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Item 2. Management’s Discussion and Analysis

2022-10-28 compared with 2022-07-29 · 320 added, 329 removed, 956 unchanged (40% of the section changed)

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

The following is a discussion of our results of operations, financial condition, and liquidity and capital resources as of and for the three and six months ended June 30, 2022.

The following is a discussion of our results of operations, financial condition, and liquidity and capital resources as of and for the three and nine months ended September 30, 2022.

All comparisons in this discussion are to the corresponding prior year period unless otherwise indicated.

18 unchanged sentences

Net Investment Income

Interest Expense

Critical Accounting Estimates

51 unchanged sentences

Chubb Limited, which is headquartered in Zurich, Switzerland, and its direct and indirect subsidiaries (collectively, the Chubb Group of Companies, Chubb, we, us, or our) are a global insurance and reinsurance organization, serving the needs of a diverse group of clients worldwide.

At June 30, 2022, we had total assets of $196 billion and shareholders’ equity of $52 billion.

At September 30, 2022, we had total assets of $198 billion and shareholders’ equity of $48 billion.

Chubb was incorporated in 1985 at which time it opened its first business office in Bermuda and continues to maintain operations in Bermuda.

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For more information on our segments refer to “Segment Information” under Item 1 in our 2021 Form 10-K.

On July 1, 2022, we completed the acquisition of the life and non-life insurance companies that house the personal accident, supplemental health, and life insurance business of Cigna in six Asia-Pacific markets.

Chubb paid $5.36 billion in cash for the operations, which include Cigna's accident and health (A&H) and life business in Korea, Taiwan, New Zealand, Thailand, Hong Kong, and Indonesia.

The efficiencies created by the transaction are expected to provide greater flexibility for the company to invest in people, technology, products and distribution in the region.

With the acquisition completed on July 1, we will have a full quarter of earnings in the third quarter of 2022.

We now expect expense synergies to reach a run-rate of about $100 million pre-tax, which is higher than our initial estimate.

To achieve that run-rate savings, we expect one-time pre-tax integration costs over the next three years to be $140 million on an economic basis, as the deal price was reduced by $30 million of non-cash employee-related retention costs.

The $30 million will also be recorded as an integration cost, resulting in total expected integration costs of $170 million pre-tax.

Consolidated Operating Results – Three and Six Months Ended June 30, 2022 and 2021

Three Months Ended Six Months Ended

June 30 % Change June 30 % Change

Our results for the three and nine months ended September 30, 2022, include the results of these acquired businesses from July 1, 2022, and are included in our Life Insurance segment and, to a lesser extent, Overseas General Insurance segment according to the nature of the business written.

Refer to Note 2 to the Consolidated Financial Statements for additional information on our acquisition.

Consolidated Operating Results – Three and Nine Months Ended September 30, 2022 and 2021

Three Months Ended Nine Months Ended

September 30 % Change September 30 % Change

(in millions of U.S.

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Net premiums written - constant dollars (1)

17.3 % 12.1 %

Net premiums earned 11,535 10,000 15.3 % 29,838 27,034 10.4 %

17 unchanged sentences

Amounts are calculated by translating prior period results using the same local currency exchange rates as the comparable current period.

Financial Highlights for the Three Months Ended June 30, 2022

• Net income was $1.2 billion compared with $2.3 billion in the prior year period.

Net income in the current quarter was driven by strong underwriting results, including growth in net premiums earned and improvements in our combined ratios.

Net income is lower compared to prior year, reflecting the after-tax mark-to-market losses on public and private equities of $345 million and $144 million, respectively, compared to gains of $82 million and $712 million, respectively, in the prior year.

Additionally, losses in the fixed income portfolio were higher year-over-year by $362 million after-tax.

• Consolidated net premiums written were $10.3 billion, up 7.9 percent, or 10.0 percent in constant dollars, primarily from growth in commercial lines and consumer lines of 10.6 percent and 2.5 percent, respectively, or 12.1 percent and 5.5 percent in constant dollars, respectively.

Financial Highlights for the Three Months Ended September 30, 2022

• Net income was $812 million compared with $1.8 billion in the prior year period.

Net income in the current quarter was driven by strong underwriting results, including growth in net premiums earned and improvement in our combined ratios.

Net income is lower compared to prior year, reflecting the after-tax mark-to-market losses on private equities of $231 million, compared to gains of $705 million in the prior year.

• Consolidated net premiums written were $12.0 billion, up 14.4 percent, or 17.3 percent in constant dollars.

The acquisition of Cigna's business in Asia added 7.1 percentage points, or 7.2 percentage points in constant dollars, to the growth in net premiums written.

• Consolidated net premiums earned were $11.5 billion, up 15.3 percent, or 18.6 percent in constant dollars.

Commercial lines growth was 13.0 percent, or 14.8 percent in constant dollars, while consumer lines were essentially flat, or up 2.8 percent in constant dollars.

• Total pre-tax and after-tax catastrophe losses were $291 million (3.2 percentage points of the P&C combined ratio) and $241 million, respectively, compared with $280 million (3.4 percentage points of the P&C combined ratio) and $226 million, respectively, in the prior year period.

Catastrophe losses in the current quarter were from weather-related events globally with approximately 79 percent in the U.S.

and 21 percent internationally.

• Total pre-tax and after-tax favorable prior period development were $247 million (2.7 percentage points of the P&C combined ratio) and $205 million, respectively, including pre-tax adverse development of $155 million for molestation claims, predominantly reviver statute-related.

Excluding the adverse development, we had pre-tax favorable development of

$402 million, with 59 percent in long-tail lines, and 41 percent in short-tail lines.

This compares with pre-tax and after-tax favorable prior period development of $268 million (3.3 percentage points of the P&C combined ratio) and $224 million, respectively, in the prior year period.

The acquisition of Cigna's business in Asia added 7.3 percentage points, or 7.5 percentage points in constant dollars, to the growth in net premiums earned.

• Total pre-tax and after-tax catastrophe losses were $1.2 billion (11.3 percentage points of the P&C combined ratio) and $949 million, respectively, compared with $1.1 billion (12.2 percentage points of the P&C combined ratio) and $943 million, respectively, in the prior year period.

Catastrophe losses in the current quarter were primarily from Hurricane Ian losses of $975 million pre-tax and global weather-related events.

• Total pre-tax and after-tax favorable prior period development were $222 million (2.2 percentage points of the P&C combined ratio) and $162 million, respectively, including pre-tax adverse development of $52 million related to legacy environmental exposures.

Excluding the adverse development, we had pre-tax favorable development of $274 million, with 5 percent in long-tail lines, and 95 percent in short-tail lines.

This compares with pre-tax and after-tax favorable prior

period development of $321 million (3.6 percentage points of the P&C combined ratio) and $227 million, respectively, in the prior year period.

• The P&C combined ratio was 93.1 percent compared with 93.4 percent in the prior year period.

The P&C current accident year (CAY) combined ratio excluding catastrophe losses was 84.0 percent compared with 84.8 percent in the prior year period.

The current year ratios decreased due to underlying loss ratio improvement, including earned rate exceeding lost cost trends, and the favorable impact of higher net premiums earned on the expense ratio.

The current year ratios decreased due to the favorable impact of higher net premiums earned on the expense ratio.

• Net investment income was a record $979 million compared with $866 million in the prior year period.

• Operating cash flow was $2.7 billion for the quarter compared with $3.1 billion in the prior year period.

• Shareholders' equity decreased by $5.0 billion in the quarter, as net income of $1.2 billion was more than offset by net unrealized losses on investments of $4.1 billion after-tax from rising interest rates and $746 million related to cumulative foreign exchange translation.

In addition, shareholders' equity reflected total capital returned to shareholders in the quarter of $1.5 billion, including share repurchases of $1.1 billion, at an average purchase price of $206.11 per share, and dividends of $348 million.

• Operating cash flow was $3.4 billion compared with $3.3 billion in the prior year period.

• Shareholders' equity decreased by $4.0 billion in the quarter, as net income of $812 million was more than offset by net unrealized losses on investments of $2.9 billion after-tax from rising interest rates and $1.0 billion related to cumulative foreign exchange translation.

In addition, shareholders' equity reflected total capital returned to shareholders in the quarter of $1.0 billion, including share repurchases of $685 million, at an average purchase price of $186.22 per share, and dividends of $346 million.

Net Premiums Written Three Months Ended

June 30 % Change Six Months Ended

September 30 % Change Nine Months Ended

September 30 %

(in millions of U.S.

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(1) Commercial multiple peril represents retail package business (property and general liability).

(2) For purposes of this schedule only, A&H results from our Combined North America and International businesses, normally included in the Life Insurance and Overseas General Insurance segments, respectively, as well as the A&H results of our North America Commercial P&C segment, are included in Global A&H lines above.

The increase in consolidated net premiums written for the three and six months ended June 30, 2022 reflects growth across most lines of business.

For the three months ended June 30, 2022, commercial lines growth was 10.6 percent and consumer lines growth was 2.5 percent, or 12.1 percent and 5.5 percent, respectively, on a constant dollar basis, driven by higher new business, positive rate increases, and strong renewal retention.

• Commercial casualty grew primarily in North America, Europe, and Asia, driven by higher new business and strong retention, including exposure and rate increases.

• Workers' compensation growth for the six months ended June 30, 2022 was due to exposure increases in North America.

• Financial lines grew in North America, Asia, and Europe reflecting higher new business, strong retention and positive rate increases.

(2) For purposes of this schedule only, A&H results include Combined North America and International businesses, which are normally included in the Life Insurance and Overseas General Insurance segments, respectively, as well as the A&H results of our North America Commercial P&C segment, are included in Global A&H lines above.

The increase in consolidated net premiums written for the three and nine months ended September 30, 2022, reflects growth across most lines of business driven by positive rate increases, new business, and strong renewal retention.

The acquisition of Cigna's business in Asia contributed $738 million for the three and nine months ended September 30, 2022.

• Commercial casualty grew primarily in North America, Europe, and Asia, driven by strong new business and retention, including exposure and rate increases.

• Workers' compensation decreased for the quarter due to a favorable COVID-related exposure adjustment in the prior year.

Growth for the nine months ended September 30, 2022, was due to exposure increases in North America.

• Financial lines decreased for the quarter as growth in Asia and Latin America was more than offset by lower retention and lower new business in North America.

The year-to-date increase reflects growth across most regions from strong new business and retention, and rate increases.

• Surety increased due to strong new business in North America.

• Commercial multiple peril increased due to strong new business and renewal retention, including exposure and positive rate increases in North America.

• Property and other short-tail lines grew globally due to strong new business and renewal retention, including positive rate increases and increased exposure.

• Agriculture increased for the three and six months ended June 30, 2022 due to underlying growth in crop insurance, reflecting higher commodity prices and policy count growth.

Partially offsetting growth for the six months was a return of premium to the U.S.

• Agriculture increased due to underlying growth in crop insurance, reflecting higher commodity prices, higher reported acreage from policyholders, and policy count growth.

Partially offsetting growth for the nine months was a return of premium to the U.S.

government in the first quarter of 2022 of $161 million.

1 unchanged sentence

Partially offsetting growth in North America were additional cancellations in parts of California exposed to wildfires.

• Global A&H lines grew in Asia, Latin America, Europe, and Japan on a constant dollar basis, driven by higher new business and recovery from less travel volume and reduced consumer activity in the prior year.

• Global A&H lines increased due to the acquisition of Cigna's business in Asia in the third quarter of 2022, which contributed $ 593 m illion.

Additionally, growth in Asia, Latin America, Europe, and Japan on a constant dollar basis, was driven by higher new business and increased travel volume and consumer activity.

Our North American Combined Insurance supplemental A&H business decreased primarily due to the non-renewal of a large program.

• Reinsurance lines decreased for the quarter as the impact of new treaties bound was offset by a one-time portfolio transfer in the prior year.

The year-to-date increase reflects continued growth in the portfolio from the impact of new treaties bound in the current year and in 2021;

and favorable premium adjustments.

• International life operations declined, as new business in Asia, primarily in Thailand, was offset by lower business in Hong Kong, driven by the continued impact of the pandemic on our agency force, and Latin America, principally reflecting the non-renewal of certain large account business in Chile.

• Reinsurance lines increased for the quarter primarily due to higher catastrophe reinstatement premiums.

Growth for the nine months ended September 30, 2022, was driven by new business and favorable premium adjustments;

partially offset by a one-time portfolio transfer in the prior year.

• International life operations increased due to the acquisition of Cigna's business in Asia in the third quarter of 2022, which contributed $145 million.

Growth from new business in Asia, primarily in Thailand, Indonesia and Vietnam, was more than offset by lower business in Latin America, principally reflecting the non-renewal of certain large account business in Chile.

For additional information on net premiums written, refer to the segment results discussions.

2 unchanged sentences

Net premiums earned for long-duration contracts, typically traditional life contracts, generally are recognized as earned when due from policyholders.

For the three months ended June 30, 2022, net premiums earned increased $744 million, or 8.4 percent, comprising 13.0 percent positive growth in commercial lines, or 14.8 percent in constant dollars, while consumer lines were flat, or up 2.8 percent in constant dollars, as the acceleration of growth in net premiums written described above are not yet reflected in net premiums earned.

For the six months ended June 30, 2022, net premiums earned increased $1,269 million, or 7.4 percent, comprising 11.5 percent positive growth in commercial lines, or 13.0 percent in constant dollars, while consumer lines were flat, or up 2.7 percent in constant dollars.

For the three months ended September 30, 2022, net premiums earned increased $1,535 million, or 15.3 percent.

For the nine months ended September 30, 2022, net premiums earned increased $2,804 million, or 10.4 percent.

Catastrophe Losses and Prior Period Development

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Refer to the Non-GAAP Reconciliation section for further information on reinstatement premiums on catastrophe losses and adjustments to prior period development.

Three Months Ended Six Months Ended

June 30 June 30

Three Months Ended Nine Months Ended

September 30 September 30

(in millions of U.S.

2 unchanged sentences

Favorable prior period development $ 222 $ 321 $ 709 $ 781

Catastrophe losses through June 30, 2022 and 2021 were primarily from the following events:

Severe weather-related events in the U.S.

Catastrophe losses through September 30, 2022 and 2021, were primarily from the following events:

Hurricane Ian losses of $975 million, severe weather-related events in the U.S.

and internationally, Australia storms, and Colorado wildfires.

Winter storm losses in the U.S.

and other severe weather-related events in the U.S.

Hurricane Ida losses of $806 million, winter storm losses in the U.S., flooding in Europe, and other severe weather-related events in the U.S.

and internationally.

Prior period development (PPD) arises from changes to loss estimates recognized in the current year that relate to loss events that occurred in previous calendar years and excludes the effect of losses from the development of earned premium from previous accident years.

Pre-tax net favorable PPD for the three months ended June 30, 2022 was $247 million, including adverse development of $155 million for molestation claims, predominantly reviver statute-related.

Excluding the adverse development, we had favorable development of $402 million, with 59 percent in long-tail lines, principally from accident years 2017 and prior, and 41 percent in short-tail lines, primarily in A&H, specialty, and automobile lines.

Pre-tax net favorable PPD for the six months ended June 30, 2022 was $487 million, including adverse development of $155 million for molestation claims described above, predominantly reviver statute-related.

This molestation adverse development includes no change to the previously established reserve for the Boy Scouts of America settlement.

Excluding the adverse development, we had favorable development of $642 million with 39 percent in long-tail lines, principally from accident years 2017 and prior, and 61 percent in short-tail lines, primarily in A&H, property, and specialty lines.

Pre-tax net favorable PPD for the three months ended June 30, 2021 was $268 million, including adverse development of $68 million for molestation claims.

Excluding the adverse development, we had favorable development of $336 million with 28 percent in long-tail lines, principally from accident years 2017 and prior, and 72 percent in short-tail lines, primarily in A&H, property, and surety lines.

Pre-tax net favorable PPD for the six months ended June 30, 2021 was $460 million, including adverse development of $68 million for molestation claims described above.

Excluding the adverse development, we had favorable development of $528 million with 25 percent in long-tail lines, principally from accident years 2017 and prior, and 75 percent in short-tail lines, primarily in A&H, property, and surety lines.

Pre-tax net favorable PPD for the three months ended September 30, 2022, was $222 million, including adverse development of $52 million related to legacy environmental exposures.

Excluding the adverse development, we had favorable development of $274 million, with 5 percent in long-tail lines, principally from accident years 2018 and prior, and 95 percent in short-tail lines, primarily in property lines.

Pre-tax net favorable PPD for the nine months ended September 30, 2022, was $709 million, including adverse development of $155 million for molestation claims, predominantly reviver statute-related, and adverse development of $52 million related to legacy environmental exposures.

The molestation adverse development includes no change to the previously established reserve for the Boy Scouts of America settlement.

Excluding the adverse development, we had favorable development of $916 million with 29 percent in long-tail lines, principally from accident years 2018 and prior, and 71 percent in short-tail lines, primarily in property and A&H lines.

Pre-tax net favorable PPD for the three months ended September 30, 2021, was $321 million, including adverse development of $33 million related to legacy environmental exposures.

Excluding the adverse development, we had favorable development of $354 million with 30 percent in long-tail lines, principally from accident years 2017 and prior, and 70 percent in short-tail lines, primarily in homeowners and property lines.

Pre-tax net favorable PPD for the nine months ended September 30, 2021, was $781 million, including adverse development of $33 million related to legacy environmental exposures and $68 million for molestation claims.

Excluding the adverse development, we had favorable development of $882 million with 27 percent in long-tail lines, principally from accident years 2017 and prior, and 73 percent in short-tail lines, primarily in homeowners, A&H, property, and surety lines.

Refer to the prior period development discussion in Note 6 to the Consolidated Financial Statements for additional information.

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A P&C combined ratio under 100 percent indicates underwriting income, and a combined ratio exceeding 100 percent indicates underwriting loss.

Three Months Ended Six Months Ended

June 30 June 30

Three Months Ended Nine Months Ended

September 30 September 30

2022 2021 2022 2021

7 unchanged sentences

P&C Combined ratio 93.1 % 93.4 % 87.5 % 90.4 %

The loss and loss expense ratio and the CAY loss ratio excluding catastrophe losses decreased for the three and six months ended June 30, 2022, reflecting earned rate exceeding loss cost trends.

The loss and loss expense ratio for the three months ended June 30, 2022 was favorably impacted by higher net premiums earned, partially offset by higher catastrophe losses and lower favorable prior period development.

The loss and loss expense ratio for the six months ended June 30, 2022 benefited from higher net premiums earned, lower catastrophe losses compared to the prior year, and higher favorable prior period development.

The policy acquisition cost ratio decreased for the three and six months ended June 30, 2022, primarily due to a higher percentage of net premiums earned from commercial P&C lines that have a lower acquisition cost ratio.

The administrative expense ratio decreased for the three and six months ended June 30, 2022, primarily due to the favorable impact of higher net premiums earned, partially offset by increased investment to support growth and higher employee-related expenses.

The loss and loss expense ratio and the CAY loss ratio excluding catastrophe losses increased for the three months ended September 30, 2022, reflecting the impact of a current accident year benefit recorded in the prior year partially offset by earned rate exceeding loss cost trends.

The loss and loss expense ratio and the CAY loss ratio excluding catastrophe losses decreased for the nine months ended September 30, 2022, primarily from earned rate exceeding loss cost trends.

The loss and loss expense ratio for the nine months ended September 30, 2022, also benefited from higher net premiums earned and lower catastrophe losses, partially offset by lower favorable prior period development.

The policy acquisition cost ratio decreased for the three and nine months ended September 30, 2022, primarily due to a higher percentage of net premiums earned from lines that have a lower acquisition cost ratio.

The administrative expense ratio decreased for the three and nine months ended September 30, 2022, primarily due to the favorable impact of higher net premiums earned, partially offset by higher employee-related expenses and increased investment to support growth.

Policy benefits

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Refer to the Life Insurance segment operating results section for further discussion.

For the three months ended June 30, 2022 and 2021, Policy benefits were $159 million and $185 million, respectively, which included (gains) losses from fair value changes in separate account liabilities that do not qualify for separate account reporting under GAAP of $(18) million and $15 million, respectively.

For the three months ended September 30, 2022 and 2021, Policy benefits were $486 million and $151 million, respectively, which included (gains) losses from fair value changes in separate account liabilities that do not qualify for separate account reporting under GAAP of $(67) million and $(24) million, respectively.

The offsetting movements of these liabilities are recorded in Other (income) expense on the Consolidated statements of operations.

Excluding the separate account gains and losses, Policy benefits were $177 million and $170 million for the three months ended June 30, 2022 and 2021, respectively.

For the six months ended June 30, 2022 and 2021, Policy benefits were $304 million and $352 million, respectively, which included (gains) losses from fair value changes in separate account liabilities that do not qualify for separate account reporting under GAAP of $(49) million and $19 million, respectively.

Excluding the separate account gains and losses, Policy benefits were $553 million and $175 million for the three months ended September 30, 2022 and 2021, respectively.

For the nine months ended September 30, 2022 and 2021, Policy benefits were $790 million and $503 million, respectively, which included (gains) losses from fair value changes in separate account liabilities that do not qualify for separate account reporting under GAAP of $(116) million and $(5) million, respectively.

The offsetting movements of these liabilities are recorded in Other (income) expense on the Consolidated statements of operations.

Excluding the separate account gains and losses, Policy benefits were $353 million and $333 million for the six months ended June 30, 2022 and 2021, respectively.

Excluding the separate account gains and losses, Policy benefits were $906 million and $508 million for the nine months ended September 30, 2022 and 2021, respectively.

Refer to the respective sections that follow for a discussion of Net investment income, Other (income) expense, Net realized gains (losses), Amortization of purchased intangibles, and Income tax expense.

Segment Operating Results – Three and Six Months Ended June 30, 2022 and 2021

Segment Operating Results – Three and Nine Months Ended September 30, 2022 and 2021

We operate through six business segments:

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This segment includes our North America Major Accounts and Specialty Insurance division (large corporate accounts and wholesale business), and the North America Commercial Insurance division (principally middle market and small commercial accounts).

Three Months Ended Six Months Ended

June 30 % Change June 30 % Change

Three Months Ended Nine Months Ended

September 30 % Change September 30 % Change

(in millions of U.S.

8 unchanged sentences

Net investment income 589 507 16.4 % 1,600 1,582 1.2 %

Other (income) expense — 14 NM 6 16 (61.9) %

Other (income) expense 6 8 (17.8) % 12 24 (48.4) %

Segment income $ 975 $ 889 9.6 % $ 3,739 $ 2,937 27.3 %

7 unchanged sentences

Combined ratio 90.9 % 90.1 % 0.8 pts 83.0 % 87.9 % (4.9) pts

NM - not meaningful

Catastrophe Losses and Prior Period Development Three Months Ended Six Months Ended

June 30 June 30

Catastrophe Losses and Prior Period Development Three Months Ended Nine Months Ended

September 30 September 30

(in millions of U.S.

2 unchanged sentences

Favorable prior period development $ 166 $ 157 $ 561 $ 440

Catastrophe losses through June 30, 2022 and 2021 were primarily from severe weather-related events and winter storm losses in the U.S.

Catastrophe losses through September 30, 2022 and 2021, were primarily from the following events:

Hurricane Ian losses, severe weather-related events and winter storm losses in the U.S.

Hurricane Ida losses, winter storm losses and other severe weather-related events in the U.S.

Refer to the prior period development discussion in Note 6 to the Consolidated Financial Statements for additional information.

Net premiums written increased $380 million, or 8.9 percent, and $755 million, or 9.5 percent, for the three and six months ended June 30, 2022, respectively, comprising:

• Commercial lines:

Positive growth of 8.7 percent and 9.6 percent, respectively, reflecting strong premium retention, including both rate and exposure increases, as well as new business across a number of retail and wholesale lines, including property, primary and excess casualty, commercial multiple peril, surety, and financial lines.

Growth for the six months ended June 30, 2022 also reflects strong premium retention, including rate and exposure increases, from workers’ compensation.

• Consumer lines:

Positive growth of 11.6 percent and 7.9 percent, respectively, due to recovery in A&H lines from exposure declines in the prior year and strong new business.

Net premiums earned increased $445 million, or 11.7 percent, and $885 million, or 11.8 percent for the three and six months ended June 30, 2022, respectively, reflecting the growth in net premiums written described above.

Net premiums written increased $353 million, or 8.1 percent, and $1,108 million, or 9.0 percent, for the three and nine months ended September 30, 2022, respectively, reflecting strong premium retention, including both rate and exposure increases.

Additionally, there was new business across a number of retail and wholesale lines, including property, primary and excess casualty, commercial multiple peril, and surety.

A&H growth reflects recovery in A&H lines from exposure declines in the prior year and strong new business.

Growth for the nine months ended September 30, 2022 also reflects strong premium retention, including rate and exposure increases, from financial lines and workers’ compensation.

Net premiums earned increased $329 million, or 8.3 percent, and $1,214 million, or 10.6 percent for the three and nine months ended September 30, 2022, respectively, reflecting the growth in net premiums written described above.

Combined Ratio

The loss and loss expense ratio decreased for the three and six months ended June 30, 2022, reflecting lower catastrophe losses, higher favorable prior period development, and earned rate exceeding loss cost trends.

The administrative expense ratio was relatively flat for the three and six months ended June 30, 2022, primarily due to the favorable impact of higher net premiums earned, offset by higher employee-related expenses and increased investment to support growth.

The loss and loss expense ratio increased for the three months ended September 30, 2022, primarily from higher catastrophe losses.

The loss and loss expense ratio decreased for the nine months ended September 30, 2022, primarily from lower catastrophe losses and higher favorable prior period development.

The CAY loss ratio excluding catastrophe losses decreased for the three and nine months ended September 30, 2022, primarily from earned rate exceeding loss cost trends.

The administrative expense ratio decreased for the three and nine months ended September 30, 2022, primarily due to a one-time expense accrual release and the favorable impact of higher net premiums earned, partially offset by higher employee-related expenses.

North America Personal P&C Insurance

The North America Personal P&C Insurance segment comprises operations that provide high net worth personal lines products, including homeowners and complementary products such as valuable articles, excess liability, automobile, and recreational marine insurance and services in the U.S.

Three Months Ended Six Months Ended

June 30 % Change June 30 % Change

Three Months Ended Nine Months Ended

September 30 % Change September 30 % Change

(in millions of U.S.

8 unchanged sentences

Net investment income 76 60 26.6 % 199 189 5.3 %

Other (income) expense 1 (5) NM 2 (4) NM

Other (income) expense 1 1 — 3 (3) NM

Amortization of purchased intangibles 2 2 — 7 8 (5.2) %

10 unchanged sentences

Catastrophe Losses and Prior Period Development

Three Months Ended Six Months Ended

June 30 June 30

Three Months Ended Nine Months Ended

September 30 September 30

(in millions of U.S.

2 unchanged sentences

Favorable prior period development $ 133 $ 182 $ 187 $ 266

Catastrophe losses through June 30, 2022 and 2021 were primarily from the following events:

Severe weather-related events in the U.S.

Catastrophe losses through September 30, 2022 and 2021, were primarily from the following events:

Hurricane Ian losses, severe weather-related events in the U.S.

and Colorado wildfires.

Winter storm losses and other severe weather-related events in the U.S.

Hurricane Ida losses, winter storm losses and other severe weather-related events in the U.S.

Refer to the prior period development discussion in Note 6 to the Consolidated Financial Statements for additional information.

Net premiums written increased $63 million, or 4.7 percent, and $145 million, or 5.9 percent for the three and six months ended June 30, 2022, respectively, primarily driven by new business and strong renewal retention, from both rate and exposure increases, primarily in homeowners and automobile;

Net premiums written increased $92 million, or 7.1 percent, and $237 million, or 6.3 percent for the three and nine months ended September 30, 2022, respectively, primarily driven by strong new business and renewal retention, from both rate and exposure increases, primarily in homeowners and automobile;

partially offset by additional cancellations in parts of California exposed to wildfires.

Net premiums earned increased $47 million, or 3.9 percent, and $110 million, or 4.6 percent for the three and six months ended June 30, 2022, respectively, reflecting the growth in net premiums written described above.

Net premiums earned increased $90 million, or 7.2 percent, and $200 million, or 5.5 percent for the three and nine months ended September 30, 2022, respectively, reflecting the growth in net premiums written described above.

Combined Ratio

The loss and loss expense ratio increased for the three months ended June 30, 2022, primarily from higher catastrophe losses and lower favorable prior period development.

The loss and loss expense ratio decreased for the six months ended June 30, 2022, reflecting lower catastrophe losses compared to the prior year, partially offset by lower favorable prior period development.

The CAY loss ratio excluding catastrophe losses was flat for the three and six months ended June 30, 2022, reflecting slightly higher losses in automobile, offset by earned rate exceeding loss cost trends in homeowners.

The policy acquisition cost ratio increased for the three and six months ended June 30, 2022, primarily due to a higher year-over-year amount of supplemental commissions.

The administrative expense ratio increased for the three and six months ended June 30, 2022, primarily due to increased investment to support growth and higher employee-related expenses.

The loss and loss expense ratio decreased for the three and nine months ended September 30, 2022, primarily from lower catastrophe losses, partially offset by lower favorable prior period development.

The CAY loss ratio excluding catastrophe losses increased for the three and nine months ended September 30, 2022, reflecting higher losses in automobile and, to a lesser extent, homeowners.

The policy acquisition cost ratio was relatively flat for the three and nine months ended September 30, 2022.

The administrative expense ratio decreased for the three months ended September 30, 2022, primarily due to a one-time expense accrual release, the favorable impact of higher net premiums earned and strong expense management.

The administrative expense ratio was flat for the nine months ended September 30, 2022.

North America Agricultural Insurance

2 unchanged sentences

(Rain and Hail) as well as farm and ranch and specialty P&C commercial insurance products and services through our Chubb Agribusiness unit.

Three Months Ended Six Months Ended

June 30 % Change June 30 % Change

Three Months Ended Nine Months Ended

September 30 % Change September 30 % Change

(in millions of U.S.

8 unchanged sentences

Net investment income 9 6 28.9 % 23 21 5.6 %

Other (income) expense 1 — NM 1 — NM

Amortization of purchased intangibles 7 7 — 20 20 —

8 unchanged sentences

Combined ratio 90.6 % 89.9 % 0.7 pts 87.8 % 89.6 % (1.8) pts

Catastrophe Losses and Prior Period Development Three Months Ended Six Months Ended

June 30 June 30

NM - not meaningful

Catastrophe Losses and Prior Period Development Three Months Ended Nine Months Ended

September 30 September 30

(in millions of U.S.

1 unchanged sentence

Catastrophe losses $ 31 $ 8 $ 52 $ 20

Favorable prior period development $ — $ — $ 26 $ 2

Catastrophe losses through June 30, 2022 and 2021 were primarily from severe weather-related events in Chubb Agribusiness and winter storm losses in the U.S.

(Unfavorable) favorable prior period development $ (9) $ (7) $ 17 $ (5)

Catastrophe losses through September 30, 2022 and 2021, were primarily from the following events:

Hurricane Ian losses, severe weather-related events in the Chubb Agribusiness, and winter storm losses in the U.S.

Severe weather-related events in Chubb Agribusiness and winter storm losses in the U.S.

Refer to the prior period development discussion in Note 6 to the Consolidated Financial Statements for additional information.

Net premiums written increased $226 million, or 44.0 percent for the three months ended June 30, 2022, primarily due to an increase in MPCI, primarily reflecting higher commodity prices and policy count growth.

Net premiums written increased $105 million, or 15.1 percent for the six months ended June 30, 2022, primarily due to an increase in MPCI due to the factors noted above, partly offset by a return of premium to the U.S.

Net premiums written increased $308 million, or 21.8 percent for the three months ended September 30, 2022, primarily due to an increase in MPCI, primarily reflecting higher commodity prices, higher reported acreage from policyholders, and policy count growth.

Net premiums written increased $413 million, or 19.6 percent for the nine months ended September 30, 2022, primarily due to an increase in MPCI reflecting the factors noted above, partly offset by a return of premium to the U.S.

government in the first quarter of 2022 of $161 million.

Under the profit-sharing agreement, we returned additional premiums to the government because of the lower losses experienced in certain states in 2021.

This return of premium reduced net premiums written growth for the six months ended June 30, 2022 by 23.2 percentage points.

Net premiums earned increased $163 million, or 39.6 percent, and increased $24 million, or 4.6 percent for the three and six months ended June 30, 2022, respectively, reflecting the growth in net premiums written described above.

This return of premium reduced net premiums written growth for the nine months ended September 30, 2022, by 7.6 percentage points.

Net premiums earned increased $335 million, or 25.0 percent, and $359 million, or 19.3 percent for the three and nine months ended September 30, 2022, respectively, reflecting the growth in net premiums written described above.

Combined Ratio

The combined ratio for the six months ended June 30, 2022, was impacted by the return of premium to the U.S.

The combined ratio for the nine months ended September 30, 2022, was impacted by the return of premium to the U.S.

government under the profit-sharing agreement related to the profitable 2021 crop year described above.

This prior period development resulted in a reduction to net premiums earned of $161 million and a corresponding reduction to incurred losses, with no net impact to underwriting income.

The loss and loss expense ratio increased for the three months ended June 30, 2022, primarily from higher catastrophe losses.

The loss and loss expense ratio decreased for the six months ended June 30, 2022, primarily due to the impact of the return of premium described above.

The CAY loss ratio excluding catastrophe losses was relatively flat for the three and six months ended June 30, 2022.

The policy acquisition cost ratio decreased for the three months ended June 30, 2022, primarily due to the favorable impact of higher net premiums earned from MPCI.

The policy acquisition cost ratio increased for the six months ended June 30, 2022, primarily due to the impact of the return of premium described above.

The CAY policy acquisition cost ratio, which excludes the unfavorable impact of catastrophe losses and prior period development of 1.7 percentage points, decreased 1.3 percentage points for the six months ended June 30, 2022, mainly due to the favorable impact of higher net premiums earned from MPCI.

The administrative expense ratio decreased for the three and six months ended June 30, 2022, reflecting the favorable impact of higher net premiums earned from MPCI, higher Administrative and Operating (A&O) reimbursements on the MPCI business, and strong expense management.

The loss and loss expense ratio increased for the three months ended September 30, 2022, primarily from higher catastrophe losses.

The loss and loss expense ratio decreased for the nine months ended September 30, 2022, primarily due to favorable prior period development compared with unfavorable prior period development in the prior year, partially offset by higher catastrophe losses.

The CAY loss ratio excluding catastrophe losses was relatively flat for the three and nine months ended September 30, 2022.

The policy acquisition cost ratio decreased for the three and nine months ended September 30, 2022, primarily due to the favorable impact of higher net premiums earned from MPCI.

The administrative expense ratio decreased for the three and nine months ended September 30, 2022, reflecting the favorable impact of higher net premiums earned from MPCI, higher Administrative and Operating (A&O) reimbursements on the MPCI business, and strong expense management.

Overseas General Insurance

4 unchanged sentences

Chubb provides funds at Lloyd's to support underwriting by Syndicate 2488 which is managed by Chubb Underwriting Agencies Limited.

Three Months Ended Six Months Ended

June 30 % Change June 30 % Change

Three Months Ended Nine Months Ended

September 30 % Change September 30 % Change

(in millions of U.S.

9 unchanged sentences

Net investment income 151 157 (3.2) % 460 447 3.1 %

Other (income) expense 3 2 30.8 % 5 3 45.8 %

Other (income) expense (2) — NM 3 3 — %

Amortization of purchased intangibles 12 11 8.0 % 40 36 11.9 %

8 unchanged sentences

Combined ratio 88.5 % 92.2 % (3.7) pts 86.3 % 88.3 % (2.0) pts

NM- Not meaningful

Catastrophe Losses and Prior Period Development

Three Months Ended Six Months Ended

June 30 June 30

Three Months Ended Nine Months Ended

September 30 September 30

(in millions of U.S.

2 unchanged sentences

Favorable prior period development $ 5 $ 28 $ 238 $ 209

Catastrophe losses through June 30, 2022 and 2021 were primarily from the following events:

International weather-related events and storms in Australia.

Winter storm losses in the U.S.

and international weather-related events.

Catastrophe losses through September 30, 2022 and 2021, were primarily from the following events:

Hurricane Ian losses, International weather-related events, and storms in Australia.

Flooding in Europe, Hurricane Ida, winter storm losses and international weather-related events.

Refer to the prior period development discussion in Note 6 to the Consolidated Financial Statements for additional information.

Net Premiums Written by Region

Three months ended June 30

Three months ended September 30

(in millions of U.S.

9 unchanged sentences

Net premiums written $ 2,645 100 % $ 2,596 100 % $ 2,369 1.9 % 11.7 %

Six months ended June 30

Nine months ended September 30

(in millions of U.S.

10 unchanged sentences

(1) Includes the international supplemental A&H business of Combined Insurance and other international operations including mainland China.

Overall, net premiums written increased $143 million and $332 million, or $292 million and $619 million on a constant dollar basis, for the three and six months ended June 30, 2022, respectively, reflecting growth in both commercial and consumer lines.

For the three and six months ended June 30, 2022, commercial lines grew 7.0 percent and 7.9 percent, or 13.0 percent and 13.3 percent on a constant-dollar basis, respectively, and consumer lines grew 3.9 percent and 3.4 percent, or 11.6 percent and 10.2 percent on a constant-dollar basis, respectively.

Growth in our European division for the three and six months ended June 30, 2022 was supported by both our wholesale and retail divisions.

This growth was primarily driven by higher new business, premium retention, and positive rate increases in commercial lines, including commercial property and casualty, and financial lines.

Overall, net premiums written increased $49 million and $381 million, or $276 million and $895 million on a constant dollar basis, for the three and nine months ended September 30, 2022, respectively, reflecting growth in both commercial and consumer lines.

For the three and nine months ended September 30, 2022, commercial lines grew 2.5 percent and 6.1 percent, or 11.0 percent and 12.6 percent on a constant-dollar basis, respectively, and consumer lines grew 1.1 percent and 2.7 percent, or 12.7 percent and 11.0 percent on a constant-dollar basis, respectively.

The acquisition of Cigna's business in Asia contributed $39 million for the three and nine months ended September 30, 2022.

Our European division increased for the three and nine months ended September 30, 2022 on a constant dollar basis, supported by both our wholesale and retail divisions.

This growth was primarily driven by higher new business, and positive rate increases in commercial lines, including commercial property and casualty lines.

Consumer lines increased primarily due to A&H, reflecting increased travel volume.

Additionally, A&H in the prior year was adversely impacted by restrictions resulting from the COVID-19 pandemic.

Latin America increased for the three and six months ended June 30, 2022 driven by growth in consumer lines, including automobile in personal and travel in A&H.

Latin America increased for the three and nine months ended September 30, 2022 driven by growth in consumer lines, including automobile in personal and travel in A&H.

Commercial lines also grew due to exposure increases, positive rate increases, and new business, primarily property.

Asia Pacific increased for the three and six months ended June 30, 2022 driven by higher new business, higher retention and positive rate increases in commercial lines, including property and casualty, financial lines, and growth in consumer lines, primarily specialty and high net worth in personal, and travel in A&H.

Japan increased for the three and six months ended June 30, 2022 on a constant-dollar basis primarily from new business in A&H.

Net premiums earned increased $117 million and $267 million, or $270 million and $531 million on a constant-dollar basis, for the three and six months ended June 30, 2022, respectively, reflecting the increase in net premiums written described above.

Asia Pacific increased for the three and nine months ended September 30, 2022 driven by higher new business, higher retention and positive rate increases in commercial lines, including property and casualty, and financial lines, and growth in consumer lines, primarily specialty and high net worth in personal, and travel in A&H.

The acquisition of Cigna's business in Thailand also contributed to the increase, as described above.

Japan increased for the three and nine months ended September 30, 2022 on a constant-dollar basis primarily from new business in A&H.

Net premiums earned increased $77 million and $344 million, or $317 million and $848 million on a constant-dollar basis, for the three and nine months ended September 30, 2022, respectively, reflecting the increase in net premiums written described above.

Combined Ratio

The loss and loss expense ratio decreased for the three months ended June 30, 2022, due to underlying loss ratio improvement and higher favorable prior period development, partially offset by higher catastrophe losses.

The loss and loss expense ratio increased for the six months ended June 30, 2022, primarily due to higher catastrophe losses, partially offset by higher

favorable prior period development.

The CAY loss ratio excluding catastrophe losses decreased for the three and six months ended June 30, 2022, primarily reflecting underlying loss ratio improvement, including earned rate exceeding loss cost trends.

The policy acquisition cost ratio decreased for the three and six months ended June 30, 2022, primarily due to a change in the mix of business, including higher premiums earned from commercial lines that have a lower acquisition cost ratio than consumer lines.

The administrative expense ratio decreased for the three and six months ended June 30, 2022, reflecting continued expense management control and the favorable impact of higher net premiums earned.

The loss and loss expense ratio decreased for the three months ended September 30, 2022, due to lower catastrophe losses, partially offset by lower favorable prior period development.

The loss and loss expense ratio decreased for the nine months ended September 30, 2022, due to higher favorable prior period development.

The CAY loss ratio excluding catastrophe losses decreased for the three and nine months ended September 30, 2022, primarily reflecting underlying loss ratio improvement, including earned rate exceeding loss cost trends.

The policy acquisition cost ratio decreased for the three and nine months ended September 30, 2022, primarily due to a change in the mix of business, including higher premiums earned from commercial lines that have a lower acquisition cost ratio than consumer lines.

The administrative expense ratio decreased for the three and nine months ended September 30, 2022, reflecting continued expense management control and the favorable impact of higher net premiums earned.

Global Reinsurance

1 unchanged sentence

Global Reinsurance markets its reinsurance products worldwide primarily through reinsurance brokers under the Chubb Tempest Re brand name and provides a broad range of traditional and non-traditional reinsurance coverage to a diverse array of primary P&C companies.

Three Months Ended Six Months Ended

June 30 % Change June 30 % Change

Three Months Ended Nine Months Ended

September 30 % Change September 30 % Change

(in millions of U.S.

7 unchanged sentences

Administrative expenses 8 9 (4.0) % 27 27 1.8 %

Underwriting income 16 25 (38.3) % 65 32 101.6 %

Underwriting loss (123) (45) 172.5 % (58) (13) NM

Net investment income 71 99 (28.5) % 232 250 (7.3) %

Other (income) expense 1 — NM 1 — NM

Segment income $ 91 $ 106 (14.3) % $ 225 $ 183 22.9 %

Other (income) expense — — — 1 — NM

Segment income (loss) $ (52) $ 54 NM $ 173 $ 237 (27.2) %

Loss and loss expense ratio:

8 unchanged sentences

Catastrophe Losses and Prior Period Development

Three Months Ended Six Months Ended

June 30 June 30

Three Months Ended Nine Months Ended

September 30 September 30

(in millions of U.S dollars) 2022 2021 2022 2021

Catastrophe losses $ 157 $ 81 $ 160 $ 131

(Unfavorable) favorable prior period development $ (25) $ — $ (22) $ 7

Catastrophe losses through June 30, 2022 were primarily from storms in Australia.

Catastrophe losses through June 30, 2021 were primarily from winter storm losses in the U.S.

Net premiums written decreased $12 million for the three months ended June 30, 2022 as the impact of new treaties bound was offset by a one-time portfolio transfer in the prior year.

Net premiums written increased $34 million for the six months ended June 30, 2022 due to continued growth in the portfolio reflecting the impact of new treaties bound in the current year and in 2021, and favorable premium adjustments.

Net premiums earned increased $30 million and $85 million for the three and six months ended June 30, 2022, respectively, primarily reflecting the factors as described above.

The change was also due to the impact of higher new business written in the prior year for which premiums are earned in the current year.

Favorable (Unfavorable) prior period development $ — $ 4 $ (22) $ 11

Catastrophe losses through September 30, 2022, were primarily from Hurricane Ian, and storms in Australia and Canada.

Catastrophe losses through September 30, 2021, were primarily from severe weather-related events in the U.S.

and Canada, including Hurricane Ida.

Net premiums written increased $44 million and $78 million for the three and nine months ended September 30, 2022, respectively, primarily due to higher catastrophe reinstatement premiums, continued growth in the portfolio from new business and favorable premium adjustments.

Growth for the nine months ended September 30, 2022 was partially offset by a one-time portfolio transfer in the prior year.

Net premiums earned increased $44 million and $129 million for the three and nine months ended September 30, 2022, respectively, primarily reflecting the factors described above.

The increase for the nine months ended September 30, 2022 was also due to the impact of higher new business written in the prior year for which premiums are earned in the current year.

Combined Ratio

The loss and loss expense ratio increased for the three months ended June 30, 2022, primarily due to unfavorable prior period development in the current year.

The loss and loss expense ratio decreased for the six months ended June 30, 2022, primarily due to lower catastrophe losses, partially offset by unfavorable prior period development in the current year.

The CAY loss ratio excluding catastrophe losses decreased for the three months ended June 30, 2022 primarily due to a shift in the mix of business.

The policy acquisition cost ratio increased for the three and six months ended June 30, 2022, primarily due to a shift in the mix of business.

The administrative expense ratio decreased for the three and six months ended June 30, 2022, primarily from the favorable impact of higher net premiums earned.

The loss and loss expense ratio increased for the three and nine months ended September 30, 2022, primarily due to higher catastrophe losses and the unfavorable impact of prior period development.

The CAY loss ratio excluding catastrophe losses decreased for the three and nine months ended September 30, 2022 primarily due to a shift in the mix of business.

The policy acquisition cost ratio decreased for the three and nine months ended September 30, 2022, primarily due to catastrophe reinstatement premiums, which were fully earned in the three months ended September 30, 2022 and more than offset the impact of a shift in the mix of business.

The administrative expense ratio decreased for the three and nine months ended September 30, 2022, primarily from the favorable impact of higher net premiums earned.

Life Insurance

The Life Insurance segment comprises our international life operations, Chubb Tempest Life Re (Chubb Life Re), and the North American supplemental A&H and life business of Combined Insurance.

The Life Insurance segment comprises our international life operations, which commencing this quarter, includes Cigna's A&H and life business in six Asian markets acquired on July 1, 2022.

The Life Insurance segment also includes Chubb Tempest Life Re (Chubb Life Re), and the North American supplemental A&H and life business of Combined Insurance.

We assess the performance of our life business based on Life Insurance underwriting income, which includes Net investment income and (Gains) losses from fair value changes in separate account assets that do not qualify for separate account reporting under GAAP.

Three Months Ended Six Months Ended

June 30 % Change June 30 % Change

Three Months Ended Nine Months Ended

September 30 % Change September 30 % Change

(in millions of U.S.

5 unchanged sentences

Losses and loss expenses 135 179 (23.7) % 437 562 (22.2) %

Policy benefits 177 170 3.9 % 353 333 6.0 %

Policy benefits 553 175 NM 906 508 78.4 %

Policy acquisition costs 271 168 60.5 % 573 538 6.5 %

5 unchanged sentences

Segment income $ 271 $ 104 158.3 % $ 487 $ 310 57.0 %

Net premiums written decreased $44 million and $78 million, or $29 million and $50 million on a constant-dollar basis, for the three and six months ended June 30, 2022, respectively.

For our international life operations, net premiums written decreased 4.9 percent for the three months ended June 30, 2022, as growth in Asia from new business, principally in Thailand and Indonesia, was offset by lower business in H ong Kong and Korea, driven by the continued impact of the pandemic on our agency force, and Latin America, principally reflecting the non-renewal of certain large account business in Chile.

For the six months ended June 30, 2022, net premiums written declined 4.7 percent as growth in Thailand, Taiwan, Indonesia and Vietnam were more than offset by declines in Hong Kong, Korea, and Latin America as noted above.

Net premiums written in our North American Combined Insurance business declined 10.2 percent and 8.8 percent, for the three and six months ended June 30, 2022, respectively, primarily due to the non-renewal of a large program.

NM- Not meaningful

Net premiums written increased $664 million and $586 million, or $687 million and $637 million on a constant-dollar basis, for the three and nine months ended September 30, 2022, respectively.

For our international life operations, net premiums written increased 214.1 percent and 67.9 percent for the three and nine months ended September 30, 2022, respectively, primarily due to the acquisition of Cigna's business in Asia, which contributed $699 million.

In addition, there was growth in Asia from new business, principally in Thailand, Indonesia and Vietnam, which was more than offset by lower business in Latin America, principally reflecting non-renewals of certain large account business in Chile.

Net premiums written in our North American Combined Insurance business declined 8.6 percent and 8.7 percent, for the three and nine months ended September 30, 2022, respectively, primarily due to the non-renewal of a large program.

The following table presents deposits collected on universal life and investment contracts:

Three Months Ended Six Months Ended

June 30 % Change June 30 % Change

Three Months Ended Nine Months Ended

September 30 % Change September 30 % Change

(in millions of U.S.

5 unchanged sentences

New life deposits are an important component of production, and although they do not significantly affect current period income from operations, they are key to our efforts to grow our business.

Life deposits collected decreased $178 million and $172 million for the three and six months ended June 30, 2022, respectively, primarily in Taiwan, reflecting challenging market conditions for deposit products.

The prior year benefited from successful sales campaigns in broker and bank channels in Taiwan.

Life deposits collected decreased $209 million and $381 million for the three and nine months ended September 30, 2022, respectively, primarily in Taiwan, reflecting challenging market conditions for deposit products.

Additionally, the prior year benefited from successful sales campaigns in broker and bank channels in Taiwan.

Partially offsetting the decline is $36 million from deposits collected through the acquired Cigna businesses in Asia, primarily in Korea.

Life Insurance underwriting income and Segment income

Life Insurance underwriting income increased $15 million and $33 million for the three and six months ended June 30, 2022, respectively, reflecting lower year-over-year COVID-related losses and lower policy acquisition costs primarily due to the decrease in net premiums written and deposits collected noted above.

Segment income was flat for the three months ended June 30, 2022.

Segment income increased $10 million for the six months ended June 30, 2022, primarily due to the increase in underwriting income described above, partially offset by lower income from our investment in Huatai, our partially-owned insurance entity in China.

Life Insurance underwriting income increased $176 million and $209 million for the three and nine months ended

September 30, 2022, respectively, with $159 million of growth from the acquisition of Cigna's business in Asia, and lower year-over-year COVID-related losses.

Segment income increased $167 million and $177 million for the three and nine months ended September 30, 2022, respectively, reflecting the increase in underwriting income described above.

Corporate results primarily include the results of our non-insurance companies, income and expenses not attributable to reportable segments and loss and loss expenses of asbestos and environmental (A&E) liabilities and certain other non-A&E run-off exposures, including molestation.

Three Months Ended Six Months Ended

June 30 % Change June 30 % Change

Three Months Ended Nine Months Ended

September 30 % Change September 30 % Change

(in millions of U.S.

4 unchanged sentences

Underwriting loss 165 142 15.2 % 539 399 34.9 %

Net investment income (loss) (4) (15) (75.6) % (9) (32) (74.4) %

Net investment income (loss) 5 (10) NM (4) (42) (87.9) %

Interest expense 150 122 23.3 % 416 366 13.8 %

Net realized gains (losses) (365) (11) NM (778) 841 NM

Other (income) expense 138 (708) NM (121) (1,123) (89.2) %

Other (income) expense 194 (722) NM 73 (1,845) NM

Amortization of purchased intangibles 46 49 (7.6) % 137 148 (7.7) %

3 unchanged sentences

NM - not meaningful

Losses and loss expenses primarily includes unfavorable prior period development for molestation claims.

Administrative expenses were relatively flat for the three months ended June 30, 2022.

Administrative expenses increased $14 million for the six months ended June 30, 2022, primarily due to higher employee-related expenses and increased investment to support growth.

Cigna integration expenses are one-time in nature and are not related to the on-going business activities of the segments.

Losses and loss expenses for the three months ended September 30, 2022 and 2021 were primarily from adverse development relating to our Brandywine environmental exposures of $52 million and $33 million, respectively.

Losses and loss expenses for the nine months ended September 30, 2022 also includes unfavorable prior period development for molestation claims.

Administrative expenses decreased $8 million for the three months ended September 30, 2022, primarily due to lower employee-related expenses.

Administrative expenses increased $6 million for the nine months ended September 30, 2022, primarily due to increased spending to support digital growth initiatives.

Cigna integration expenses of $23 million and $26 million for the three and nine months ended September 30, 2022, respectively, principally comprised transfer taxes and employee-related expenses.

These expenses are one-time in nature and are not related to the on-going business activities of the segments.

The Chief Executive Officer does not manage segment results or allocate resources to segments when considering these costs and they are therefore excluded from our definition of segment income.

10 unchanged sentences

The following tables present our net realized and unrealized gains (losses):

Three Months Ended June 30

Three Months Ended September 30

(in millions of U.S.

Fixed maturities $ (279) $ (3,045) $ (3,324) $ (10) $ (554) $ (564)

Fixed income and equity derivatives (81) — (81) (91) — (91)

Fixed income and investment derivatives (198) — (198) (9) — (9)

Public equity

7 unchanged sentences

Foreign exchange 198 (966) (768) 106 (414) (308)

Other — 5 5 — (9) (9)

Net gains (losses), pre-tax $ (504) $ (5,116) $ (5,620) $ (33) $ 993 $ 960

Six Months Ended June 30

(40) (59) (99) (4) 4 —

Net losses, pre-tax $ (384) $ (4,070) $ (4,454) $ (21) $ (964) $ (985)

(1) Other realized losses includes $36 million related to impairment of fixed assets.

Nine Months Ended September 30

(in millions of U.S.

Fixed maturities $ (857) $ (12,041) $ (12,898) $ 26 $ (2,177) $ (2,151)

Fixed income and equity derivatives (34) — (34) 18 — 18

Fixed income and investment derivatives (232) — (232) 9 — 9

Public equity

9 unchanged sentences

Net gains (losses), pre-tax $ (787) $ (13,752) $ (14,539) $ 833 $ (2,294) $ (1,461)

(1) Other realized losses include impairment of assets related to Chubb's Russian entities.

Pre-tax net unrealized losses of $4,344 million and $8,996 million in our investment portfolio for the three and six months ended June 30, 2022, respectively, were principally the result of an increase in interest rates.

In addition, there were realized losses of $782 million and $760 million for the three and six months ended June 30, 2022, respectively, primarily from mark-to-market losses on public equities and sales in fixed income securities.

(1) Other realized losses includes $36 million related to impairment of fixed assets.

Pre-tax net unrealized losses of $3,045 million and $12,041 million in our investment portfolio for the three and nine months ended September 30, 2022, respectively, were principally the result of an increase in interest rates.

In addition, there were realized losses of $599 million and $1,359 million for the three and nine months ended September 30, 2022, respectively, primarily from mark-to-market losses on public equities and sales in fixed income securities.

The variable annuity reinsurance derivative transactions consist of changes in the fair value of GLB liabilities and gains or losses on other derivative instruments we maintain that decrease in fair value when the S&P 500 index increases.

The variable annuity reinsurance derivative transactions resulted in realized gains of $1 million for the three months ended June 30, 2022, reflecting a net loss of $143 million, primarily from an increase in the fair value of the GLB liabilities, and a net realized gain of $144 million related to these derivative instruments.

The variable annuity reinsurance derivative transactions resulted in realized gains of $78 million for the six months ended June 30, 2022, reflecting a net loss of $108 million, primarily from an increase in the fair value of the GLB liabilities, and a net realized gain of $186 million related to these derivative instruments.

The increase in the fair value of the GLB liabilities for the three and six months ended June 30, 2022, was primarily due to lower global equity markets and higher volatility, partially offset by higher interest rates.

For the three months ended June 30, 2021, the variable annuity reinsurance derivative transactions resulted in realized losses of $72 million, reflecting principally a net realized loss of $64 million related to these other derivatives.

The fair value of the GLB liabilities remained relatively flat for the three months ended June 30, 2021, as the impact of higher global equity markets was offset by lower interest rates.

For the six months ended June 30, 2021, the variable annuity reinsurance derivative transactions resulted in realized gains of $203 million reflecting a net gain of $311 million principally related to a decrease in the fair value of the GLB liabilities due to higher interest rates and higher global equity markets, partially offset by a net realized loss of $108 million related to these other derivatives.

The variable annuity reinsurance derivative transactions resulted in realized gains of $76 million for the three months ended September 30, 2022, reflecting a net gain of $22 million, primarily from a decrease in the fair value of the GLB liabilities due to higher interest rates, partially offset by lower global equity markets and changes made to our valuation model relating to policyholder behavior, and a net realized gain of $54 million related to these other derivative instruments.

The variable annuity reinsurance derivative transactions resulted in realized gains of $154 million for the nine months ended September 30, 2022, reflecting a net loss of $86 million, primarily from an increase in the fair value of the GLB liabilities due to lower global equity markets and changes to our valuation model relating to policyholder behavior, partially offset by higher interest rates, and a net realized gain of $240 million related to these other derivative instruments.

For the three months ended September 30, 2021, the variable annuity reinsurance derivative transactions resulted in realized losses of $63 million, reflecting a net loss of $59 million, primarily from an increase in the fair value of the GLB liabilities due to underperformance in certain equity markets, partially offset by an increase in interest rates, and a net realized loss of $4 million related to these other derivatives.

For the nine months ended September 30, 2021, the variable annuity reinsurance derivative transactions resulted in net realized gains of $140 million reflecting a net gain of $252 million, principally related to a decrease in the fair value of the GLB liabilities due to higher interest rates and higher global equity markets, partially offset by a net realized loss of $112 million related to these other derivatives.

Effective Income Tax Rate

1 unchanged sentence

A change in the geographic mix of earnings could impact our ETR.

For the three and six months ended June 30, 2022 our ETR was 19.4 percent and 16.9 percent, respectively.

This compares to an ETR of 12.3 percent and 12.5 percent for the three and six months ended June 30, 2021, respectively.

The ETR for each period was impacted by our mix of earnings among various jurisdictions and discrete tax benefits.

For the three and nine months ended September 30, 2022 our ETR was 24.6 percent and 18.6 percent, respectively.

This compares to an ETR of 10.7 percent and 12.0 percent for the three and nine months ended September 30, 2021, respectively.

The ETR for each period in 2022 was impacted by the acquisition of Cigna's business in Asia, our mix of earnings among various jurisdictions, and discrete tax benefits.

Non-GAAP Reconciliation

32 unchanged sentences

Three Months Ended

June 30, 2022

September 30, 2022

(in millions of U.S.

9 unchanged sentences

Expense adjustments - unfavorable (favorable) (1) — — — — — (1)

PPD reinstatement premiums - unfavorable (favorable) — — — — (3) — (3)

PPD, gross of related adjustments - favorable (unfavorable) 245 133 (9) 5 — (73) 301

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Net premiums earned E $ 4,283 $ 1,334 $ 1,673 $ 2,741 $ 255 $ 10,286

Reinstatement premiums (collected) expensed on catastrophe losses — — — — (55) (55)

Net premiums earned adjustments on PPD - unfavorable (favorable) 80 — — — — 80

PPD reinstatement premiums - unfavorable (favorable) — — — — (3) (3)

Net premiums earned excluding adjustments F $ 4,363 $ 1,334 $ 1,673 $ 2,741 $ 200 $ 10,311

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Three Months Ended

June 30, 2021

September 30, 2021

(in millions of U.S.

8 unchanged sentences

Net premiums earned adjustments on PPD - unfavorable (favorable) 56 — — — — — 56

Expense adjustments - unfavorable (favorable) 3 — — — — — 3

PPD reinstatement premiums - unfavorable (favorable) — (2) — — 3 — 1

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North America Commercial P&C Insurance North America Personal P&C Insurance North America Agricultural Insurance Overseas General Insurance Global Reinsurance Corporate Total P&C

Six Months Ended

June 30, 2022

Nine Months Ended

September 30, 2022

(in millions of U.S.

17 unchanged sentences

Net premiums earned E $ 12,645 $ 3,852 $ 2,217 $ 8,065 $ 712 $ 27,491

Reinstatement premiums (collected) expensed on catastrophe losses — — — — (55) (55)

Net premiums earned adjustments on PPD - unfavorable (favorable) 83 — 159 — — 242

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North America Commercial P&C Insurance North America Personal P&C Insurance North America Agricultural Insurance Overseas General Insurance Global Reinsurance Corporate Total P&C

Six Months Ended

June 30, 2021

Nine Months Ended

September 30, 2021

(in millions of U.S.

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Amortization of Purchased Intangibles and Other Amortization

Amortization expense related to purchased intangibles was $71 million and $142 million for the three and six months ended June 30, 2022, respectively, and principally relates to the Chubb Corp acquisition.

The following table presents, as of June 30, 2022, the estimated pre-tax amortization expense (benefit) of purchased intangibles, at current foreign currency exchange rates, for the third and fourth quarters of 2022 and for the next five years:

Associated with the Chubb Corp Acquisition

For the Years Ending December 31

(in millions of U.S.

dollars) Agency distribution relationships and renewal rights Fair value adjustment on Unpaid losses and loss expenses Total (1)

Other intangible assets (2)

Amortization of purchased intangibles

Third quarter of 2022 $ 49 $ (3) $ 46 $ 24 $ 70

Fourth quarter of 2022 49 (3) 46 25 71

2023 177 (6) 171 94 265

2024 159 (5) 154 88 242

2025 143 (5) 138 86 224

2026 129 (6) 123 84 207

2027 116 (10) 106 82 188

Total $ 822 $ (38) $ 784 $ 483 $ 1,267

(1) Recorded in Corporate.

(2) Recorded in applicable segment(s) that acquired the intangible assets.

Amortization expense related to purchased intangibles was $69 million and $211 million for the three and nine months ended September 30, 2022, respectively, compared with $71 million and $216 million for the prior year periods, respectively.

The respective increases principally relate to purchased intangibles from the acquisition of Cigna's business in Asia.

Refer to Note 7 to the Consolidated Financial Statements for more information on the expected pre-tax amortization expense (benefit) of purchased intangibles, at current foreign currency exchange rates, for the fourth quarter of 2022 and for the next five years.

Reduction of deferred tax liability associated with Other intangible assets

At June 30, 2022, the deferred tax liability associated with Other intangible assets (excluding the fair value adjustment on Unpaid losses and loss expense) was $1,171 million.

The following table presents as of June 30, 2022, the expected reduction to the deferred tax liability associated with the amortization of Other intangible assets, at current foreign currency exchange rates, for the third and fourth quarters of 2022 and for the next five years:

At September 30, 2022, the deferred tax liability associated with Other intangible assets (excluding the fair value adjustment on Unpaid losses and loss expense) was $1,206 million.

The following table presents, as of September 30, 2022, the expected reduction to the deferred tax liability associated with the amortization of Other intangible assets, at current foreign exchange rates, for the fourth quarter of 2022 and for the next five years:

For the Years Ending December 31

(in millions of U.S.

dollars) Reduction to deferred tax liability associated with intangible assets

Third quarter of 2022 16

dollars) Reduction to deferred tax liability associated with other intangibles

Fourth quarter of 2022 $ 17

Amortization of the fair value adjustment on acquired invested assets and assumed long-term debt

The following table presents at June 30, 2022, the expected amortization expense of the fair value adjustment on acquired invested assets related to the Chubb Corp acquisition, at current foreign currency exchange rates, and the expected amortization benefit from the fair value adjustment on assumed long-term debt for the third and fourth quarters of 2022 and for the next five years:

The following table presents, as of September 30, 2022, the expected amortization expense of the fair value adjustment on acquired invested assets related to the acquisition of Cigna's business in Asia and prior acquisitions, at current foreign currency exchange rates, and the expected amortization benefit from the fair value adjustment on assumed long-term debt related to the Chubb Corp acquisition for the fourth quarter of 2022 and for the next five years:

Amortization (expense) benefit of the fair value adjustment on

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(in millions of U.S.

dollars) Acquired invested assets (1)

dollars) Acquired Cigna invested assets Other acquired invested assets Total invested assets (1)

Assumed long-term debt (2)

Third quarter of 2022 (15) 5

Fourth quarter of 2022 $ 6 $ (14) $ (8) $ 6

2023 35 (50) (15) 21

2024 32 (13) 19 21

2025 30 — 30 21

2026 28 — 28 21

2027 27 — 27 21

Total $ 158 $ (77) $ 81 $ 111

(1) Recorded as a reduction to Net investment income in the Consolidated statements of operations.

(1) Recorded as an increase (reduction) to Net investment income in the Consolidated statements of operations.

(2) Recorded as a reduction to Interest expense in the Consolidated statements of operations.

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Three Months Ended

June 30 Six Months Ended

September 30 Nine Months Ended

(in millions of U.S.

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Net investment income is influenced by a number of factors including the amounts and timing of inward and outward cash flows, the level of interest rates, and changes in overall asset allocation.

Net investment income increased 0.4 percent for the three months ended June 30, 2022, primarily due to higher reinvestment rates on fixed maturities, offset by reduced call activity in fixed income securities, and lower income from equity securities and private equities, which are included in Other investments.

Net investment income decreased 2.1 percent for the six months ended June 30, 2022, due to reduced call activity in fixed income securities and lower income from equity securities, and private equities, which are included in Other investments.

Net investment income increased 13.1 percent and 2.9 percent for the three and nine months ended September 30, 2022, respectively, primarily due to higher reinvestment rates on fixed maturities.

For private equities where we own less than three percent, investment income is included within Net investment income in the table above.

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Three Months Ended

June 30 Six Months Ended

September 30 Nine Months Ended

(in millions of U.S.

1 unchanged sentence

Total mark-to-market gain (loss) on private equity, pre-tax $ (232) $ 713 $ (52) $ 1,887

Interest Expense

Interest expense was $266 million for the six months ended June 30, 2022, including a benefit of $10 million related to the amortization of the fair value of debt assumed in the Chubb Corp acquisition.

Pre-tax interest expense for our existing debt obligations and fees based on expected usage of certain facilities, including letters of credit, collateral fees, and repurchase agreements, is expected to be $297 million for the rest of 2022, or, $573 million for the full year 2022 based on current foreign exchange rates.

This is an increase of about $30 million from our previous estimate of $543 million for full year 2022 as disclosed in our 2021 Form 10-K.

This increase is primarily driven by interest from an additional $2.0 billion in repurchase agreements which Chubb entered into during the second quarter of 2022 to finance a portion of the acquisition of Cigna's accident and health (A&H) and life business in six Asia-Pacific markets.

The $2.0 billion repurchase agreements are due to expire by the end of 2022.

In addition, we expect a benefit of $11 million related to the fair value of debt amortization for the rest of 2022, or, $21 million for the full year 2022.

For more information on our debt obligations, refer to Note 9 to the Consolidated Financial Statements, under Item 8 in our 2021 Form 10-K.

Our investment portfolio is invested primarily in publicly traded, investment grade, fixed income securities with an average credit quality of A/A as rated by the independent investment rating services Standard and Poor’s (S&P)/Moody’s Investors Service (Moody’s) at June 30, 2022.

The portfolio is externally managed by independent, professional investment managers and is broadly diversified across geographies, sectors, and issuers.

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Exposures are aggregated, monitored, and actively managed by our Global Credit Committee, comprising senior executives, including our Chief Financial Officer, our Chief Risk Officer, our Chief Investment Officer, and our Treasurer.

We also have well-established, strict contractual investment rules requiring managers to maintain highly diversified exposures to individual issuers and closely monitor investment manager compliance with portfolio guidelines.

The average duration of our fixed income securities, including the effect of options and swaps, was 4.3 years and 4.1 years at June 30, 2022 and December 31, 2021, respectively.

We estimate that a 100 basis point (bps) increase in interest rates would reduce the valuation of our fixed income portfolio by approximately $4.1 billion at June 30, 2022.

We also have well-established, strict contractual investment rules requiring managers to maintain highly diversified exposures to individual issuers and clos ely monitor investment manager compliance with portfolio guidelines.

The average duration of our fixed income securities, including the effect of options and swaps, was 4.5 years and 4.1 years at September 30, 2022 and December 31, 2021, respectively.

We estimate that a 100 basis point (bps) increase in interest rates would reduce the valuation of our fixed income portfolio by approximately $4.4 billion at September 30, 2022.

The following table shows the fair value and cost/amortized cost, net of valuation allowance, of our invested assets:

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

(in millions of U.S.

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Total investments $ 111,255 $ 121,170 $ 122,852 $ 119,695

The fair value of our total investments decreased $13.2 billion during the six months ended June 30, 2022 due to unrealized losses on fixed maturities, sales of fixed income securit ies, and sh are repurchases, partially offset by strong operating cash flows.

The following tables present the fair value of our fixed income securities at June 30, 2022 and December 31, 2021.

The fair value of our total investments decreased $11.6 billion during the nine months ended September 30, 2022 due to unrealized losses on fixed maturities, sales of equity securities , and sh are repurchases, partially offset by strong operating cash flows.

The following tables present the fair value of our fixed income securities at September 30, 2022 and December 31, 2021.

The first table lists investments according to type and second according to S&P credit rating:

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

(in millions of U.S.

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Corporate and asset-backed securities

The following table presents our 10 largest global exposures to corporate bonds by fair value at June 30, 2022:

The following table presents our 10 largest global exposures to corporate bonds by fair value at September 30, 2022:

(in millions of U.S.

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JP Morgan Chase & Co 590

Wells Fargo & Co 487

Morgan Stanley 587

Comcast Corp 414

Verizon Communications Inc 412

Wells Fargo & Co 531

Citigroup Inc 482

Goldman Sachs Group Inc 458

Verizon Communications Inc 418

Comcast Corp 353

HSBC Holdings Plc 330

3 unchanged sentences

Value Amortized Cost, Net

June 30, 2022

September 30, 2022

(in millions of U.S.

22 unchanged sentences

fixed income portfolio by country/sovereign for non-U.S.

government securities at June 30, 2022:

government securities at September 30, 2022:

(in millions of U.S.

2 unchanged sentences

Canada 864 925

Taiwan 804 834

Federative Republic of Brazil 581 598

1 unchanged sentence

United Mexican States 486 533

United Kingdom 440 461

Kingdom of Thailand 415 446

Socialist Republic of Vietnam 426 339

Commonwealth of Australia 411 470

Province of Quebec 377 401

Commonwealth of Australia 365 429

Socialist Republic of Vietnam 357 341

Other Non-U.S.

3 unchanged sentences

fixed income portfolio by country/sovereign for non-U.S.

corporate securities at June 30, 2022:

corporate securities at September 30, 2022:

(in millions of U.S.

2 unchanged sentences

Canada 1,747 1,922

United States (1)

South Korea 1,106 1,151

France 1,060 1,179

United States (1)

Australia 848 948

1 unchanged sentence

Switzerland 496 571

Germany 502 552

Netherlands 474 530

China 386 413

Germany 443 510

Other Non-U.S.

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Also, issuers of below-investment grade securities usually have higher levels of debt and are more sensitive to adverse economic conditions, such as recession or increasing interest rates, than investment grade issuers.

At June 30, 2022, our corporate fixed income investment portfolio included below-investment grade and non-rated securities which, in total, comprised approximately 16 percent of our fixed income portfolio.

At September 30, 2022, our corporate fixed income investment portfolio included below-investment grade and non-rated securities which, in total, comprised approximately 16 percent of our fixed income portfolio.

Our below-investment grade and non-rated portfolio includes 1,763 issuers, with the greatest single exposure being $146 million.

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Our minimum rating for initial purchase is BB/B.

Fourteen external investment managers are responsible for high-yield security selection and portfolio construction.

Sixteen external investment managers are responsible for high-yield security selection and portfolio construction.

Our high-yield managers have a conservative approach to credit selection and very low historical default experience.

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Critical Accounting Estimates

As of June 30, 2022, there were no material changes to our critical accounting estimates.

As of September 30, 2022, there were no material changes to our critical accounting estimates.

For a full discussion of our critical accounting estimates, refer to Item 7 in our 2021 Form 10-K.

11 unchanged sentences

Other (including foreign exchange translation) (1,793) (493) (1,300)

Balance at June 30, 2022 $ 74,092 $ 16,573 $ 57,519

Balance at September 30, 2022 $ 75,992 $ 17,380 $ 58,612

(1) Net of valuation allowance for uncollectible reinsurance.

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Asbestos and Environmental (A&E)

There was no significant A&E reserve activity during the three and six months ended June 30, 2022.

During the three months ended September 30, 2022, we increased environmental net loss reserves for Brandywine managed operations by $52 million.

A&E reserves are included in Corporate.

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Chubb uses internal and external data together with sophisticated, analytical catastrophe loss and risk modeling techniques to ensure an appropriate understanding of risk, including diversification and correlation effects, across different product lines and territories.

The table below presents our modeled pre-tax estimates of natural catastrophe PML, net of reinsurance, at June 30, 2022, and does not represent our expected catastrophe losses for any one year.

The table below presents our modeled pre-tax estimates of natural catastrophe PML, net of reinsurance, at September 30, 2022, and does not represent our expected catastrophe losses for any one year.

Modeled Net Probable Maximum Loss (PML) Pre-tax

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1-in-250 $ 7,506 15.8 % $ 5,439 11.4 % $ 1,517 3.2 %

(1) Worldwide aggregate is comprised of losses arising from tropical cyclones, convective storms, earthquakes, U.S.

(1) Worldwide aggregate is comprised of losses arising from tropical cyclones, convective storms, earthquakes, and U.S.

wildfires and inland floods, and excludes "non-modeled" perils such as man-made and other catastrophe risks including pandemic.

2 unchanged sentences

The PML for worldwide and key U.S.

peril regions are based on our in-force portfolio at April 1, 2022, and reflect the April 1, 2022, reinsurance program (see Global Property Catastrophe Reinsurance Program section) as well as inuring reinsurance protection coverages.

peril regions are based on our in-force portfolio at July 1, 2022, and reflect the April 1, 2022, reinsurance program (see Global Property Catastrophe Reinsurance Program section) as well as inuring reinsurance protection coverages.

These estimates assume that reinsurance recoverable is fully collectible.

According to the model, for the 1-in-100 return period scenario, there is a one percent chance that our pre-tax annual aggregate losses incurred in any year from U.S.

hurricane events could be in excess of $2,916 million (or 5.6 percent of our total shareholders’ equity at June 30, 2022).

hurricane events could be in excess of $2,869 million (or 6.0 percent of our total shareholders’ equity at September 30, 2022).

Effective December 31, 2021, our worldwide PMLs include losses from U.S.

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• While the use of third-party modeling packages to simulate potential catastrophe losses is prevalent within the insurance industry, the models are reliant upon significant meteorology, seismology, and engineering assumptions to estimate catastrophe losses.

In particular, modeled catastrophe events are not always a representation of actual events and ensuing additional loss potential;

Modeled catastrophe events are not always a representation of actual events and ensuing additional loss potential;

• There is no universal standard in the preparation of insured data for use in the models, the running of the modeling software, and interpretation of loss output.

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(d) These coverages are both part of the same Third layer within the Global Property Catastrophe Reinsurance Program and are fully placed with Reinsurers.

We anticipate that positive cash flows from operations (underwriting activities and investment income) should be sufficient to cover cash outflows under most loss scenarios for the near term.

In addition to cash from operations, routine sales of investments, and financing arrangements, we have agreements with a third-party bank provider which implemented two international multi-currency notional cash pooling programs to enhance cash management efficiency during periods of short-term timing mismatches between expected inflows and outflows of cash by currency.

The programs allow us to optimize investment income by avoiding portfolio disruption.

Should the need arise, we generally have access to capital markets and to credit facilities with letter of credit capacity of $3.7 billion with a sub-limit of $2.0 billion for revolving credit.

At June 30, 2022, our usage under these facilities was $1.3 billion in letters of credit.

Our access to credit under these facilities is dependent on the ability of the banks that are a party to the facilities to meet their funding commitments.

The facilities require that we maintain certain financial covenants, all of which we met at June 30, 2022.

Should the existing credit providers on these facilities experience financial difficulty, we may be required to replace credit sources, possibly in a difficult market.

If we cannot obtain adequate capital or sources of credit on favorable terms, on a timely basis, or at all, our business, operating results, and financial condition could be adversely affected.

To date, we have not experienced difficulty accessing our credit facilities.

The payment of dividends or other statutorily permissible distributions from our operating companies are subject to the laws and regulations applicable to each jurisdiction, as well as the need to maintain capital levels adequate to support the insurance and reinsurance operations, including financial strength ratings issued by independent rating agencies.

During the six months ended June 30, 2022, we were able to meet all our obligations, including the payments of dividends on our Common Shares, with our net cash flows.

We assess which subsidiaries to draw dividends from based on a number of factors.

Considerations such as regulatory and legal restrictions as well as the subsidiary’s financial condition are paramount to the dividend decision.

Chubb Limited received dividends of $5.8 billion and $1.8 billion from its Bermuda subsidiaries during the six months ended June 30, 2022 and 2021, respectively.

Chubb Limited received cash dividends of nil and $21 million and non-cash dividends of nil and $536 million from a Swiss subsidiary during the six months ended June 30, 2022 and 2021, respectively.

insurance subsidiaries of Chubb INA Holdings Inc.

(Chubb INA) may pay dividends, without prior regulatory approval, subject to restrictions set out in state law of the subsidiary’s domicile (or, if applicable, commercial domicile).

Chubb INA’s international subsidiaries are also subject to insurance laws and regulations particular to the countries in which the subsidiaries operate.

These laws and regulations sometimes include restrictions that limit the amount of dividends payable without prior approval of regulatory insurance authorities.

Chubb Limited received no dividends from Chubb INA during the six months ended June 30, 2022 and 2021.

Debt issued by Chubb INA is serviced by statutorily permissible distributions by Chubb INA’s insurance subsidiaries to Chubb INA as well as other group resources.

Chubb INA received $1.8 billion and $470 million from its subsidiaries during the six months ended June 30, 2022 and 2021, respectively.

Our sources of liquidity include cash from operations, routine sales of investments, and financing arrangements.

The following is a discussion of our cash flows for the six months ended June 30, 2022 and 2021.

Operating cash flows were $5.2 billion in both the six months ended June 30, 2022, and 2021.

Cash from (used for) investing was $1.1 billion in the six months ended June 30, 2022, compared to $(2.0) billion in the prior period, an increase of $3.1 billion.

Cash from investing in the current period included higher net sales of fixed maturities and equity securities of $3.7 billion, partially offset by higher private equity contributions, net of distributions received, of $606 million.

In addition, cash used related to acquisitions of Huatai Group ownership interest was $113 million in 2022 compared to $65 million in 2021.

Cash used for financing was $0.7 billion in the six months ended June 30, 2022, compared to $3.0 billion in the prior year period.

This decrease of $2.3 billion was the result of an additional $2.0 billion in repurchase agreements which Chubb entered into during the second quarter of 2022 to finance a portion of the acquisition of Cigna's A&H and life business in six Asia-Pacific markets.

Chubb uses repurchase agreements as a low-cost funding alternative.

At June 30, 2022, there were $3.4 billion in repurchase agreements outstanding with various maturities over the next six months.

Both internal and external forces influence our financial condition, results of operations, and cash flows.

Claim settlements, premium levels, and investment returns may be impacted by changing rates of inflation and other economic conditions.

In many cases, significant periods of time, ranging up to several years or more, may lapse between the occurrence of an insured loss, the reporting of the loss to us, and the settlement of the liability for that loss.

Capital Resources

Capital resources consist of funds deployed or available to be deployed to support our business operations.

June 30 December 31

September 30 December 31

(in millions of U.S.

8 unchanged sentences

Ratio of financial debt plus trust preferred securities to total capitalization 25.0 % 21.6 %

The ratios of financial debt to total capitalization in the table above are higher at June 30, 2022 compared to December 31, 2021 from the decline in shareholders' equity, principally reflecting net unrealized depreciation on investments in the current period compared to net unrealized appreciation in 2021.

The ratios of financial debt to total capitalization in the table above are higher at September 30, 2022 compared to December 31, 2021 from the decline in shareholders' equity, principally reflecting net unrealized depreciation on investments in the current period compared to net unrealized appreciation in 2021.

Repurchase agreements are excluded from the table above and are disclosed separately from short-term debt in the Consolidated balance sheets.

The repurchase agreements are collateralized borrowings where we maintain the right and ability to redeem the collateral on short notice, unlike short-term debt which comprises the current maturities of our long-term debt instruments.

For the six months ended June 30, 2022, we repurchased $2.1 billion of Common Shares in a series of open market transactions under the Board of Directors (Board) share repurchase authorization.

At June 30, 2022, there were 41,081,627 Common Shares in treasury with a weighted-average cost of $165.36 per share, and $2.5 billion in share repurchase authorization remained through June 30, 2023.

For the period July 1, 2022 through July 28, 2022, we repurchased 1,513,728 Common Shares for a total of $281 million in a series of open market transactions.

At July 28, 2022, $2.2 billion in share repurchase authorization remained.

For the nine months ended September 30, 2022, we repurchased $2.8 billion of Common Shares in a series of open market transactions under the Board of Directors (Board) share repurchase authorization.

At September 30, 2022, there were 31,356,130 Common Shares in treasury with a weighted-average cost of $158.76 per share, and $1.8 billion in share repurchase authorization remained through June 30, 2023.

We generally maintain the ability to issue certain classes of debt and equity securities via a Securities and Exchange Commission (SEC) shelf registration statement which is renewed every three years.

12 unchanged sentences

June 17, 2022 July 8, 2022 $0.83 (CHF 0.80)

September 16, 2022

October 7, 2022

$0.83 (CHF 0.78)

We anticipate that positive cash flows from operations (underwriting activities and investment income) should be sufficient to cover cash outflows under most loss scenarios for the near term.

The programs allow us to optimize investment income by avoiding portfolio disruption.

Should the need arise, we generally have access to capital markets and to credit facilities with letter of credit capacity of $3.7 billion with a sub-limit of $2.0 billion for revolving credit.

At September 30, 2022, our usage under these facilities was $1.4 billion in letters of credit.

Our access to credit under these facilities is dependent on the ability of the banks that are a party to the facilities to meet their funding commitments.

The facilities require that we maintain certain financial covenants, all of which we met at September 30, 2022.

Should the existing credit providers on these facilities experience financial difficulty, we may be required to replace credit sources, possibly in a difficult market.

If we cannot obtain adequate capital or sources of credit on favorable terms, on a timely basis, or at all, our business, operating results, and financial condition could be adversely affected.

To date, we have not experienced difficulty accessing our credit facilities.

In October 2022, Chubb entered into a new group syndicated credit facility through 2027 with capacity of $3.0 billion.

This facility consolidated our three existing syndicated facilities with capacity of $2.7 billion.

During the nine months ended September 30, 2022, we were able to meet all our obligations, including the payments of dividends on our Common Shares, with our net cash flows.

We assess which subsidiaries to draw dividends from based on a number of factors.

Considerations such as regulatory and legal restrictions as well as the subsidiary’s financial condition are paramount to the dividend decision.

Chubb Limited received dividends of $6.8 billion and $3.1 billion from its Bermuda subsidiaries during the nine months ended September 30, 2022 and 2021, respectively.

Chubb Limited received cash dividends of $32 million and $21 million and non-cash dividends of $348 million and $536 million from a Swiss subsidiary during the nine months ended September 30, 2022 and 2021, respectively.

insurance subsidiaries of Chubb INA Holdings Inc.

(Chubb INA) may pay dividends, without prior regulatory approval, subject to restrictions set out in state law of the subsidiary’s domicile (or, if applicable, commercial domicile).

Chubb INA’s international subsidiaries are also subject to insurance laws and regulations particular to the countries in which the subsidiaries operate.

These laws and regulations sometimes include restrictions that limit the amount of dividends payable without prior approval of regulatory insurance authorities.

Chubb Limited received no dividends from Chubb INA during the nine months ended September 30, 2022 and 2021.

Debt issued by Chubb INA is serviced by statutorily permissible distributions by Chubb INA’s insurance subsidiaries to Chubb INA as well as other group resources.

Chubb INA received $1.8 billion and $910 million from its subsidiaries during the nine months ended September 30, 2022 and 2021, respectively.

Our sources of liquidity include cash from operations, routine sales of investments, and financing arrangements.

The following is a discussion of our cash flows for the nine months ended September 30, 2022 and 2021.

Operating cash flows were $8.6 billion in the nine months ended September 30, 2022, compared to $8.5 billion in the prior year period.

Cash used for investing was $5.2 billion in the nine months ended September 30, 2022, compared to $3.8 billion in the prior year period.

Cash used for investing in the current year was primarily due to cash paid for the purchase of Cigna's business in Asia of $5.0 billion, which is net of cash acquired of $366 million.

There were net sales, principally in equities securities and fixed maturities of $1.9 billion, in part to fund the acquisition of Cigna's business in Asia, compared to net purchases of $2.3 billion in the prior year.

In addition, the current year included higher private equity contributions, net of distributions received, of $1.5 billion compared to $981 million in the prior year.

Cash used for financing was $2.7 billion in the nine months ended September 30, 2022, compared to $4.8 billion in the prior year period.

This decrease of $2.1 billion reflects lower Common Shares repurchased of $1.2 billion and proceeds of $1.0 billion from repurchase agreements, which were used to finance a portion of the acquisition of Cigna's business in Asia.

At September 30, 2022, there were $2.4 billion in repurchase agreements outstanding with various maturities over the next four months.

Both internal and external forces influence our financial condition, results of operations, and cash flows.

Claim settlements, premium levels, and investment returns may be impacted by changing rates of inflation and other economic conditions.

Information provided in connection with outstanding debt of subsidiaries

6 unchanged sentences

(Subsidiary Issuer)

June 30 December 31 June 30 December 31

September 30 December 31 September 30 December 31

(in millions of U.S.

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The following table presents the condensed statements of operations and comprehensive income of Chubb Limited and Chubb INA Holdings Inc., excluding equity in earnings from non-guarantor subsidiaries:

Six Months Ended June 30, 2022 Chubb Limited

Nine Months Ended September 30, 2022 Chubb Limited

(Parent Guarantor) Chubb INA Holdings Inc.

11 unchanged sentences

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 2. Management’s Discussion and Analysis