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Item 2. Management’s Discussion and Analysis

2023-07-28 compared with 2023-05-02 · 431 added, 256 removed, 848 unchanged (45% 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 months ended March 31, 2023.

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, 2023.

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

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the uncertainties of the loss-reserving and claims-settlement processes, including the difficulties associated with assessing environmental damage and asbestos-related latent injuries, the impact of aggregate-policy-coverage limits, the impact of bankruptcy protection sought by various asbestos producers and other related businesses, and the timing of loss payments;

• infection rates and severity of COVID-19 and related risks, and their effects on our business operations and claims activity, and any adverse impact to our insureds, brokers, agents, and employees;

actual claims may exceed our best estimate of ultimate insurance losses incurred which could change including as a result of, among other things, the impact of legislative or regulatory actions taken in response to COVID-19;

• changes in the distribution or placement of risks due to increased consolidation of insurance and reinsurance brokers;

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global political conditions and possible business disruption or economic contraction that may result from such events;

• severity of pandemics and related risks, and their effects on our business operations and claims activity, and any adverse impact to our insureds, brokers, agents, and employees;

• developments in global financial markets, including changes in interest rates, stock markets, and other financial markets;

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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 March 31, 2023, we had total assets of $201 billion and shareholders’ equity of $53 billion.

At June 30, 2023, we had total assets of $205 billion and shareholders’ equity of $53 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 2022 Form 10-K.

Consolidated Operating Results – Three Months Ended March 31, 2023 and 2022

Three Months Ended

March 31 % Change

Consolidated Operating Results – Three and Six Months Ended June 30, 2023 and 2022

Three Months Ended Six Months Ended

June 30 % Change June 30 % Change

(in millions of U.S.

dollars, except for percentages) 2023 2022 Q-23 vs.

Q-22 2023 2022 YTD-23 vs.

Net premiums written $ 11,951 $ 10,293 16.1 % $ 22,661 $ 19,482 16.3 %

Net premiums written - constant dollars (1)

16.8 % 17.5 %

Net premiums earned 10,999 9,549 15.2 % 21,141 18,286 15.6 %

Net investment income 1,145 888 28.9 % 2,252 1,710 31.7 %

Net realized gains (losses) (77) 23 NM

Net realized gains (losses) (304) (503) (39.5) % (381) (480) (20.5) %

Market risk benefits gains (losses) (7) (33) (79.9) % (122) 16 NM

5 unchanged sentences

Interest expense 165 134 22.8 % 325 266 22.2 %

Other (income) expense (296) (312) (5.1) %

Other (income) expense (100) 101 NM (396) (211) 88.1 %

Amortization of purchased intangibles 70 71 (2.0) % 142 142 —

Cigna integration expenses 22 — NM

Cigna integration expenses 15 3 NM 37 3 NM

Total expenses 9,648 8,420 14.6 % 18,429 15,745 17.0 %

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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 March 31, 2023

Financial Highlights for the Three Months Ended June 30, 2023

• Net income was $1.8 billion compared with $1.2 billion in the prior year period.

Net income in the current quarter included the results of Cigna's business acquired during the third quarter of 2022 and record net investment income.

Net income is slightly lower compared to the prior year, reflecting market risk benefit losses of $115 million, from lower interest rates and higher volatility, partially offset by higher equity markets, compared to a gain of $49 million in the prior year.

• Consolidated net premiums written were $10.7 billion, up 16.6 percent, or 18.3 percent in constant dollars, with Cigna's business in Asia adding 8.3 percentage points, or 8.4 percentage points in constant dollars.

Net income in the current quarter was driven by strong underwriting results, including growth in net premiums earned, and record net investment income.

The acquisition of Cigna's Asian business in 2022 added to net income.

In addition, there were after-tax mark-to-market gains on public and private equities of $52 million in the current quarter compared to losses of $489 million in the prior year.

• Consolidated net premiums written were $12.0 billion, up 16.1 percent, or 16.8 percent in constant dollars.

P&C net premiums written were up 9.8 percent, or 10.4 percent in constant dollars, with commercial and consumer lines up 10.4 percent and 10.5 percent, respectively.

• Consolidated net premiums earned were $10.1 billion, up 16.1 percent, or 17.7 percent in constant dollars, with Cigna's business in Asia adding 8.7 percentage points, or 8.8 percentage points in constant d ollars.

Life net premiums written up were up 126.1 percent, or 127.6 percent in constant dollars, driven substantially by the acquisition of Cigna's Asian business.

• Consolidated net premiums earned were $11.0 billion, up 15.2 percent, or 15.8 percent in constant dollars .

P&C net premiums earned increased 8.1 percent, or 8.7 percent in constant dollars, with commercial and consumer lines up 9.1 percent and 7.7 percent, respectively.

• Total pre-tax and after-tax catastrophe losses were $400 million (4.1 percentage points of the P&C combined ratio) and $319 million, respectively, compared with $291 million (3.2 percentage points of the P&C combined ratio) and $241 million, respectively, in the prior year period.

Catastrophe losses in the current quarter were primarily from global weather-related events.

• Total pre-tax and after-tax favorable prior period development were $196 million (2.2 percentage points of the combined ratio) and $149 million, respectively.

The $196 million in pre-tax development was comprised of $202 million in favorable non-catastrophe development and $6 million in adverse catastrophe-related development.

This compares with $240 million (3.2 percentage points of the combined ratio) and $195 million, respectively, in the prior year period.

Catastrophe losses in the current quarter comprise 25 individual events, primarily in North America.

• Total pre-tax and after-tax favorable prior period development were $200 million (2.0 percentage points of the P&C combined ratio) and $155 million, respectively.

This compares with $247 million (2.7 percentage points of the P&C combined ratio) and $205 million, respectively, in the prior year period.

• The P&C combined ratio was 85.4 percent compared with 84.0 percent in the prior year period.

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• Operating cash flow was $2.5 billion compared with $2.7 billion in the prior year period.

• Shareholders' equity remained essentially flat in the quarter, as net income of $1.8 billion and cumulative translation gains of $216 million were partially offset by net unrealized losses on investments of $1.2 billion from higher interest rates.

In addition, shareholders' equity reflects total capital returned to shareholders in the quarter of $1.1 billion, including share repurchases of $724 million, at an average purchase price of $197.04 per share, and dividends of $354 million.

We previously announced that our Board of Directors approved a new share repurchase program of up to $5 billion with no expiration date, effective July 1, 2023.

• Effective January 1, 2023, we adopted the Long-Duration Targeted Improvements (LDTI) U.S.

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The impact to 2022 results was immaterial.

• Shareholders' equity increased by $2.5 billion in the quarter, primarily from net income of $1.9 billion and net unrealized gains on investments of $1.6 billion after-tax from lower interest rates.

In addition, shareholders' equity reflected total capital returned to shareholders in the quarter of $772 million, including share repurchases of $428 million, at an average purchase price of $212.81 per share, and dividends of $344 million.

• On July 1, 2023 we closed on an additional 5.4% ownership interests in Huatai Group, a Chinese financial services holding company, that brings our total aggregate ownership to approximately 69.6%.

We will apply consolidation accounting to our Huatai Group investment effective in the third quarter of 2023.

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

Net Premiums Written Three Months Ended

March 31 % Change

June 30 % Change Six Months Ended

(in millions of U.S.

dollars, except for percentages) 2023 2022 Q-23 vs.

Q-22 2023 2022 YTD-23 vs.

Commercial casualty $ 2,024 $ 1,773 14.1 % 15.2 % $ 3,927 $ 3,610 8.8 % 10.2 %

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Total Commercial P&C lines 6,716 6,077 10.5 % 11.4 % 12,918 11,919 8.4 % 9.6 %

Agriculture 293 62 NM NM

Agriculture 767 738 4.0 % 4.0 % 1,060 800 32.5 % 32.5 %

Personal automobile 460 423 8.8 % 4.9 % 887 835 6.2 % 2.9 %

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

The increase in consolidated net premiums written for the three months ended March 31, 2023, reflects growth across most product lines driven by strong renewal retention, positive rate increases, and new business.

Cigna's business in Asia contributed $758 million for the three months ended March 31, 2023.

• Commercial casualty grew in all regions globally driven by strong premium retention, including both rate and exposure increases, and strong new business.

• Workers' compensation growth was due to strong premium retention and rate increases in North America.

• Financial lines decreased, reflecting lower new business and lower rates in North America.

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

The increase in consolidated net premiums written for the three and six months ended June 30, 2023, reflects growth across most product lines driven by strong premium retention, including rate and exposure increases, and strong new business.

In addition, growth for the three and six months ended June 30, 2023 includes the results of Cigna's business acquired during the third quarter of 2022.

• Commercial casualty grew in all regions globally, principally in North America and Europe, driven by strong premium retention, including both rate and exposure increases, and strong new business.

• Workers' compensation decreased in the quarter from lower new business in North America.

• Financial lines decreased, reflecting lower renewal business in North America.

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

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

• Agriculture increased due to underlying growth in crop insurance, reflecting higher commodity prices.

• Agriculture increased due to underlying growth in crop insurance, reflecting higher commodity prices, principally from our fall-seeded crops, and strong new business in Chubb Agribusiness.

In addition, the prior year included a return of premium to the U.S.

government of $161 million.

• Personal lines grew principally in North America, with growth strongest in our high net worth business.

• Global A&H – P&C increased due to growth in Asia, including $34 million from the acquisition of Cigna’s business in Asia, and higher new business and increased consumer activity, including higher travel volume, in Europe, Latin America, and Japan.

• Reinsurance lines increased primarily due to continued growth in the portfolio, driven by new business.

• Global A&H – Life increased due to the acquisition of Cigna’s business in Asia, which contributed $570 million to growth.

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

• Life increased driven substantially by growth in Asia, principally from new business in Hong Kong, and the acquisition of Cigna's business in Asia, which contributed $154 million to growth.

• Personal lines grew principally in North America and Europe, with growth strongest in homeowners.

• Global A&H – P&C increased due to growth in Asia, primarily due to the acquisition of Cigna’s business in 2022, and higher new business and increased consumer activity, including higher travel volume, in Europe, Latin America, and Japan.

• Reinsurance lines increased reflecting new business and rate increases in property, partially offset by lower catastrophe reinstatement premiums.

• Global A&H – Life increased due to the acquisition of Cigna’s business in Asia.

Growth in our North American Combined Insurance supplemental A&H business was more than offset by the non-renewal of a large program.

• Life increased primarily due to the acquisition of Cigna's business in Asia.

In addition, there was growth in Latin America and Asia, principally in Hong Kong.

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

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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 March 31, 2023, net premiums earned increased $1.4 billion, up 16.1 percent, or 17.7 percent in constant dollars.

For the three months ended June 30, 2023, net premiums earned increased $1.5 billion, up 15.2 percent, or 15.8 percent in constant dollars.

P&C net premiums earned increased 8.1 percent, or 8.7 percent in constant dollars, comprising growth in commercial and consumer lines of 9.1 percent and 7.7 percent, respectively.

For the six months ended June 30, 2023, net premiums earned increased $2.9 billion, up 15.6 percent, or 16.7 percent in constant dollars.

P&C net premiums earned increased 8.2 percent, or 9.2 percent in constant dollars, comprising growth in commercial and consumer lines of 9.7 percent and 7.8 percent, respectively.

Catastrophe Losses and Prior Period Development

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and Canada, we generally use a similar definition.

Prior period development includes adjustments relating to either profit commission reserves or policyholder dividend reserves based on actual claim experience that develops after the policy period ends.

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.

PPD includes adjustments relating to either profit commission reserves or policyholder dividend reserves based on actual claim experience that develops after the policy period ends.

The expense adjustments correlate to the prior period loss development on these same policies.

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

Three Months Ended Six Months Ended

June 30 June 30

(in millions of U.S.

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Favorable prior period development $ 200 $ 247 $ 396 $ 487

Catastrophe losses through March 31, 2023 and 2022, were primarily from the following events:

Catastrophe losses through June 30, 2023 and 2022, were primarily from the following events:

Severe weather-related events in the U.S.

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and New Zealand storms.

Australia storms, Colorado wildfires, and other severe weather-related events in the U.S.

and internationally.

Pre-tax net favorable PPD for the three months ended March 31, 2023, was $196 million, comprising $202 million in favorable non-catastrophe development and $6 million in adverse catastrophe-related development.

This development includes adverse development of $19 million in long-tail lines, principally from accident years 2013 through 2017.

The remaining net favorable development of $215 million in short-tail lines is primarily in surety and A&H lines.

Pre-tax net favorable PPD for the three months ended March 31, 2022, was $240 million, with 5 percent in long-tail lines, principally from accident years 2018 and prior, and 95 percent in short-tail lines, primarily in A&H, property, and surety lines.

Severe weather-related events in the U.S.

and internationally, Australia storms, and Colorado wildfires.

Pre-tax net favorable PPD for the three months ended June 30, 2023, was $200 million, including adverse development of $49 million for molestation claims.

Pre-tax net favorable PPD for the six months ended June 30, 2023, was $396 million, including adverse development of $49 million for molestation claims.

Excluding the adverse development, we had net favorable development of $445 million with 23 percent in long-tail lines, principally from accident years 2011 through 2019, and 77 percent in short-tail lines, primarily in A&H and surety lines.

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 included 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.

Refer to the prior period development discussion in Note 8 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

Three Months Ended Six Months Ended

June 30 June 30

2023 2022 2023 2022

Loss and loss expense ratio

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P&C Combined ratio 85.4 % 84.0 % 85.8 % 84.2 %

The loss and loss expense ratio increased for the three months ended March 31, 2023, reflecting higher catastrophe losses and lower favorable prior period development.

The CAY loss ratio excluding catastrophe losses decreased for the three months ended March 31, 2023, primarily from a higher percentage of net premiums earned from lines with a lower loss ratio and earned rate and exposure exceeding loss cost trends in certain lines.

The policy acquisition cost ratio decreased for the three months ended March 31, 2023, primarily due to the favorable impact of higher net premiums earned.

The administrative expense ratio for the three months ended March 31, 2023 remained essentially flat as higher employee-related expenses and increased investment to support growth was offset by the favorable impact of higher net premiums earned.

The loss and loss expense ratio increased for the three and six months ended June 30, 2023, reflecting higher catastrophe losses and lower favorable prior period development.

The CAY loss ratio excluding catastrophe losses decreased for the three and six months ended June 30, 2023, primarily from a higher percentage of net premiums earned from lines with a lower loss ratio.

The policy acquisition cost ratio increased for the three months ended June 30, 2023, primarily due to lower ceded commissions and the absence of earned premium adjustments recorded in prior year that have a lower expense ratio.

The policy acquisition cost ratio decreased for the six months ended June 30, 2023, due to the favorable impact of higher net premiums earned, partially offset by lower ceded commissions.

The administrative expense ratio remained essentially flat for the three and six months ended June 30, 2023, as higher pension expenses, which will continue through 2023, is mostly offset by the favorable impact of higher net premiums earned.

The increase in pension expense reflects the adverse impact of market conditions in 2022.

Policy benefits

Policy benefits represent losses on contracts classified as long-duration and generally include accident and supplemental health products, term and whole life products, endowment products, and annuities.

In addition, Policy benefits for the three and six months ended June 30, 2023 includes the results of Cigna's business acquired during the third quarter of 2022.

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

For the three months ended March 31, 2023 and 2022, Policy benefits were $797 million and $373 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 $(25) million and $(31) million, respectively.

For the three months ended June 30, 2023 and 2022, Policy benefits were $830 million and $361 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 $(12) million and $(18) 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 $822 million and $404 million for the three months ended March 31, 2023 and 2022, respectively.

Excluding the separate account gains and losses, Policy benefits were $842 million and $379 million for the three months ended June 30, 2023 and 2022, respectively.

For the six months ended June 30, 2023 and 2022, Policy benefits were $1,627 million and $734 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 $(37) million and $(49) 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 $1,664 million and $783 million for the six months ended June 30, 2023 and 2022, 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 Months Ended March 31, 2023 and 2022

Segment Operating Results – Three and Six Months Ended June 30, 2023 and 2022

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

March 31 % Change

Three Months Ended Six Months Ended

June 30 % Change June 30 % Change

(in millions of U.S.

dollars, except for percentages) 2023 2022 Q-23 vs.

Q-22 2023 2022 YTD-23 vs.

Net premiums written $ 5,155 $ 4,665 10.5 % $ 9,443 $ 8,704 8.5 %

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Net investment income 726 522 39.1 % 1,424 1,011 40.8 %

Other (income) expense 7 6 10.9 %

Other (income) expense 5 — NM 12 6 88.2 %

Segment income $ 1,526 $ 1,502 1.6 % $ 2,949 $ 2,764 6.7 %

Loss and loss expense ratio:

CAY loss ratio excluding catastrophe losses 60.5 % 61.5 % (1.0) pts

Catastrophe losses 3.7 % 2.0 % 1.7 pts

Prior period development (1.7) % (2.8) % 1.1 pts

Loss and loss expense ratio 62.5 % 60.7 % 1.8 pts

Policy acquisition cost ratio 14.0 % 13.9 % 0.1 pts

Administrative expense ratio 6.7 % 6.5 % 0.2 pts

Combined ratio 83.2 % 81.1 % 2.1 pts

Catastrophe Losses and Prior Period Development Three Months Ended

CAY loss ratio excluding catastrophe losses 60.7 % 61.4 % (0.7) pts 60.6 % 61.5 % (0.9) pts

Catastrophe losses 5.0 % 2.9 % 2.1 pts 4.4 % 2.4 % 2.0 pts

Prior period development (3.4) % (6.7) % 3.3 pts (2.6) % (4.8) % 2.2 pts

Loss and loss expense ratio 62.3 % 57.6 % 4.7 pts 62.4 % 59.1 % 3.3 pts

Policy acquisition cost ratio 13.3 % 12.8 % 0.5 pts 13.7 % 13.4 % 0.3 pts

Administrative expense ratio 6.9 % 6.5 % 0.4 pts 6.8 % 6.5 % 0.3 pts

Combined ratio 82.5 % 76.9 % 5.6 pts 82.9 % 79.0 % 3.9 pts

NM - Not meaningful

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

June 30 June 30

(in millions of U.S.

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Favorable prior period development $ 146 $ 287 $ 218 $ 395

Catastrophe losses through March 31, 2023 and 2022, were primarily from the following events:

Catastrophe losses through June 30, 2023 and 2022, were primarily from the following events:

flooding, hail, tornadoes, wind events, and winter storm losses.

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

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

Refer to Note 8 in the Consolidated Financial Statements for detail on prior period development.

Net premiums written increased $249 million, or 6.2 percent for the three months ended March 31, 2023, reflecting strong premium retention, including both rate and exposure increases, and strong new business in certain lines.

The increase in premiums was across most lines of business, including property, commercial multiple peril, A&H, and excess casualty.

Partially offsetting the increase was a 1.3 percentage point impact of loss portfolio transfer transactions year-over-year.

Net premiums earned increased $255 million, or 6.2 percent for the three months ended March 31, 2023, reflecting the growth in net premiums written described above.

Net premiums written increased $490 million, or 10.5 percent, and $739 million, or 8.5 percent for the three and six months ended June 30, 2023, respectively, reflecting strong premium retention, including both rate and exposure increases, and strong new business.

The increase in premiums was across most lines of business, most notably in property, but also in casualty excluding workers' compensation and commercial multiple peril lines.

This growth was partially offset by a decline in financial lines due to lower renewal business.

Net premiums earned increased $358 million, or 8.4 percent, and $613 million, or 7.3 percent for the three and six months ended June 30, 2023, respectively, reflecting the growth in net premiums written described above.

Combined Ratio

The loss and loss expense ratio increased for the three months ended March 31, 2023, primarily from higher catastrophe losses and lower favorable prior period development.

Prior period development for the three months ended March 31, 2023, comprised $112 million of favorable development, partially offset by a charge of $40 million related to development from the 2022 late-season catastrophes.

The CAY loss ratio excluding catastrophe losses decreased for the three months ended March 31, 2023, primarily from a higher percentage of net premiums earned from property lines that have a lower loss ratio and earned rate and exposure exceeding loss cost trends in certain lines.

The administrative expense ratio increased for the three months ended March 31, 2023, primarily due to higher pension expenses reflecting unfavorable market conditions, partially offset by the favorable impact of higher net premiums earned.

We expect the higher pension expense to continue through 2023.

The loss and loss expense ratio increased for the three and six months ended June 30, 2023, primarily from higher catastrophe losses and lower favorable prior period development.

Refer to Note 8 in the Consolidated Financial Statements for detail on prior period development.

The CAY loss ratio excluding catastrophe losses decreased for the three and six months ended June 30, 2023, primarily from a higher percentage of net premiums earned from property lines that have a lower loss ratio.

The policy acquisition cost ratio increased for the three and six months ended June 30, 2023, primarily due to lower ceded commissions.

The administrative expense ratio increased for the three and six months ended June 30, 2023, primarily from higher pension expenses which will continue through 2023, partially offset by the favorable impact of higher net premiums earned.

The increase in pension expense reflects the adverse impact of market conditions in 2022.

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

March 31 % Change

Three Months Ended Six Months Ended

June 30 % Change June 30 % Change

(in millions of U.S.

dollars, except for percentages) 2023 2022 Q-23 vs.

Q-22 2023 2022 YTD-23 vs.

Net premiums written $ 1,581 $ 1,426 10.8 % $ 2,877 $ 2,606 10.4 %

5 unchanged sentences

Net investment income 86 64 33.3 % 168 123 36.1 %

Other (income) expense 1 1 —

Other (income) expense (1) 1 NM — 2 NM

Amortization of purchased intangibles 3 3 — 5 5 —

1 unchanged sentence

Loss and loss expense ratio:

CAY loss ratio excluding catastrophe losses 53.9 % 53.3 % 0.6 pts

Catastrophe losses 12.1 % 8.0 % 4.1 pts

Prior period development 1.3 % (4.1) % 5.4 pts

Loss and loss expense ratio 67.3 % 57.2 % 10.1 pts

Policy acquisition cost ratio 20.6 % 20.8 % (0.2) pts

Administrative expense ratio 6.0 % 5.5 % 0.5 pts

Combined ratio 93.9 % 83.5 % 10.4 pts

CAY loss ratio excluding catastrophe losses 54.0 % 53.6 % 0.4 pts 53.9 % 53.4 % 0.5 pts

Catastrophe losses 10.9 % 7.4 % 3.5 pts 11.4 % 7.7 % 3.7 pts

Prior period development (2.5) % (0.2) % (2.3) pts (0.5) % (2.1) % 1.6 pts

Loss and loss expense ratio 62.4 % 60.8 % 1.6 pts 64.8 % 59.0 % 5.8 pts

Policy acquisition cost ratio 20.4 % 20.3 % 0.1 pts 20.5 % 20.5 % — pts

Administrative expense ratio 6.1 % 5.8 % 0.3 pts 6.1 % 5.7 % 0.4 pts

Combined ratio 88.9 % 86.9 % 2.0 pts 91.4 % 85.2 % 6.2 pts

NM - Not meaningful

Catastrophe Losses and Prior Period Development

Three Months Ended

Three Months Ended Six Months Ended

June 30 June 30

(in millions of U.S.

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Catastrophe losses $ 147 $ 95 $ 306 $ 195

(Unfavorable) favorable prior period development $ (17) $ 51

Catastrophe losses through March 31, 2023 and 2022, were primarily from the following events:

winter storm losses, flooding, hail, tornadoes, and wind events.

Colorado wildfires and severe weather-related events in the U.S.

Favorable prior period development $ 33 $ 3 $ 16 $ 54

Catastrophe losses through June 30, 2023 and 2022, were primarily from the following events:

flooding, hail, tornadoes, wind events, and winter storm losses.

Severe weather-related events in the U.S.

and Colorado wildfires.

Refer to Note 8 in the Consolidated Financial Statements for detail on prior period development.

Net premiums written increased $116 million, or 9.9 percent for the three months ended March 31, 2023, primarily driven by strong new business and renewal retention, from both rate and exposure increases, across all lines, including homeowners, automobile, and excess liability.

Net premiums earned increased $73 million, or 5.9 percent for the three months ended March 31, 2023, reflecting the growth in net premiums written described above.

Net premiums written increased $155 million, or 10.8 percent, and $271 million, or 10.4 percent for the three and six months ended June 30, 2023, respectively, primarily driven by record new business and strong renewal retention, from both rate and exposure increases, across all lines, principally in homeowners.

Net premiums earned increased $86 million, or 6.7 percent, and $159 million, or 6.3 percent for the three and six months ended June 30, 2023, respectively, reflecting the growth in net premiums written described above.

Combined Ratio

The loss and loss expense ratio increased for the three months ended March 31, 2023, primarily reflecting the impact of higher catastrophe losses in the current quarter, including a charge of $9 million related to the development from 2022 late-season catastrophes, and a reserve release in the prior year quarter due to lower than expected paid and reported loss activity attributable to the indirect effects of COVID related economic slowdown.

The CAY loss ratio excluding catastrophe losses increased for the three months ended March 31, 2023, primarily reflecting higher auto losses, partially offset by homeowners earned rate and exposure exceeding lost cost trends.

The administrative expense ratio increased for the three months ended March 31, 2023, primarily due to higher year-over-year pension expenses from unfavorable market conditions, partially offset by the favorable impact of higher net premiums earned.

We expect the higher pension expense to continue through 2023.

The loss and loss expense ratio increased for the three months ended June 30, 2023, primarily reflecting higher catastrophe losses, partially offset by higher favorable prior period development.

The loss and loss expense ratio increased for the six months ended June 30, 2023, primarily reflecting higher catastrophe losses in the current year, and a reserve release in the prior year due to lower than expected paid and reported loss activity.

The CAY loss ratio excluding catastrophe losses increased for the three and six months ended June 30, 2023, primarily reflecting higher auto and excess liability losses, partially offset by homeowners earned rate and exposure exceeding loss cost trends.

The increase in pension expense reflects the adverse impact of market conditions in 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

March 31 % Change

Three Months Ended Six Months Ended

June 30 % Change June 30 % Change

(in millions of U.S.

dollars, except for percentages) 2023 2022 Q-23 vs.

Net premiums written $ 293 $ 62 NM

Net premiums earned 159 (29) NM

Losses and loss expenses 140 (92) NM

Q-22 2023 2022 YTD-23 vs.

Net premiums written $ 767 $ 738 4.0 % $ 1,060 $ 800 32.5 %

Net premiums earned 635 573 11.0 % 794 544 46.0 %

Losses and loss expenses 507 478 6.2 % 647 386 67.9 %

Policy acquisition costs 37 31 20.1 % 52 43 21.3 %

6 unchanged sentences

Loss and loss expense ratio:

CAY loss ratio excluding catastrophe losses 73.1 % 70.6 % 2.5 pts

Catastrophe losses 15.4 % NM NM

Prior period development — NM NM

Loss and loss expense ratio 88.5 % NM NM

Policy acquisition cost ratio 9.3 % NM NM

Administrative expense ratio 1.4 % NM NM

Combined ratio 99.2 % NM NM

CAY loss ratio excluding catastrophe losses 80.9 % 79.6 % 1.3 pts 79.4 % 77.9 % 1.5 pts

Catastrophe losses (0.9) % 3.7 % (4.6) pts 2.4 % 4.0 % (1.6) pts

Prior period development (0.3) % — (0.3) pts (0.3) % (11.0) % 10.7 pts

Loss and loss expense ratio 79.7 % 83.3 % (3.6) pts 81.5 % 70.9 % 10.6 pts

Policy acquisition cost ratio 5.9 % 5.4 % 0.5 pts 6.6 % 8.0 % (1.4) pts

Administrative expense ratio 0.6 % 0.4 % 0.2 pts 0.7 % 0.1 % 0.6 pts

Combined ratio 86.2 % 89.1 % (2.9) pts 88.8 % 79.0 % 9.8 pts

NM - Not meaningful

Catastrophe Losses and Prior Period Development Three Months Ended

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

June 30 June 30

(in millions of U.S.

dollars) 2023 2022 2023 2022

Catastrophe losses $ 24 $ —

(Favorable) unfavorable catastrophe losses $ (5) $ 21 $ 19 $ 21

Favorable prior period development $ 3 $ — $ 3 $ 26

Catastrophe losses through March 31, 2023, were primarily from U.S.

flooding, hail, tornadoes, wind events, and winter storm losses.

Catastrophe activity for the three months ended June 30, 2023, relates to development from the first quarter of 2023.

Catastrophe losses through June 30, 2023 and 2022, were primarily from the following events:

flooding, hail, tornadoes, and wind events.

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

Refer to Note 8 in the Consolidated Financial Statements for detail on prior period development.

Net premiums written increased $231 million for the three months ended March 31, 2023, reflecting growth in MPCI due to higher commodity prices, and strong new business in Chubb Agribusiness.

In addition, growth reflects the return of premium to the U.S.

government of $161 million in the first quarter of 2022 as part of the profit-sharing agreement.

Net premiums written increased $29 million, or 4.0 percent, and $260 million, or 32.5 percent for the three and six months ended June 30, 2023, respectively, reflecting growth in MPCI due to higher commodity prices, principally from our fall-seeded crops, and strong new business in Chubb Agribusiness.

In addition, growth for the six months ended June 30, 2023 reflects the return of premium to the U.S.

government of $161 million in the first quarter of 2022 as part of a profit-sharing agreement.

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

Net premiums earned increased $188 million for the three months ended March 31, 2023, reflecting the factors described above.

Net premiums earned increased $62 million, or 11.0 percent, and $250 million, or 46.0 percent for the three and six months ended June 30, 2023, respectively, reflecting the factors described above.

Combined Ratio

The CAY loss ratio excluding catastrophe losses increased for the three months ended March 31, 2023, primarily from higher premiums earned from MPCI, which have a higher loss ratio, and a 1.5 percentage point increase from a year-over-year impact from our crop commodity price hedge activity which produced a loss this quarter versus a gain last year.

The CAY administrative expense ratio increased for the three months ended March 31, 2023, reflecting lower Administrative and Operating (A&O) reimbursements on the MPCI business.

The CAY loss ratio excluding catastrophe losses increased for the three and six months ended June 30, 2023, primarily due to lower crop year gain estimated in the current year compared to the prior year through June 30 and the year-over-year impact of crop commodity price hedge activity, which resulted in an increase of 0.7 percentage points and 0.8 percentage points, respectively.

The decrease in the loss and loss expense ratio for the three months ended June 30, 2023, reflects catastrophe loss development from the first quarter of 2023.

The increase in the loss and loss expense ratio for the six months ended June 30, 2023, reflects the prior year impact of the return of premium to the U.S.

government mentioned above which had a corresponding reduction in incurred losses, partially offset by lower catastrophe losses.

The policy acquisition cost ratio increased for the three months ended June 30, 2023, reflecting changes in mix of business away from products that have a lower acquisition cost ratio.

The policy acquisition cost ratio decreased for the six months ended June 30, 2023, primarily from the favorable impact of higher net premiums earned from MPCI.

The administrative expense ratio increased for the six months ended June 30, 2023, reflecting lower Administrative and Operating (A&O) reimbursements on the MPCI business.

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

March 31 % Change

Three Months Ended Six Months Ended

June 30 % Change June 30 % Change

(in millions of U.S.

dollars, except for percentages) 2023 2022 Q-23 vs.

Q-22 2023 2022 YTD-23 vs.

Net premiums written $ 2,885 $ 2,640 9.3 % $ 6,148 $ 5,719 7.5 %

7 unchanged sentences

Net investment income 200 162 23.5 % 388 309 25.7 %

Other (income) expense (9) 2 NM

Other (income) expense (10) 3 NM (19) 5 NM

Amortization of purchased intangibles 15 14 9.6 % 33 28 16.6 %

1 unchanged sentence

Loss and loss expense ratio:

CAY loss ratio excluding catastrophe losses 49.4 % 49.4 % — pts

Catastrophe losses 4.1 % 5.8 % (1.7) pts

Prior period development (5.1) % (2.3) % (2.8) pts

Loss and loss expense ratio 48.4 % 52.9 % (4.5) pts

Policy acquisition cost ratio 25.6 % 25.8 % (0.2) pts

Administrative expense ratio 10.0 % 10.2 % (0.2) pts

Combined ratio 84.0 % 88.9 % (4.9) pts

CAY loss ratio excluding catastrophe losses 49.5 % 50.0 % (0.5) pts 49.5 % 49.7 % (0.2) pts

Catastrophe losses 0.9 % 1.8 % (0.9) pts 2.4 % 3.8 % (1.4) pts

Prior period development (2.1) % (6.4) % 4.3 pts (3.6) % (4.4) % 0.8 pts

Loss and loss expense ratio 48.3 % 45.4 % 2.9 pts 48.3 % 49.1 % (0.8) pts

Policy acquisition cost ratio 25.7 % 25.9 % (0.2) pts 25.6 % 25.8 % (0.2) pts

Administrative expense ratio 10.0 % 10.3 % (0.3) pts 10.1 % 10.3 % (0.2) pts

Combined ratio 84.0 % 81.6 % 2.4 pts 84.0 % 85.2 % (1.2) pts

NM - Not meaningful

Catastrophe Losses and Prior Period Development

Three Months Ended

Three Months Ended Six Months Ended

June 30 June 30

(in millions of U.S.

2 unchanged sentences

Favorable prior period development $ 61 $ 173 $ 204 $ 233

Catastrophe losses through March 31, 2023 and 2022, were primarily from the following events:

Storms in New Zealand and international weather-related events.

Catastrophe losses through June 30, 2023 and 2022, were primarily from the following events:

Storms in New Zealand, flooding in Italy, and international weather-related events.

Storms in Australia and international weather-related events.

1 unchanged sentence

Net Premiums Written by Region

Three months ended March 31

Three months ended June 30

(in millions of U.S.

9 unchanged sentences

Net premiums written $ 2,885 100 % $ 2,640 100 % $ 2,600 9.3 % 10.9 %

Six months ended June 30

(in millions of U.S.

dollars, except for percentages) 2023 2023

% of Total 2022 2022

% of Total C$

2022 Y-23 vs.

Europe, Middle East, and Africa $ 3,028 49 % $ 2,857 50 % $ 2,745 6.0 % 10.3 %

Latin America 1,274 21 % 1,154 20 % 1,199 10.4 % 6.2 %

Asia Pacific 1,505 24 % 1,333 23 % 1,276 13.0 % 18.0 %

Japan 247 4 % 258 5 % 232 (4.3) % 6.4 %

94 2 % 117 2 % 114 (20.1) % (17.8) %

Net premiums written $ 6,148 100 % $ 5,719 100 % $ 5,566 7.5 % 10.4 %

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

Net premiums written increased $184 million, or $297 million on a constant dollar basis, for the three months ended March 31, 2023, reflecting growth in commercial lines of 6.2 percent, or 10.8 percent on a constant-dollar basis, and growth in consumer lines of 5.6 percent, or 8.6 percent on a constant-dollar basis.

Our European division increased for the three months ended March 31, 2023, supported by both our wholesale and retail divisions.

The growth in commercial lines of 6.0 percent, or 11.7 percent on a constant-dollar basis, was primarily driven by higher new business, and positive rate increases, including commercial property and casualty lines.

Consumer lines declined 2.9 percent, but grew 4.5 percent on a constant-dollar basis primarily due to increased travel volume in A&H.

Latin America increased for the three months ended March 31, 2023.

The growth in commercial lines of 10.1 percent, or 9.4 percent on a constant-dollar basis, is driven by exposure increases, positive rate increases, and new business, primarily property and casualty lines.

Consumer lines grew 8.5 percent, or 2.4 percent on a constant-dollar basis due to increased A&H.

Asia Pacific increased for the three months ended March 31, 2023.

The growth in commercial lines of 11.3 percent, or 14.9 percent on a constant-dollar basis, is driven by higher new business, higher retention and positive rate increases, including property and casualty lines.

The growth in consumer lines of 16.7 percent, or 22.5 percent on a constant-dollar basis, increased primarily from travel in A&H.

The acquisition of Cigna's business in Asia contributed $34 million in 2023.

Japan increased for the three months ended March 31, 2023, on a constant-dollar basis, primarily from higher new business in A&H.

Net premiums earned increased $158 million, or $252 million on a constant-dollar basis, for the three months ended March 31, 2023, reflecting the increase in commercial and consumer net premiums written described above.

Overall, net premiums written increased $245 million and $429 million, or $285 million and $582 million on a constant dollar basis, for the three and six months ended June 30, 2023, respectively, reflecting growth in both commercial and consumer lines.

For the three and six months ended June 30, 2023, commercial lines grew 9.2 percent and 7.6 percent, or 11.9 percent and 11.3 percent on a constant-dollar basis, respectively, and consumer lines grew 9.3 percent and 7.4 percent, or 9.5 percent and 9.0 percent on a constant-dollar basis, respectively.

Our European division increased for the three and six months ended June 30, 2023, supported by both our wholesale and retail divisions.

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

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

Latin America increased for the three and six months ended June 30, 2023, driven by growth in commercial lines due to exposure increases, positive rate increases, and new business, primarily property and casualty lines.

Consumer lines grew due to increased A&H.

Asia Pacific increased for the three and six months ended June 30, 2023, driven by higher new business, higher retention and positive rate increases in commercial lines, including property and casualty lines and growth attributable to the acquisition of Cigna's business in Asia.

Consumer lines increased primarily from travel in A&H.

Japan increased for the three and six months ended June 30, 2023, on a constant-dollar basis, primarily from higher new business in A&H.

Net premiums earned increased $212 million and $370 million, or $244 million and $496 million on a constant-dollar basis, for the three and six months ended June 30, 2023, respectively, reflecting the increase in net premiums written described above.

Combined Ratio

The loss and loss expense ratio decreased for the three months ended March 31, 2023, due to lower catastrophe losses and higher favorable prior period development related to a reserve release from 2022 late-season catastrophes.

The policy acquisition cost ratio decreased for the three months ended March 31, 2023, primarily due to a change in the mix of business, including less premiums earned from personal lines that have a higher acquisition cost ratio and higher premiums earned from commercial lines that have a lower acquisition cost ratio than consumer lines.

The administrative expense ratio decreased for the three months ended March 31, 2023, reflecting the favorable impact of higher net premiums earned, partially offset by increased investment to support growth.

The loss and loss expense ratio increased for the three months ended June 30, 2023, due to lower favorable prior period development, partially offset by lower catastrophe losses.

The loss and loss expense ratio decreased for the six months ended June 30, 2023, due to lower catastrophe losses, partially offset by lower favorable prior period development.

The CAY loss ratio excluding catastrophe losses decreased for the three and six months ended June 30, 2023, primarily due to underlying loss ratio improvement.

The administrative expense ratio decreased for the three and six months ended June 30, 2023, reflecting the favorable impact of higher net premiums earned, partially offset by increased investment to support growth.

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

March 31 % Change

Three Months Ended Six Months Ended

June 30 % Change June 30 % Change

(in millions of U.S.

dollars, except for percentages) 2023 2022 Q-23 vs.

Q-22 2023 2022 YTD-23 vs.

Net premiums written $ 293 $ 262 11.6 % $ 570 $ 515 10.6 %

4 unchanged sentences

Administrative expenses 9 10 (9.9) % 18 19 (1.2) %

Underwriting income 61 49 23.2 %

Underwriting income 72 16 NM 133 65 103.4 %

Net investment income 48 76 (37.1) % 97 161 (39.5) %

Other (income) expense (1) — NM

Other (income) expense — 1 NM (1) 1 NM

Segment income $ 120 $ 91 31.2 % $ 231 $ 225 2.7 %

Loss and loss expense ratio:

CAY loss ratio excluding catastrophe losses 49.0 % 49.9 % (0.9) pts

Catastrophe losses — 0.4 % (0.4) pts

Prior period development (3.3) % (1.5) % (1.8) pts

Loss and loss expense ratio 45.7 % 48.8 % (3.1) pts

Policy acquisition cost ratio 25.6 % 26.5 % (0.9) pts

Administrative expense ratio 3.8 % 3.7 % 0.1 pts

Combined ratio 75.1 % 79.0 % (3.9) pts

CAY loss ratio excluding catastrophe losses 46.7 % 49.7 % (3.0) pts 47.8 % 49.8 % (2.0) pts

Catastrophe losses 0.4 % 0.8 % (0.4) pts 0.2 % 0.6 % (0.4) pts

Prior period development (8.4) % 12.1 % (20.5) pts (5.7) % 5.1 % (10.8) pts

Loss and loss expense ratio 38.7 % 62.6 % (23.9) pts 42.3 % 55.5 % (13.2) pts

Policy acquisition cost ratio 27.0 % 25.6 % 1.4 pts 26.3 % 26.1 % 0.2 pts

Administrative expense ratio 3.9 % 4.6 % (0.7) pts 3.8 % 4.1 % (0.3) pts

Combined ratio 69.6 % 92.8 % (23.2) pts 72.4 % 85.7 % (13.3) pts

NM - not meaningful

Catastrophe Losses and Prior Period Development

Three Months Ended

Three Months Ended Six Months Ended

June 30 June 30

(in millions of U.S dollars) 2023 2022 2023 2022

Catastrophe losses $ 1 $ 2 $ 1 $ 3

Favorable prior period development $ 8 $ 3

Favorable (unfavorable) prior period development $ 17 $ (25) $ 25 $ (22)

Refer to Note 8 in the Consolidated Financial Statements for detail on prior period development.

Net premiums written increased $24 million for the three months ended March 31, 2023, primarily due to continued growth in the portfolio, driven by new business.

Net premiums earned increased $9 million for the three months ended March 31, 2023, primarily reflecting the increase in net premiums written described above.

Net premiums written increased $31 million and $55 million for the three and six months ended June 30, 2023, respectively, primarily from new business and rate increases in property, partially offset by lower catastrophe reinstatement premiums.

Net premiums earned increased $15 million and $24 million for the three and six months ended June 30, 2023, respectively, primarily reflecting the increase in net premiums written described above.

Combined Ratio

The loss and loss expense ratio and the CAY loss ratio excluding catastrophe losses decreased for the three months ended March 31, 2023, reflecting loss ratio improvement in multiple lines of business, including earned rate exceeding loss cost

The loss and loss expense ratio also benefited from more favorable prior period development and lower catastrophe losses.

The policy acquisition cost ratio decreased for the three months ended March 31, 2023, primarily due to a treaty written in the current quarter with a low acquisition cost ratio.

The administrative expense ratio increased for the three months ended March 31, 2023, primarily due to employee-related expenses, offset by the favorable impact of higher net premiums earned.

The loss and loss expense ratio decreased for the three and six months ended June 30, 2023, mainly from favorable prior period development and lower catastrophe losses.

The CAY loss ratio excluding catastrophe losses decreased for the three and six months ended June 30, 2023, primarily from an improvement in market conditions which lowered loss ratio expectations in several lines of business, including property, casualty, and workers' compensation lines.

The policy acquisition cost ratio increased for the three months ended June 30, 2023, primarily due to lower catastrophe reinstatement premiums which have a lower acquisition cost ratio.

The administrative expense ratio decreased for the three and six months ended June 30, 2023, primarily due to the favorable impact of higher net premiums earned.

Life Insurance

1 unchanged sentence

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.

Results for the three months ended March 31, 2022 are adjusted to reflect the adoption of LDTI.

Results for the three and six months ended June 30, 2022, respectively, are adjusted to reflect the adoption of LDTI.

Refer to Note 1 c).

Three Months Ended

March 31 % Change

Three Months Ended Six Months Ended

June 30 % Change June 30 % Change

(in millions of U.S.

dollars, except for percentages) 2023 2022 Q-23 vs.

Q-22 2023 2022 YTD-23 vs.

Net premiums written $ 1,270 $ 562 126.1 % $ 2,563 $ 1,138 125.3 %

9 unchanged sentences

Segment income $ 254 $ 106 140.3 % $ 498 $ 227 119.9 %

Net premiums written increased $717 million, or $728 million on a constant-dollar basis, for the three months ended March 31, 2023.

For our international life operations, net premiums written increased 237.7 percent primarily due to the acquisition of Cigna's business in Asia, which contributed $724 million.

In addition, there was growth from new business in Latin America and Asia, principally in Hong Kong.

Net premiums written in our North American Combined Insurance business declined 7.0 percent primarily due to the non-renewal of a large program.

Net premiums written increased $708 million and $1,425 million, or $712 million and $1,440 million on a constant-dollar basis, for the three and six months ended June 30, 2023, respectively.

For our international life operations, net premiums written increased 234.5 percent and 236.1 percent for the three and six months ended June 30, 2023, respectively, primarily due to the acquisition of Cigna's business in Asia.

In addition, there was growth in Latin America, primarily in our bank distribution channels, and in Asia, principally in Hong Kong.

Net premiums written in our North American Combined Insurance business declined 5.7 percent and 6.3 percent, for the three and six months ended June 30, 2023, respectively, as growth in the supplemental A&H business was more than offset by the non-renewal of a large program.

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

Three Months Ended

March 31 % Change

Three Months Ended Six Months Ended

June 30 % Change June 30 % Change

(in millions of U.S.

1 unchanged sentence

2022 Q-23 vs.

Q-22 2023 2022 C$ 2022 Y-23 vs.

Deposits collected on universal life and investment contracts (1)

$ 400 $ 427 $ 408 (6.6) % (2.0) % $ 709 $ 984 $ 919 (27.9) % (22.8) %

(1) The three months ended June 30, 2023, includes a favorable adjustment of $27 million;

excluding this item, deposits decreased 13.0 percent, or 8.7 percent on a constant-dollar basis.

Deposits collected on universal life and investment contracts (life deposits) are not reflected as revenues in our Consolidated statements of operations in accordance with GAAP.

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 $248 million for the three months ended March 31, 2023, primarily in Taiwan, reflecting challenging market conditions for deposit products.

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 $27 million and $275 million for the three and six months ended June 30, 2023, respectively, primarily in Taiwan, reflecting challenging market conditions for deposit products.

Partially offsetting the decline for the three and six months ended June 30, 2023, respectively, are deposits collected through the acquired Cigna businesses in Asia.

Life Insurance segment income

Life Insurance segment income increased $123 million for the three months ended March 31, 2023, reflecting $159 million of growth from the acquisition of Cigna's business in Asia, partially offset by lower income from our investment in Huatai, our partially-owned insurance entity in China.

Life Insurance segment income increased $148 million and $271 million for the three and six months ended June 30, 2023, respectively, reflecting growth from the acquisition of Cigna's business in Asia, primarily in Korea.

Growth for the three and six months ended June 30, 2023 also reflected higher net investment income due to a higher invested asset base, including from the Cigna acquisition, and $5 million and $10 million, respectively, from equity securities supporting policyholder dividends.

Grow th for the three months ended June 30, 2023, also included higher income from our investment in Huatai, our partially-owned insurance entity in China from higher investment income as well as from our increased ownership interest compared to prior year.

Income from Huatai is recorded under the equity method of accounting with our share of net income or loss reported in Other (income) expense.

Effective July 1, 2023, and starting with our third quarter 2023 reporting, we will apply consolidation accounting to our investment in Huatai.

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.

Results for the three months ended March 31, 2022 are adjusted to reflect the adoption of LDTI.

Results for the three and six months ended June 30, 2022, are adjusted to reflect the adoption of LDTI.

Refer to Note 1 c).

Three Months Ended

March 31 % Change

Three Months Ended Six Months Ended

June 30 % Change June 30 % Change

(in millions of U.S.

dollars, except for percentages) 2023 2022 Q-23 vs.

Q-22 2023 2022 YTD-23 vs.

Losses and loss expenses $ 61 $ 191 (68.4) % $ 72 $ 201 (64.5) %

1 unchanged sentence

Underwriting loss 156 281 (44.6) % 264 374 (29.5) %

Net investment income (loss) 11 (5) NM

Net investment income (loss) 3 (4) NM 14 (9) NM

Other (income) expense 14 138 (91.0) % (200) (121) 66.0 %

Amortization of purchased intangibles 43 45 (6.1) % 85 91 (6.4) %

Net realized gains (losses) (76) 22 NM

Net realized gains (losses) (309) (512) (39.6) % (385) (490) (21.2) %

Market risk benefits gains (losses) (7) (33) (79.9) % (122) 16 NM

Interest expense 165 134 22.8 % 325 266 22.2 %

Cigna integration expenses 22 — NM

Cigna integration expenses 15 3 NM 37 3 NM

Income tax expense 392 291 34.8 % 776 644 20.4 %

1 unchanged sentence

NM - not meaningful

Administrative expenses increased $14 million for the three months ended March 31, 2023, primarily due to increased spending to support digital growth initiatives.

Cigna integration expenses of $22 million for the three months ended March 31, 2022, principally comprised legal and professional fees and all other costs directly related to the integration activities of the Cigna acquisition.

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

Administrative expenses increased $5 million and $19 million for the three and six months ended June 30, 2023, respectively, primarily due to increased spending to support digital growth initiatives.

Cigna integration expenses of $15 million and $37 million for the three and six months ended June 30, 2023 , respectively, principally comprised legal and professional fees and all other costs directly related to the integration activities of the Cigna acquisition.

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

5 unchanged sentences

The majority of our investment portfolio is available for sale and reported at fair value.

Our held to maturity investment portfolio is reported at amortized cost, net of valuation allowance.

The effect of market movements on our fixed maturities portfolio impacts Net income (through Net realized gains (losses)) when securities are sold, when we write down an asset, or when we record a change to the valuation allowance for expected credit losses.

1 unchanged sentence

Additionally, Net income is impacted through the reporting of changes in the fair value of public and private equity securities and derivatives, including financial futures, options, and swaps.

Changes in unrealized appreciation and depreciation on available for sale securities, resulting from the revaluation of securities held, changes in cumulative foreign currency translation adjustment, changes in current discount rate on future policy benefits, changes in instrument-specific credit risk on market risk benefits, unrealized postretirement benefit obligations liability adjustment, and cross-currency swaps designated as hedges for accounting purposes are reported as separate components of Accumulated other comprehensive income (loss) in Shareholders’ equity in the Consolidated balance sheets.

unrealized postretirement benefit obligations liability adjustment, and cross-currency swaps designated as hedges for accounting purposes are reported as separate components of Accumulated other comprehensive income (loss) in Shareholders’ equity in the Consolidated balance sheets.

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

Three Months Ended March 31

Three Months Ended June 30

(As Adjusted)

13 unchanged sentences

Other (6) 48 42 — 5 5

Net (losses), pre-tax $ (304) $ (955) $ (1,259) $ (503) $ (4,446) $ (4,949)

Six Months Ended June 30

(As Adjusted)

(in millions of U.S.

Fixed maturities $ (287) $ 592 $ 305 $ (578) $ (8,996) $ (9,574)

Fixed income and investment derivatives (101) — (101) (34) — (34)

Public equity

Sales (3) — (3) 418 — 418

Mark-to-market 42 — 42 (625) — (625)

Private equity (less than 3 percent ownership)

Mark-to-market 35 — 35 59 — 59

Total investment portfolio (314) 592 278 (760) (8,996) (9,756)

Other derivatives 1 — 1 10 — 10

Foreign exchange (55) 38 (17) 344 (689) (345)

Current discount rate on future policy benefits — (186) (186) — 1,067 1,067

Instrument-specific credit risk on market risk benefits — 8 8 — 40 40

Other (13) 15 2 (74) 24 (50)

Net gains (losses), pre-tax $ (381) $ 467 $ 86 $ (480) $ (8,554) $ (9,034)

Pre-tax net unrealized gains of $1,786 million in our investment portfolio for the three months ended March 31, 2023 were principally the result of a decrease in interest rates.

In addition, there were pre-tax net realized losses of $200 million, comprising losses from sales of fixed maturities, derivative losses, and impairments on fixed income securities.

Pre-tax net unrealized losses of $1,194 million in our investment portfolio for the three months ended June 30, 2023 was primarily driven by higher interest rates as well as the $423 million pre-tax impact of the reclassification of our approximately $8 billion HTM portfolio to our AFS portfolio.

This reclassification to AFS increases management's flexibility to execute on its investment strategy to take advantage of higher yields when the opportunity arises, while not making any major change to its current asset allocation.

Refer to Note 3 a) to the Consolidated Financial Statements.

Pre-tax net unrealized gains of $592 million for the six months ended June 30, 2023 were principally the result of changes in interest rates.

In addition, there were pre-tax net realized losses of $114 million and $314 million for the three and six months ended June 30, 2023, respectively, comprising losses from sales and impairments of fixed maturities and derivative losses.

Effective Income Tax Rate

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

For the three months ended March 31, 2023 our ETR was 16.9 percent compared to 15.3 percent in the prior year period.

The increase in the ETR from the prior year period was due to an increase in income in higher tax rate jurisdictions driven by the Cigna acquisition and an increase in the enacted UK tax rate, partially offset by discrete tax items.

For the three and six months ended June 30, 2023, our ETR was 17.9 percent and 17.4 percent, respectively.

This compares to an ETR of 19.6 percent and 17.0 percent for the three and six months ended June 30, 2022.

The ETR for each period in 2023 was impacted by our mix of earnings among various jurisdictions, most notably related to gains/(losses) that were realized, the impact of our Cigna acquisition, and an increase in the enacted UK tax rate, partially offset by discrete tax items.

Non-GAAP Reconciliation

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Three Months Ended

March 31, 2023

June 30, 2023

(in millions of U.S.

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PPD, net of related adjustments - favorable (unfavorable) 146 33 3 61 17 (60) 200

Net premiums earned adjustments on PPD - unfavorable (favorable) 12 — (2) — — — 10

Expense adjustments - unfavorable (favorable) 4 — — — — — 4

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Net premiums earned E $ 4,606 $ 1,357 $ 635 $ 2,908 $ 237 $ 9,743

Net premiums earned adjustments on PPD - unfavorable (favorable) 12 — (2) — — 10

PPD reinstatement premiums - unfavorable (favorable) — — — — 6 6

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Three Months Ended

March 31, 2022

June 30, 2022

(in millions of U.S.

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Letters A, B, C, D, E, and F included in the table are references for calculating the ratios above.

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, 2023

(in millions of U.S.

dollars except for ratios)

Losses and loss expenses/policy benefits A $ 5,600 $ 1,734 $ 647 $ 2,751 $ 203 $ 72 $ 11,007

Catastrophe losses and related adjustments

Catastrophe losses, net of related adjustments (393) (306) (19) (139) (1) — (858)

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

Catastrophe losses, gross of related adjustments (393) (306) (19) (139) (1) — (858)

PPD and related adjustments

PPD, net of related adjustments - favorable (unfavorable) 218 16 3 204 25 (70) 396

Net premiums earned adjustments on PPD - unfavorable (favorable) 12 — (2) — — 10

Expense adjustments - unfavorable (favorable) 7 — — — — — 7

PPD reinstatement premiums - unfavorable (favorable) — (1) — — 6 — 5

PPD, gross of related adjustments - favorable (unfavorable) 237 15 1 204 31 (70) 418

CAY loss and loss expense ex CATs B $ 5,444 $ 1,443 $ 629 $ 2,816 $ 233 $ 2 $ 10,567

Policy acquisition costs and administrative expenses

Policy acquisition costs and administrative expenses C $ 1,838 $ 712 $ 58 $ 2,031 $ 145 $ 192 $ 4,976

Expense adjustments - favorable (unfavorable) (7) — — — — — (7)

Policy acquisition costs and administrative expenses, adjusted D $ 1,831 $ 712 $ 58 $ 2,031 $ 145 $ 192 $ 4,969

Net premiums earned E $ 8,975 $ 2,677 $ 794 $ 5,694 $ 481 $ 18,621

Net premiums earned adjustments on PPD - unfavorable (favorable) 12 — (2) — — 10

PPD reinstatement premiums - unfavorable (favorable) — (1) — — 6 5

Net premiums earned excluding adjustments F $ 8,987 $ 2,676 $ 792 $ 5,694 $ 487 $ 18,636

P&C Combined ratio

Loss and loss expense ratio A/E 62.4 % 64.8 % 81.5 % 48.3 % 42.3 % 59.1 %

Policy acquisition cost and administrative expense ratio C/E 20.5 % 26.6 % 7.3 % 35.7 % 30.1 % 26.7 %

P&C Combined ratio 82.9 % 91.4 % 88.8 % 84.0 % 72.4 % 85.8 %

CAY P&C Combined ratio ex CATs

Loss and loss expense ratio, adjusted B/F 60.6 % 53.9 % 79.4 % 49.5 % 47.8 % 56.7 %

Policy acquisition cost and administrative expense ratio, adjusted D/F 20.3 % 26.6 % 7.3 % 35.6 % 29.8 % 26.7 %

CAY P&C Combined ratio ex CATs 80.9 % 80.5 % 86.7 % 85.1 % 77.6 % 83.4 %

Combined ratio

Combined ratio 85.8 %

impact of gains and losses on crop derivatives —

P&C Combined ratio 85.8 %

The ratios above are calculated using whole U.S.

Accordingly, calculations using rounded amounts may differ.

Letters A, B, C, D, E, and F included in the table are references for calculating the ratios above.

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

(in millions of U.S.

dollars except for ratios)

Losses and loss expenses/policy benefits A $ 4,943 $ 1,486 $ 386 $ 2,613 $ 254 $ 201 $ 9,883

Catastrophe losses and related adjustments

Catastrophe losses, net of related adjustments (205) (195) (21) (200) (3) — (624)

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

Catastrophe losses, gross of related adjustments (205) (195) (21) (200) (3) — (624)

PPD and related adjustments

PPD, net of related adjustments - favorable (unfavorable) 395 54 26 233 (22) (199) 487

Net premiums earned adjustments on PPD - unfavorable (favorable) 3 — 159 — — — 162

Expense adjustments - unfavorable (favorable) 5 — (1) — — — 4

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

PPD, gross of related adjustments - favorable (unfavorable) 403 54 184 233 (24) (199) 651

CAY loss and loss expense ex CATs B $ 5,141 $ 1,345 $ 549 $ 2,646 $ 227 $ 2 $ 9,910

Policy acquisition costs and administrative expenses

Policy acquisition costs and administrative expenses C $ 1,660 $ 660 $ 44 $ 1,923 $ 138 $ 173 $ 4,598

Expense adjustments - favorable (unfavorable) (5) — 1 — — — (4)

Policy acquisition costs and administrative expenses, adjusted D $ 1,655 $ 660 $ 45 $ 1,923 $ 138 $ 173 $ 4,594

Net premiums earned E $ 8,362 $ 2,518 $ 544 $ 5,324 $ 457 $ 17,205

Net premiums earned adjustments on PPD - unfavorable (favorable) 3 — 159 — — 162

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

Net premiums earned excluding adjustments F $ 8,365 $ 2,518 $ 703 $ 5,324 $ 455 $ 17,365

P&C Combined ratio

Loss and loss expense ratio A/E 59.1 % 59.0 % 70.9 % 49.1 % 55.5 % 57.4 %

Policy acquisition cost and administrative expense ratio C/E 19.9 % 26.2 % 8.1 % 36.1 % 30.2 % 26.8 %

P&C Combined ratio 79.0 % 85.2 % 79.0 % 85.2 % 85.7 % 84.2 %

CAY P&C Combined ratio ex CATs

Loss and loss expense ratio, adjusted B/F 61.5 % 53.4 % 77.9 % 49.7 % 49.8 % 57.1 %

Policy acquisition cost and administrative expense ratio, adjusted D/F 19.7 % 26.3 % 6.4 % 36.1 % 30.3 % 26.4 %

CAY P&C Combined ratio ex CATs 81.2 % 79.7 % 84.3 % 85.8 % 80.1 % 83.5 %

Combined ratio

Combined ratio 84.3 %

impact of gains and losses on crop derivatives (0.1) %

P&C Combined ratio 84.2 %

The ratios above are calculated using whole U.S.

Accordingly, calculations using rounded amounts may differ.

Letters A, B, C, D, E, and F included in the table are references for calculating the ratios above.

Amortization of Purchased Intangibles and Other Amortization

Amortization of purchased intangibles

Amortization expense related to purchased intangibles was $72 million and $71 million for the three months ended March 31, 2023 and 2022, respectively.

At March 31, 2023, the deferred tax liability associated with the Other intangible assets (excluding the fair value adjustment on Unpaid losses and loss expense) was $1,206 million.

The following table presents, as of March 31, 2023, the expected reduction to the deferred tax liability associated with the amortization of Other intangible assets, at current foreign currency exchange rates, for the second through fourth quarters of 2023 and for the next five years:

Amortization expense related to purchased intangibles was $70 million and $142 million for the three and six months ended June 30, 2023, respectively, compared with $71 million and $142 million for the prior year periods, respectively.

At June 30, 2023, the deferred tax liability associated with the Other intangible assets (excluding the fair value adjustment on Unpaid losses and loss expense) was $1,200 million.

The following table presents, as of June 30, 2023, 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 through fourth quarters of 2023 and for the next five years:

For the Years Ending December 31

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dollars) Reduction to deferred tax liability associated with intangible assets

Second quarter of 2023 $ 16

Third quarter of 2023 $ 16

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

The following table presents, as of March 31, 2023, the expected amortization expense of the fair value adjustment on acquired invested assets related to the acquisitions of Cigna's business in Asia and Chubb Corp, 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 second through fourth quarters of 2023 and for the next five years:

The following table presents, as of June 30, 2023, the expected amortization expense of the fair value adjustment on acquired invested assets related to the acquisitions of Cigna's business in Asia and Chubb Corp, 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 third through fourth quarters of 2023 and for the next five years:

Amortization (expense) benefit of the fair value adjustment on

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Assumed long-term debt (2)

Second quarter of 2023 $ 6 $ (9) $ (3) $ 5

Third quarter of 2023 $ 6 $ (8) $ (2) $ 5

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Three Months Ended

June 30 Six Months Ended

(in millions of U.S.

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Gross investment income (1)

1,194 933 2,346 1,801

Investment expenses (49) (45) (94) (91)

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(1) Includes amortization expense related to fair value adjustment of acquired invested assets

$ (3) $ (14) $ (5) $ (30)

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 34.7 percent for the three months ended March 31, 2023, primarily due to higher reinvestment rates on fixed maturities.

Net investment income increased 28.9 percent and 31.7 percent for the three and six months ended June 30, 2023, 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

(in millions of U.S.

dollars) 2023 2022 2023 2022

Total mark-to-market gain on private equity, pre-tax $ 257 $ 310

Total mark-to-market gain (loss) on private equity, pre-tax $ 17 $ (130) $ 274 $ 180

Interest Expense

Interest expense for the three months ended March 31, 2023, comprised $165 million related to fixed expenses on existing debt obligations and variable expenses, and a $5 million benefit related to the amortization of the fair value of debt assumed in the Chubb Corp acquisition.

Interest expense for the six months ended June 30, 2023, comprised $335 million related to fixed expenses on existing debt obligations and variable expenses, and a $10 million benefit related to the amortization of the fair value of debt assumed in the Chubb Corp acquisition.

The variable expenses relate to fees from the usage of certain facilities, including letters of credit, and interest on held collateral and repurchase agreements.

Interest expense for the first quarter of 2023 was higher than expected primarily due to rising interest rates on held collateral.

Interest expense for the six months ended June 30, 2023, was higher than expected primarily due to rising interest rates on held collateral and repurchase agreements.

Based on our existing fixed debt obligations and projected variable expenses, we now expect pre-tax interest expense on these items to be approximately $342 million for the remainder of 2023, or $171 million each quarter.

For more information on our debt obligations, refer to Note 9 to the Consolidated Financial Statements, under Item 8 in our 2022 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 March 31, 2023.

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 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 4.7 years and 4.5 years at March 31, 2023, and December 31, 2022, respectively.

We estimate that a 100 basis point (bps) increase in interest rates would reduce the valuation of our fixed income portfolio by approximately $4.7 billion at March 31, 2023.

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 was 4.6 years and 4.5 years at June 30, 2023, and December 31, 2022, respectively.

We estimate that a 100 basis point (bps) increase in interest rates would reduce the valuation of our fixed income portfolio by approximately $4.6 billion at June 30, 2023.

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

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

(in millions of U.S.

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Total investments $ 116,636 $ 123,880 $ 113,142 $ 121,519

The fair value of our total investments increased $2.2 billion during the three months ended March 31, 2023, primarily due to the investing of operating cash flow and unrealized gains on fixed maturities due to decreasing interest rates.

This increase was partially offset by the payment of our $475 million 2.7 percent senior notes due March 2023 and share repurchases.

The following tables present the fair value of our fixed income securities at March 31, 2023, and December 31, 2022.

The fair value of our total investments increased $3.5 billion during the six months ended June 30, 2023, primarily due to the investing of operating cash flow and unrealized gains on fixed maturities, partially offset by share repurchases and dividend payments.

The following tables present the fair value of our fixed income securities at June 30, 2023, and December 31, 2022.

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

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

(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 March 31, 2023:

The following table presents our 10 largest global exposures to corporate bonds by fair value at June 30, 2023:

(in millions of U.S.

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Bank of America Corp $ 762

Morgan Stanley 688

JP Morgan Chase & Co 664

Morgan Stanley 663

Wells Fargo & Co 588

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Goldman Sachs Group Inc 512

Verizon Communications Inc 382

UBS Group AG 386

HSBC Holdings Plc 375

Comcast Corp 355

Anheuser-Busch InBev SA/NV 328

Verizon Communications Inc 364

Mortgage-backed securities

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Value Amortized Cost, Net

March 31, 2023

June 30, 2023

(in millions of U.S.

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

government securities at March 31, 2023:

government securities at June 30, 2023:

(in millions of U.S.

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Canada 945 1,004

Province of Ontario 593 620

United Mexican States 549 582

Federative Republic of Brazil 649 654

United Mexican States 610 641

Province of Ontario 589 629

Kingdom of Thailand 548 532

Commonwealth of Australia 479 523

Socialist Republic of Vietnam 496 384

Commonwealth of Australia 464 539

United Kingdom 401 450

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

corporate securities at March 31, 2023:

corporate securities at June 30, 2023:

(in millions of 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 March 31, 2023, 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 June 30, 2023, 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 over 1,700 issuers, with the greatest single exposure being $155 million.

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Other (including foreign exchange translation) 163 (8) 171

Balance at March 31, 2023 $ 75,417 $ 16,520 $ 58,897

Balance at June 30, 2023 $ 76,480 $ 16,608 $ 59,872

(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 months ended March 31, 2023.

There was no significant A&E reserve activity during the three and six months ended June 30, 2023.

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 March 31, 2023, 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 June 30, 2023, and does not represent our expected catastrophe losses for any one year.

Modeled Net Probable Maximum Loss (PML) Pre-tax

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The PML for worldwide and key U.S.

peril regions are based on our in-force portfolio at January 1, 2023, and reflect the April 1, 2023, 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 April 1, 2023, and reflect the April 1, 2023, 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 $3,441 million (or 6.5 percent of our total shareholders’ equity at March 31, 2023).

hurricane events could be in excess of $3,477 million (or 6.6 percent of our total shareholders’ equity at June 30, 2023).

Effective December 31, 2022, our worldwide PMLs include losses from floods in Canada and Europe.

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

March 31 December 31

June 30 December 31

(in millions of U.S.

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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 three months ended March 31, 2023, we repurchased $428 million of Common Shares in a series of open market transactions under the Board of Directors (Board) share repurchase authorization.

At March 31, 2023, there were 32,217,934 Common Shares in treasury with a weighted-average cost of $165.77 per share, and $1.2 billion in share repurchase authorization remained through June 30, 2023.

For the period April 1, 2023, through May 1, 2023, we repurchased 215,400 Common Shares for a total of $43 million in a series of open market transactions under the share repurchase authorization.

At May 1, 2023, $1.2 billion in share repurchase authorization remained.

For the six months ended June 30, 2023, we repurchased $1.2 billion of Common Shares in a series of open market transactions under the Board of Directors (Board) share repurchase authorization.

At June 30, 2023, there were 20,760,232 Common Shares in treasury with a weighted-average cost of $152.91 per share.

In June 2023, the Board authorized the repurchase of up to $5.0 billion of Chubb's Common Shares effective July 1, 2023 with no expiration date.

At July 27, 2023, $5.0 billion in share repurchase authorization remained.

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.

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The Board determines the record and payment dates at which the annual dividend may be paid until the date of the 2024 annual general meeting, and is authorized to abstain from distributing a dividend at its discretion.

The four quarterly installments each of $0.83 per share were distributed by the Board as expected.

The annual dividend approved in May 2023 represented a $0.12 per share increase ($0.03 per quarter) over the prior year dividend.

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March 17, 2023 April 10, 2023 $0.83 (CHF 0.77)

June 16, 2023 July 7, 2023 $0.86 (CHF 0.77)

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.

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Should the need arise, we generally have access to capital markets and to credit facilities with letter of credit capacity of $4.0 billion, $3.0 billion of which can be used for revolving credit.

At March 31, 2023, our usage under these facilities was $1.4 billion in letters of credit.

At June 30, 2023, 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 March 31, 2023.

The facilities require that we maintain certain financial covenants, all of which we met at June 30, 2023.

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

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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 three months ended March 31, 2023, we were able to meet all our obligations, including the payments of dividends on our Common Shares, with our net cash flows.

During the six months ended June 30, 2023, 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 $225 million and $1.0 billion from its Bermuda subsidiaries during the three months ended March 31, 2023 and 2022, respectively.

Chubb Limited received dividends of $925 million and $5.8 billion from its Bermuda subsidiaries during the six months ended June 30, 2023 and 2022, respectively.

insurance subsidiaries of Chubb INA Holdings Inc.

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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 three months ended March 31, 2023 and 2022.

Chubb Limited received no dividends from Chubb INA during the six months ended June 30, 2023 and 2022.

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 no dividends from its subsidiaries during the three months ended March 31, 2023 and 2022.

Chubb INA received $458 million and $1.8 billion from its subsidiaries during the six months ended June 30, 2023 and 2022, respectively.

Subsequently, in July 2023, Chubb INA received $518 million from its subsidiaries.

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 three months ended March 31, 2023 and 2022.

Operating cash flows were $2.3 billion in the three months ended March 31, 2023, compared to $2.4 billion in the prior year period.

Cash used for investing was $570 million in the three months ended March 31, 2023, compared to $995 million in the prior year period, a decrease of $425 million.

Cash used for investing in the current period included lower private equity contributions, net of distributions received, of $351 million and lower net purchases of equity securities and fixed maturities of $148 million.

Cash used for financing was $1.4 billion in the three months ended March 31, 2023, compared to $1.3 billion in the prior year period.

The increase of $108 million is from the repayment of long-term debt of $475 million in the current year, partially offset by fewer common shares repurchased of $456 million.

The following is a discussion of our cash flows for the six months ended June 30, 2023 and 2022.

Operating cash flows were $4.8 billion in the six months ended June 30, 2023, compared to $5.2 billion in the prior year period, primarily due to higher net losses paid and higher income taxes paid, partially offset by higher net premiums collected.

Cash from (used for) investing was $(2.3) billion in the six months ended June 30, 2023, compared to $1.1 billion in the prior year period, a decrease of $3.3 billion.

Cash used for investing in the current period primarily included higher net purchases of fixed maturities and equity securities of $3.3 billion.

Cash used for financing was $2.3 billion in the six months ended June 30, 2023, compared to $0.7 billion in the prior year period.

The increase of $1.6 billion is from net repayments of $1.9 billion from repurchase agreements and $475 million from long-term debt, partially offset by fewer common shares repurchased of $860 million.

We use repurchase agreements as a low-cost alternative.

At March 31, 2023, there were $1.4 billion in repurchase agreements outstanding with various maturities over the next two months.

At June 30, 2023, there were $1.5 billion in repurchase agreements outstanding with various maturities over the next eleven months.

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

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(Subsidiary Issuer)

March 31 December 31 March 31 December 31

June 30 December 31 June 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:

Three Months Ended March 31, 2023 Chubb Limited

Six Months Ended June 30, 2023 Chubb Limited

(Parent Guarantor) Chubb INA Holdings Inc.

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Other (income) expense (22) 37

Cigna integration expenses — 2

Income tax expense (benefit) 5 (136)

2 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