|
|
|
3,395
|
|
|
—
|
|
|
3,395
|
|
|||||
Sales of equity securities
|
—
|
|
|
—
|
|
|
46
|
|
|
—
|
|
|
46
|
|
|||||
Maturities and redemptions of fixed maturities
available for sale
|
—
|
|
|
7
|
|
|
2,536
|
|
|
—
|
|
|
2,543
|
|
|||||
Maturities and redemptions of fixed maturities held to maturity
|
—
|
|
|
—
|
|
|
240
|
|
|
—
|
|
|
240
|
|
|||||
Net change in short-term investments
|
—
|
|
|
173
|
|
|
59
|
|
|
—
|
|
|
232
|
|
|||||
Net derivative instruments settlements
|
—
|
|
|
(2
|
)
|
|
(87
|
)
|
|
—
|
|
|
(89
|
)
|
|||||
Private equity contributions
|
—
|
|
|
—
|
|
|
(198
|
)
|
|
—
|
|
|
(198
|
)
|
|||||
Private equity distributions
|
—
|
|
|
—
|
|
|
315
|
|
|
—
|
|
|
315
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
(106
|
)
|
|
—
|
|
|
(106
|
)
|
|||||
Net cash flows from (used for) investing activities
|
—
|
|
|
174
|
|
|
(240
|
)
|
|
—
|
|
|
(66
|
)
|
|||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Dividends paid on Common Shares
|
(324
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(324
|
)
|
|||||
Common Shares repurchased
|
—
|
|
|
—
|
|
|
(128
|
)
|
|
—
|
|
|
(128
|
)
|
|||||
Proceeds from issuance of repurchase agreements
|
—
|
|
|
—
|
|
|
753
|
|
|
—
|
|
|
753
|
|
|||||
Repayment of long-term debt
|
—
|
|
|
(500
|
)
|
|
—
|
|
|
—
|
|
|
(500
|
)
|
|||||
Repayment of repurchase agreements
|
—
|
|
|
—
|
|
|
(752
|
)
|
|
—
|
|
|
(752
|
)
|
|||||
Proceeds from share-based compensation plans
|
—
|
|
|
—
|
|
|
42
|
|
|
—
|
|
|
42
|
|
|||||
Dividend to parent company
|
—
|
|
|
—
|
|
|
(496
|
)
|
|
496
|
|
|
—
|
|
|||||
Advances (to) from affiliates
|
108
|
|
|
(171
|
)
|
|
63
|
|
|
—
|
|
|
—
|
|
|||||
Net proceeds from (payments to) affiliated notional cash pooling programs
(1)
|
(363
|
)
|
|
653
|
|
|
—
|
|
|
(290
|
)
|
|
—
|
|
|||||
Policyholder contract deposits
|
—
|
|
|
—
|
|
|
109
|
|
|
—
|
|
|
109
|
|
|||||
Policyholder contract withdrawals
|
—
|
|
|
—
|
|
|
(58
|
)
|
|
—
|
|
|
(58
|
)
|
|||||
Net cash flows used for financing activities
|
(579
|
)
|
|
(18
|
)
|
|
(467
|
)
|
|
206
|
|
|
(858
|
)
|
|||||
Effect of foreign currency rate changes on cash and restricted cash
|
—
|
|
|
—
|
|
|
(17
|
)
|
|
—
|
|
|
(17
|
)
|
|||||
Net increase in cash and restricted cash
|
5
|
|
|
—
|
|
|
357
|
|
|
(290
|
)
|
|
72
|
|
|||||
Cash and restricted cash – beginning of period
(1)
|
1
|
|
|
1
|
|
|
2,068
|
|
|
(982
|
)
|
|
1,088
|
|
|||||
Cash and restricted cash – end of period
(1)
|
$
|
6
|
|
|
$
|
1
|
|
|
$
|
2,425
|
|
|
$
|
(1,272
|
)
|
|
$
|
1,160
|
|
(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
March 31, 2017
and December 31, 2016, 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 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;
|
•
|
the ability of our company to increase use of data analytics and technology as part of our business strategy and adapt to new technologies; 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 March 31, 2018
|
•
|
Net income was $1,082 million compared with $1,093 million in the prior year period.
|
•
|
Total company and P&C net premiums written were $7.1 billion and $6.5 billion, respectively, up 5.9 percent and 5.8 percent.
|
•
|
Total pre-tax and after-tax catastrophe losses were $380 million (5.8 percentage points of the combined ratio) and $303 million, respectively, compared with $206 million (3.3 percentage points of the combined ratio) and $164 million, respectively, last year.
|
•
|
P&C combined ratio was 90.1 percent compared with 87.5 percent prior year. P&C current accident year combined ratio excluding catastrophe losses was 87.6 percent compared with 88.0 percent prior year.
|
•
|
Total pre-tax and after-tax favorable prior period development were $209 million (3.3 percentage points of the combined ratio) and $166 million, respectively, compared with $231 million (3.8 percentage points of the combined ratio) and $155 million, respectively, last year.
|
•
|
Net investment income was $806 million compared with $745 million in the prior year period. Excluding the amortization of the fair value adjustment on acquired invested assets of The Chubb Corporation (Chubb Corp), net investment income was $877 million, compared with $836 million, up 4.9 percent.
|
Consolidated Operating Results – Three Months Ended March 31, 2018 and 2017
|
|
Three Months Ended
|
|
|
|
||||||
|
March 31
|
|
|
% Change
|
|
|||||
(in millions of U.S. dollars, except for percentages)
|
2018
|
|
|
2017
|
|
|
Q-18 vs.
Q-17 |
|
||
Net premiums written
(1)
|
$
|
7,104
|
|
|
$
|
6,710
|
|
|
5.9
|
%
|
Net premiums earned
(1)
|
7,027
|
|
|
6,772
|
|
|
3.8
|
%
|
||
Net investment income
|
806
|
|
|
745
|
|
|
8.2
|
%
|
||
Net realized gains (losses)
|
(2
|
)
|
|
(7
|
)
|
|
(71.4
|
)%
|
||
Total revenues
|
7,831
|
|
|
7,510
|
|
|
4.3
|
%
|
||
Losses and loss expenses
|
4,102
|
|
|
3,789
|
|
|
8.3
|
%
|
||
Policy benefits
|
151
|
|
|
168
|
|
|
(10.1
|
)%
|
||
Policy acquisition costs
|
1,464
|
|
|
1,397
|
|
|
4.8
|
%
|
||
Administrative expenses
|
692
|
|
|
676
|
|
|
2.4
|
%
|
||
Interest expense
|
157
|
|
|
154
|
|
|
1.9
|
%
|
||
Other (income) expense
|
(47
|
)
|
|
(70
|
)
|
|
(32.9
|
)%
|
||
Amortization of purchased intangibles
|
85
|
|
|
64
|
|
|
32.8
|
%
|
||
Chubb integration expenses
|
10
|
|
|
111
|
|
|
(91.0
|
)%
|
||
Total expenses
|
6,614
|
|
|
6,289
|
|
|
5.2
|
%
|
||
Income before income tax
|
1,217
|
|
|
1,221
|
|
|
(0.3
|
)%
|
||
Income tax expense
|
135
|
|
|
128
|
|
|
5.5
|
%
|
||
Net income
|
$
|
1,082
|
|
|
$
|
1,093
|
|
|
(1.1
|
)%
|
|
|
Three Months Ended
|
|
||||||||||||||
|
|
March 31
|
|
||||||||||||||
(in millions of U.S. dollars, except for percentages)
|
2018
|
|
|
2017
|
|
|
% Change Q-18 vs. Q-17
|
|
|
C$
(1)
2017
|
|
|
C$
(1)
%
Change
Q-18 vs. Q-17
|
|
|||
Commercial multiple peril
(2)
|
$
|
201
|
|
|
$
|
201
|
|
|
—
|
|
|
$
|
201
|
|
|
—
|
|
Commercial casualty
|
1,145
|
|
|
1,049
|
|
|
9.2
|
%
|
|
1,071
|
|
|
6.9
|
%
|
|||
Workers' compensation
|
624
|
|
|
588
|
|
|
6.1
|
%
|
|
588
|
|
|
6.1
|
%
|
|||
Professional liability
|
773
|
|
|
763
|
|
|
1.3
|
%
|
|
807
|
|
|
(4.2
|
)%
|
|||
Surety
|
161
|
|
|
150
|
|
|
7.3
|
%
|
|
153
|
|
|
5.2
|
%
|
|||
Property and other short-tail lines
|
1,040
|
|
|
1,044
|
|
|
(0.4
|
)%
|
|
1,053
|
|
|
(1.2
|
)%
|
|||
Total Commercial P&C
|
3,944
|
|
|
3,795
|
|
|
3.9
|
%
|
|
3,873
|
|
|
1.8
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
||||||||
Agriculture
|
108
|
|
|
61
|
|
|
76.2
|
%
|
|
61
|
|
|
76.2
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
||||||||
Personal automobile - North America
|
184
|
|
|
165
|
|
|
11.5
|
%
|
|
166
|
|
|
10.8
|
%
|
|||
Personal automobile - International
|
214
|
|
|
186
|
|
|
15.1
|
%
|
|
198
|
|
|
8.1
|
%
|
|||
Personal homeowners
|
738
|
|
|
697
|
|
|
5.9
|
%
|
|
699
|
|
|
5.6
|
%
|
|||
Personal other
|
387
|
|
|
362
|
|
|
6.9
|
%
|
|
378
|
|
|
2.4
|
%
|
|||
Total Personal lines
|
1,523
|
|
|
1,410
|
|
|
8.0
|
%
|
|
1,441
|
|
|
5.7
|
%
|
|||
Total Property and Casualty lines
|
5,575
|
|
|
5,266
|
|
|
5.9
|
%
|
|
5,375
|
|
|
3.7
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
||||||||
Global A&H lines
(3)
|
1,072
|
|
|
994
|
|
|
7.8
|
%
|
|
1,029
|
|
|
4.2
|
%
|
|||
Reinsurance lines
|
193
|
|
|
199
|
|
|
(3.0
|
)%
|
|
203
|
|
|
(4.8
|
)%
|
|||
Life
|
264
|
|
|
251
|
|
|
5.2
|
%
|
|
258
|
|
|
2.3
|
%
|
|||
Total consolidated
|
$
|
7,104
|
|
|
$
|
6,710
|
|
|
5.9
|
%
|
|
$
|
6,865
|
|
|
3.5
|
%
|
(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)
|
Commercial multiple peril represents retail package business (property and general liability)
|
(3)
|
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.
|
•
|
Net premiums written in our North America Commercial P&C Insurance segment
increased
$82 million
for the three months ended
March 31, 2018
primarily due to growth in our retail casualty and risk management businesses reflecting strong new business increases in both our large corporate and middle market accounts, and growth in our retail workers' compensation business due to stronger retention. In addition, our commercial segment experienced positive rate increases across a number of lines in both our Major account and middle market businesses. These increases were partially offset by planned portfolio management in certain of our retail and wholesale brokerage financial lines, and in our program business.
|
•
|
Net premiums written in our North America Personal P&C Insurance segment
increased
$64 million
for the three months ended
March 31, 2018
, primarily due to growth in homeowners and complementary products such as automobiles and valuables ($26 million) and the non-renewal of a quota share reinsurance treaty in the second quarter of 2017 covering the acquired Fireman's Fund homeowners and automobile businesses ($38 million).
|
•
|
Net premiums written in our North America Agricultural Insurance segment
increased
$47 million
for the three months ended
March 31, 2018
, primarily due to an increase in MPCI premium which was driven by new business and the year-over-year impact of the premium sharing formulas under the U.S. government. Under the MPCI profit and loss calculation, we cede more premiums to the government during profitable years. In the prior year, the program was more profitable which resulted in higher cessions compared to the first quarter of 2018.
|
•
|
Net premiums written in our Overseas General Insurance segment
increased
$172 million
, or
$33 million
on a constant-dollar basis, for the three months ended
March 31, 2018
, driven by growth in personal lines and accident and health (A&H) lines in Asia and Latin America. In addition, P&C lines growth was primarily in small commercial property and general casualty lines reflecting new business principally in Asia, and in middle market driven by new business and rate increases. This growth was partially offset by declines in large account business.
|
•
|
Net premiums written in our Global Reinsurance segment decreased
$6 million
for the three months ended
March 31, 2018
, as the prior year included a $7 million favorable non-recurring reinstatement premium adjustment related to prior period loss development. Net premiums written increased $1 million excluding the non-recurring adjustment.
|
•
|
Net premiums written in our Life Insurance segment increased $
35 million
for the three months ended
March 31, 2018
, primarily due to growth in our Asian international life operations and Combined Insurance supplemental A&H program business. This growth was offset somewhat by our life reinsurance business, which continues to decline as no new life reinsurance business is currently being written.
|
|
Three Months Ended
|
|
|||
|
March 31
|
|
|||
|
2018
|
|
|
2017
|
|
Loss and loss expense ratio
|
60.0
|
%
|
|
57.4
|
%
|
Policy acquisition cost ratio
|
20.6
|
%
|
|
20.5
|
%
|
Administrative expense ratio
|
9.5
|
%
|
|
9.6
|
%
|
P&C Combined Ratio
|
90.1
|
%
|
|
87.5
|
%
|
|
Three Months Ended
|
|
|||||
|
March 31
|
|
|||||
(in millions of U.S dollars)
|
2018
|
|
|
2017
|
|
||
Catastrophe losses, pre-tax
|
$
|
380
|
|
|
$
|
206
|
|
Favorable prior period development net of related reinstatement premiums, pre-tax
|
$
|
209
|
|
|
$
|
231
|
|
|
Catastrophe Loss Charge by Event
|
|
|||||||||||||||||||||
|
North America Commercial P&C Insurance
|
|
|
North America Personal P&C Insurance
|
|
|
North America Agricultural Insurance
|
|
|
Overseas General Insurance
|
|
|
Global
Reinsurance
|
|
|
Total Consolidated
|
|
||||||
Three Months Ended
|
|||||||||||||||||||||||
March 31, 2018
|
|||||||||||||||||||||||
(in millions of U.S. dollars)
|
|||||||||||||||||||||||
Gross losses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Northeast winter storms
|
$
|
57
|
|
|
$
|
171
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
231
|
|
California mudslides
|
4
|
|
|
177
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
182
|
|
||||||
Other
|
24
|
|
|
31
|
|
|
—
|
|
|
21
|
|
|
—
|
|
|
76
|
|
||||||
Total
|
$
|
85
|
|
|
$
|
379
|
|
|
$
|
1
|
|
|
$
|
22
|
|
|
$
|
2
|
|
|
$
|
489
|
|
Net losses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Northeast winter storms
|
$
|
53
|
|
|
$
|
139
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
195
|
|
California mudslides
|
4
|
|
|
120
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
125
|
|
||||||
Other
|
21
|
|
|
25
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
60
|
|
||||||
Total
|
$
|
78
|
|
|
$
|
284
|
|
|
$
|
1
|
|
|
$
|
15
|
|
|
$
|
2
|
|
|
$
|
380
|
|
Reinstatement premiums
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total before income tax
|
$
|
78
|
|
|
$
|
284
|
|
|
$
|
1
|
|
|
$
|
15
|
|
|
$
|
2
|
|
|
$
|
380
|
|
Income tax benefit
|
|
|
|
|
|
|
|
|
|
|
$
|
77
|
|
||||||||||
Total after income tax
|
|
|
|
|
|
|
|
|
|
|
$
|
303
|
|
|
Three Months Ended
|
|
|||
|
March 31
|
|
|||
|
2018
|
|
|
2017
|
|
Loss and loss expense ratio
|
60.0
|
%
|
|
57.4
|
%
|
Catastrophe losses and related reinstatement premiums
|
(5.8
|
)%
|
|
(3.3
|
)%
|
Prior period development net of related reinstatement premiums
|
3.5
|
%
|
|
4.0
|
%
|
CAY loss ratio excluding catastrophe losses
|
57.7
|
%
|
|
58.1
|
%
|
•
|
A change in the mix of business in our Overseas General Insurance segment towards countries that have a lower loss ratio and a higher acquisition cost ratio (0.2 percentage points);
|
•
|
Integration-related claims handling expense savings realized (0.2 percentage points);
|
•
|
Partially offset by non-catastrophe weather related (i.e., wind and water) and fire related large losses in our North America Personal P&C Insurance segment (0.2 percentage points).
|
|
Three Months Ended
|
|
|||
|
March 31
|
|
|||
|
2018
|
|
|
2017
|
|
CAY Loss and loss expense ratio ex CATs
|
57.7
|
%
|
|
58.1
|
%
|
CAY Policy acquisition cost ratio ex CATs
|
20.5
|
%
|
|
20.3
|
%
|
CAY Administrative expense ratio ex CATs
|
9.4
|
%
|
|
9.6
|
%
|
CAY P&C combined ratio ex CATs
|
87.6
|
%
|
|
88.0
|
%
|
Segment Operating Results – Three Months Ended March 31, 2018 and 2017
|
|
Three Months Ended
|
|
|
|
|
|||||||
|
March 31
|
|
|
% Change
|
|
|||||||
(in millions of U.S. dollars, except for percentages)
|
2018
|
|
|
2017
|
|
|
Q-18 vs.
Q-17 |
|
||||
Net premiums written
(1)
|
$
|
2,812
|
|
|
$
|
2,730
|
|
|
3.0
|
%
|
||
Net premiums earned
|
3,029
|
|
|
3,041
|
|
|
(0.4
|
)%
|
||||
Losses and loss expenses
|
1,908
|
|
|
1,860
|
|
|
2.6
|
%
|
||||
Policy acquisition costs
|
472
|
|
|
487
|
|
|
(3.1
|
)%
|
||||
Administrative expenses
|
231
|
|
|
231
|
|
|
—
|
|
||||
Underwriting income
|
418
|
|
|
463
|
|
|
(9.7
|
)%
|
||||
Net investment income
|
503
|
|
|
478
|
|
|
5.2
|
%
|
||||
Other (income) expense
|
(6
|
)
|
|
4
|
|
|
NM
|
|
||||
Segment income
|
$
|
927
|
|
|
$
|
937
|
|
|
(1.1
|
)%
|
||
Loss and loss expense ratio
|
63.0
|
%
|
|
61.2
|
%
|
|
1.8
|
|
pts
|
|
||
Policy acquisition cost ratio
|
15.6
|
%
|
|
16.0
|
%
|
|
(0.4
|
)
|
pts
|
|
||
Administrative expense ratio
|
7.6
|
%
|
|
7.6
|
%
|
|
—
|
|
pts
|
|
||
Combined ratio
|
86.2
|
%
|
|
84.8
|
%
|
|
1.4
|
|
pts
|
|
|
Three Months Ended
|
|
|||||
|
March 31
|
|
|||||
(in millions of U.S. dollars)
|
2018
|
|
|
2017
|
|
||
Catastrophe losses, pre-tax
|
$
|
78
|
|
|
$
|
83
|
|
Favorable prior period development net of related reinstatement premiums, pre-tax
|
$
|
101
|
|
|
$
|
179
|
|
|
Three Months Ended
|
|
|||
|
March 31
|
|
|||
|
2018
|
|
|
2017
|
|
Loss and loss expense ratio
|
63.0
|
%
|
|
61.2
|
%
|
Catastrophe losses and related reinstatement premiums
|
(2.6
|
)%
|
|
(2.8
|
)%
|
Prior period development net of related reinstatement premiums
|
3.6
|
%
|
|
6.0
|
%
|
CAY loss ratio excluding catastrophe losses
|
64.0
|
%
|
|
64.4
|
%
|
|
Three Months Ended
|
|
|
|
|
|||||||
|
March 31
|
|
|
% Change
|
|
|||||||
(in millions of U.S. dollars, except for percentages)
|
2018
|
|
|
2017
|
|
|
Q-18 vs.
Q-17 |
|
||||
Net premiums written
|
$
|
1,048
|
|
|
$
|
984
|
|
|
6.5
|
%
|
||
Net premiums earned
|
1,140
|
|
|
1,086
|
|
|
5.1
|
%
|
||||
Losses and loss expenses
|
886
|
|
|
633
|
|
|
40.0
|
%
|
||||
Policy acquisition costs
|
237
|
|
|
217
|
|
|
9.2
|
%
|
||||
Administrative expenses
|
65
|
|
|
65
|
|
|
—
|
|
||||
Underwriting income (loss)
|
(48
|
)
|
|
171
|
|
|
NM
|
|
||||
Net investment income
|
59
|
|
|
55
|
|
|
7.3
|
%
|
||||
Other (income) expense
|
—
|
|
|
1
|
|
|
NM
|
|
||||
Amortization of purchased intangibles
|
3
|
|
|
3
|
|
|
—
|
|
||||
Segment income
|
$
|
8
|
|
|
$
|
222
|
|
|
(96.4
|
)%
|
||
Loss and loss expense ratio
|
77.7
|
%
|
|
58.3
|
%
|
|
19.4
|
|
pts
|
|
||
Policy acquisition cost ratio
|
20.8
|
%
|
|
20.0
|
%
|
|
0.8
|
|
pts
|
|
||
Administrative expense ratio
|
5.7
|
%
|
|
5.9
|
%
|
|
(0.2
|
)
|
pts
|
|
||
Combined ratio
|
104.2
|
%
|
|
84.2
|
%
|
|
20.0
|
|
pts
|
|
||
NM – not meaningful
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|||||
|
March 31
|
|
|||||
(in millions of U.S. dollars)
|
2018
|
|
|
2017
|
|
||
Catastrophe losses, pre-tax
|
$
|
284
|
|
|
$
|
68
|
|
Favorable prior period development net of related reinstatement premiums, pre-tax
|
$
|
6
|
|
|
$
|
3
|
|
|
Three Months Ended
|
|
|||
|
March 31
|
|
|||
|
2018
|
|
|
2017
|
|
Loss and loss expense ratio
|
77.7
|
%
|
|
58.3
|
%
|
Catastrophe losses and related reinstatement premiums
|
(24.9
|
)%
|
|
(6.2
|
)%
|
Prior period development net of related reinstatement premiums
|
0.5
|
%
|
|
0.3
|
%
|
CAY loss ratio excluding catastrophe losses
|
53.3
|
%
|
|
52.4
|
%
|
|
Three Months Ended
|
|
|
|
|
|||||||
|
March 31
|
|
|
% Change
|
|
|||||||
(in millions of U.S. dollars, except for percentages)
|
2018
|
|
|
2017
|
|
|
Q-18 vs.
Q-17 |
|
||||
Net premiums written
|
$
|
108
|
|
|
$
|
61
|
|
|
76.2
|
%
|
||
Net premiums earned
|
43
|
|
|
14
|
|
|
214.2
|
%
|
||||
Losses and loss expenses
(1)
|
(55
|
)
|
|
(73
|
)
|
|
(24.7
|
)%
|
||||
Policy acquisition costs
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
||||
Administrative expenses
|
(3
|
)
|
|
(5
|
)
|
|
(40.0
|
)%
|
||||
Underwriting income
|
102
|
|
|
93
|
|
|
9.7
|
%
|
||||
Net investment income
|
7
|
|
|
6
|
|
|
16.7
|
%
|
||||
Amortization of purchased intangibles
|
7
|
|
|
7
|
|
|
—
|
|
||||
Segment income
|
$
|
102
|
|
|
$
|
92
|
|
|
10.9
|
%
|
||
Loss and loss expense ratio
|
(127.6
|
)%
|
|
(539.4
|
)%
|
|
411.8
|
|
pts
|
|
||
Policy acquisition cost ratio
|
(3.1
|
)%
|
|
(4.2
|
)%
|
|
1.1
|
|
pts
|
|
||
Administrative expense ratio
|
(7.6
|
)%
|
|
(34.9
|
)%
|
|
27.3
|
|
pts
|
|
||
Combined ratio
|
(138.3
|
)%
|
|
(578.5
|
)%
|
|
440.2
|
|
pts
|
|
(1)
|
Gains (losses) on crop derivatives were $2 million and nil for the three months ended March 31, 2018 and 2017, respectively. These gains (losses) are included in Net realized gains (losses) in our Consolidated statements of operations but are reclassified to Losses and loss expenses for purposes of presenting North America Agricultural Insurance underwriting income.
|
|
Three Months Ended
|
|
|||||
|
March 31
|
|
|||||
(in millions of U.S. dollars)
|
2018
|
|
|
2017
|
|
||
Catastrophe losses, pre-tax
|
$
|
1
|
|
|
$
|
5
|
|
Favorable prior period development net of related reinstatement premiums, pre-tax
|
$
|
76
|
|
|
$
|
79
|
|
|
Three Months Ended
|
|
|||
|
March 31
|
|
|||
|
2018
|
|
|
2017
|
|
Loss and loss expense ratio
|
(127.6
|
)%
|
|
(539.4
|
)%
|
Catastrophe losses and related reinstatement premiums
|
(1.5
|
)%
|
|
(39.5
|
)%
|
Prior period development net of related reinstatement premiums
|
198.0
|
%
|
|
654.7
|
%
|
CAY loss ratio excluding catastrophe losses
|
68.9
|
%
|
|
75.8
|
%
|
|
Three Months Ended
|
|
|
|
|
|||||||
|
March 31
|
|
|
% Change
|
|
|||||||
(in millions of U.S. dollars, except for percentages)
|
2018
|
|
|
2017
|
|
|
Q-18 vs.
Q-17 |
|
||||
Net premiums written
(1)
|
$
|
2,384
|
|
|
$
|
2,212
|
|
|
7.8
|
%
|
||
Net premiums earned
|
2,107
|
|
|
1,936
|
|
|
8.8
|
%
|
||||
Losses and loss expenses
|
1,078
|
|
|
1,071
|
|
|
0.7
|
%
|
||||
Policy acquisition costs
|
588
|
|
|
529
|
|
|
11.2
|
%
|
||||
Administrative expenses
|
239
|
|
|
245
|
|
|
(2.4
|
)%
|
||||
Underwriting income
(2)
|
202
|
|
|
91
|
|
|
122.0
|
%
|
||||
Net investment income
|
151
|
|
|
148
|
|
|
2.0
|
%
|
||||
Other (income) expense
|
7
|
|
|
(1
|
)
|
|
NM
|
|
||||
Amortization of purchased intangibles
|
10
|
|
|
11
|
|
|
(9.1
|
)%
|
||||
Segment income
|
$
|
336
|
|
|
$
|
229
|
|
|
46.7
|
%
|
||
Loss and loss expense ratio
|
51.1
|
%
|
|
55.3
|
%
|
|
(4.2
|
)
|
pts
|
|
||
Policy acquisition cost ratio
|
27.9
|
%
|
|
27.3
|
%
|
|
0.6
|
|
pts
|
|
||
Administrative expense ratio
|
11.4
|
%
|
|
12.7
|
%
|
|
(1.3
|
)
|
pts
|
|
||
Combined ratio
|
90.4
|
%
|
|
95.3
|
%
|
|
(4.9
|
)
|
pts
|
|
(1)
|
On a constant-dollar basis, for the three months ended
March 31, 2018
, net premiums written
increased
$33 million
, or
1.4
percent. Amounts are calculated by translating prior period results using the same local currency rates as the comparable current period. The 2017 net premiums written amount was revised to reflect the transfer of certain multinational accounts ($12 million) from the North America Commercial P&C Insurance segment to better align the reporting with the management of these businesses in 2018. There is no impact on a consolidated basis.
|
(2)
|
On a constant-dollar basis, for the three months ended
March 31, 2018
, underwriting income
increased
$99 million
, or
96.8
percent. Amounts are calculated by translating prior period results using the same local currency rates as the comparable current period.
|
|
Three Months Ended March 31
|
|
|
% Change
|
|
||||||||||||||||||
(in millions of U.S. dollars, except for percentages)
|
2018
|
|
|
2018
% of Total |
|
|
2017
|
|
|
2017
% of Total
|
|
|
C$
(1)
2017 |
|
|
Q-18 vs.
Q-17 |
|
|
C$
(1)
Q-18 vs. Q-17 |
|
|||
Region
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Europe
|
$
|
1,110
|
|
|
47
|
%
|
|
$
|
1,030
|
|
|
47
|
%
|
|
$
|
1,128
|
|
|
7.8
|
%
|
|
(1.6
|
)%
|
Latin America
|
528
|
|
|
22
|
%
|
|
497
|
|
|
22
|
%
|
|
507
|
|
|
6.2
|
%
|
|
4.1
|
%
|
|||
Asia
|
657
|
|
|
28
|
%
|
|
577
|
|
|
26
|
%
|
|
604
|
|
|
13.9
|
%
|
|
8.8
|
%
|
|||
Other
(2)
|
89
|
|
|
3
|
%
|
|
108
|
|
|
5
|
%
|
|
112
|
|
|
(17.6
|
)%
|
|
(20.5
|
)%
|
|||
Net premiums written
|
$
|
2,384
|
|
|
100
|
%
|
|
$
|
2,212
|
|
|
100
|
%
|
|
$
|
2,351
|
|
|
7.8
|
%
|
|
1.4
|
%
|
|
Three Months Ended March 31
|
|
|||||
(in millions of U.S. dollars)
|
2018
|
|
|
2017
|
|
||
Catastrophe losses, pre-tax
|
$
|
15
|
|
|
$
|
50
|
|
Favorable (unfavorable) prior period development net of related reinstatement premiums, pre-tax
|
$
|
22
|
|
|
$
|
(12
|
)
|
•
|
2018
: Severe weather-related events in Europe
|
•
|
2017
: Cyclone Debbie in Australia
|
|
Three Months Ended
|
|
|||
|
March 31
|
|
|||
|
2018
|
|
|
2017
|
|
Loss and loss expense ratio
|
51.1
|
%
|
|
55.3
|
%
|
Catastrophe losses and related reinstatement premiums
|
(0.7
|
)%
|
|
(2.6
|
)%
|
Prior period development net of related reinstatement premiums
|
1.0
|
%
|
|
(0.6
|
)%
|
CAY loss ratio excluding catastrophe losses
|
51.4
|
%
|
|
52.1
|
%
|
|
Three Months Ended
|
|
|
|
|
||||||
|
March 31
|
|
|
% Change
|
|
||||||
(in millions of U.S. dollars, except for percentages)
|
2018
|
|
|
2017
|
|
|
Q-18 vs.
Q-17 |
|
|||
Net premiums written
|
$
|
193
|
|
|
$
|
199
|
|
|
(3.0
|
)%
|
|
Net premiums earned
|
168
|
|
|
189
|
|
|
(11.0
|
)%
|
|||
Losses and loss expenses
|
67
|
|
|
94
|
|
|
(28.7
|
)%
|
|||
Policy acquisition costs
|
40
|
|
|
51
|
|
|
(21.6
|
)%
|
|||
Administrative expenses
|
10
|
|
|
10
|
|
|
—
|
|
|||
Underwriting income
|
51
|
|
|
34
|
|
|
50.0
|
%
|
|||
Net investment income
|
64
|
|
|
62
|
|
|
3.2
|
%
|
|||
Other (income) expense
|
(7
|
)
|
|
—
|
|
|
NM
|
|
|||
Segment income
|
$
|
122
|
|
|
$
|
96
|
|
|
27.1
|
%
|
|
Loss and loss expense ratio
|
40.1
|
%
|
|
49.6
|
%
|
|
(9.5)
|
pts
|
|
||
Policy acquisition cost ratio
|
23.6
|
%
|
|
26.8
|
%
|
|
(3.2)
|
pts
|
|
||
Administrative expense ratio
|
5.8
|
%
|
|
5.7
|
%
|
|
0.1
|
pts
|
|
||
Combined ratio
|
69.5
|
%
|
|
82.1
|
%
|
|
(12.6)
|
pts
|
|
|
Three Months Ended
|
|
|||||
|
March 31
|
|
|||||
(in millions of U.S dollars)
|
2018
|
|
|
2017
|
|
||
Catastrophe losses, pre-tax
|
$
|
2
|
|
|
$
|
—
|
|
Favorable (unfavorable) prior period development net of related reinstatement premiums, pre-tax
(1)
|
$
|
14
|
|
|
$
|
(8
|
)
|
(1)
Favorable (unfavorable) reinstatement premiums receivable on prior period development - pre-tax
|
$
|
(1
|
)
|
|
$
|
7
|
|
|
Three Months Ended
|
|
|||
|
March 31
|
|
|||
|
2018
|
|
|
2017
|
|
Loss and loss expense ratio
|
40.1
|
%
|
|
49.6
|
%
|
Catastrophe losses and related reinstatement premiums
|
(1.2
|
)%
|
|
—
|
|
Prior period development net of related reinstatement premiums
|
8.8
|
%
|
|
(6.4
|
)%
|
CAY loss ratio excluding catastrophe losses
|
47.7
|
%
|
|
43.2
|
%
|
|
Three Months Ended
|
|
|
|
|
|||||
|
March 31
|
|
|
% Change
|
|
|||||
(in millions of U.S. dollars, except for percentages)
|
2018
|
|
|
2017
|
|
|
Q-18 vs.
Q-17 |
|
||
Net premiums written
|
$
|
559
|
|
|
$
|
524
|
|
|
6.7
|
%
|
Net premiums earned
|
540
|
|
|
506
|
|
|
6.8
|
%
|
||
Losses and loss expenses
|
205
|
|
|
193
|
|
|
6.2
|
%
|
||
Policy benefits
(1)
|
151
|
|
|
168
|
|
|
(10.1
|
)%
|
||
(Gains) losses from fair value changes in separate account assets
(1)
|
(6
|
)
|
|
(30
|
)
|
|
(80.0
|
)%
|
||
Policy acquisition costs
|
128
|
|
|
114
|
|
|
12.3
|
%
|
||
Administrative expenses
|
78
|
|
|
72
|
|
|
8.3
|
%
|
||
Net investment income
|
83
|
|
|
75
|
|
|
10.7
|
%
|
||
Life Insurance underwriting income
|
67
|
|
|
64
|
|
|
4.7
|
%
|
||
Other (income) expense
(1)
|
2
|
|
|
1
|
|
|
100.0
|
%
|
||
Amortization of purchased intangibles
|
1
|
|
|
1
|
|
|
—
|
|
||
Segment income
|
$
|
64
|
|
|
$
|
62
|
|
|
3.2
|
%
|
(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
|
|
|
|
|
|
|
||||||||||
|
March 31
|
|
|
% Change
|
|
||||||||||||
(in millions of U.S. dollars, except for percentages)
|
2018
|
|
|
2017
|
|
|
C$
(1)
2017
|
|
|
Q-18 vs.
Q-17 |
|
|
C$
(1)
Q-18 vs.
Q-17 |
|
|||
Deposits collected on Universal life and investment contracts
|
$
|
379
|
|
|
$
|
310
|
|
|
$
|
324
|
|
|
22.0
|
%
|
|
16.9
|
%
|
|
Three Months Ended
|
|
|
|
||||||
|
March 31
|
|
|
% Change
|
|
|||||
(in millions of U.S. dollars, except for percentages)
|
2018
|
|
|
2017
|
|
|
Q-18 vs.
Q-17 |
|
||
Losses and loss expenses
|
$
|
11
|
|
|
$
|
11
|
|
|
—
|
|
Administrative expenses
|
72
|
|
|
58
|
|
|
24.1
|
%
|
||
Underwriting loss
|
83
|
|
|
69
|
|
|
20.3
|
%
|
||
Net investment income (loss)
|
(61
|
)
|
|
(79
|
)
|
|
(22.8
|
)%
|
||
Interest expense
|
157
|
|
|
154
|
|
|
1.9
|
%
|
||
Net realized gains (losses)
|
(4
|
)
|
|
(7
|
)
|
|
(42.9
|
)%
|
||
Other (income) expense
|
(37
|
)
|
|
(45
|
)
|
|
(17.8
|
)%
|
||
Amortization expense of purchased intangibles
|
64
|
|
|
42
|
|
|
52.4
|
%
|
||
Chubb integration expenses
|
10
|
|
|
111
|
|
|
(91.0
|
)%
|
||
Income tax expense
|
135
|
|
|
128
|
|
|
5.5
|
%
|
||
Net loss
|
$
|
(477
|
)
|
|
$
|
(545
|
)
|
|
(12.5
|
)%
|
Effective Income Tax Rate
|
Non-GAAP Reconciliation
|
Other Income and Expense Items
|
|
Three Months Ended
|
|
|||||
|
March 31
|
|
|||||
(in millions of U.S. dollars)
|
2018
|
|
|
2017
|
|
||
Equity in net (income) loss of partially-owned entities
|
$
|
(59
|
)
|
|
$
|
(53
|
)
|
(Gains) losses from fair value changes in separate account assets
(1)
|
(6
|
)
|
|
(30
|
)
|
||
Federal excise and capital taxes
|
3
|
|
|
3
|
|
||
Other
|
15
|
|
|
10
|
|
||
Other (income) expense
|
$
|
(47
|
)
|
|
$
|
(70
|
)
|
(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
|
|
||||||
Second quarter of 2018
|
$
|
82
|
|
|
$
|
8
|
|
|
$
|
(26
|
)
|
|
$
|
64
|
|
|
$
|
20
|
|
|
$
|
84
|
|
Third quarter of 2018
|
82
|
|
|
8
|
|
|
(26
|
)
|
|
64
|
|
|
20
|
|
|
84
|
|
||||||
Fourth quarter of 2018
|
82
|
|
|
8
|
|
|
(26
|
)
|
|
64
|
|
|
20
|
|
|
84
|
|
||||||
2019
|
284
|
|
|
—
|
|
|
(63
|
)
|
|
221
|
|
|
75
|
|
|
296
|
|
||||||
2020
|
242
|
|
|
—
|
|
|
(36
|
)
|
|
206
|
|
|
70
|
|
|
276
|
|
||||||
2021
|
218
|
|
|
—
|
|
|
(20
|
)
|
|
198
|
|
|
64
|
|
|
262
|
|
||||||
2022
|
198
|
|
|
—
|
|
|
(14
|
)
|
|
184
|
|
|
57
|
|
|
241
|
|
||||||
2023
|
179
|
|
|
—
|
|
|
(7
|
)
|
|
172
|
|
|
52
|
|
|
224
|
|
||||||
Total
|
$
|
1,367
|
|
|
$
|
24
|
|
|
$
|
(218
|
)
|
|
$
|
1,173
|
|
|
$
|
378
|
|
|
$
|
1,551
|
|
(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 to deferred tax liability associated with intangible assets
|
|
|
Second quarter of 2018
|
$
|
24
|
|
Third quarter of 2018
|
24
|
|
|
Fourth quarter of 2018
|
24
|
|
|
2019
|
79
|
|
|
2020
|
69
|
|
|
2021
|
62
|
|
|
2022
|
56
|
|
|
2023
|
51
|
|
|
Total
|
$
|
389
|
|
|
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)
|
|
||
Second quarter of 2018
|
$
|
(65
|
)
|
|
$
|
9
|
|
Third quarter of 2018
|
(62
|
)
|
|
6
|
|
||
Fourth quarter of 2018
|
(60
|
)
|
|
5
|
|
||
2019
|
(220
|
)
|
|
21
|
|
||
2020
|
(190
|
)
|
|
21
|
|
||
2021
|
(160
|
)
|
|
21
|
|
||
2022
|
(17
|
)
|
|
21
|
|
||
2023
|
—
|
|
|
21
|
|
||
Total
|
$
|
(774
|
)
|
|
$
|
125
|
|
(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.
|
Interest Expense
|
|
|
|
Estimated Interest Expense
|
||||||||||||||||
|
First quarter
|
|
|
Second quarter
|
|
|
Third quarter
|
|
|
Fourth quarter
|
|
|
Full Year
|
|
|||||
(in millions of U.S. dollars)
|
2018
|
|
|
2018
|
|
|
2018
|
|
|
2018
|
|
|
2018
|
|
|||||
Fixed interest expense based on outstanding debt
|
$
|
140
|
|
|
$
|
131
|
|
|
$
|
126
|
|
|
$
|
125
|
|
|
$
|
522
|
|
Variable interest expense based on expected usage
|
29
|
|
|
35
|
|
|
37
|
|
|
39
|
|
|
140
|
|
|||||
Adjusted interest expense
|
$
|
169
|
|
|
$
|
166
|
|
|
$
|
163
|
|
|
$
|
164
|
|
|
$
|
662
|
|
Amortization of the fair value of debt related to the Chubb Corp acquisition
|
(12
|
)
|
|
(9
|
)
|
|
(6
|
)
|
|
(5
|
)
|
|
(32
|
)
|
|||||
Total interest expense, including amortization of the fair value of debt
|
$
|
157
|
|
|
$
|
157
|
|
|
$
|
157
|
|
|
$
|
159
|
|
|
$
|
630
|
|
•
|
We redeemed the $1.0 billion unsecured junior subordinated capital securities on April 6, 2018. No interest expense was considered for this debt after April 6, 2018.
|
•
|
We plan to redeem the $600 million 5.75 percent senior note on May 15, 2018. No interest expense was considered for this debt after May 15, 2018.
|
•
|
We plan to redeem the $100 million 6.6 percent senior note on August 15, 2018. No interest expense was considered for this debt after August 15, 2018.
|
Net Investment Income
|
|
Three Months Ended
|
|
|||||
|
March 31
|
|
|||||
(in millions of U.S. dollars)
|
2018
|
|
|
2017
|
|
||
Fixed maturities
|
$
|
772
|
|
|
$
|
730
|
|
Short-term investments
|
48
|
|
|
26
|
|
||
Equity securities
|
8
|
|
|
9
|
|
||
Other investments
|
19
|
|
|
19
|
|
||
Gross investment income
(1)
|
847
|
|
|
784
|
|
||
Investment expenses
|
(41
|
)
|
|
(39
|
)
|
||
Net investment income
(1)
|
$
|
806
|
|
|
$
|
745
|
|
(1)
Includes amortization expense related to fair value adjustment of acquired invested assets related to the Chubb Corp acquisition
|
$
|
(71
|
)
|
|
$
|
(91
|
)
|
Net Realized and Unrealized Gains (Losses)
|
|
Three Months Ended March 31, 2018
|
|
|
Three Months Ended March 31, 2017
|
|
||||||||||||||||||
(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
|
)
|
|
$
|
(1,211
|
)
|
|
$
|
(1,234
|
)
|
|
$
|
(12
|
)
|
|
$
|
256
|
|
|
$
|
244
|
|
Fixed income derivatives
|
17
|
|
|
—
|
|
|
17
|
|
|
6
|
|
|
—
|
|
|
6
|
|
||||||
Public equity
|
10
|
|
|
—
|
|
|
10
|
|
|
4
|
|
|
28
|
|
|
32
|
|
||||||
Private equity
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
31
|
|
|
23
|
|
||||||
Mark-to-market on public and private equity
|
8
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total investment portfolio
(1)
|
12
|
|
|
(1,211
|
)
|
|
(1,199
|
)
|
|
(10
|
)
|
|
315
|
|
|
305
|
|
||||||
Variable annuity reinsurance derivative transactions, net of applicable hedges
|
60
|
|
|
—
|
|
|
60
|
|
|
19
|
|
|
—
|
|
|
19
|
|
||||||
Other derivatives
|
2
|
|
|
—
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||||
Foreign exchange
|
(77
|
)
|
|
397
|
|
|
320
|
|
|
(19
|
)
|
|
134
|
|
|
115
|
|
||||||
Other
|
1
|
|
|
(23
|
)
|
|
(22
|
)
|
|
1
|
|
|
(20
|
)
|
|
(19
|
)
|
||||||
Net gains (losses) before tax
|
$
|
(2
|
)
|
|
$
|
(837
|
)
|
|
$
|
(839
|
)
|
|
$
|
(7
|
)
|
|
$
|
429
|
|
|
$
|
422
|
|
(1)
|
For the three months ended
March 31, 2018
, other-than-temporary impairments in Net realized gains (losses) included
$1 million
for fixed maturities. For the three months ended
March 31, 2017
, other-than-temporary impairments in Net realized gains (losses) included
$6 million
for fixed maturities,
$5 million
for public equity, and
$8 million
for private equity.
|
Investments
|
|
March 31, 2018
|
|
|
December 31, 2017
|
|
||||||||||
(in millions of U.S. dollars)
|
Fair
Value
|
|
|
Cost/
Amortized
Cost
|
|
|
Fair
Value
|
|
|
Cost/
Amortized
Cost
|
|
||||
Fixed maturities available for sale
|
$
|
79,111
|
|
|
$
|
79,208
|
|
|
$
|
78,939
|
|
|
$
|
77,835
|
|
Fixed maturities held to maturity
|
14,122
|
|
|
14,253
|
|
|
14,474
|
|
|
14,335
|
|
||||
Short-term investments
|
2,874
|
|
|
2,874
|
|
|
3,561
|
|
|
3,561
|
|
||||
|
96,107
|
|
|
96,335
|
|
|
96,974
|
|
|
95,731
|
|
||||
Equity securities
(1)
|
948
|
|
|
948
|
|
|
937
|
|
|
737
|
|
||||
Other investments
(1)
|
4,919
|
|
|
4,919
|
|
|
4,672
|
|
|
4,417
|
|
||||
Total investments
|
$
|
101,974
|
|
|
$
|
102,202
|
|
|
$
|
102,583
|
|
|
$
|
100,885
|
|
(1)
|
Effective Q1 2018, we adopted new accounting guidance that requires any changes in fair value of equity securities and other investments that are accounted for under the cost-method to be recognized immediately in net income. Therefore, the amortized cost of these investments is equal to their fair value at March 31, 2018.
|
|
March 31, 2018
|
|
|
December 31, 2017
|
|
||||||||
(in millions of U.S. dollars, except for percentages)
|
Market
Value
|
|
|
% of Total
|
|
|
Market
Value
|
|
|
% of Total
|
|
||
Treasury
|
$
|
4,277
|
|
|
4
|
%
|
|
$
|
4,049
|
|
|
4
|
%
|
Agency
|
593
|
|
|
1
|
%
|
|
564
|
|
|
1
|
%
|
||
Corporate and asset-backed securities
|
26,564
|
|
|
28
|
%
|
|
27,215
|
|
|
28
|
%
|
||
Mortgage-backed securities
|
18,467
|
|
|
19
|
%
|
|
18,032
|
|
|
19
|
%
|
||
Municipal
|
19,550
|
|
|
20
|
%
|
|
20,766
|
|
|
21
|
%
|
||
Non-U.S.
|
23,782
|
|
|
25
|
%
|
|
22,787
|
|
|
23
|
%
|
||
Short-term investments
|
2,874
|
|
|
3
|
%
|
|
3,561
|
|
|
4
|
%
|
||
Total
|
$
|
96,107
|
|
|
100
|
%
|
|
$
|
96,974
|
|
|
100
|
%
|
AAA
|
$
|
14,723
|
|
|
15
|
%
|
|
$
|
15,512
|
|
|
16
|
%
|
AA
|
37,322
|
|
|
39
|
%
|
|
37,407
|
|
|
39
|
%
|
||
A
|
18,306
|
|
|
19
|
%
|
|
18,369
|
|
|
19
|
%
|
||
BBB
|
12,616
|
|
|
13
|
%
|
|
12,377
|
|
|
13
|
%
|
||
BB
|
7,710
|
|
|
8
|
%
|
|
7,941
|
|
|
8
|
%
|
||
B
|
5,235
|
|
|
6
|
%
|
|
5,135
|
|
|
5
|
%
|
||
Other
|
195
|
|
|
—
|
%
|
|
233
|
|
|
—
|
|
||
Total
|
$
|
96,107
|
|
|
100
|
%
|
|
$
|
96,974
|
|
|
100
|
%
|
(in millions of U.S. dollars)
|
Market Value
|
|
|
Wells Fargo & Co
|
$
|
542
|
|
JP Morgan Chase & Co
|
417
|
|
|
Goldman Sachs Group Inc
|
410
|
|
|
AT&T Inc
|
399
|
|
|
Anheuser-Busch InBev NV
|
354
|
|
|
Bank of America Corp
|
340
|
|
|
Verizon Communications Inc
|
338
|
|
|
General Electric Co
|
334
|
|
|
Morgan Stanley
|
328
|
|
|
HSBC Holdings Plc
|
307
|
|
|
S&P Credit Rating
|
|
|
Market
Value
|
|
|
Amortized Cost
|
|
|||||||||||||||||||
March 31, 2018 (in millions of U.S. dollars)
|
AAA
|
|
|
AA
|
|
|
A
|
|
|
BBB
|
|
|
BB and
below
|
|
|
Total
|
|
|
Total
|
|
|||||||
Agency residential mortgage-backed (RMBS)
|
$
|
—
|
|
|
$
|
15,176
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15,176
|
|
|
$
|
15,459
|
|
Non-agency RMBS
|
28
|
|
|
27
|
|
|
85
|
|
|
29
|
|
|
24
|
|
|
193
|
|
|
193
|
|
|||||||
Commercial mortgage-backed
|
2,809
|
|
|
203
|
|
|
86
|
|
|
—
|
|
|
—
|
|
|
3,098
|
|
|
3,145
|
|
|||||||
Total mortgage-backed securities
|
$
|
2,837
|
|
|
$
|
15,406
|
|
|
$
|
171
|
|
|
$
|
29
|
|
|
$
|
24
|
|
|
$
|
18,467
|
|
|
$
|
18,797
|
|
(in millions of U.S. dollars)
|
Market Value
|
|
|
Amortized Cost
|
|
||
United Kingdom
|
$
|
1,392
|
|
|
$
|
1,381
|
|
Republic of Korea
|
1,071
|
|
|
1,005
|
|
||
Canada
|
988
|
|
|
1,001
|
|
||
Federative Republic of Brazil
|
812
|
|
|
794
|
|
||
Province of Ontario
|
639
|
|
|
644
|
|
||
United Mexican States
|
579
|
|
|
585
|
|
||
Province of Quebec
|
510
|
|
|
514
|
|
||
Federal Republic of Germany
|
494
|
|
|
488
|
|
||
Kingdom of Thailand
|
488
|
|
|
459
|
|
||
French Republic
|
343
|
|
|
325
|
|
||
Other Non-U.S. Government Securities
(1)
|
4,542
|
|
|
4,443
|
|
||
Total
|
$
|
11,858
|
|
|
$
|
11,639
|
|
(1)
|
There are no investments in Portugal, Ireland, Italy, Greece or Spain.
|
(in millions of U.S. dollars)
|
Market Value
|
|
|
Amortized Cost
|
|
||
United Kingdom
|
$
|
2,064
|
|
|
$
|
2,027
|
|
Canada
|
1,454
|
|
|
1,455
|
|
||
United States
(1)
|
998
|
|
|
1,000
|
|
||
France
|
911
|
|
|
899
|
|
||
Australia
|
828
|
|
|
818
|
|
||
Netherlands
|
664
|
|
|
656
|
|
||
Germany
|
549
|
|
|
536
|
|
||
Japan
|
424
|
|
|
425
|
|
||
Switzerland
|
410
|
|
|
407
|
|
||
China
|
310
|
|
|
310
|
|
||
Other Non-U.S. Corporate Securities
|
3,312
|
|
|
3,284
|
|
||
Total
|
$
|
11,924
|
|
|
$
|
11,817
|
|
Critical Accounting Estimates
|
|
March 31
|
|
|
December 31
|
|
||
(in millions of U.S. dollars)
|
2018
|
|
|
2017
|
|
||
Reinsurance recoverable on unpaid losses and loss expenses
(1)
|
$
|
13,822
|
|
|
$
|
14,014
|
|
Reinsurance recoverable on paid losses and loss expenses
(1)
|
1,160
|
|
|
1,020
|
|
||
Reinsurance recoverable on losses and loss expenses
(1)
|
$
|
14,982
|
|
|
$
|
15,034
|
|
Reinsurance recoverable on policy benefits
(1)
|
$
|
181
|
|
|
$
|
184
|
|
(1)
|
Net of provision for uncollectible reinsurance.
|
(in millions of U.S. dollars)
|
Gross
Losses
|
|
|
Reinsurance
Recoverable
(1)
|
|
|
Net
Losses
|
|
|||
Balance at December 31, 2017
|
$
|
63,179
|
|
|
$
|
14,014
|
|
|
$
|
49,165
|
|
Losses and loss expenses incurred
|
5,028
|
|
|
926
|
|
|
4,102
|
|
|||
Losses and loss expenses paid
|
(5,448
|
)
|
|
(1,206
|
)
|
|
(4,242
|
)
|
|||
Foreign currency revaluation and other
|
380
|
|
|
88
|
|
|
292
|
|
|||
Balance at March 31, 2018
|
$
|
63,139
|
|
|
$
|
13,822
|
|
|
$
|
49,317
|
|
(1)
|
Net of provision for uncollectible reinsurance of $320 million and $321 million at March 31, 2018 and December 31, 2017, respectively.
|
Catastrophe management
|
|
Modeled Net PML
|
|||||||||||||||||||
|
Worldwide
(1)
|
|
U.S. Hurricane
|
|
California Earthquake
|
|||||||||||||||
|
Annual Aggregate
|
|
Annual Aggregate
|
|
Single Occurrence
|
|||||||||||||||
(in millions of U.S. dollars, except for percentages)
|
Chubb
|
|
% of Total
Shareholders’ Equity |
|
Chubb
|
|
% of Total
Shareholders’ Equity |
|
Chubb
|
|
% of Total
Shareholders’ Equity |
|||||||||
1-in-10
|
$
|
1,938
|
|
|
3.8
|
%
|
|
$
|
1,127
|
|
|
2.2
|
%
|
|
$
|
143
|
|
|
0.3
|
%
|
1-in-100
|
$
|
4,035
|
|
|
7.9
|
%
|
|
$
|
2,853
|
|
|
5.6
|
%
|
|
$
|
1,387
|
|
|
2.7
|
%
|
1-in-250
|
$
|
6,526
|
|
|
12.7
|
%
|
|
$
|
5,130
|
|
|
10.0
|
%
|
|
$
|
1,522
|
|
|
3.0
|
%
|
Natural Catastrophe Property Reinsurance Program
|
Crop Insurance
|
Liquidity
|
Capital Resources
|
|
March 31
|
|
|
December 31
|
|
||
(in millions of U.S. dollars, except for ratios)
|
2018
|
|
|
2017
|
|
||
Short-term debt
|
$
|
1,669
|
|
|
$
|
1,013
|
|
Long-term debt
|
12,786
|
|
|
11,556
|
|
||
Total financial debt
|
14,455
|
|
|
12,569
|
|
||
Trust preferred securities
|
308
|
|
|
308
|
|
||
Total shareholders’ equity
|
51,287
|
|
|
51,172
|
|
||
Total capitalization
|
$
|
66,050
|
|
|
$
|
64,049
|
|
Ratio of financial debt to total capitalization
|
21.9
|
%
|
|
19.6
|
%
|
||
Ratio of financial debt plus trust preferred securities to total capitalization
|
22.4
|
%
|
|
20.1
|
%
|
Shareholders of record as of:
|
|
Dividends paid as of:
|
|
|
December 29, 2017
|
|
January 19, 2018
|
|
$0.71 (CHF 0.70)
|
March 29, 2018
|
|
April 20, 2018
|
|
$0.71 (CHF 0.66)
|
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk
|
•
|
No changes to the benefit ratio used to establish benefit reserves at
March 31, 2018
.
|
•
|
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,
15
percent—
25
percent international 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, and the MSCI EAFE index as a proxy for international 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),
20
percent—
30
percent medium-term rates (maturing between 5 years and 10 years, inclusive), and
60
percent—
70
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
March 31, 2018
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
85
percent of that population has become eligible to annuitize and generate a claim (since approximately
15
percent of policies are not eligible to annuitize until after
March 31, 2018
). 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 effect”. The unfavorable impact of timing effect on our Gross FVL in a quarter is not reflected in the sensitivity tables below. For this reason, when using the tables below to estimate the sensitivity of Gross FVL in the second quarter to various changes, it is necessary to assume an additional
$5
million to
$45
million increase in Gross FVL and realized losses. However, the impact to Net income is substantially mitigated because the majority of this realized loss is offset by the positive quarterly run rate of Life insurance underwriting income generated by the variable annuity guarantee reinsurance portfolio if markets remain unchanged during the period. Note that both the timing effect and the quarterly run rate of Life insurance underwriting income change over time as the book ages.
|
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
|
$
|
216
|
|
|
$
|
141
|
|
|
$
|
24
|
|
|
$
|
(150
|
)
|
|
$
|
(357
|
)
|
|
$
|
(598
|
)
|
|
Increase/(decrease) in hedge value
|
(155
|
)
|
|
—
|
|
|
155
|
|
|
311
|
|
|
466
|
|
|
622
|
|
||||||
|
Increase/(decrease) in net income
|
$
|
61
|
|
|
$
|
141
|
|
|
$
|
179
|
|
|
$
|
161
|
|
|
$
|
109
|
|
|
$
|
24
|
|
Flat
|
(Increase)/decrease in Gross FVL
|
$
|
116
|
|
|
$
|
—
|
|
|
$
|
(169
|
)
|
|
$
|
(370
|
)
|
|
$
|
(606
|
)
|
|
$
|
(873
|
)
|
|
Increase/(decrease) in hedge value
|
(155
|
)
|
|
—
|
|
|
155
|
|
|
311
|
|
|
466
|
|
|
622
|
|
||||||
|
Increase/(decrease) in net income
|
$
|
(39
|
)
|
|
$
|
—
|
|
|
$
|
(14
|
)
|
|
$
|
(59
|
)
|
|
$
|
(140
|
)
|
|
$
|
(251
|
)
|
-100 bps
|
(Increase)/decrease in Gross FVL
|
$
|
(51
|
)
|
|
$
|
(216
|
)
|
|
$
|
(410
|
)
|
|
$
|
(639
|
)
|
|
$
|
(900
|
)
|
|
$
|
(1,186
|
)
|
|
Increase/(decrease) in hedge value
|
(155
|
)
|
|
—
|
|
|
155
|
|
|
311
|
|
|
466
|
|
|
622
|
|
||||||
|
Increase/(decrease) in net income
|
$
|
(206
|
)
|
|
$
|
(216
|
)
|
|
$
|
(255
|
)
|
|
$
|
(328
|
)
|
|
$
|
(434
|
)
|
|
$
|
(564
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
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
|
$
|
53
|
|
|
$
|
(59
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(9
|
)
|
|
$
|
9
|
|
|
Increase/(decrease) in hedge value
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Increase/(decrease) in net income
|
$
|
53
|
|
|
$
|
(59
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(9
|
)
|
|
$
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Sensitivities to Actuarial Assumptions
|
|
|
|
|
Mortality
|
|||||||||||||||||||
(in millions of U.S. dollars)
|
|
|
|
|
+20%
|
|
+10%
|
|
-10%
|
|
-20%
|
|||||||||||||
(Increase)/decrease in Gross FVL
|
|
|
|
|
$
|
18
|
|
|
$
|
9
|
|
|
$
|
(9
|
)
|
|
$
|
(19
|
)
|
|||||
Increase/(decrease) in hedge value
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Increase/(decrease) in net income
|
|
|
|
|
$
|
18
|
|
|
$
|
9
|
|
|
$
|
(9
|
)
|
|
$
|
(19
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
Lapses
|
||||||||||||||||||
(in millions of U.S. dollars)
|
|
|
|
|
+50%
|
|
+25%
|
|
-25%
|
|
-50%
|
|||||||||||||
(Increase)/decrease in Gross FVL
|
|
|
|
|
$
|
70
|
|
|
$
|
40
|
|
|
$
|
(45
|
)
|
|
$
|
(96
|
)
|
|||||
Increase/(decrease) in hedge value
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Increase/(decrease) in net income
|
|
|
|
|
$
|
70
|
|
|
$
|
40
|
|
|
$
|
(45
|
)
|
|
$
|
(96
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
Annuitization
|
||||||||||||||||||
(in millions of U.S. dollars)
|
|
|
|
|
+50%
|
|
+25%
|
|
-25%
|
|
-50%
|
|||||||||||||
(Increase)/decrease in Gross FVL
|
|
|
|
|
$
|
(375
|
)
|
|
$
|
(199
|
)
|
|
$
|
167
|
|
|
$
|
331
|
|
|||||
Increase/(decrease) in hedge value
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Increase/(decrease) in net income
|
|
|
|
|
$
|
(375
|
)
|
|
$
|
(199
|
)
|
|
$
|
167
|
|
|
$
|
331
|
|
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
|
|
|
Approximate Dollar Value of Shares that May Yet be Purchased Under the Plan
(2)
|
|
||
January 1 through January 31
|
13,936
|
|
|
$
|
142.88
|
|
|
—
|
|
|
$
|
1.0
|
billion
|
February 1 through February 28
|
466,953
|
|
|
$
|
144.88
|
|
|
—
|
|
|
$
|
1.0
|
billion
|
March 1 through March 31
|
169,990
|
|
|
$
|
146.61
|
|
|
—
|
|
|
$
|
1.0
|
billion
|
Total
|
650,879
|
|
|
$
|
145.29
|
|
|
—
|
|
|
|
(1)
|
This column includes activity related to 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 5. Other Information
|
ITEM 6. Exhibits
|
|
|
|
|
Incorporated by Reference
|
|
|
|||||
Exhibit
Number
|
|
Exhibit Description
|
|
Form
|
|
Original
Number
|
|
|
Date Filed
|
|
Filed
Herewith
|
|
|
8-K
|
|
3.1
|
|
|
May 20, 2016
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8-K
|
|
3.1
|
|
|
November 21, 2016
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8-K
|
|
4.1
|
|
|
May 20, 2016
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8-K
|
|
3.1
|
|
|
November 21, 2016
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8-K
|
|
4.1
|
|
|
March 6, 2018
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8-K
|
|
4.2
|
|
|
March 6, 2018
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8-K
|
|
4.3
|
|
|
March 6, 2018
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
10.1
*
|
|
|
10-K
|
|
10.89
|
|
|
February 23, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.2
*
|
|
|
10-K
|
|
10.90
|
|
|
February 23, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.3
*
|
|
|
10-K
|
|
10.91
|
|
|
February 23, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.4
*
|
|
|
10-K
|
|
10.92
|
|
|
February 23, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.5
*
|
|
|
10-K
|
|
10.93
|
|
|
February 23, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.6
*
|
|
|
10-K
|
|
10.94
|
|
|
February 23, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.7
*
|
|
|
10-K
|
|
10.95
|
|
|
February 23, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.8
*
|
|
|
10-K
|
|
10.96
|
|
|
February 23, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.9
*
|
|
|
10-K
|
|
10.97
|
|
|
February 23, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.10
*
|
|
|
10-K
|
|
10.98
|
|
|
February 23, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.11
*
|
|
|
10-K
|
|
10.99
|
|
|
February 23, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
X
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
X
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
X
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
X
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
101.1
|
|
The following financial information from Chubb Limited’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018 formatted in XBRL: (i) Consolidated Balance Sheets at March 31, 2018, and December 31, 2017; (ii) Consolidated Statements of Operations and Comprehensive Income for the three months ended March 31, 2018 and 2017; (iii) Consolidated Statements of Shareholders’ Equity for the three months ended March 31, 2018 and 2017; (iv) Consolidated Statements of Cash Flows for the three months ended March 31, 2018 and 2017; and (v) Notes to Consolidated Financial Statements
|
|
|
|
|
|
|
|
X
|
SIGNATURES
|
|
CHUBB LIMITED
|
|
(Registrant)
|
|
|
May 2, 2018
|
/s/ Evan G. Greenberg
|
|
Evan G. Greenberg
|
|
Chairman, President and Chief Executive Officer
|
|
|
May 2, 2018
|
/s/ Philip V. Bancroft
|
|
Philip V. Bancroft
|
|
Executive Vice President and Chief Financial Officer
|
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:
|
5)
|
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):
|
/s/ Evan G. Greenberg
|
Evan G. Greenberg
|
Chairman, President and Chief Executive Officer
|
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:
|
5)
|
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):
|
/s/ Philip V. Bancroft
|
Philip V. Bancroft
|
Executive Vice President and Chief Financial Officer
|
Dated: May 2, 2018
|
/s/ Evan G. Greenberg
|
|
Evan G. Greenberg
|
|
Chairman, President and Chief Executive Officer
|
Dated: May 2, 2018
|
/s/ Philip V. Bancroft
|
|
Philip V. Bancroft
|
|
Executive Vice President and Chief Financial Officer
|