What changed in this filing

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Item 1. Financial Statements

2021-04-30 compared with 2020-10-30 · 211 added, 823 removed, 982 unchanged (51% of the section changed)

2 unchanged sentences

Chubb Limited and Subsidiaries

September 30 December 31

March 31 December 31

(in millions of U.S.

dollars, except share and per share data) 2021 2020

Fixed maturities available for sale, at fair value, net of valuation allowance - $ 34

at September 30, 2020 (amortized cost – $ 85,201 and $ 82,580 )

Fixed maturities available for sale, at fair value, net of valuation allowance - $ 15 and $ 20

(amortized cost – $ 87,873 and $ 85,188 )

$ 91,071 $ 90,699

Fixed maturities held to maturity, at amortized cost, net of valuation allowance - $ 45

at September 30, 2020 (fair value – $ 12,473 and $ 13,005 )

Fixed maturities held to maturity, at amortized cost, net of valuation allowance - $ 43 and $ 44

(fair value – $ 11,752 and $ 12,510 )

11,132 11,653

7 unchanged sentences

Accrued investment income 857 867

Insurance and reinsurance balances receivable 10,588 10,357

Insurance and reinsurance balances receivable, net of valuation allowance - $ 43 and $ 44

10,573 10,480

Reinsurance recoverable on losses and loss expenses, net of valuation allowance - $ 317 and $ 314

17 unchanged sentences

Repurchase agreements 1,405 1,405

Short-term debt 1,300 1,299

Long-term debt 14,879 14,948

4 unchanged sentences

Common Shares (CHF 24.15 par value;

477,605,264 and 479,783,864 shares issued;

477,605,264 shares issued;

449,676,959 and 450,732,625 shares outstanding)

10 unchanged sentences

Chubb Limited and Subsidiaries

Three Months Ended Nine Months Ended

September 30 September 30

Three Months Ended

(in millions of U.S.

4 unchanged sentences

Net investment income 863 861

Net realized gains (losses):

Other-than-temporary impairment (OTTI) losses gross — ( 54 ) — ( 81 )

Portion of OTTI losses recognized in other comprehensive income (OCI) — 30 — 31

Net OTTI losses recognized in income — ( 24 ) — ( 50 )

Net realized gains (losses) excluding OTTI losses ( 141 ) ( 131 ) ( 1,069 ) ( 425 )

Total net realized gains (losses) (includes $ 49 , $( 11 ), $( 303 ), and $( 43 )

r eclassified from AOCI)

( 141 ) ( 155 ) ( 1,069 ) ( 475 )

Net realized gains (losses) (includes $ 24 and $( 319 ) reclassified from AOCI)

Total revenues 9,971 7,697

6 unchanged sentences

Amortization of purchased intangibles 72 73

Chubb integration expenses — 2 — 9

Total expenses 7,333 7,230

Income before income tax 2,638 467

Income tax expense (includes $ 7 , nil , $( 35 ), and $( 2 ) on reclassified unrealized gains and losses)

142 230 295 626

Income tax expense (benefit) (includes $ 4 and $( 40 ) on unrealized gains and losses reclassified from AOCI)

Net income $ 2,300 $ 252

Other comprehensive income

Unrealized appreciation $ 687 $ 694 $ 1,456 $ 3,791

Other comprehensive income (loss)

Unrealized depreciation $ ( 2,293 ) $ ( 2,479 )

Reclassification adjustment for net realized (gains) losses included in net income

( 2,317 ) ( 2,160 )

638 705 1,759 3,834

Cumulative foreign currency translation adjustment 22 ( 859 )

Postretirement benefit liability adjustment ( 28 ) ( 14 )

Other comprehensive income, before income tax 861 495 1,532 3,629

Income tax expense related to OCI items ( 103 ) ( 113 ) ( 295 ) ( 660 )

Other comprehensive income 758 382 1,237 2,969

Comprehensive income $ 1,952 $ 1,473 $ 2,352 $ 6,250

Other comprehensive loss, before income tax ( 2,323 ) ( 3,033 )

Income tax benefit related to OCI items 412 321

Other comprehensive loss ( 1,911 ) ( 2,712 )

Comprehensive income (loss) $ 389 $ ( 2,460 )

Earnings per share

4 unchanged sentences

Chubb Limited and Subsidiaries

Three Months Ended Nine Months Ended

September 30 September 30

Three Months Ended

(in millions of U.S.

1 unchanged sentence

Common Shares

Balance – beginning of period $ 11,121 $ 11,121 $ 11,121 $ 11,121

Cancellation of treasury shares ( 57 ) — ( 57 ) —

Balance – end of period 11,064 11,121 11,064 11,121

Balance – beginning and end of period $ 11,064 $ 11,121

Common Shares in treasury

1 unchanged sentence

Common Shares repurchased ( 519 ) ( 326 )

Cancellation of treasury shares 323 — 323 —

Net shares issued under employee share-based compensation plans 262 208

9 unchanged sentences

Balance – beginning of period 39,337 36,142

Cumulative effect of adoption of accounting guidance (refer to Note 1) — — ( 72 ) ( 12 )

Cumulative effect of adoption of accounting guidance — ( 63 )

Balance – beginning of period, as adjusted 39,337 36,079

Net income 2,300 252

Cancellation of treasury shares ( 266 ) — ( 266 ) —

Funding of dividends declared from Additional paid-in capital 352 340

1 unchanged sentence

Balance – end of period 41,637 36,331

Accumulated other comprehensive income

Accumulated other comprehensive income (loss)

Net unrealized appreciation (depreciation) on investments

Balance – beginning of period 4,673 2,543

Change in period, before reclassification from AOCI, net of income tax

expense of $( 102 ), $( 125 ), $( 300 ) and $( 674 )

585 569 1,156 3,117

Amounts reclassified from AOCI, net of income tax (expense) benefit of $ 7 ,

nil , $( 35 ) and $( 2 )

Change in period, before reclassification from AOCI, net of income tax benefit of

$ 401 and $ 324

( 1,892 ) ( 2,155 )

Change in period, net of income tax expense of $( 95 ), $( 125 ), $( 335 )

Amounts reclassified from AOCI, net of income tax (expense) benefit of $ 4 and $( 40 )

Change in period, net of income tax benefit of $ 405 and $ 284

( 1,912 ) ( 1,876 )

2 unchanged sentences

Balance – beginning of period ( 1,637 ) ( 1,939 )

Change in period, net of income tax (expense) benefit of $( 13 ), $ 8 , $ 27

233 ( 185 ) ( 141 ) ( 140 )

Change in period, net of income tax benefit of $ 2 and $ 34

Balance – end of period ( 1,613 ) ( 2,764 )

4 unchanged sentences

Balance – end of period ( 190 ) 4

Accumulated other comprehensive income 1,856 521 1,856 521

Accumulated other comprehensive income (loss) 958 ( 2,093 )

Total shareholders’ equity $ 59,076 $ 52,197

2 unchanged sentences

Chubb Limited and Subsidiaries

Nine Months Ended September 30

Three Months Ended

(in millions of U.S.

23 unchanged sentences

Sales of fixed maturities available for sale 1,343 4,687

Sales of to be announced mortgage-backed securities — 6

Sales of equity securities 351 131

5 unchanged sentences

Private equity distributions 206 211

Net deposit paid on share acquisition ( 503 ) —

Payment for Huatai Group interest ( 1,054 ) ( 329 )

Payment, including deposit, for Huatai Group interest ( 65 ) ( 1,550 )

Other ( 44 ) ( 125 )

3 unchanged sentences

Common Shares repurchased ( 519 ) ( 323 )

Proceeds from issuance of long-term debt 988 1,286

Repayment of long-term debt — ( 501 )

Proceeds from issuance of repurchase agreements 450 952

1 unchanged sentence

Proceeds from share-based compensation plans 115 47

Policyholder contract deposits 322 376

Policyholder contract withdrawals ( 253 ) ( 221 )

Policyholder contract deposits and other 133 135

Policyholder contract withdrawals and other ( 124 ) ( 162 )

Other ( 65 ) ( 3 )

Net cash flows used for financing activities ( 812 ) ( 645 )

24 unchanged sentences

The following table provides a reconciliation of cash and restricted cash reported within the Consolidated balance sheets that total to the amounts shown in the Consolidated statements of cash flows:

September 30 December 31

March 31 December 31

(in millions of U.S.

3 unchanged sentences

Total cash and restricted cash shown in the Consolidated statements of cash flows $ 1,841 $ 1,836

During the nine months ended September 30, 2020, Goodwill decreased $ 42 million, primarily reflecting the impact of foreign exchange.

d) Accounting guidance adopted in 2020

Financial Instruments – Credit Losses:

Measurement of Credit Losses on Financial Instruments

Effective January 1, 2020, we adopted, on a modified retrospective basis, new guidance on the accounting for credit losses of financial instruments that are measured at amortized cost, including held to maturity securities, and reinsurance recoverables, by applying an approach based on the current expected credit losses (CECL).

The estimate of expected credit losses considers historical information, current information, as well as reasonable and supportable forecasts, including estimates of prepayments.

In addition, the guidance also replaced the current available for sale (AFS) security other-than-temporary impairment model by requiring an estimate of the expected credit loss (ECL) only when the fair value is below the amortized cost of the asset.

The length of time the fair value of an AFS security has been below its amortized cost no longer impacts the determination of whether a potential credit loss exists.

The AFS security model also requires the use of a valuation allowance as compared to the previous practice of writing down the asset.

In 2020, we recognized a cumulative effect adjustment and decreased beginning retained earnings by $ 79 million pre-tax, or $ 72 million after-tax, principally related to the valuation allowance for credit losses.

We also adopted the required disclosures within Note 3 Investments and Note 5 Reinsurance.

Results for reporting periods prior to January 1, 2020 are presented in accordance with the previous guidance.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

Chubb Limited and Subsidiaries

Accounting guidance not yet adopted

Effects of Reference Rate Reform on Financial Reporting

In March 2020, the FASB issued guidance which provides optional expedients and exceptions for applying GAAP to investments, derivatives, or other transactions that reference the London Interbank Offered Rate (LIBOR) or another reference rate expected to be discontinued because of reference rate reform.

Along with the optional expedients, the amendments include a general principle that permits an entity to consider contract modifications due to reference reform to be an event that does not require contract re-measurement at the modification date or reassessment of a previous accounting determination.

Additionally, a company may make a one-time election to sell, transfer, or both sell and transfer debt securities classified as held to maturity that reference a rate affected by reference rate reform and that were classified as held to maturity before January 1, 2020.

This standard may be elected over time through December 31, 2022 as reference rate reform activities occur.

We are currently assessing the effect of adopting this guidance on our financial condition and results of operations.

During the three months ended March 31, 2021, Goodwill increased $ 12 million, primarily reflecting the impact of foreign exchange.

d) Accounting guidance not yet adopted

Targeted Improvements to the Accounting for Long-Duration Contracts

4 unchanged sentences

We will be better able to quantify the effect of adopting this standard as we progress in our implementation process and draw nearer to the date of adoption.

Refer to the 2019 Form 10-K for information on additional accounting guidance not yet adopted.

Chubb maintains a direct investment in Huatai Insurance Group Company Limited (Huatai Group).

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

Chubb Limited and Subsidiaries

Chubb maintains a direct investment in Huatai Insurance Group Co., Ltd.

(Huatai Group).

Huatai Group is the parent company of, and owns 100 percent of, Huatai Property & Casualty Insurance Co., Ltd.

(Huatai P&C) and approximately 80 percent of Huatai Life Insurance Co., Ltd.

(Huatai Life) (collectively, Huatai).

In 2019, Chubb entered into agreements to acquire an additional 22.4 percent ownership in Huatai Group for approximately $ 1.55 billion through two separate purchases, a 15.3 percent ownership interest for approximately $ 1.1 billion and a 7.1 percent ownership interest for approximately $ 493 million.

On July 13, 2020, we acquired the 15.3 percent ownership interest.

The purchase of the additional 7.1 percent ownership interest is contingent upon important conditions that are expected to be completed by the end of 2021.

In connection with these purchase agreements, in January 2020, we paid collateralized deposits totaling $ 1.55 billion to the selling shareholders.

Transactions relating to the deposits are recorded within investing activities on the Consolidated statement of cash flows.

As of September 30, 2020, Chubb's aggregate ownership interest in Huatai Group was 46.2 percent.

(Huatai P&C), approximately 80 percent of Huatai Life Insurance Co., Ltd.

(Huatai Life), and approximately 82 percent of Huatai Asset Management Co., Ltd.

(collectively, Huatai).

Huatai Group's insurance operations have more than 600 branches and 17 million customers in China.

In November 2020, we completed the purchase of an incremental 0.9 percent ownership interest in Huatai Group for approximately $ 65 million, which was paid in January 2021.

As of March 31, 2021, Chubb's aggregate ownership interest in Huatai Group was approximately 47.1 percent.

Chubb applies the equity method of accounting to its investment in Huatai Group by recording its share of net income or loss in Other (income) expense in the Consolidated statements of operations.

At September 30, 2020, the total carrying value of our investment in Huatai was approximately $ 2.4 billion, including approximately $ 1.3 billion attributable to goodwill.

Upon completion of the 7.1 percent purchase, which will result in majority ownership of Huatai Group, Chubb is expected to obtain control of Huatai Group, Huatai P&C and Huatai Life.

In 2019, Chubb entered into an agreement to acquire an additional 7.1 percent ownership interest in Huatai Group.

The purchase of the additional 7.1 percent ownership interest is contingent upon important conditions.

Upon completion of the 7.1 percent purchase, Chubb is expected to obtain majority ownership of Huatai Group and control of Huatai.

At that time, Chubb is expected to apply consolidation accounting and discontinue the application of the equity method of accounting.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

Chubb Limited and Subsidiaries

a) Fixed maturities

Effective January 1, 2020, we adopted new accounting guidance that requires a valuation allowance for credit losses to be established for fixed maturity securities classified as held to maturity (HTM) or available for sale (AFS).

For information on accounting policies applicable to periods prior to January 1, 2020, refer to the 2019 Form 10-K.

September 30, 2020 Amortized

March 31, 2021 Amortized

Cost Valuation Allowance Gross

19 unchanged sentences

$ 11,175 $ ( 43 ) $ 11,132 $ 621 $ ( 1 ) $ 11,752

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

Chubb Limited and Subsidiaries

December 31, 2020 Amortized

Cost Valuation Allowance Gross

Appreciation Gross

Depreciation Fair

Value OTTI Recognized

(in millions of U.S.

6 unchanged sentences

$ 85,188 $ ( 20 ) $ 5,655 $ ( 124 ) $ 90,699

Cost Valuation Allowance Net Carrying Value Gross

Appreciation Gross Unrealized Depreciation Fair

Held to maturity

5 unchanged sentences

$ 11,697 $ ( 44 ) $ 11,653 $ 859 $ ( 2 ) $ 12,510

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

Chubb Limited and Subsidiaries

Management evaluates CECL for all HTM securities each quarter.

Treasury and agency securities and U.S.

government agency mortgage-backed securities are assumed to have no risk of non-payment and therefore are excluded from the CECL evaluation.

The remaining HTM securities are evaluated for potential credit loss on a collective pool basis.

We elected to pool HTM securities by 1) external credit rating and 2) time to maturity (duration).

These characteristics are the most representative of similar risk characteristics within our portfolio.

Chubb pools HTM securities and calculates an expected credit loss for each pool using Moody’s corporate bond default average, corporate bond recovery rate, and an economic cycle multiplier.

The multiplier is based on the leading economic index and adjusts the average default frequency for a forward-looking economic outlook.

Prior to the adoption of this guidance, HTM securities were evaluated individually for other-than-temporary impairment (OTTI).

Management monitors the credit quality of HTM securities through the review of external credit ratings on a quarterly basis.

The following table presents the amortized cost of our HTM securities according to S&P rating:

September 30, 2020

March 31, 2021 December 31, 2020

(in millions of U.S.

dollars) Amortized cost % of Total

dollars, except for percentages) Amortized cost % of Total Amortized cost % of Total

AAA $ 2,404 22 % $ 2,511 22 %

AA 5,815 52 % 6,193 53 %

A 2,109 19 % 2,138 18 %

BBB 818 7 % 826 7 %

BB 28 — % 28 — %

Other 1 — % 1 — %

Total $ 11,175 100 % $ 11,697 100 %

Management evaluates expected credit losses (ECL) for AFS securities when fair value is below amortized cost.

AFS securities are evaluated for potential credit loss on an individual security level but the evaluation may use assumptions consistent with expectations of credit losses for a group of similar securities.

If management has the intent to sell or is required to sell the security before recovery, the entire impairment loss will be recorded through income to Net realized gains (losses).

If management does not have the intent to sell or is not required to sell the security before recovery, an allowance for credit losses is established and the portion of loss that relates to credit losses is recorded in income to Net realized gains (losses) and the portion of loss that relates to non-credit loss is recorded in Other comprehensive income.

Examples of criteria that are collectively evaluated to determine if a credit loss has occurred include the following:

• The extent to which the fair value is less than amortized cost;

• Adverse conditions related to the security, industry, or geographic area;

• Downgrades in the security's credit rating by a rating agency;

• Failure of the issuer to make scheduled principal or interest payments

AFS securities that meet any one of the criteria included above are subject to a discounted cash flow analysis by comparing the present value of expected future cash flows with the amortized cost basis.

If the present value of expected future cash flows is less than the amortized cost, a credit loss exists and an allowance for credit losses is then recognized.

If the present value of expected future cash flows is equal to or greater than the amortized cost basis, management will conclude an expected credit loss does not exist.

We elected to not measure an allowance for accrued investment income as uncollectible balances are written off in a timely manner, typically 30 to 45 days after uncollected balances are due.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

1 unchanged sentence

The following table presents fixed maturities by contractual maturity:

September 30 December 31

March 31 December 31

(in millions of U.S.

dollars) Net Carrying Value Fair Value Amortized Cost Fair Value

dollars) Net Carrying Value Fair Value Net Carrying Value Fair Value

Available for sale

16 unchanged sentences

b) Gross unrealized loss

Fixed maturities in an unrealized loss position at September 30, 2020 comprised both investment grade and below investment grade securities for which fair value declined primarily due to widening credit spreads since the date of purchase.

The following table presents, for AFS fixed maturities in an unrealized loss position (including securities on loan) that are not deemed to have credit losses, the aggregate fair value and gross unrealized loss by length of time the security has continuously been in an unrealized loss position:

Fixed maturities in an unrealized loss position at March 31, 2021 comprised both investment grade and below investment grade securities for which fair value declined primarily due to widening credit spreads since the date of purchase.

The following tables present, for AFS fixed maturities in an unrealized loss position (including securities on loan) that are not deemed to have expected credit losses, the aggregate fair value and gross unrealized loss by length of time the security has continuously been in an unrealized loss position:

0 – 12 Months Over 12 Months Total

September 30, 2020 Fair Value Gross

March 31, 2021 Fair Value Gross

Loss Fair Value Gross

1 unchanged sentence

(in millions of U.S.

Treasury / Agency $ 220 $ ( 7 ) $ — $ — $ 220 $ ( 7 )

4,775 ( 161 ) 381 ( 19 ) 5,156 ( 180 )

5 unchanged sentences

Chubb Limited and Subsidiaries

The following table presents, for all securities in an unrealized loss position (including securities on loan), the aggregate fair value and gross unrealized loss by length of time the security has continuously been in an unrealized loss position:

0 – 12 Months Over 12 Months Total

3 unchanged sentences

(in millions of U.S.

Treasury / Agency $ 234 $ ( 1 ) $ 339 $ — $ 573 $ ( 1 )

$ 1,628 $ ( 35 ) $ 114 $ ( 5 ) $ 1,742 $ ( 40 )

2 unchanged sentences

40 ( 1 ) 16 ( 1 ) 56 ( 2 )

Total fixed maturities $ 5,563 $ ( 81 ) $ 3,337 $ ( 88 ) $ 8,900 $ ( 169 )

Total AFS fixed maturities $ 4,755 $ ( 75 ) $ 758 $ ( 22 ) $ 5,513 $ ( 97 )

c) Net realized gains (losses)

Management reviews credit losses and the valuation allowance for expected credit losses each quarter.

When all or a portion of a fixed maturity security is identified to be uncollectible and written off, the valuation allowance for expected credit losses is reduced by the same amount.

In general, a security is considered uncollectible no later than when all efforts to collect contractual cash flows have been exhausted.

Below are considerations for when a security may be deemed uncollectible:

• We have sufficient information to determine that the issuer of the security is insolvent;

• We receive notice that the issuer of the security has filed for bankruptcy, and the collectability is expected to be adversely impacted by the bankruptcy;

• The issuer of a security has violated multiple debt covenants;

• Amounts have been past due for a specified period of time with no response from the issuer;

• A significant deterioration in the value of the collateral has occurred;

• We have received correspondence from the issuer of the security indicating that it doesn’t intend to pay the contractual principal and interest.

Projected cash flows are driven primarily by assumptions regarding probability of default and also the timing and amount of recoveries associated with defaults.

Chubb developed the projected cash flows using market data, issuer-specific information, and credit ratings.

In combination with contractual cash flows and the use of historical default and recovery data by Moody’s Investors Service (Moody’s) rating category we generate expected cash flows using the average cumulative issuer-weighted global default rates by letter rating.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

Chubb Limited and Subsidiaries

The following table presents the components of Net realized gains (losses):

Three Months Ended Nine Months Ended

September 30 September 30

Three Months Ended

(in millions of U.S.

1 unchanged sentence

Fixed maturities:

OTTI on fixed maturities, gross $ — $ ( 54 ) $ — $ ( 81 )

OTTI on fixed maturities recognized in OCI (pre-tax) — 30 — 31

OTTI on fixed maturities, net — ( 24 ) — ( 50 )

Gross realized gains excluding OTTI 50 70 195 153

Gross realized losses excluding OTTI ( 32 ) ( 57 ) ( 331 ) ( 146 )

Provision for expected credit losses 42 — ( 4 ) —

Gross realized gains $ 37 $ 77

Gross realized losses ( 19 ) ( 125 )

Net (provision for) recovery of expected credit losses 6 ( 150 )

Impairment (1)

( 11 ) — ( 163 ) —

Total fixed maturities $ 24 $ ( 319 )

16 unchanged sentences

Unrealized gains (losses) recognized for securities still held at reporting date $ 322 $ 38 $ 360 $ ( 5 ) $ 5 $ —

Nine Months Ended

(in millions of U.S.

dollars) Equity Securities Other Investments Total Equity Securities Other Investments Total

Net gains (losses) recognized during the period $ 119 $ ( 71 ) $ 48 $ 66 $ ( 18 ) $ 48

Net gains (losses) recognized from sales of securities 197 — 197 57 ( 4 ) 53

Unrealized gains (losses) recognized for securities still held at reporting date $ ( 78 ) $ ( 71 ) $ ( 149 ) $ 9 $ ( 14 ) $ ( 5 )

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

1 unchanged sentence

The following table presents a roll-forward of valuation allowance for expected credit losses on fixed maturities:

Three Months Ended Nine Months Ended

September 30 September 30

Three Months Ended

(in millions of U.S.

5 unchanged sentences

Initial allowance for purchased securities with credit deterioration — 2

Write-offs charged against the expected credit loss — ( 5 )

Recovery of expected credit loss ( 9 ) —

4 unchanged sentences

Provision for expected credit loss — 1

Recoveries of amounts previously written off ( 8 ) ( 8 )

Recovery of expected credit loss ( 1 ) —

Valuation allowance for expected credit losses - end of period $ 43 $ 45

Purchased Credit Deterioration (PCD) Securities

During the nine months ended September 30, 2020, we purchased $ 108 million of securities with credit deterioration, categorized as available for sale, and assessed an allowance for credit losses of $ 5 million at acquisition.

These PCD securities had a par value at acquisition of $ 144 million.

Alternative investments

Alternative investments include partially-owned investment companies, investment funds, and limited partnerships measured at fair value using their respective net asset values or equivalent (NAV) as a practical expedient.

d) Alternative investments

Alternative investments include partially-owned investment companies, investment funds, and limited partnerships measured at fair value using net asset value (NAV) as a practical expedient.

The following table presents, by investment category, the expected liquidation period, fair value, and maximum future funding commitments of alternative investments:

September 30 December 31

March 31 December 31

Period of Underlying Assets 2021 2020

37 unchanged sentences

Subsequent to notification, the investment fund can redeem Chubb’s investment within several months of the notification.

Notice periods for redemption of the investment funds range up to 270 days.

Notice periods for redemption of the investment funds are up to 270 days.

Chubb can redeem its investment funds without consent from the investment fund managers.

d) Restricted assets

e) Restricted assets

Chubb is required to maintain assets on deposit with various regulatory authorities to support its insurance and reinsurance operations.

4 unchanged sentences

We have investments in segregated portfolios primarily to provide collateral or guarantees for LOC and derivative transactions.

Included in restricted assets at September 30, 2020 and December 31, 2019 are investments, primarily fixed maturities, totaling $ 20.0 billion and $ 21.0 billion, respectively, and cash of $ 166 million and $ 109 million, respectively.

Included in restricted assets at March 31, 2021 and December 31, 2020 are investments, primarily fixed maturities, totaling $ 20.8 billion and $ 19.6 billion, respectively, and cash of $ 157 million and $ 89 million, respectively.

The following table presents the components of restricted assets:

September 30 December 31

March 31 December 31

(in millions of U.S.

32 unchanged sentences

For fixed maturities other than U.S.

Treasury securities that generally do not trade on a daily basis, the pricing services prepare estimates of fair value measurements using their pricing applications, which include available relevant market information, benchmark curves, benchmarking of like securities, sector groupings, and matrix pricing.

Treasury securities that generally do not trade on a daily basis, the pricing services prepare estimates of fair value measurements using their pricing applications or pricing models, which include available relevant market information, benchmark curves, benchmarking of like securities, sector groupings, and matrix pricing.

Additional valuation factors that can be taken into account are nominal spreads, dollar basis, and liquidity adjustments.

4 unchanged sentences

Given the asset class, the priority of the use of inputs may change, or some market inputs may not be relevant.

Additionally, fixed maturities valuation is more subjective when markets are less liquid due to the lack of market based inputs (i.e., stale pricing), which may increase the potential that an investment's estimated fair value is not reflective of the price at which an actual transaction would occur.

Additionally, fixed maturities valuation is more subjective when markets are less liquid due to the lack of market based inputs (i.e., stale pricing) and may require the use of models to be priced.

The lack of market based inputs may increase the potential that an investment's estimated fair value is not reflective of the price at which an actual transaction would occur.

The overwhelming majority of fixed maturities are classified within Level 2 because the most significant inputs used in the pricing techniques are observable.

26 unchanged sentences

Other derivative instruments

We maintain positions in exchange-traded equity futures contracts designed to limit exposure to a severe equity market decline, which would cause an increase in expected claims and, therefore, an increase in reserves for our guaranteed minimum death benefits (GMDB) and guaranteed living benefits (GLB) reinsurance business.

We maintain positions in exchange-traded equity futures contracts designed to limit exposure to a severe equity market decline, which would cause an increase in expected claims and, therefore, an increase in future policy benefit reserves for our guaranteed minimum death benefits (GMDB) and an increase in the fair value liability for our guaranteed living benefits (GLB) reinsurance business.

Our positions in exchange-traded equity futures contracts are classified within Level 1.

11 unchanged sentences

The GLB arises from life reinsurance programs covering living benefit guarantees whereby we assume the risk of guaranteed minimum income benefits (GMIB) associated with variable annuity contracts.

GLB’s are recorded in Accounts payable, accrued expenses, and other liabilities and Future policy benefits in the Consolidated balance sheets.

GLB’s are recorded in Accounts payable, accrued expenses, and other liabilities in the Consolidated balance sheets.

For GLB reinsurance, Chubb estimates fair value using an internal valuation model which includes current market information and estimates of policyholder behavior.

5 unchanged sentences

Financial instruments measured at fair value on a recurring basis, by valuation hierarchy

September 30, 2020 Level 1 Level 2 Level 3 Total

March 31, 2021 Level 1 Level 2 Level 3 Total

(in millions of U.S.

17 unchanged sentences

Investment derivative instruments $ 79 $ — $ — $ 79

Other derivative instruments 7 — — 7

Total liabilities measured at fair value $ 86 $ — $ 760 $ 846

(1) Excluded from the table above are partially-owned investments, investment funds, and limited partnerships of $ 5,694 million, policy loans of $ 225 million and other investments of $ 90 million at September 30, 2020 measured using NAV as a practical expedient.

(1) Excluded from the table above are partially-owned investments, investment funds, and limited partnerships of $ 7,457 million, policy loans of $ 232 million and other investments of $ 70 million at March 31, 2021 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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

15 unchanged sentences

Investment derivative instruments 35 — — 35

Other derivative instruments 2 — — 2

Separate account assets 4,264 124 — 4,388

3 unchanged sentences

Other derivative instruments 17 — — 17

— — 1,089 1,089

Total liabilities measured at fair value $ 69 $ — $ 1,089 $ 1,158

(1) Excluded from the table above are partially-owned investments, investment funds, and limited partnerships of $ 4,921 million and other investments of $ 95 million at December 31, 2019 measured using NAV as a practical expedient.

(1) Excluded from the table above are partially-owned investments, investment funds, and limited partnerships of $ 6,770 million, policy loans of $ 233 million and other investments of $ 60 million at December 31, 2020 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.

Level 3 financial instruments

6 unchanged sentences

Unobservable Inputs Ranges Weighted Average (1)

September 30, 2020 December 31, 2019

March 31, 2021 December 31, 2020

$ 760 $ 1,089 Actuarial model Lapse rate 3 % – 34 %

5 unchanged sentences

All else equal, as lapse rates increase, ultimate claim payments will decrease.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

Chubb Limited and Subsidiaries

The GMIB annuitization rate is the percentage of policies for which the policyholder will elect to annuitize using the guaranteed benefit provided under the GMIB.

All else equal, as GMIB annuitization rates increase, ultimate claim payments will increase, subject to treaty claim limits.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

Chubb Limited and Subsidiaries

The effect of changes in key market factors on assumed lapse and annuitization rates reflect emerging trends using data available from cedants.

1 unchanged sentence

The model and related assumptions are regularly re-evaluated by management and enhanced, as appropriate, based upon additional experience obtained related to policyholder behavior and availability of updated information such as market conditions, market participant assumptions, and demographics of in-force annuities.

For the three and nine months ended September 30, 2020 and 2019, no material refinements were made to the model.

For the three months ended March 31, 2021 and 2020, no material refinements were made to the model.

For detailed information on our lapse and annuitization rate assumptions, refer to Note 4 to the Consolidated Financial Statements of our 2020 Form 10-K.

2 unchanged sentences

Three Months Ended

September 30, 2020

March 31, 2021

(in millions of U.S.

2 unchanged sentences

investments GLB (1)

Corporate and asset-backed securities MBS

Corporate and asset-

backed securities Mortgage-backed securities

Balance, beginning of period $ 546 $ 1,573 $ 60 $ 73 $ 5 $ 10 $ 1,089

$ 469 $ 1,369 $ 60 $ 64 $ 2 $ 10 $ 928

Transfers into Level 3 — 17 — — — — —

Transfers out of Level 3 — ( 1 ) — — — — —

Change in Net Unrealized Gains/Losses in OCI 8 6 — — — — —

3 unchanged sentences

Settlements ( 18 ) ( 125 ) ( 9 ) — ( 5 ) — —

Other — — — — — — ( 10 )

Balance, end of period $ 650 $ 1,612 $ 51 $ 75 $ 1 $ 10 $ 760

2 unchanged sentences

(1) Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value.

Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the Consolidated balance sheets.

The liability for GLB reinsurance was $ 1,318 million at September 30, 2020, and $ 1,372 million at June 30, 2020, which includes a fair value derivative adjustment of $ 882 million and $ 928 million, respectivel y.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

2 unchanged sentences

Three Months Ended

September 30, 2019

March 31, 2020

(in millions of U.S.

2 unchanged sentences

investments GLB (1)

Corporate and asset-backed securities MBS

Balance – beginning of period

$ 371 $ 1,359 $ 76 $ 56 $ 4 $ 11 $ 403

Transfers into Level 3 — 1 — — — — —

Change in Net Unrealized Gains/Losses in OCI, including foreign exchange

( 8 ) ( 4 ) — ( 1 ) — — —

Net Realized Gains/Losses — — — ( 1 ) — — 106

Purchases 68 176 1 5 2 — —

Sales ( 35 ) ( 18 ) — ( 3 ) — — —

Settlements ( 3 ) ( 64 ) — — — ( 1 ) —

Balance – end of period $ 393 $ 1,450 $ 77 $ 56 $ 6 $ 10 $ 509

Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date

$ — $ — $ — $ ( 1 ) $ — $ — $ 106

(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 $ 935 million at September 30, 2019, and $ 815 million at June 30, 2019, which includes a fair value derivative adjustment of $ 509 million and $ 403 million, respectively .

Assets Liabilities

Available-for-Sale Debt Securities Equity

securities Short-term investments Other

investments GLB (1)

Nine Months Ended

September 30, 2020

(in millions of U.S.

dollars) Non-U.S.

Corporate and asset-backed securities MBS

Corporate and asset-

backed securities Mortgage-backed securities

Balance, beginning of period $ 449 $ 1,451 $ 60 $ 69 $ 6 $ 10 $ 897

$ 449 $ 1,451 $ 60 $ 69 $ 6 $ 10 $ 456

Transfers into Level 3 — 91 — — — — —

Transfers out of Level 3 ( 3 ) ( 1 ) — — — — —

Change in Net Unrealized Gains (Losses) in OCI, including foreign exchange

1 ( 31 ) — — ( 1 ) — —

Change in Net Unrealized Gains/ Losses in OCI ( 14 ) ( 45 ) — 1 — — —

Net Realized Gains/Losses ( 2 ) ( 13 ) — ( 2 ) — — 685

2 unchanged sentences

Settlements ( 1 ) ( 101 ) — — ( 6 ) — —

Other — — — — — — 9

Balance, end of period $ 465 $ 1,502 $ 60 $ 67 $ 1 $ 10 $ 1,591

Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date $ — $ ( 14 ) $ — $ ( 2 ) $ — $ — $ 685

$ — $ ( 6 ) $ — $ 1 $ — $ — $ 426

Change in Net Unrealized Gains/Losses included in OCI at the Balance sheet date $ ( 15 ) $ ( 44 ) $ — $ — $ — $ — $ —

$ — $ ( 25 ) $ — $ — $ ( 1 ) $ — $ —

(1) Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value.

Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the Consolidated balance sheets.

The liability for GLB reinsurance was $ 1,318 million at September 30, 2020, and $ 897 million at December 31, 2019, which includes a fair value derivative adjustment of $ 882 million and $ 456 million, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

Chubb Limited and Subsidiaries

Assets Liabilities

Available-for-Sale Debt Securities Equity

securities Short-term investments Other

investments GLB (1)

Nine Months Ended

September 30, 2019

(in millions of U.S.

dollars) Non-U.S.

Corporate and asset-backed securities MBS

Balance – beginning of period

$ 345 $ 1,299 $ 61 $ 57 $ 1 $ 11 $ 452

Transfers into Level 3 3 16 — — — — —

Transfers out of Level 3 ( 15 ) — — — — — —

Change in Net Unrealized Gains/Losses in OCI, including foreign exchange

( 2 ) 1 — 1 — — —

Net Realized Gains/Losses ( 1 ) — — ( 4 ) — — 57

Purchases 164 425 19 19 6 — —

Sales ( 54 ) ( 91 ) ( 1 ) ( 17 ) — — —

Settlements ( 47 ) ( 200 ) ( 2 ) — ( 1 ) ( 1 ) —

Balance – end of period $ 393 $ 1,450 $ 77 $ 56 $ 6 $ 10 $ 509

Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date

$ — $ ( 1 ) $ — $ ( 3 ) $ — $ — $ 57

(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 $ 935 million at September 30, 2019, and $ 861 million at December 31, 2018, which includes a fair value derivative adjustment of $ 509 million and $ 452 million, respectively.

b) Financial instruments disclosed, but not measured, at fair value

6 unchanged sentences

The following tables present fair value, by valuation hierarchy, and carrying value of the financial instruments not measured at fair value:

September 30, 2020 Fair Value Net Carrying

March 31, 2021 Fair Value Net Carrying

(in millions of U.S.

8 unchanged sentences

Repurchase agreements $ — $ 1,405 $ — $ 1,405 $ 1,405

Short-term debt — 1,302 — 1,302 1,300

Long-term debt — 16,408 — 16,408 14,879

1 unchanged sentence

Total liabilities $ — $ 18,283 $ — $ 18,283 $ 16,592

December 31, 2019 Fair Value Carrying

December 31, 2020 Fair Value Net Carrying

(in millions of U.S.

8 unchanged sentences

Repurchase agreements $ — $ 1,405 $ — $ 1,405 $ 1,405

Short-term debt — 1,307 — 1,307 1,299

Long-term debt — 17,487 — 17,487 14,948

4 unchanged sentences

Reinsurance recoverable on ceded reinsurance

September 30, 2020 December 31, 2019

March 31, 2021 December 31, 2020

(in millions of U.S.

7 unchanged sentences

(1) Net of valuation allowance for uncollectible reinsurance.

The increase in reinsurance recoverable on losses and loss expenses was primarily due to catastrophe losses.

We evaluate the financial condition of our reinsurers and potential reinsurers on a regular basis and also monitor concentrations of credit risk with reinsurers.

The valuation allowance for uncollectible reinsurance is required principally due to the potential failure of reinsurers to indemnify Chubb, primarily because of disputes under reinsurance contracts and insolvencies.

We have established a valuation allowance for amounts estimated to be uncollectible on both unpaid and paid losses as well as future policy benefits.

Management evaluates the need for a valuation allowance for uncollectible reinsurance recoverable using current and historical factors, and forecasts each quarter.

These factors include a review of active and run-off lines of business, review of reinsurer financial strength ratings, and review of our largest reinsurers.

The evaluation of the valuation allowance includes several judgments including certain aspects of the allocation of reinsurance recoverable on incurred but not reported (IBNR) claims by reinsurer and a default analysis to estimate uncollectible reinsurance.

The primary components of the default analysis are reinsurance recoverable balances by reinsurer, net of collateral, and default factors used to determine the portion of a reinsurer's balance deemed uncollectible.

Default factors require considerable judgment and are determined using principally the current financial strength rating, or rating equivalent, of each reinsurer.

Changes in the valuation allowance for uncollectible reinsurance recoverables are recorded in Losses and loss expenses in the Consolidated statements of operations.

For additional information, refer to Note 1 d) to the Consolidated Financial Statements of our 2019 Form 10-K.

The evaluation of the valuation allowance at December 31, 2019 was consistent with the new accounting guidance adopted January 1, 2020, therefore, there was no material change to the valuation allowance upon adoption.

The increase in reinsurance recoverable on losses and loss expenses was primarily due to unfavorable prior period development in certain lines and catastrophe losses in the quarter.

The following table presents a roll-forward of valuation allowance for uncollectible reinsurance related to Reinsurance recoverable on loss and loss expenses:

Nine Months Ended

Three Months Ended

(in millions of U.S.

dollars) 2021 2020

Reinsurance recoverable

Valuation allowance for uncollectible reinsurance - beginning of period $ 314 $ 316

1 unchanged sentence

Write-offs charged against the valuation allowance — ( 13 )

Foreign exchange revaluation 2

Valuation allowance for uncollectible reinsurance - end of period $ 317 $ 305

For additional information, refer to Note 1 d) to the Consolidated Financial Statements of our 2020 Form 10-K.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

2 unchanged sentences

The following table presents a reconciliation of beginning and ending Unpaid losses and loss expenses:

Nine Months Ended September 30

Three Months Ended

(in millions of U.S.

19 unchanged sentences

(1) Net of valuation allowance for uncollectible reinsurance.

(2) Relates to prior period loss reserve development only and excludes prior period development related to reinstatement premiums, expense adjustments and earned premiums totaling $ 23 million and $ 60 million for the nine months ended September 30, 2020 and 2019, respectively.

Gross and net unpaid losses and loss expenses increased $ 5,215 million and $ 4,629 million, respectively, for the nine months ended September 30, 2020, driven by catastrophe losses incurred, an increase in underlying exposure due to premium growth, and reduced payment activity due to the economic slowdown related to the COVID-19 pandemic.

(2) Relates to prior period loss reserve development only and excludes prior period development related to reinstatement premiums, expense adjustments and earned premiums totaling $ 4 million and $ 2 million for the three months ended March 31, 2021 and 2020, respectively.

Gross and net unpaid losses and loss expenses increased $ 1,444 million and $ 1,231 million, respectively, for the three months ended March 31, 2021, reflecting an increase in underlying exposure due to premium growth and catastrophe losses incurred, partially offset by favorable prior period development.

Prior Period Development

5 unchanged sentences

The following table summarizes (favorable) and adverse PPD by segment.

Three Months Ended September 30 Nine Months Ended September 30

Three Months Ended March 31

(in millions of U.S.

dollars) Long-tail Short-tail Total Long-tail Short-tail Total

dollars) Long-tail Short-tail Total

North America Commercial P&C Insurance $ ( 46 ) $ ( 81 ) $ ( 127 )

15 unchanged sentences

North America Commercial P&C Insurance

For the three months ended September 30, 2020, net favorable PPD was $ 200 million, which was the net result of several underlying favorable and adverse movements, and was driven by the following principal changes:

For the three months ended March 31, 2021, net favorable PPD was $ 127 million, which was the net result of several underlying favorable and adverse movements, and was driven by the following principal changes:

• Net favorable development of $ 46 million in long-tail business, primarily from:

• Net favorable development of $ 155 million in workers' compensation business mainly impacting accident years 2016 and prior, driven by lower than expected paid and reported loss activity, and related updates to loss development factors, partly offset by adverse development in accident year 2019;

• Net favorable development of $ 47 million in commercial excess and umbrella portfolios, driven by accident years 2014 and prior, and accident year 2019.

The 2014 and prior development was a function of lower than expected paid and reported loss activity.

The development on the 2019 accident year relates to three large policies covering specific perils, which expired in the quarter, with no covered events occurring;

• Net favorable development of $ 41 million on large multi-line prospective deals in the 2016 and prior accident years, due to lower than expected reported loss activity.

These structured deals typically cover large clients for multiple product lines and with varying loss limitations;

this development is net of premium returns of $ 26 million tied to the loss performance of the particular deals;

• Net favorable development of $ 40 million in our foreign casualty business, mainly in accident year 2016, due to lower than expected reported loss activity, partly offset by a large loss in accident year 2017;

• Net adverse development of $ 29 million in assumed general liability and excess lines mainly in accident years 2016 and prior due to higher than expected reported loss activity.

• Net favorable development of $ 51 million in professional liability (errors & omissions and third-party cyber risk), driven by accident years 2016 and 2017, which saw lower than expected loss emergence, partly offset by higher than expected development in accident year 2019;

• Net favorable development of $ 35 million in voluntary environmental lines, driven by accident years 2017 and prior, which saw lower than expected loss emergence, partly offset by higher than expected development in accident year 2019;

• Net adverse development of $ 57 million in excess and umbrella portfolios, with accident years 2015 through 2019 continuing to experience higher than expected loss development, partly offset by favorable development in accident years 2014 and prior.

• Net favorable development of $ 81 million in short-tail business, primarily from:

• Net favorable development of $ 49 million in surety, mainly in accident years 2018 and 2019, driven by lower than expected loss emergence;

• Net favorable development of $ 48 million in accident & health, driven by accident years 2019 and 2020, where loss emergence was lower than expected;

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

Chubb Limited and Subsidiaries

• Net adverse development of $ 55 million in short-tail business, primarily from:

• Net adverse development of $ 35 million in our property portfolios, due to adverse non-catastrophe loss development mainly in accident year 2019, partially offset by favorable catastrophe-driven loss experience;

• Net adverse development of $ 21 million in our marine portfolios, mainly impacting the 2019 accident year, driven by higher than expected non-catastrophe loss development.

For the nine months ended September 30, 2020, net favorable PPD was $ 451 million, which was the net result of several underlying favorable and adverse movements, and was driven by the following principal changes:

• Net favorable development of $ 25 million in property and marine coverages in accident year 2020, driven by lower than expected non-catastrophe loss development;

• Net adverse development of $ 41 million in first-party cyber risk, driven by accident years 2019 and 2020, which experienced higher than expected loss development as well as heightened frequency and severity.

For the three months ended March 31, 2020, net favorable PPD was $ 105 million, which was the net result of several underlying favorable and adverse movements, and was driven by the following principal changes:

• Net favorable development of $ 43 million in long-tail business, primarily from:

• Net favorable development of $ 337 million in our workers’ compensation lines.

This included favorable development of $ 62 million related to our annual assessment of multi-claimant events including industrial accidents, in the 2019 accident year.

Consistent with prior years, we reviewed these potential exposures after the close of the accident year to allow for late reporting or identification of significant losses.

This favorable development in accident year 2019 was partially offset by some higher than expected activity from other claims.

The remaining overall favorable development was mainly in accident years 2016 and prior, driven by lower than expected loss experience and related updates to loss development factors;

• Net favorable development of $ 66 million in professional liability (errors & omissions and cyber risk), driven by accident years 2016 and prior, which experienced lower than expected loss emergence;

• Net favorable development of $ 43 million in voluntary environmental lines, in accident years 2016 and prior, due to lower than expected emergence and a related updates to loss development factors;

• Net favorable development of $ 41 million on large multi-line prospective deals due to the same factors experienced for the three months ended September 30, 2020, as described above;

• Net favorable development of $ 40 million in our foreign casualty businesses due to the same factors experienced for the three months ended September 30, 2020, as described above;

• Net adverse development of $ 75 million in commercial automobile liability, mainly in high deductible and excess portfolios, driven by adverse paid and reported loss experience and related updates to loss development factors, mainly in accident years 2015 through 2019;

• Net adverse development of $ 5 million for U.S.

child molestation claims, predominantly reviver statute-related.

• Net favorable development of $ 12 million in short-tail business due to the same factors experienced for the three months ended September 30, 2020, as described above, which was offset by:

• Net favorable development of $ 66 million in professional liability (errors & omissions and third-party cyber risk), driven by accident years 2016 and prior, which saw lower than expected emergence;

• Net favorable development of $ 43 million in voluntary environmental lines, driven by accident years 2016 and prior, which saw lower than expected emergence and a favorable revision to loss development patterns;

• Net favorable development of $ 28 million in construction workers’ compensation, mainly in accident years 2016 and prior, which saw lower than expected reported loss emergence and a favorable revision to loss development patterns;

• Net adverse development of $ 49 million in excess and umbrella portfolios, with accident years 2015 through 2019 experiencing higher than expected reported development, partially offset by lower than expected emergence in accident years 2014 and prior;

• Net adverse development of $ 23 million in wholesale general liability coverages, driven by higher than expected reported loss emergence in accident years 2014 through 2019.

• Net favorable development of $ 62 million in short-tail business, primarily from:

• Net favorable development of $ 36 million, in accident & health, mainly in accident years 2018 and 2019, driven by lower than expected paid loss emergence;

• Net favorable development of $ 31 million in surety, driven by accident year 2018, where loss emergence was lower than expected.

For the three months ended September 30, 2019, net favorable PPD was $ 109 million, which was the net result of several underlying favorable and adverse movements, and was driven by the following principal changes:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

Chubb Limited and Subsidiaries

• Net favorable development of $ 197 million in long-tail business, primarily from:

• Net favorable development of $ 94 million in workers' compensation business mainly impacting accident years 2015 and prior, driven by lower than expected paid and reported loss activity, and related improvements in loss development factors;

• Net favorable development of $ 39 million in our foreign casualty business, impacting accident years 2015 and prior, driven by reported loss activity that was generally lower than expected;

• Net favorable development of $ 36 million on large multi-line prospective deals in the 2015 and prior accident years, due to lower than expected reported loss activity.

These structured deals typically cover large clients for multiple product lines and with varying loss limitations;

this development is net of premium returns of $ 34 million tied to the loss performance of the particular deals;

• Net favorable development of $ 32 million in U.S.

commercial excess and umbrella portfolios, mainly in accident years 2013 and prior, driven by lower paid and reported loss activity relative to prior expectations as well as an increase in weighting towards experience-based methods, partly offset by modestly adverse development in more recent accident years, mainly in 2018, due to higher than expected large loss activity.

• Net adverse development of $ 88 million in short-tail business, primarily in our property and marine portfolios from:

• Net adverse development excluding catastrophes of $ 116 million, with adverse development of $ 154 million across our retail, wholesale, and program distribution channels in accident year 2018, primarily due to a higher than expected severity of non-catastrophe claims, partly offset by favorable development of $ 38 million in 2017 and prior accident years on non-catastrophe claims;

• Net favorable catastrophe development of $ 27 million.

There was $ 41 million of favorable development on the 2017 and 2018 natural catastrophes, mostly in 2017, partly offset by some adverse development on older catastrophe events.

For the nine months ended September 30, 2019, net favorable PPD was $ 425 million, which was the net result of several underlying favorable and adverse movements, and was driven by the following principal changes:

• Net favorable development of $ 468 million in long-tail business, primarily from:

• Net favorable development of $ 294 million in our workers’ compensation lines.

This included favorable development of $ 61 million related to our annual assessment of multi-claimant events including industrial accidents, in the 2018 accident year.

Consistent with prior years, we reviewed these potential exposures after the close of the accident year to allow for late reporting or identification of significant losses.

This development in accident year 2018 was partially offset by some higher than expected activity from other claims and from involuntary pools.

The remaining overall favorable development was mainly in accident years 2015 and prior, generally driven by lower than expected loss experience and related updates to loss development factors;

• Net favorable development of $ 63 million in U.S.

commercial excess and umbrella portfolios due to the same factors experienced for the three months ended September 30, 2019, as described above with a similar result of favorable development in older accident years, partly offset by some adverse development in several of the more recent prior accident years which led to reserve strengthening in those years;

• Net favorable development of $ 53 million in professional liability (errors & omissions and cyber), mainly in the 2015 and prior accident years where case activity was less than expected, partially offset by adverse development in the 2016 accident year, which was driven by several large adverse claim developments;

• Net favorable development of $ 39 million in our foreign casualty business due to the same factors experienced for the three months ended September 30, 2019, as described above;

• Net favorable development of $ 36 million on large multi-line prospective deals due to the same factors experienced for the three months ended September 30, 2019, as described above;

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

Chubb Limited and Subsidiaries

• Net adverse development of $ 31 million in automobile liability, driven by adverse paid and reported loss experience mainly in accident years 2014 through 2018.

• Net adverse development of $ 43 million in short-tail business due to the same factors experienced for the three months ended September 30, 2019, as described above, which was partly offset by favorable development of $ 49 million in surety business, mainly in the 2017 accident year, driven by lower than expected reported loss activity.

North America Personal P&C Insurance

For the three and nine months ended September 30, 2020, net adverse PPD was $ 48 million, which was the net result of several underlying favorable and adverse movements, and was driven by the following principal changes:

• Net adverse development of $ 69 million in our homeowners lines, including valuables, mainly in accident years 2017 through 2019 due to higher than expected non-catastrophe loss emergence and adverse development arising from natural catastrophes in accident years 2017 and 2018;

• Net favorable development of $ 22 million in our personal excess lines, driven by favorable development mainly in the 2017 accident year, partly offset by adverse development in accident year 2019.

For the three months ended September 30, 2019, net favorable PPD was $ 62 million, which was the net result of several underlying favorable and adverse movements, and was driven by the following principal changes:

• Net favorable development of $ 36 million in our homeowners lines, including valuables, mainly in accident year 2018.

Non-catastrophe loss emergence was generally lower than expected in recent accident years.

Losses arising from accident year 2017 natural catastrophes developed adversely;

however, this was mostly offset by favorable development on the 2018 catastrophe events;

• Net favorable development of $ 26 million in our personal excess lines primarily impacting the 2016 accident year, due to lower than expected loss emergence and an increase in weighting towards experience-based methods, partly offset by adverse emergence in accident year 2015.

For the nine months ended September 30, 2019, net favorable PPD was $ 88 million, which was the net result of several underlying favorable and adverse movements, and was driven by the following principal changes:

• Net favorable claim development of $ 132 million on the 2017 and 2018 natural catastrophes for all lines;

• Net favorable development of $ 26 million in our personal excess lines due to the same factors experienced for the three months ended September 30, 2019, as described above;

• Net adverse development of $ 82 million in our homeowners lines, including valuables, arising from non-catastrophe loss emergence, mainly in the 2018 accident year.

North America Agricultural Insurance

For the three and nine months ended September 30, 2020, net adverse PPD was $ 18 million and $ 4 million, respectively.

For the three months ended September 30, 2019, net adverse PPD was $ 18 million.

For the nine months ended September 30, 2019, net favorable PPD was $ 43 million, which is the net of the adverse activity noted above and favorable claim development in our Multiple Peril Crop Insurance (MPCI) business, which was due to better than expected crop yield results in certain states at the prior year-end period (i.e., 2019 results based on crop yield results at year-end 2018).

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

Chubb Limited and Subsidiaries

For the three months ended March 31, 2021, net favorable PPD was $ 40 million, driven by accident year 2020, which experienced better than expected non-catastrophe loss development in homeowners and valuables.

Overseas General Insurance

For the three months ended September 30, 2020, net favorable PPD was $ 60 million, which was the net result of several underlying favorable and adverse movements, and was driven by the following principal changes:

• Net favorable development of $ 71 million in long-tail business, primarily from:

• Net favorable development of $ 94 million in casualty lines, including favorable development of $ 143 million in accident years 2016 and prior, due to lower than expected loss emergence across primary and excess lines in Continental Europe, U.K., and Asia Pacific, partially offset by adverse development of $ 49 million in accident years 2017 through 2019, primarily due to adverse large loss experience in the U.K.

and Asia Pacific;

• Net favorable development of $ 22 million in political risks, driven by benign loss experience in 2018 and 2019;

• Net adverse development of $ 57 million in financial lines, with adverse development of $ 125 million in accident years 2016 through 2019, primarily due to adverse large loss experience in Directors and Officers (D&O) in the U.K.

and Asia Pacific.

This was partially offset by favorable development of $ 68 million in accident years 2015 and prior, primarily from favorable case-specific settlements within Continental Europe and Asia Pacific financial institutions.

For the nine months ended September 30, 2020, net favorable PPD was $ 100 million, which was the net result of several underlying favorable and adverse movements and was driven by the following principal changes:

• Net favorable development of $ 72 million in long-tail lines due to the same factors experienced for the three months ended September 30, 2020 described above;

• Net favorable development of $ 28 million in short-tail business, including $ 22 million in marine lines across all regions mainly in accident years 2017 and 2018.

For the three months ended September 30, 2019, net favorable PPD was $ 25 million, which was the net result of several underlying favorable and adverse movements, and was driven by the following principal changes:

• Net favorable development of $ 66 million in long-tail business, primarily from:

• Net favorable development of $ 101 million in casualty lines, including favorable development of $ 123 million in accident years 2015 and prior, due to lower than expected loss emergence mainly across primary lines in Continental Europe, U.K., and Asia Pacific, partially offset by adverse development of $ 22 million in accident years 2016 through 2018, primarily due to adverse attritional and large loss experience in Continental Europe;

• Net adverse development of $ 50 million in financial lines, with favorable development of $ 75 million in accident years 2015 and prior, due to lower than expected loss emergence across most regions in D&O and Professional Indemnity, which was more than offset by adverse development of $ 125 million in accident years 2016 through 2018, primarily due to adverse large loss experience in D&O in the U.K.

and Asia Pacific.

• Net adverse development of $ 41 million in short-tail business, primarily due to net adverse development of $ 27 million in Surety, driven by adverse large loss experience across Continental Europe and Latin America in accident years 2017 and 2018.

For the nine months ended September 30, 2019, net favorable PPD was $ 49 million, which was the net result of several underlying favorable and adverse movements, and was driven by net favorable development of $ 66 million in long-tail lines due to the same factors experienced for the three months ended September 30, 2019 described above.

For the three months ended March 31, 2021, net favorable PPD was $ 25 million, which reflects favorable loss experience across several lines, mainly in accident year 2020, none of which were significant individually or in the aggregate.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

Chubb Limited and Subsidiaries

Global Reinsurance

For the three and nine months ended September 30, 2020, net favorable PPD was $ 6 million and $ 29 million, respectively, which was the net result of several underlying favorable and adverse movements, none of which is significant individually or in the aggregate.

For the three months ended September 30, 2019, net favorable PPD was $ 25 million, in long-tail business, primarily from professional liability, medical malpractice, and workers' compensation lines primarily from treaty years 2013 and prior principally due to lower than expected loss emergence.

For the nine months ended September 30, 2019, net favorable PPD was $ 33 million, which was the net result of several underlying favorable and adverse movements, and was driven by the following principal changes:

• Net favorable development of $ 59 million in long-tail business, primarily in our casualty, professional liability, medical malpractice, and workers’ compensation lines primarily from treaty years 2013 and prior principally due to lower than expected loss emergence;

• Net adverse development of $ 26 million in short-tail business, which included $ 37 million of adverse development primarily on 2017 and 2018 natural catastrophe events.

For the three months ended September 30, 2020, net adverse development was $ 54 million, driven principally by development in environmental liabilities of $ 35 million due to certain case specific incurred activity.

For the nine months ended September 30, 2020 net adverse development was $ 339 million, driven by adverse development of $ 254 million for U.S.

child molestation claims, predominantly reviver statute-related, as well as the adverse development noted above regarding environmental liabilities.

The remainder of the adverse development was driven by increased claim costs on a limited number of non-A&E run-off casualty and workers’ compensation exposures, and charges relating to unallocated loss adjustment expenses due to run-off operating expenses.

For the three months ended September 30, 2019, net adverse development was $ 36 million, driven principally by adverse development in environmental liabilities of $ 27 million due to case specific settlements and higher than expected remediation expense and defense costs, generally impacting larger modeled accounts.

For the nine months ended September 30, 2019, net adverse development was $ 79 million, driven principally by adverse development on non A&E run-off casualty exposures, including workers' compensation, and by the adverse development in environmental liabilities as described above.

The net adverse development also included charges relating to unallocated loss adjustment expenses due to run-off operating expenses of $ 28 million.

On September 17, 2020, Chubb INA Holdings Inc.

(Chubb INA) issued $ 1 billion of 1.375 percent senior notes due September 2030.

These senior notes are redeemable at any time at Chubb INA's option subject to a “make-whole” premium (the present value of the remaining principal and interest discounted at the applicable comparable government bond rate plus 0.15 percent).

The notes are also redeemable at par plus accrued and unpaid interest in the event of certain changes in tax law.

These notes do not have the benefit of any sinking fund.

These senior unsecured notes are guaranteed on a senior basis by Chubb and they rank equally with all of Chubb's other senior obligations.

They also contain customary limitations on lien provisions as well as customary events of default provisions which, if breached, could result in the accelerated maturity of such senior debt.

Commitments, contingencies, and guarantees

2 unchanged sentences

As a global company, Chubb entities transact business in multiple currencies.

Our policy is to generally match assets, liabilities,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

Chubb Limited and Subsidiaries

and required capital for each individual jurisdiction in local currency, which would include the use of derivatives discussed below.

Our policy is to generally match assets, liabilities, and required capital for each individual jurisdiction in local currency, which would include the use of derivatives discussed below.

We do not hedge our net asset non-U.S.

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The GMIB risk is triggered if, at the time the contract holder elects to convert the accumulated account value to a periodic payment stream (annuitize), the accumulated account value is not sufficient to provide a guaranteed minimum level of monthly income.

The GLB reinsurance product meets the definition of a derivative instrument.

Benefit reserves in respect of GLBs are classified as Future policy benefits (FPB) while the fair value derivative adjustment is classified within AP.

The GLB reinsurance product meets the definition of a derivative instrument and is classified within AP.

Chubb also generally maintains positions in exchange-traded equity futures contracts on equity market indices to limit equity exposure in the GMDB and GLB book of business.

2 unchanged sentences

The following table presents the balance sheet locations, fair values of derivative instruments in an asset or (liability) position, and notional values/payment provisions of our derivative instruments:

September 30, 2020 December 31, 2019

March 31, 2021 December 31, 2020

Balance Sheet

14 unchanged sentences

$ 2 $ ( 7 ) $ 813 $ — $ ( 17 ) $ 725

(AP) / (FPB) $ — $ ( 1,318 ) $ 2,071 $ — $ ( 897 ) $ 1,510

(AP) $ — $ ( 760 ) $ 1,506 $ — $ ( 1,089 ) $ 1,658

(1) Includes fair value of embedded derivatives.

(2) Related to GMDB and GLB book of business.

(3) Includes both future policy benefits reserves of $ 436 million and $ 441 million and fair value derivative adjustment of $ 882 million and $ 456 million at September 30, 2020 and December 31, 2019, respectively.

(3) 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.

At September 30, 2020 and December 31, 2019, net derivative liabilities of $ 45 million and $ 75 million, respectively, included in the table above were subject to a master netting agreement.

At March 31, 2021 and December 31, 2020, net derivative liabilities of $ 12 million and $ 30 million, respectively, included in the table above were subject to a master netting agreement.

The remaining derivatives included in the table above were not subject to a master netting agreement.

2 unchanged sentences

The following table presents net realized gains (losses) related to derivative instrument activity in the Consolidated statements of operations:

Three Months Ended Nine Months Ended

September 30 September 30

Three Months Ended

(in millions of U.S.

2 unchanged sentences

Foreign currency forward contracts $ ( 16 ) $ 43

Interest rate swaps — ( 55 ) — ( 270 )

All other futures contracts, options, and equities 125 ( 27 )

2 unchanged sentences

GLB and other derivative instruments:

$ 46 $ ( 106 ) $ ( 426 ) $ ( 57 )

GLB $ 319 $ ( 685 )

Futures contracts on equities (2)

( 52 ) ( 6 ) ( 30 ) ( 89 )

Other ( 1 ) ( 2 )

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(1) Includes embedded derivatives.

(2) Excludes foreign exchange gains (losses) related to GLB.

(2) Related to GMDB and GLB book of business.

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Investments in futures contracts may be made only to the extent that there are assets under management not otherwise committed.

Exchange-traded equity futures contracts are used to limit exposure to a severe equity market decline, which would cause an increase in expected claims and therefore, an increase in reserves for GMDB and GLB reinsurance business.

An option contract conveys to the holder the right, but not the obligation, to purchase or sell a specified amount or value of an underlying security at a fixed price.

29 unchanged sentences

Under the GLB program, as the assuming entity, Chubb is obligated to provide coverage until the expiration or maturity of the underlying deferred annuity contracts or the expiry of the reinsurance treaty.

Premiums received under the reinsurance treaties are classified as premium.

Expected losses allocated to premiums received are classified as Future policy benefits and valued similar to GMDB reinsurance.

Other changes in fair value arise principally from changes in expected losses allocated to expected future premiums.

The GLB is accounted for as a derivative and is recorded at fair value.

Fair value represents management’s estimate of an exit price and thus, includes a risk margin.

13 unchanged sentences

Remaining contractual maturity

September 30, 2020 December 31, 2019

March 31, 2021 December 31, 2020

(in millions of U.S.

8 unchanged sentences

Gross amount of recognized liability for securities lending payable $ 2,076 $ 1,844

At September 30, 2020 and December 31, 2019, our repurchase agreement obligations of $ 1,413 million and $ 1,416 million, respectively, were fully collateralized.

At March 31, 2021 and December 31, 2020, our repurchase agreement obligations of $ 1,405 million were fully collateralized.

In contrast to securities lending programs, the use of cash received is not restricted for the repurchase obligations.

2 unchanged sentences

Remaining contractual maturity

September 30, 2020 December 31, 2019

Up to 30 Days 30-90 Days Greater than

90 Days Total Up to 30 Days 30-90 Days Greater than

March 31, 2021 December 31, 2020

30-90 Days Greater than

90 Days Total 30-90 Days Greater than

90 Days Total

15 unchanged sentences

d) Fixed maturities

At September 30, 2020, we have commitments to purchase fixed income securities of $ 695 million over the next several years.

At March 31, 2021, we have commitments to purchase fixed income securities of $ 591 million over the next several years.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

1 unchanged sentence

e) Other investments

At September 30, 2020 included in Other investments in the Consolidated balance sheet are investments in limited partnerships and partially-owned investment companies with a carrying value of $ 5.5 billion.

At March 31, 2021, included in Other investments in the Consolidated balance sheet are investments in limited partnerships and partially-owned investment companies with a carrying value of $ 7.2 billion.

In connection with these investments, we have commitments that may require funding of up to $ 3.1 billion over the next several years.

1 unchanged sentence

f) Income taxes

At September 30, 2020, $ 50 million of unrecognized tax benefits remain out standing.

At March 31, 2021, $ 62 million of unrecognized tax benefits remain out standing.

It is reasonably possible that over the next twelve months, that the amount of unrecognized tax benefits may change resulting from the re-evaluation of unrecognized tax benefits arising from examinations by taxing authorities, settlements and the lapses of statutes of limitations.

The IRS commenced its field examination of Chubb’s federal income tax returns for tax years 2016, 2017, and 2018 during July 2020.

With few exceptions, Chubb is no longer subject to income tax examinations for years before 2012 .

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In the opinion of management, our ultimate liability for these matters could be, but we believe is not likely to be, material to our consolidated financial condition and results of operations.

At September 30, 2020 and December 31, 2019, the right-of-use asset was $ 470 million and $ 551 million, respectively, and is recorded within Other assets on the Consolidated balance sheets.

At September 30, 2020 and December 31, 2019, the lease liability was $ 517 million and $ 603 million, respectively, and is recorded within Accounts payable, accrued expenses, and other liabilities on the Consolidated balance sheets.

These leases consist principally of real estate operating leases that are amortized on a straight-line basis over the term of the lease.

At March 31, 2021 and December 31, 2020, the right-of-use asset was $ 448 million and $ 473 million, respectively, recorded within Other assets on the Consolidated balance sheets and the lease liability was $ 490 million and $ 517 million, respectively, which was recorded within Accounts payable, accrued expenses, and other liabilities on the Consolidated balance sheets.

These leases consist principally of real estate operating leases that are amortized on a straight-line basis over the term of the lease, which expire at various dates.

Shareholders’ equity

1 unchanged sentence

Though the par value of Common Shares is stated in Swiss francs, Chubb continues to use U.S.

dollars as its reporting currency for preparing consolidated financial statements.

dollars as its reporting currency for preparing the Consolidated Financial statements.

Under Swiss corporate law, dividends, including distributions through a reduction in par value (par value reduction) or from legal reserves, must be stated in Swiss francs though dividend payments are made by Chubb in U.S.

At September 30, 2020, our Common Shares had a par value of CHF 24.15 per share.

At March 31, 2021, our Common Shares had a par value of CHF 24.15 per share.

At our May 2020 and 2019 annual general meetings, our shareholders approved annual dividends for the following year of up to $ 3.12 per share and $ 3.00 per share, respectively, which were paid in four quarterly installments of $ 0.78 per share and $ 0.75 per share, respectively, at dates determined by the Board of Directors (Board) after the annual general meetings by way of a distribution from capital contribution reserves, transferred to free reserves for payment.

At our May 2020 annual general meeting, our shareholders approved an annual dividend for the following year of up to $ 3.12 per share, expected to be paid in four quarterly installments of $ 0.78 per share after the general meeting by way of distribution from capital contribution reserves, transferred to free reserves for payment.

The Board will determine the record and payment dates at which the annual dividend may be paid until the date of the 2021 annual general meeting, and is authorized to abstain from distributing a dividend at its discretion.

The following table presents dividend distributions per Common Share in Swiss francs (CHF) and U.S.

dollars (USD):

Three Months Ended Nine Months Ended

September 30 September 30

2020 2019 2020 2019

CHF USD CHF USD CHF USD CHF USD

Total dividend distributions per common share 0.71 $ 0.78 0.73 $ 0.75 2.18 $ 2.31 2.20 $ 2.23

Dividend distributions per Common Share for the three months ended March 31, 2021 and 2020 were $ 0.78 (CHF 0.70 ) and $ 0.75 (CHF 0.72 ), respectively.

Increases in Common Shares in treasury are due to open market repurchases of Common Shares and the surrender of Common Shares to satisfy tax withholding obligations in connection with the vesting of restricted stock and the forfeiture of unvested restricted stock.

Decreases in Common Shares in treasury are principally due to grants of restricted stock, exercises of stock options, purchases under the Employee Stock Purchase Plan (ESPP), and share cancellations.

At March 31, 2021, 27,928,305 Common Shares remain in treasury after share repurchases and 2,054,334 net shares issued under employee share-based compensation plans.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

Chubb Limited and Subsidiaries

Common Shares in treasury are used principally for issuance upon the exercise of employee stock options, grants of restricted stock, and purchases under the Employee Stock Purchase Plan (ESPP).

At our May 2020 annual general meeting, our shareholders approved the cancellation of 2,178,600 shares purchased under our share repurchase program during the period beginning September 23, 2019 and ending December 31, 2019.

The capital reduction by cancellation of shares was subject to publication requirements and a two-month waiting period in accordance with Swiss law and became effective August 3, 2020.

At September 30, 2020, 26,229,070 Common Shares remain in treasury after share repurchases, share cancellations, and 1,670,777 net shares issued under employee share-based compensation plans.

Chubb Limited securities repurchase authorizations

In December 2018, the Board authorized the repurchase of up to $ 1.5 billion of Chubb's Common Shares from December 1, 2018 through December 31, 2019.

In November 2019, the Board authorized the repurchase of up to $ 1.5 billion of Chubb's Common Shares from November 21, 2019 through December 31, 2020.

We suspended share repurchase activity during the second and third quarters of 2020, given the economic environment.

Subsequently, we resumed share repurchases on October 29, 2020 as disclosed below.

In November 2020, the Board authorized the repurchase of up to $ 1.5 billion of Chubb's Common Shares from November 19, 2020 through December 31, 2021.

The $ 1.5 billion November 2019 Board authorization remained effective through December 31, 2020.

Repurchases through December 31, 2020 were made under this authorization.

In February 2021, the Board approved an increase to the November 2020 share repurchase program of $ 1.0 billion to a total of $ 2.5 billion, effective through December 31, 2021.

The following table presents repurchases of Chubb's Common Shares conducted in a series of open market transactions under the Board authorizations:

Three Months Ended Nine Months Ended October 1, 2020 through October 29, 2020

September 30 September 30

Three Months Ended April 1, 2021 through

April 29, 2021

(in millions of U.S.

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2021 2020 2021 2020

Three Months Ended September 30 U.S.

Three Months Ended March 31 U.S.

Plans Non-U.S.

2 unchanged sentences

Service cost $ — $ 1 $ — $ 1 $ — $ —

Non-service cost:

Non-service cost (benefit):

Interest cost 18 5 25 6 — 1

3 unchanged sentences

Settlements — — 1 — — —

Total non-service (benefit) cost ( 31 ) ( 4 ) ( 16 ) ( 4 ) ( 20 ) ( 20 )

Net periodic (benefit) cost $ ( 31 ) $ ( 3 ) $ ( 4 ) $ ( 1 ) $ ( 20 ) $ ( 20 )

Total non-service cost (benefit) ( 46 ) ( 5 ) ( 30 ) ( 4 ) ( 20 ) ( 20 )

Net periodic benefit cost (benefit) $ ( 46 ) $ ( 4 ) $ ( 30 ) $ ( 3 ) $ ( 20 ) $ ( 20 )

The line items in which the service cost and non-service cost (benefit) components of net periodic benefit cost (benefit) are included in the Consolidated statements of operations were as follows:

Pension Benefit Plans Other Postretirement

Benefit Plans

2020 2019 2020 2019

Nine Months Ended September 30 U.S.

Plans Non-U.S.

(in millions of U.S.

Service cost $ — $ 3 $ 37 $ 8 $ — $ —

Non-service cost:

Interest cost 74 17 89 20 2 3

Expected return on plan assets ( 168 ) ( 32 ) ( 142 ) ( 33 ) ( 3 ) ( 3 )

Amortization of net actuarial loss — 1 — 2 — —

Amortization of prior service cost — 1 — — ( 60 ) ( 60 )

Settlements 3 — 1 — — —

Total non-service (benefit) cost ( 91 ) ( 13 ) ( 52 ) ( 11 ) ( 61 ) ( 60 )

Net periodic (benefit) cost $ ( 91 ) $ ( 10 ) $ ( 15 ) $ ( 3 ) $ ( 61 ) $ ( 60 )

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

Chubb Limited and Subsidiaries

The line items in which the service and non-service cost components of net periodic (benefit) cost are included in the Consolidated statements of operations were as follows:

Pension Benefit Plans Other Postretirement Benefit Plans

Three Months Ended September 30 2020 2019 2020 2019

(in millions of U.S.

Service cost:

Losses and loss expenses $ — $ 2 $ — $ —

Administrative expenses 1 13 — —

Total service cost 1 15 — —

Non-service cost:

Losses and loss expenses ( 3 ) ( 1 ) ( 2 ) ( 2 )

Administrative expenses ( 32 ) ( 19 ) ( 18 ) ( 18 )

Total non-service (benefit) cost ( 35 ) ( 20 ) ( 20 ) ( 20 )

Net periodic (benefit) cost $ ( 34 ) $ ( 5 ) $ ( 20 ) $ ( 20 )

Pension Benefit Plans Other Postretirement Benefit Plans

Nine Months Ended September 30 2020 2019 2020 2019

Three Months Ended March 31 2021 2020 2021 2020

(in millions of U.S.

3 unchanged sentences

Total service cost 1 1 — —

Non-service cost:

Non-service cost (benefit):

Losses and loss expenses ( 5 ) ( 3 ) ( 2 ) ( 2 )

Administrative expenses ( 46 ) ( 31 ) ( 18 ) ( 18 )

Total non-service (benefit) cost ( 104 ) ( 63 ) ( 61 ) ( 60 )

Net periodic (benefit) cost $ ( 101 ) $ ( 18 ) $ ( 61 ) $ ( 60 )

Total non-service cost (benefit) ( 51 ) ( 34 ) ( 20 ) ( 20 )

Net periodic benefit cost (benefit) $ ( 50 ) $ ( 33 ) $ ( 20 ) $ ( 20 )

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

4 unchanged sentences

Corporate results primarily include income and expenses not attributable to reportable segments and losses and loss expenses of asbestos and environmental (A&E) liabilities and certain other non-A&E run-off exposures.

Management uses underwriting income (loss) as the main measure of segment performance.

Management uses underwriting income (loss) as the basis for segment performance.

Chubb calculates underwriting income (loss) by subtracting Losses and loss expenses, Policy benefits, Policy acquisition costs, and Administrative expenses from Net premiums earned.

To calculate Segment income (loss), include Net investment income (loss), Other (income) expense, and Amortization expense of purchased intangibles.

Our main measure of segment performance is Segment income (loss), which also includes Net investment income (loss), Other (income) expense, and Amortization of purchased intangibles acquired by the segment.

We determined that this definition of segment income (loss) is appropriate and aligns with how the business is managed.

We continue to evaluate our segments as our business continues to evolve and may further refine our segments and segment income (loss) measures.

Certain items are presented in a different manner for segment reporting purposes than in the Consolidated Financial Statements.

These items are reconciled to the consolidated presentation in the Segment measure reclass column below.

These items include:

These items are reconciled to the consolidated presentation in the Segment measure reclass column below and include:

• Losses and loss expenses include realized gains and losses on crop derivatives.

8 unchanged sentences

For the Three Months Ended

September 30, 2020

March 31, 2021

(in millions of U.S.

16 unchanged sentences

Income tax expense 338 — 338

Net income (loss) $ ( 196 ) $ — $ 1,194

Net income $ 697 $ — $ 2,300

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

1 unchanged sentence

For the Three Months Ended

September 30, 2019

March 31, 2020

(in millions of U.S.

10 unchanged sentences

Other (income) expense 6 2 — 4 — ( 12 ) 23 32 55

Amortization expense of purchased intangibles

— 3 7 11 — 1 54 — 76

Segment income (loss) $ 952 $ 263 $ 2 $ 349 $ 101 $ 95 $ ( 160 ) $ 14 $ 1,616

Net realized gains (losses) including OTTI

( 141 ) ( 14 ) ( 155 )

Interest expense 138 — 138

Chubb integration expenses 2 — 2

Income tax expense 230 — 230

Net income (loss) $ ( 671 ) $ — $ 1,091

For the Nine Months Ended

September 30, 2020

(in millions of U.S.

dollars) North America Commercial P&C Insurance North America Personal P&C Insurance North America Agricultural Insurance Overseas General Insurance Global Reinsurance Life Insurance Corporate Segment Measure Reclass Chubb Consolidated

Net premiums written $ 10,750 $ 3,719 $ 1,604 $ 6,857 $ 606 $ 1,874 $ — $ — $ 25,410

Net premiums earned 10,427 3,623 1,441 6,838 520 1,838 — — 24,687

Losses and loss expenses 8,123 2,406 1,223 3,935 314 556 342 ( 2 ) 16,897

Policy benefits — — — — — 542 — 8 550

Policy acquisition costs 1,452 724 96 1,903 127 551 — — 4,853

Administrative expenses 751 199 12 759 28 238 214 — 2,201

Underwriting income (loss) 101 294 110 241 51 ( 49 ) ( 556 ) ( 6 ) 186

Net investment income (loss) 1,544 195 23 396 214 285 ( 65 ) ( 64 ) 2,528

Other (income) expense 19 4 1 10 1 ( 52 ) ( 283 ) ( 72 ) ( 372 )

Amortization expense of purchased intangibles

— 8 20 33 — 3 153 — 217

Amortization expense of

purchased intangibles — 3 7 12 — 1 50 — 73

Segment income (loss) $ 963 $ 265 $ 16 $ 278 $ 113 $ 94 $ ( 174 ) $ 2 $ 1,557

3 unchanged sentences

Net income (loss) $ ( 1,477 ) $ — $ 252

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

Chubb Limited and Subsidiaries

For the Nine Months Ended

September 30, 2019

(in millions of U.S.

Net premiums written $ 9,937 $ 3,616 $ 1,534 $ 6,881 $ 540 $ 1,770 $ — $ — $ 24,278

Net premiums earned 9,660 3,509 1,374 6,595 487 1,730 — — 23,355

Losses and loss expenses 6,238 2,178 1,163 3,385 245 581 83 ( 8 ) 13,865

Policy benefits — — — — — 495 — 20 515

Policy acquisition costs 1,377 708 90 1,855 127 454 — — 4,611

Administrative expenses 755 211 9 771 26 237 211 — 2,220

Underwriting income (loss) 1,290 412 112 584 89 ( 37 ) ( 294 ) ( 12 ) 2,144

Net investment income (loss) 1,584 194 22 444 206 278 ( 98 ) ( 62 ) 2,568

Other (income) expense 17 2 1 11 — ( 37 ) ( 238 ) ( 82 ) ( 326 )

Amortization expense of purchased intangibles

— 9 21 34 — 2 163 — 229

Segment income (loss) $ 2,857 $ 595 $ 112 $ 983 $ 295 $ 276 $ ( 317 ) $ 8 $ 4,809

Net realized gains (losses) including OTTI

( 467 ) ( 8 ) ( 475 )

Interest expense 418 — 418

Chubb integration expenses 9 — 9

Income tax expense 626 — 626

Net income (loss) $ ( 1,837 ) $ — $ 3,281

Underwriting assets are reviewed in total by management for purposes of decision-making.

Other than Unpaid losses and loss expenses, Reinsurance recoverables, Goodwill and Other intangible assets, Chubb does not allocate assets to its segments.

Other than Unpaid losses and loss expenses, Future policy benefits, Reinsurance recoverables, Goodwill and Other intangible assets, Chubb does not allocate assets to its segments.

Earnings per share

Three Months Ended Nine Months Ended

September 30 September 30

Three Months Ended

(in millions of U.S.

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Information provided in connection with outstanding debt of subsidiaries

The following tables present condensed consolidating financial information at September 30, 2020 and December 31, 2019, and for the three and nine months ended September 30, 2020 and 2019 for Chubb Limited (Parent Guarantor) and Chubb INA Holdings Inc.

(Subsidiary Issuer).

The Subsidiary Issuer is an indirect 100 percent-owned subsidiary of the Parent Guarantor.

Chubb INA Holdings Inc.

(Subsidiary Issuer) is an indirect 100 percent-owned and consolidated subsidiary of Chubb Limited (Parent Guarantor).

The Parent Guarantor fully and unconditionally guarantees certain of the debt of the Subsidiary Issuer.

Condensed consolidating financial information of the Parent Guarantor and Subsidiary Issuer are presented on the equity method of accounting.

The revenues and expenses and cash flows of the subsidiaries of the Subsidiary Issuer are presented in the Other Chubb Limited Subsidiaries column on a combined basis.

Condensed Consolidating Balance Sheet at September 30, 2020

Certain information included relates to our compliance with our debt covenants.

The following table presents the condensed balance sheets of Chubb Limited and Chubb INA Holdings Inc.:

Chubb Limited

(Parent Guarantor) (1)

Chubb INA Holdings Inc.

(Subsidiary Issuer)

(in millions of U.S.

dollars) Chubb

Guarantor) Chubb INA

Holdings Inc.

Issuer) Other Chubb

Subsidiaries Consolidating

Adjustments and Eliminations Chubb Limited

dollars) March 31, 2021 December 31, 2020 March 31, 2021 December 31, 2020

Investments $ — $ — $ 206 $ 197

31 — 1,799 ( 123 ) 1,707

Restricted cash

— — 166 — 166

Insurance and reinsurance balances receivable

— — 13,684 ( 3,096 ) 10,588

Reinsurance recoverable on losses and loss expenses

— — 25,482 ( 9,812 ) 15,670

Reinsurance recoverable on policy benefits — — 298 ( 95 ) 203

Value of business acquired — — 286 — 286

Goodwill and other intangible assets — — 21,103 — 21,103

Investments in subsidiaries 53,715 54,125 — ( 107,840 ) —

Cash 23 84 1 1

Due from subsidiaries and affiliates, net 3,510 3,522 — —

1 unchanged sentence

Total assets $ 3,541 $ 3,616 $ 622 $ 661

Unpaid losses and loss expenses $ — $ — $ 77,467 $ ( 9,562 ) $ 67,905

Unearned premiums — — 18,695 ( 1,193 ) 17,502

Future policy benefits — — 6,050 ( 95 ) 5,955

Due to subsidiaries and affiliates, net $ — $ — $ 3,079 $ 3,008

Affiliated notional cash pooling programs — — 361 272

— 123 — ( 123 ) —

Repurchase agreements — — 1,413 — 1,413

Short-term debt — 1,300 — — 1,300

Long-term debt — — 14,879 14,948

3 unchanged sentences

Total shareholders’ equity (2)

Total liabilities and shareholders’ equity $ 56,745 $ 55,240 $ 201,771 $ ( 125,970 ) $ 187,786

(1) Chubb maintains two notional multicurrency cash pools (Pools) with a third-party bank.

Various Chubb entities participate in one or the other of the Pools, pursuant to which credit and debit balances in individual Chubb accounts are translated daily into a single currency and pooled on a notional basis.

Individual Chubb entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero.

At September 30, 2020, the cash balance of one or more entities was negative;

however, the overall Pool balances were positive.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

Chubb Limited and Subsidiaries

Condensed Consolidating Balance Sheet at December 31, 2019

(in millions of U.S.

dollars) Chubb

Guarantor) Chubb INA

Holdings Inc.

Issuer) Other Chubb

Subsidiaries Consolidating

Adjustments and Eliminations Chubb Limited

Investments $ — $ 1,013 $ 108,221 $ — $ 109,234

3,204 3,293 ( 19,286 ) ( 19,293 )

Restricted cash

— — 109 — 109

Insurance and reinsurance balances receivable

— — 12,920 ( 2,563 ) 10,357

Reinsurance recoverable on losses and loss expenses

— — 24,780 ( 9,599 ) 15,181

Reinsurance recoverable on policy benefits — — 292 ( 95 ) 197

Value of business acquired — — 306 — 306

Goodwill and other intangible assets — — 21,359 — 21,359

Investments in subsidiaries 50,853 52,076 — ( 102,929 ) —

Due from subsidiaries and affiliates, net 4,776 — — ( 4,776 ) —

Other assets 12 408 20,072 ( 1,829 ) 18,663

Total assets $ 55,643 $ 53,939 $ 189,152 $ ( 121,791 ) $ 176,943

Unpaid losses and loss expenses $ — $ — $ 71,916 $ ( 9,226 ) $ 62,690

Unearned premiums — — 17,978 ( 1,207 ) 16,771

Future policy benefits — — 5,909 ( 95 ) 5,814

Due to subsidiaries and affiliates, net — 4,446 330 ( 4,776 ) —

Repurchase agreements — — 1,416 — 1,416

Short-term debt — 1,298 1 — 1,299

Long-term debt — 13,559 — — 13,559

Trust preferred securities — 308 — — 308

Other liabilities 312 1,649 21,352 ( 3,558 ) 19,755

Total liabilities 312 21,260 118,902 ( 18,862 ) 121,612

Total shareholders’ equity 55,331 32,679 70,250 ( 102,929 ) 55,331

Total liabilities and shareholders’ equity $ 3,541 $ 3,616 $ 622 $ 661

(1) Chubb maintains two notional multicurrency cash pools (Pools) with a third-party bank.

Refer to the 2019 Form 10-K for additional information.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

Chubb Limited and Subsidiaries

Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)

For the Three Months Ended September 30, 2020 Chubb

Guarantor) Chubb INA

Holdings Inc.

Issuer) Other Chubb

Subsidiaries Consolidating

Adjustments and Eliminations Chubb

(in millions of U.S.

Net premiums written $ — $ — $ 9,078 $ — $ 9,078

Net premiums earned — — 8,765 — 8,765

Net investment income — 1 839 — 840

Equity in earnings of subsidiaries 1,174 516 — ( 1,690 ) —

Net realized gains (losses)

3 ( 192 ) 48 — ( 141 )

Losses and loss expenses — — 5,835 — 5,835

Policy benefits — — 198 — 198

Policy acquisition costs and administrative expenses

21 ( 33 ) 2,390 — 2,378

Interest (income) expense ( 34 ) 151 13 — 130

Other (income) expense ( 10 ) ( 2 ) ( 473 ) — ( 485 )

Amortization of purchased intangibles — — 72 — 72

Income tax expense (benefit) 6 ( 66 ) 202 — 142

Net income $ 1,194 $ 275 $ 1,415 $ ( 1,690 ) $ 1,194

Comprehensive income $ 1,952 $ 812 $ 2,180 $ ( 2,992 ) $ 1,952

Condensed Consolidating Statements of Operations and Comprehensive Income

For the Three Months Ended September 30, 2019 Chubb

Guarantor) Chubb INA

Holdings Inc.

Issuer) Other Chubb

Subsidiaries Consolidating

Adjustments and Eliminations Chubb

(in millions of U.S.

Net premiums written $ — $ — $ 8,622 $ — $ 8,622

Net premiums earned — — 8,327 — 8,327

Net investment income 1 ( 3 ) 875 — 873

Equity in earnings of subsidiaries 1,053 824 — ( 1,877 ) —

Net realized gains (losses) including OTTI

( 4 ) 68 ( 219 ) — ( 155 )

Losses and loss expenses — — 5,052 — 5,052

Policy benefits — — 158 — 158

Policy acquisition costs and administrative expenses

22 ( 5 ) 2,338 — 2,355

Interest (income) expense ( 59 ) 171 26 — 138

Other (income) expense ( 7 ) ( 3 ) ( 47 ) — ( 57 )

Amortization of purchased intangibles — — 76 — 76

Chubb integration expenses — — 2 — 2

Income tax expense (benefit) 3 ( 33 ) 260 — 230

Net income $ 1,091 $ 759 $ 1,118 $ ( 1,877 ) $ 1,091

Comprehensive income $ 1,473 $ 1,138 $ 1,517 $ ( 2,655 ) $ 1,473

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

Chubb Limited and Subsidiaries

Condensed Consolidating Statements of Operations and Comprehensive Income

For the Nine Months Ended September 30, 2020 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.

Net premiums written $ — $ — $ 25,410 $ — $ 25,410

Net premiums earned — — 24,687 — 24,687

Net investment income ( 2 ) 6 2,524 — 2,528

Equity in earnings of subsidiaries 1,064 838 — ( 1,902 ) —

Net realized gains (losses) 5 ( 271 ) ( 803 ) — ( 1,069 )

Losses and loss expenses — — 16,897 — 16,897

Policy benefits — — 550 — 550

Policy acquisition costs and administrative expenses 66 ( 101 ) 7,089 — 7,054

Interest (income) expense ( 103 ) 448 45 — 390

Other (income) expense ( 27 ) 1 ( 346 ) — ( 372 )

Amortization of purchased intangibles — — 217 — 217

Income tax expense (benefit) 16 ( 125 ) 404 — 295

Net income $ 1,115 $ 350 $ 1,552 $ ( 1,902 ) $ 1,115

Comprehensive income $ 2,352 $ 1,484 $ 2,840 $ ( 4,324 ) $ 2,352

Condensed Consolidating Statements of Operations and Comprehensive Income

For the Nine Months Ended September 30, 2019 Chubb

Limited (Parent Guarantor) Chubb INA Holdings Inc.

(Subsidiary Issuer) Other Chubb Limited Subsidiaries Consolidating Adjustments and Eliminations Chubb Limited Consolidated

(1) Excludes investment in subsidiary issuer (presented separately).

(2) Total shareholders' equity of Parent Guarantor excludes $ 55.9 billion and $ 56.1 billion of investment in subsidiaries, including Subsidiary Issuer, at March 31, 2021 and December 31, 2020, respectively.

Total shareholders' equity of Subsidiary Issuer excludes $ 54.5 billion and $ 55.2 billion of investment in subsidiaries at March 31, 2021 and December 31, 2020, respectively.

The following table presents the condensed statements of operations and comprehensive income of Chubb Limited and Chubb INA Holdings Inc.:

Chubb Limited

(Parent Guarantor) (1)

Chubb INA Holdings Inc.

(Subsidiary Issuer)

Three Months Ended March 31 2021 2020 2021 2020

(in millions of U.S.

Net premiums written $ — $ — $ 24,278 $ — $ 24,278

Net premiums earned — — 23,355 — 23,355

Net investment income 3 ( 13 ) 2,578 — 2,568

Equity in earnings of subsidiaries 3,147 2,345 — ( 5,492 ) —

Net realized gains (losses) including OTTI 1 34 ( 510 ) — ( 475 )

Losses and loss expenses — — 13,865 — 13,865

Policy benefits — — 515 — 515

Policy acquisition costs and administrative expenses 64 ( 25 ) 6,792 — 6,831

Net investment income (loss) $ 1 $ ( 2 ) $ 1 $ 4

Net realized gains (loss) 13 ( 21 ) 67 113

Administrative expenses 22 24 ( 52 ) ( 38 )

Interest (income) expense ( 34 ) ( 34 ) 145 148

Other (income) expense ( 13 ) ( 9 ) ( 5 ) 8

Amortization of purchased intangibles — — 229 — 229

Chubb integration expenses — 2 7 — 9

Income tax expense (benefit) 11 — ( 22 ) 7

Net income $ 3,281 $ 1,972 $ 3,520 $ ( 5,492 ) $ 3,281

Comprehensive income $ 6,250 $ 4,476 $ 6,486 $ ( 10,962 ) $ 6,250

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

Chubb Limited and Subsidiaries

Condensed Consolidating Statement of Cash Flows

Nine Months Ended September 30, 2020 Chubb

Guarantor) Chubb INA

Holdings Inc.

Issuer) Other Chubb

Subsidiaries Consolidating

Adjustments and Eliminations Chubb

(in millions of U.S.

Net cash flows from (used for) operating activities $ 980 $ ( 363 ) $ 7,714 $ ( 1,090 ) $ 7,241

Cash flows from investing activities

Purchases of fixed maturities available for sale — ( 38 ) ( 20,755 ) — ( 20,793 )

Purchases of fixed maturities held to maturity — — ( 42 ) — ( 42 )

Purchases of equity securities — — ( 3,622 ) — ( 3,622 )

Sales of fixed maturities available for sale — 9 9,528 — 9,537

Sales of equity securities — — 1,526 — 1,526

Maturities and redemptions of fixed maturities available for sale — 35 8,674 — 8,709

Maturities and redemptions of fixed maturities held to maturity — — 841 — 841

Net change in short-term investments — 256 ( 690 ) — ( 434 )

Net derivative instruments settlements — 66 ( 140 ) — ( 74 )

Private equity contributions — — ( 1,056 ) — ( 1,056 )

Private equity distributions — — 588 — 588

Net deposit paid on share acquisition — — ( 503 ) — ( 503 )

Payment for Huatai Group interest — — ( 1,054 ) — ( 1,054 )

Capital contribution ( 1,200 ) — — 1,200 —

Other ( 2 ) ( 3 ) ( 347 ) — ( 352 )

Net cash flows from (used for) investing activities ( 1,202 ) 325 ( 7,052 ) 1,200 ( 6,729 )

Cash flows from financing activities

Dividends paid on Common Shares ( 1,035 ) — — — ( 1,035 )

Common Shares repurchased ( 333 ) — — — ( 333 )

Proceeds from issuance of long-term debt — 988 — — 988

Proceeds from issuance of repurchase agreements — — 1,402 — 1,402

Repayment of repurchase agreements — — ( 1,402 ) — ( 1,402 )

Proceeds from share-based compensation plans — — 77 — 77

Dividend to parent company — — ( 1,090 ) 1,090 —

Advances (to) from affiliates 1,621 ( 1,511 ) ( 110 ) — —

Capital contribution — — 1,200 ( 1,200 ) —

Net proceeds from (payments to) affiliated notional cash pooling programs (1)

— 123 — ( 123 ) —

Policyholder contract deposits — — 322 — 322

Policyholder contract withdrawals — — ( 253 ) — ( 253 )

Net cash flows from (used for) financing activities 253 ( 400 ) 146 ( 233 ) ( 234 )

Effect of foreign currency rate changes on cash and restricted cash ( 2 ) ( 4 ) ( 45 ) — ( 51 )

Net increase (decrease) in cash and restricted cash 29 ( 442 ) 763 ( 123 ) 227

Cash and restricted cash – beginning of period (1)

2 442 1,202 — 1,646

Cash and restricted cash – end of period (1)

$ 31 $ — $ 1,965 $ ( 123 ) $ 1,873

(1) Chubb maintains two notional multicurrency cash pools (Pools) with a third-party bank.

Individual Chubb entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero.

At September 30, 2020 and December 31, 2019, the cash balance of one or more entities was negative;

however, the overall Pool balances were positive.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – continued (Unaudited)

Chubb Limited and Subsidiaries

Condensed Consolidating Statement of Cash Flows

Nine Months Ended September 30, 2019 Chubb

Guarantor) Chubb INA

Holdings Inc.

Issuer) Other Chubb

Subsidiaries Consolidating

Adjustments and Eliminations Chubb

(in millions of U.S.

Net cash flows from operating activities $ 421 $ 1,118 $ 5,234 $ ( 1,860 ) $ 4,913

Cash flows from investing activities

Purchases of fixed maturities available for sale

— ( 16 ) ( 19,762 ) — ( 19,778 )

Purchases of fixed maturities held to maturity

— — ( 143 ) — ( 143 )

Purchases of equity securities — — ( 466 ) — ( 466 )

Sales of fixed maturities available for sale — 1 10,435 — 10,436

Sales of equity securities — — 577 — 577

Maturities and redemptions of fixed maturities

available for sale

— 18 6,372 — 6,390

Maturities and redemptions of fixed maturities held to maturity

— — 814 — 814

Net change in short-term investments — ( 5 ) 207 — 202

Net derivative instruments settlements — ( 55 ) ( 592 ) — ( 647 )

Private equity contributions — — ( 1,093 ) — ( 1,093 )

Private equity distributions

— — 973 — 973

Payment for Huatai Group interest — — ( 329 ) — ( 329 )

Capital contribution ( 1,000 ) ( 110 ) — 1,110 —

Other — ( 10 ) ( 487 ) — ( 497 )

Net cash flows used for investing activities

( 1,000 ) ( 177 ) ( 3,494 ) 1,110 ( 3,561 )

Cash flows from financing activities

Dividends paid on Common Shares ( 1,014 ) — — — ( 1,014 )

Common Shares repurchased — — ( 1,203 ) — ( 1,203 )

Proceeds from issuance of long-term debt

— 1,286 — — 1,286

Repayment of long-term debt

— ( 500 ) ( 1 ) — ( 501 )

Proceeds from issuance of repurchase agreements

— — 2,394 — 2,394

Repayment of repurchase agreements

— — ( 2,396 ) — ( 2,396 )

Proceeds from share-based compensation plans

— — 155 — 155

Dividend to parent company

— — ( 1,860 ) 1,860 —

Advances (to) from affiliates

996 ( 1,715 ) 719 — —

Capital contribution — — 1,110 ( 1,110 ) —

Net proceeds from (payments to) affiliated notional cash pooling programs (1)

593 ( 15 ) — ( 578 ) —

Policyholder contract deposits — — 376 — 376

Policyholder contract withdrawals — — ( 221 ) — ( 221 )

Net cash flows from (used for) financing activities

575 ( 944 ) ( 927 ) 172 ( 1,124 )

Effect of foreign currency rate changes on cash and restricted cash

Net increase (decrease) in cash and restricted cash 1 ( 2 ) 828 ( 578 ) 249

Cash and restricted cash – beginning of period (1)

1 2 1,989 ( 652 ) 1,340

Cash and restricted cash – end of period (1)

Net income (loss) (2)

$ 28 $ ( 4 ) $ 2 $ ( 8 )

(1) Chubb maintains two notional multicurrency cash pools (Pools) with a third-party bank.

Individual Chubb entities are permitted to overdraw on their individual accounts provided the overall Pool balances do not fall below zero.

At September 30, 2019 and December 31, 2018, the cash balance of one or more entities was negative;

however, the overall Pool balances were positive.

Comprehensive income (loss) $ 28 $ ( 4 ) $ 1 $ ( 38 )

(1) Excludes investment in subsidiary issuer (presented separately).

(2) Net income of Parent Guarantor excludes equity in earnings from investment in subsidiaries, including Subsidiary Issuer, of $ 2,272 million and $ 256 million for the three months ended March 31, 2021 and 2020, respectively.

Net income of Subsidiary Issuer excludes equity in earnings from investment in subsidiaries of $ 1,031 million and $ 593 million for the three months ended March 31, 2021 and 2020, respectively .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements