Chubb Ltd 10-Q

ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The following is a discussion of our results of operations, financial condition, and liquidity and capital resources as of and for the three and nine months ended September 30, 2023. All comparisons in this discussion are to the corresponding prior year period unless otherwise indicated. All dollar amounts are rounded. However, percent changes and ratios are calculated using whole dollars. Accordingly, calculations using rounded dollars may differ. Our results of operations and cash flows for any interim period are not necessarily indicative of our results for the full year. This discussion should be read in conjunction with our consolidated financial statements and related notes and our Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2022 (2022 Form 10-K). Other Information We routinely post important information for investors on our website (investors.chubb.com). We use this website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Securities and Exchange Commission (SEC) Regulation FD (Fair Disclosure). Accordingly, investors should monitor the Investor Information portion of our website, in addition to following our press releases, SEC filings, public conference calls, and webcasts. The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this report. MD&A Index Page Forward-Looking Statements 64 Overview 65 Consolidated Operating Results 66 Segment Operating Results 71 Net Realized and Unrealized Gains (Losses) 82 Effective Income Tax Rate 84 Non-GAAP Reconciliation 84 Amortization of Purchased Intangibles and Other Amortization 90 Net Investment Income 91 Investments 91 Critical Accounting Estimates 96 Unpaid Losses and Loss Expenses 96 Future policy benefits 96 Asbestos and Environmental (A&E) 96 Fair Value Measurements 96 Catastrophe Management 97 Global Property Catastrophe Reinsurance Program 98 Capital Resources 99 Liquidity 100 Information Provided In Connection With Outstanding Debt of Subsidiaries 101 63 Table of Contents Forward-Looking Statements The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. Any written or oral statements made by us or on our behalf may include forward-looking statements that reflect our current views with respect to future events and financial performance. The words “believe,” “anticipate,” “estimate,” “project,” “should,” “plan,” “expect,” “intend,” “hope,” “feel,” “foresee,” “will likely result,” “will continue,” and variations thereof and similar expressions, identify forward-looking statements. These forward-looking statements are subject to certain risks, uncertainties, and other factors that could, should potential events occur, cause actual results to differ materially from such statements. These risks, uncertainties, and other factors, which are described in more detail elsewhere herein and in other documents we file with the U.S. Securities and Exchange Commission (SEC), include but are not limited to: • actual amount of new and renewal business, premium rates, underwriting margins, market acceptance of our products, and risks associated with the introduction of new products and services and entering new markets; the competitive environment in which we operate, including trends in pricing or in policy terms and conditions, which may differ from our projections, and changes in market conditions that could render our business strategies ineffective or obsolete; • losses arising out of natural or man-made catastrophes; actual loss experience from insured or reinsured events and the timing of claim payments; the uncertainties of the loss-reserving and claims-settlement processes, including the difficulties associated with assessing environmental damage and asbestos-related latent injuries, the impact of aggregate-policy-coverage limits, the impact of bankruptcy protection sought by various asbestos producers and other related businesses, and the timing of loss payments; • changes in the distribution or placement of risks due to increased consolidation of insurance and reinsurance brokers; material differences between actual and expected assessments for guaranty funds and mandatory pooling arrangements; the ability to collect reinsurance recoverable, credit developments of reinsurers, and any delays with respect thereto and changes in the cost, quality, or availability of reinsurance; • uncertainties relating to governmental, legislative and regulatory policies, developments, actions, investigations, and treaties; judicial decisions and rulings, new theories of liability, legal tactics, and settlement terms; the effects of data privacy or cyber laws or regulation; 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; 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 a pandemic; • developments in global financial markets, including changes in interest rates, stock markets, and other financial markets; increased government involvement or intervention in the financial services industry; the cost and availability of financing, and foreign currency exchange rate fluctuations; changing rates of inflation; and other general economic and business conditions, including the depth and duration of potential recession; • the availability of borrowings and letters of credit under our credit facilities; the adequacy of collateral supporting funded high deductible programs; the amount of dividends received from subsidiaries; • changes to our assessment as to whether it is more likely than not that we will be required to sell, or have the intent to sell, available for sale fixed maturity investments before their anticipated recovery; • actions that rating agencies may take from time to time, such as financial strength or credit ratings downgrades or placing these ratings on credit watch negative or the equivalent; • the effects of public company bankruptcies and accounting restatements, as well as disclosures by and investigations of public companies relating to possible accounting irregularities, and other corporate governance issues; • acquisitions made performing differently than expected, our failure to realize anticipated expense-related efficiencies or growth from acquisitions, the impact of acquisitions on our pre-existing organization, and risks and uncertainties relating to our planned purchases of additional interests in Huatai Insurance Group Co., Ltd. (Huatai Group), including our ability to receive Chinese insurance regulatory approval and complete the purchases; • risks associated with being a Swiss corporation, including reduced flexibility with respect to certain aspects of capital management and the potential for additional regulatory burdens; share repurchase plans and share cancellations; • loss of the services of any of our executive officers without suitable replacements being recruited in a reasonable time frame; 64 Table of Contents • the ability of our technology resources, including information systems and security, to perform as anticipated such as with respect to preventing material information technology failures or third-party infiltrations or hacking resulting in consequences adverse to Chubb or its customers or partners; the ability of our company to increase use of data analytics and technology as part of our business strategy and adapt to new technologies; and • management’s response to these factors and actual events (including, but not limited to, those described above). You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. We undertake no obligation to publicly update or review any forward-looking statements, whether as a result of new information, future events or otherwise. Overview Chubb Limited is the Swiss-incorporated holding company of the Chubb Group of Companies. 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 September 30, 2023, we had total assets of $223 billion and total Chubb shareholders’ equity, which excludes noncontrolling interests, of $52.4 billion. Chubb was incorporated in 1985 at which time it opened its first business office in Bermuda and continues to maintain operations in Bermuda. We operate through six business segments: North America Commercial P&C Insurance, North America Personal P&C Insurance, North America Agricultural Insurance, Overseas General Insurance, Global Reinsurance, and Life Insurance. For more information on our segments refer to “Segment Information” under Item 1 in our 2022 Form 10-K. On July 1, 2023, we completed the acquisition of a controlling majority interest of Huatai Group. For the three and nine months ended September 30, 2023, the results of operations of Huatai Group is reported at 100 percent in our consolidated results starting from the acquisition date, with amounts attributable to shareholders other than Chubb are reflected under Noncontrolling interests. Huatai Group's life and asset management businesses are included in the Life Insurance segment, and Huatai Group's P&C business is included in the Overseas General Insurance segment. Results for Huatai Group's non-insurance operations, comprising real estate and holding company activity, are included in Corporate. 65 Table of Contents Consolidated Operating Results – Three and Nine Months Ended September 30, 2023 and 2022 Three Months Ended Nine Months Ended September 30 % Change September 30 % Change (in millions of U.S. dollars, except for percentages) 2023 2022 Q-23 vs. Q-22 2023 2022 YTD-23 vs. YTD-22 Net premiums written $ 13,104 $ 12,012 9.1 % $ 35,765 $ 31,494 13.6 % Net premiums written - constant dollars (1) 8.4 % 14.0 % Net premiums earned 12,674 11,530 9.9 % 33,815 29,816 13.4 % Net investment income 1,314 979 34.2 % 3,566 2,689 32.6 % Net realized gains (losses) (103) (456) (77.3) % (484) (936) (48.1) % Market risk benefits gains (losses) (32) 69 NM (154) 85 NM Total revenues 13,853 12,122 14.3 % 36,743 31,654 16.1 % Losses and loss expenses 7,106 7,063 0.6 % 17,937 16,833 6.6 % Policy benefits 938 707 32.7 % 2,565 1,441 78.0 % Policy acquisition costs 2,178 1,970 10.6 % 6,142 5,415 13.4 % Administrative expenses 1,060 883 20.0 % 2,959 2,479 19.3 % Interest expense 174 150 15.6 % 499 416 19.8 % Other (income) expense (154) 202 NM (550) (9) NM Amortization of purchased intangibles 84 69 22.0 % 226 211 7.1 % Cigna integration expenses 14 23 (38.8) % 51 26 99.4 % Total expenses 11,400 11,067 3.0 % 29,829 26,812 11.2 % Income before income tax 2,453 1,055 132.2 % 6,914 4,842 42.8 % Income tax expense 413 263 57.2 % 1,189 907 31.1 % Net income $ 2,040 $ 792 157.0 % $ 5,725 $ 3,935 45.4 % Net loss attributable to noncontrolling interests (3) — NM (3) — NM Net income attributable to Chubb $ 2,043 $ 792 157.8 % $ 5,728 $ 3,935 45.5 % NM - not meaningful (1) On a constant-dollar basis. Amounts are calculated by translating prior period results using the same local currency exchange rates as the comparable current period. Financial Highlights for the Three Months Ended September 30, 2023 • On July 1, 2023, Chubb increased its investment in Huatai Group from approximately 64.2 percent to approximately 69.6 percent, discontinued the equity method of accounting and applied consolidation accounting. Business activity for, and the financial position of, Huatai Group is reported at 100 percent on the Consolidated Financial Statements. The relevant amounts attributable to investors other than Chubb are reflected under Noncontrolling interests, Net income (loss) attributable to noncontrolling interests, and Comprehensive income (loss) attributable to noncontrolling interests on the Consolidated Financial Statements. Refer to Note 2 to the Consolidated Financial Statements for additional information. • Net income attributable to Chubb was $2.0 billion compared with $792 million in the prior year period. Net income in the current quarter was driven by strong underwriting results, including growth in net premiums earned, and record net investment income. There were after-tax mark-to-market gains on public and private equities of $46 million in the current quarter compared to losses of $287 million in the prior year. In addition, there were after-tax realized losses on fixed maturities of $37 million, compared to $393 million in the prior year. • Consolidated net premiums written were $13.1 billion, up 9.1 percent, or 8.4 percent in constant dollars. P&C net premiums written increased 8.4 percent, or 7.6 percent in constant dollars, with commercial lines and consumer lines up 5.4 percent and 14.9 percent, respectively. Life Insurance segment net premiums written increased 14.9 percent. The consolidation of Huatai Group added 2.9 percentage points, 1.8 percentage points, and 11.9 percentage points to consolidated, P&C, and Life Insurance net premiums written growth, respectively. 66 Table of Contents • Consolidated net premiums earned were $12.7 billion, up 9.9 percent, or 9.0 percent in constant dollars. The consolidation of Huatai Group added 3.3 percentage points to the growth in net premiums earned. • Total pre-tax and after-tax catastrophe losses were $670 million (6.0 percentage points of the P&C combined ratio) and $544 million, respectively, compared with $1.2 billion (11.3 percentage points of the P&C combined ratio) and $949 million, respectively, in the prior year period. • Total pre-tax and after-tax favorable prior period development were $200 million (1.9 percentage points of the P&C combined ratio) and $116 million, respectively. This compares with $222 million (2.2 percentage points of the P&C combined ratio) and $162 million, respectively, in the prior year period. • The P&C combined ratio was 88.4 percent compared with 93.1 percent in the prior year period. The current year P&C combined ratio decreased primarily due to lower catastrophe losses, partially offset by lower favorable prior period development. The P&C current accident year (CAY) combined ratio excluding catastrophe losses was 84.3 percent compared with 84.0 percent in the prior year period. • Net investment income was a record $1.3 billion compared with $979 million in the prior year period, primarily reflecting higher reinvestment rates and the consolidation of Huatai Group. • Operating cash flow was a record $4.7 billion compared with $3.4 billion in the prior year period. • Chubb shareholders' equity decreased 1.0 percent in the quarter, as net income attributable to Chubb was more than offset by net unrealized losses and total capital returned to shareholders of $1.0 billion. Shareholders' equity also includes a one-time net realized and unrealized gain of $727 million, principally reflecting the discontinuation of the equity method of accounting upon the consolidation of Huatai. Total capital returned to shareholders comprises share repurchases of $606 million, at an average purchase price of $205.44 per share, and dividends of $352 million. We previously announced that our Board of Directors approved a new share repurchase program of up to $5 billion with no expiration date, effective July 1, 2023. • Effective January 1, 2023, we adopted the Long-Duration Targeted Improvements (LDTI) U.S. GAAP guidance, which principally impacted the Life Insurance segment. Financial data for the prior reporting periods in this report are adjusted, as applicable, and are presented in accordance with the new guidance. The impact to 2022 results was immaterial. 67 Table of Contents Net Premiums Written Three Months Ended September 30 % Change Nine Months Ended September 30 % Change (in millions of U.S. dollars, except for percentages) 2023 2022 Q-23 vs. Q-22 C$ Q-23 vs. Q-22 2023 2022 YTD-23 vs. YTD-22 C$ YTD-23 vs. YTD-22 Commercial casualty $ 2,332 $ 2,167 7.6 % 7.2 % $ 6,259 $ 5,777 8.3 % 9.1 % Workers' compensation 538 476 13.1 % 13.1 % 1,693 1,625 4.2 % 4.2 % Financial lines 1,333 1,270 4.9 % 4.5 % 3,733 3,727 0.2 % 0.9 % Surety 172 152 13.1 % 10.0 % 506 477 6.1 % 5.0 % Commercial multiple peril (1) 398 341 16.9 % 16.9 % 1,129 972 16.2 % 16.2 % Property and other short-tail lines 2,082 1,756 18.5 % 17.8 % 6,453 5,503 17.3 % 18.3 % Total Commercial P&C lines 6,855 6,162 11.2 % 10.7 % 19,773 18,081 9.4 % 10.0 % Agriculture 1,521 1,723 (11.7) % (11.7) % 2,581 2,523 2.3 % 2.3 % Personal automobile 547 404 35.3 % 26.7 % 1,434 1,239 15.7 % 10.8 % Personal homeowners 1,192 1,023 16.5 % 16.6 % 3,268 2,910 12.3 % 12.8 % Personal other 474 451 5.3 % 2.7 % 1,466 1,406 4.3 % 5.3 % Total Personal lines 2,213 1,878 17.9 % 15.5 % 6,168 5,555 11.0 % 10.4 % Global A&H - P&C 802 719 11.4 % 8.9 % 2,397 2,152 11.4 % 12.4 % Reinsurance lines 261 265 (1.4) % (1.8) % 831 780 6.5 % 6.9 % Total Property and Casualty lines 11,652 10,747 8.4 % 7.6 % 31,750 29,091 9.1 % 9.5 % Life Insurance 1,452 1,265 14.9 % 15.2 % 4,015 2,403 67.1 % 68.4 % Total consolidated $ 13,104 $ 12,012 9.1 % 8.4 % $ 35,765 $ 31,494 13.6 % 14.0 % (1) Commercial multiple peril represents retail package business (property and general liability). The increase in consolidated net premiums written for the three and nine months ended September 30, 2023, reflects growth across most product lines driven by strong premium retention, including rate and exposure increases, and strong new business. The consolidation of Huatai Group contributed $365 million, or 2.9 percentage points and 1.1 percentage points, for the three and nine months ended September 30, 2023, respectively. • 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 growth reflects increased audit exposure 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 decreased in the quarter mainly due to the timing of premium recognition this year versus last year, and a modest increase in the premium the company shared with the Federal Government. Growth for the year reflects the above factors and the prior year return of premium to the U.S. government of $161 million. • Personal lines grew principally in North America and Europe, with growth strongest in homeowners. • Global A&H – P&C increased primarily due to 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 decreased in the quarter, as continued growth in the portfolio, primarily in property lines, was more than offset by the impact of catastrophe reinstatement premiums recognized in the prior year. Growth for the year reflects continued growth in the portfolio, primarily in property lines, partially offset by the impact of catastrophe reinstatement premiums recognized in the prior year. • Life increased primarily due to the consolidation of Huatai Group in the third quarter of 2023, which contributed $149 million or 11.9 percentage points. Growth for the year is primarily due to the acquisition of Cigna's business in Asia, and growth in Latin America and Asia. 68 Table of Contents For additional information on net premiums written, refer to the segment results discussions. Net Premiums Earned Net premiums earned for short-duration contracts, typically P&C contracts, generally reflect the portion of net premiums written that was recorded as revenues for the period as the exposure periods expire. 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 September 30, 2023, net premiums earned increased $1.1 billion, up 9.9 percent, or 9.0 percent in constant dollars. P&C net premiums earned increased 9.2 percent, or 8.1 percent in constant dollars, comprising growth in commercial and consumer lines of 6.9 percent and 11.9 percent, respectively. For the nine months ended September 30, 2023, net premiums earned increased $4.0 billion, up 13.4 percent, or 13.7 percent in constant dollars. P&C net premiums earned increased 8.6 percent, or 8.8 percent in constant dollars, comprising growth in commercial and consumer lines of 8.7 percent and 9.3 percent, respectively. Catastrophe Losses and Prior Period Development We generally define catastrophe loss events consistent with the definition of the Property Claims Service (PCS) for events in the U.S. and Canada. PCS defines a catastrophe as an event that causes damage of $25 million or more in insured losses and affects a significant number of insureds. For events outside of the U.S. and Canada, we generally use a similar definition. 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 Nine Months Ended September 30 September 30 (in millions of U.S. dollars) 2023 2022 2023 2022 Catastrophe losses $ 670 $ 1,158 $ 1,528 $ 1,782 Favorable prior period development $ 200 $ 222 $ 596 $ 709 Catastrophe losses through September 30, 2023 and 2022, were primarily from the following events: • 2023: Severe weather-related events in the U.S. and internationally, Hawaii wildfires, and New Zealand storms. • 2022: Hurricane Ian losses of $975 million, 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 September 30, 2023, was $200 million, including adverse development of $116 million in long-tail lines, with $50 million related to legacy environmental exposures. Net favorable development of $316 million in short-tail lines is primarily in property lines. Pre-tax net favorable PPD for the nine months ended September 30, 2023, was $596 million, including adverse development of $50 million related to legacy environmental exposures and $49 million for molestation claims. Excluding the adverse development, we had net favorable development of $695 million with 5 percent in long-tail lines, principally from accident years 2013 through 2019, and 95 percent in short-tail lines, primarily in property, A&H, and surety lines. Pre-tax net favorable PPD for the three months ended September 30, 2022, was $222 million, including adverse development of $52 million related to legacy environmental exposures. Excluding the adverse development, we had favorable development of $274 million, with 5 percent in long-tail lines, principally from accident years 2018 and prior, and 95 percent in short-tail lines, primarily in property lines. Pre-tax net favorable PPD for the nine months ended September 30, 2022, was $709 million, including adverse development of $155 million for molestation claims, predominantly reviver statute-related, and adverse development of $52 million related to legacy environmental exposures. The molestation adverse development includes no change to the previously established reserve for the Boy Scouts of America settlement. Excluding the adverse development, we had favorable development of $916 million with 29 percent in long-tail lines, principally from accident years 2018 and prior, and 71 percent in short-tail lines, primarily in property and A&H lines. 69 Table of Contents Refer to the prior period development discussion in Note 8 to the Consolidated Financial Statements for additional information. P&C Combined Ratio In evaluating our segments, excluding Life Insurance financial performance, we use the P&C combined ratio. We calculate this ratio by dividing the respective expense amounts by net premiums earned. We do not calculate this ratio for the Life Insurance segment as we do not use this measure to monitor or manage that segment. A P&C combined ratio under 100 percent indicates underwriting income, and a combined ratio exceeding 100 percent indicates underwriting loss. Three Months Ended Nine Months Ended September 30 September 30 2023 2022 2023 2022 Loss and loss expense ratio CAY loss ratio excluding catastrophe losses 60.1 % 60.6 % 58.0 % 58.4 % Catastrophe losses 5.9 % 11.4 % 5.0 % 6.6 % Prior period development (2.0) % (2.4) % (2.1) % (3.0) % Loss and loss expense ratio 64.0 % 69.6 % 60.9 % 62.0 % Policy acquisition cost ratio 16.9 % 16.6 % 17.8 % 17.7 % Administrative expense ratio 7.5 % 6.9 % 8.1 % 7.8 % P&C Combined ratio 88.4 % 93.1 % 86.8 % 87.5 % The loss and loss expense ratio decreased for the three and nine months ended September 30, 2023, reflecting lower catastrophe losses, partially offset by lower favorable prior period development. The CAY loss ratio excluding catastrophe losses decreased for the three and nine months ended September 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 September 30, 2023, primarily due to changes in mix of business away from products that have a lower acquisition cost ratio. The administrative expense ratio increased for the three and nine months ended September 30, 2023, primarily due to higher pension expenses and higher employee-related expenses, 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 and will continue through 2023. 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. Policy benefits for the three and nine months ended September 30, 2023, include the results of Huatai Group from July 1, 2023. In addition, Policy benefits for the three and nine months ended September 30, 2023, include 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 September 30, 2023 and 2022, Policy benefits were $938 million and $707 million, respectively, which include (gains) losses from fair value changes in separate account liabilities that do not qualify for separate account reporting under GAAP of $(19) million and $(67) 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 $957 million and $774 million for the three months ended September 30, 2023 and 2022, respectively. For the nine months ended September 30, 2023 and 2022, Policy benefits were $2,565 million and $1,441 million, respectively, which include (gains) losses from fair value changes in separate account liabilities that do not qualify for separate account reporting under GAAP of $(56) million and $(116) 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 $2,621 million and $1,557 million for the nine months ended September 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. 70 Table of Contents Segment Operating Results – Three and Nine Months Ended September 30, 2023 and 2022 We operate through six business segments: North America Commercial P&C Insurance, North America Personal P&C Insurance, North America Agricultural Insurance, Overseas General Insurance, Global Reinsurance, and Life Insurance. For more information on our segments refer to “Segment Information” under Item 1 in our 2022 Form 10-K. North America Commercial P&C Insurance The North America Commercial P&C Insurance segment comprises operations that provide P&C insurance and services to large, middle market, and small commercial businesses in the U.S., Canada, and Bermuda. 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 Nine Months Ended September 30 % Change September 30 % Change (in millions of U.S. dollars, except for percentages) 2023 2022 Q-23 vs. Q-22 2023 2022 YTD-23 vs. YTD-22 Net premiums written $ 5,132 $ 4,722 8.7 % $ 14,575 $ 13,426 8.6 % Net premiums earned 4,735 4,283 10.6 % 13,710 12,645 8.4 % Losses and loss expenses 3,025 3,036 (0.4) % 8,625 7,979 8.1 % Policy acquisition costs 640 583 9.9 % 1,867 1,701 9.8 % Administrative expenses 323 272 19.3 % 934 814 14.9 % Underwriting income 747 392 90.7 % 2,284 2,151 6.2 % Net investment income 780 589 32.5 % 2,204 1,600 37.7 % Other (income) expense 6 6 — 18 12 48.3 % Segment income $ 1,521 $ 975 56.0 % $ 4,470 $ 3,739 19.6 % Loss and loss expense ratio: CAY loss ratio excluding catastrophe losses 61.1 % 61.5 % (0.4) pts 60.8 % 61.5 % (0.7) pts Catastrophe losses 5.2 % 14.0 % (8.8) pts 4.7 % 6.3 % (1.6) pts Prior period development (2.4) % (4.6) % 2.2 pts (2.6) % (4.7) % 2.1 pts Loss and loss expense ratio 63.9 % 70.9 % (7.0) pts 62.9 % 63.1 % (0.2) pts Policy acquisition cost ratio 13.5 % 13.6 % (0.1) pts 13.6 % 13.5 % 0.1 pts Administrative expense ratio 6.8 % 6.4 % 0.4 pts 6.8 % 6.4 % 0.4 pts Combined ratio 84.2 % 90.9 % (6.7) pts 83.3 % 83.0 % 0.3 pts Catastrophe Losses and Prior Period Development Three Months Ended Nine Months Ended September 30 September 30 (in millions of U.S. dollars) 2023 2022 2023 2022 Catastrophe losses $ 246 $ 598 $ 639 $ 803 Favorable prior period development $ 84 $ 166 $ 302 $ 561 Catastrophe losses through September 30, 2023 and 2022, were primarily from the following events: • 2023: U.S. flooding, hail, tornadoes, wind events, winter storm losses, and Hawaii wildfires. • 2022: Hurricane Ian losses, 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. 71 Table of Contents Premiums Net premiums written increased $410 million, or 8.7 percent, and $1,149 million, or 8.6 percent for the three and nine months ended September 30, 2023, respectively, reflecting strong premium retention, including both rate and exposure increases, strong new business, as well as an increase in workers' compensation audit exposure in the current year. The increase in premiums was across most lines of business, most notably in property, but also in casualty and commercial multiple peril. Net premiums earned increased $452 million, or 10.6 percent, and $1,065 million, or 8.4 percent for the three and nine months ended September 30, 2023, respectively, reflecting the growth in net premiums written described above. Combined Ratio The CAY loss ratio excluding catastrophe losses decreased for the three and nine months ended September 30, 2023, primarily from a higher percentage of net premiums earned from lines that have a lower loss ratio. The loss and loss expense ratio decreased for the three and nine months ended September 30, 2023, primarily from lower catastrophe losses and a higher percentage of premiums earned from lines that have a lower loss ratio, partially offset by lower favorable prior period development. Refer to Note 8 in the Consolidated Financial Statements for detail on prior period development. The administrative expense ratio increased for the three and nine months ended September 30, 2023, primarily from higher pension expenses and higher employee-related expenses, 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, and will continue through 2023. 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. and Canada. Three Months Ended Nine Months Ended September 30 % Change September 30 % Change (in millions of U.S. dollars, except for percentages) 2023 2022 Q-23 vs. Q-22 2023 2022 YTD-23 vs. YTD-22 Net premiums written $ 1,527 $ 1,392 9.6 % $ 4,404 $ 3,998 10.1 % Net premiums earned 1,407 1,334 5.5 % 4,084 3,852 6.0 % Losses and loss expenses 900 857 5.1 % 2,634 2,343 12.4 % Policy acquisition costs 287 274 4.6 % 836 792 5.6 % Administrative expenses 84 71 18.9 % 247 213 15.7 % Underwriting income 136 132 2.6 % 367 504 (27.3) % Net investment income 94 76 23.5 % 262 199 31.3 % Other (income) expense 2 1 NM 2 3 NM Amortization of purchased intangibles 3 2 NM 8 7 NM Segment income $ 225 $ 205 10.5 % $ 619 $ 693 (10.6) % Loss and loss expense ratio: CAY loss ratio excluding catastrophe losses 52.4 % 53.6 % (1.2) pts 53.4 % 53.5 % (0.1) pts Catastrophe losses 19.8 % 20.6 % (0.8) pts 14.3 % 12.2 % 2.1 pts Prior period development (8.3) % (10.0) % 1.7 pts (3.2) % (4.9) % 1.7 pts Loss and loss expense ratio 63.9 % 64.2 % (0.3) pts 64.5 % 60.8 % 3.7 pts Policy acquisition cost ratio 20.4 % 20.6 % (0.2) pts 20.5 % 20.6 % (0.1) pts Administrative expense ratio 6.0 % 5.3 % 0.7 pts 6.0 % 5.5 % 0.5 pts Combined ratio 90.3 % 90.1 % 0.2 pts 91.0 % 86.9 % 4.1 pts NM - Not meaningful 72 Table of Contents Catastrophe Losses and Prior Period Development Three Months Ended Nine Months Ended September 30 September 30 (in millions of U.S. dollars) 2023 2022 2023 2022 Catastrophe losses $ 280 $ 274 $ 586 $ 469 Favorable prior period development $ 119 $ 133 $ 135 $ 187 Catastrophe losses through September 30, 2023 and 2022, were primarily from the following events: • 2023: U.S. flooding, hail, tornadoes, wind events, winter storm losses, and Hawaii wildfires. • 2022: Hurricane Ian 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. Premiums Net premiums written increased $135 million, or 9.6 percent, and $406 million, or 10.1 percent for the three and nine months ended September 30, 2023, respectively, primarily driven by strong new business and strong renewal retention, from both rate and exposure increases, across most lines, but most notably in homeowners. Net premiums earned increased $73 million, or 5.5 percent, and $232 million, or 6.0 percent for the three and nine months ended September 30, 2023, respectively, reflecting the growth in net premiums written described above. Combined Ratio The CAY loss ratio excluding catastrophe losses decreased for the three and nine months ended September 30, 2023, primarily reflecting earned rate and exposure exceeding loss cost trends, as well as lower actual loss experience in homeowners, partially offset by higher auto and excess liability losses. The loss and loss expense ratio decreased for the three months ended September 30, 2023, primarily reflecting the factors mentioned above, as well as a lower impact from catastrophe losses, partially offset by lower favorable prior period development. The loss and loss expense ratio increased for the nine months ended September 30, 2023, primarily reflecting higher catastrophe losses in the current year and lower favorable prior period development. The administrative expense ratio increased for the three and nine months ended September 30, 2023, primarily from higher pension expenses, 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, and will continue through 2023. 73 Table of Contents North America Agricultural Insurance The North America Agricultural Insurance segment comprises our North American based businesses that provide a variety of coverages in the U.S. and Canada including crop insurance, primarily Multiple Peril Crop Insurance (MPCI) and crop-hail through Rain and Hail Insurance Service, Inc. (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 Nine Months Ended September 30 % Change September 30 % Change (in millions of U.S. dollars, except for percentages) 2023 2022 Q-23 vs. Q-22 2023 2022 YTD-23 vs. YTD-22 Net premiums written $ 1,521 $ 1,723 (11.7) % $ 2,581 $ 2,523 2.3 % Net premiums earned 1,540 1,673 (8.0) % 2,334 2,217 5.3 % Losses and loss expenses 1,356 1,444 (6.1) % 2,003 1,830 9.5 % Policy acquisition costs 76 68 11.1 % 128 111 15.0 % Administrative expenses 3 3 — 9 4 120.9 % Underwriting income 105 158 (33.4) % 194 272 (28.7) % Net investment income 12 9 47.3 % 43 23 91.7 % Other (income) expense — 1 NM — 1 NM Amortization of purchased intangibles 6 7 (2.4) % 19 20 (2.4) % Segment income $ 111 $ 159 (30.3) % $ 218 $ 274 (20.5) % Loss and loss expense ratio: CAY loss ratio excluding catastrophe losses 87.5 % 84.0 % 3.5 pts 84.7 % 82.2 % 2.5 pts Catastrophe losses 1.2 % 1.8 % (0.6) pts 1.6 % 2.3 % (0.7) pts Prior period development (0.6) % 0.5 % (1.1) pts (0.5) % (2.0) % 1.5 pts Loss and loss expense ratio 88.1 % 86.3 % 1.8 pts 85.8 % 82.5 % 3.3 pts Policy acquisition cost ratio 4.9 % 4.1 % 0.8 pts 5.5 % 5.1 % 0.4 pts Administrative expense ratio 0.2 % 0.2 % — pts 0.4 % 0.2 % 0.2 pts Combined ratio 93.2 % 90.6 % 2.6 pts 91.7 % 87.8 % 3.9 pts NM - Not meaningful Catastrophe Losses and Prior Period Development Three Months Ended Nine Months Ended September 30 September 30 (in millions of U.S. dollars) 2023 2022 2023 2022 Catastrophe losses $ 18 $ 31 $ 37 $ 52 Favorable (unfavorable) prior period development $ 9 $ (9) $ 12 $ 17 Catastrophe losses through September 30, 2023 and 2022, were primarily from the following events: • 2023: U.S. flooding, hail, tornadoes, and wind events. • 2022: Hurricane Ian losses, 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. Premiums Net premiums written decreased $202 million, or 11.7 percent for the three months ended September 30, 2023, mainly due to the timing of premium recognition this year versus last year, and a modest increase in the premium the company shared with the Federal Government. Net premiums written increased $58 million, or 2.3 percent for the nine months ended September 30, 2023, reflecting 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 and strong new business in Chubb Agribusiness, partially offset by higher cessions to the U.S. government in 74 Table of Contents the current year. 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 decreased $133 million, or 8.0 percent for the three months ended September 30, 2023, and increased $117 million, or 5.3 percent for the nine months ended September 30, 2023, reflecting the factors described above. Combined Ratio The CAY loss ratio excluding catastrophe losses increased for the three and nine months ended September 30, 2023, which contemplates a lower underwriting gain for the current crop year, partially offset by the year-over-year impact of crop commodity price hedge activity, which had a favorable impact of 0.7 percentage points and 0.2 percentage points, respectively. Estimated development for the current crop year was recognized this quarter compared to the fourth quarter in the prior year. The loss and loss expense ratio increased for the three and nine months ended September 30, 2023, reflecting the factors mentioned above. The increase for the three months ended September 30, 2023, was partially offset by favorable prior period development, compared with unfavorable prior period development in the prior year, and lower catastrophe losses. The increase in loss and loss expense ratio for the nine months ended September 30, 2023, also 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, and lower favorable prior period development, partially offset by lower catastrophe losses. The policy acquisition cost ratio increased for the three and nine months ended September 30, 2023, reflecting changes in mix of business away from products that have a lower acquisition cost ratio. 75 Table of Contents Overseas General Insurance Overseas General Insurance segment comprises Chubb International and Chubb Global Markets (CGM). Chubb International comprises our international commercial P&C traditional and specialty lines serving large corporations, middle market and small customers; A&H and traditional and specialty personal lines business serving local territories outside the U.S., Bermuda, and Canada. CGM, our London-based international commercial P&C excess and surplus lines business, includes Lloyd's of London (Lloyd's) Syndicate 2488. Chubb provides funds at Lloyd's to support underwriting by Syndicate 2488 which is managed by Chubb Underwriting Agencies Limited. Effective July 1, 2023, the Overseas General Insurance segment includes 100 percent of the results of Huatai Group's P&C business as required under consolidation accounting. We previously included our share of Huatai results based on our equity method investment within Other (income) expense. Three Months Ended Nine Months Ended September 30 % Change September 30 % Change (in millions of U.S. dollars, except for percentages) 2023 2022 Q-23 vs. Q-22 2023 2022 YTD-23 vs. YTD-22 Net premiums written $ 3,211 $ 2,645 21.4 % $ 9,359 $ 8,364 11.9 % Net premiums written - constant dollars 17.3 % 12.7 % Net premiums earned 3,311 2,741 20.8 % 9,005 8,065 11.7 % Loss and loss expenses 1,635 1,333 22.7 % 4,139 3,772 9.7 % Policy benefits 91 108 (15.7) % 338 282 19.9 % Policy acquisition costs 827 720 14.8 % 2,286 2,096 9.1 % Administrative expenses 327 264 24.3 % 899 811 10.9 % Underwriting income 431 316 36.2 % 1,343 1,104 21.7 % Net investment income 248 151 63.6 % 636 460 38.2 % Other (income) expense (10) (2) NM (29) 3 NM Amortization of purchased intangibles 19 12 52.4 % 52 40 27.6 % Segment income $ 670 $ 457 46.7 % $ 1,956 $ 1,521 28.6 % Loss and loss expense ratio: CAY loss ratio excluding catastrophe losses 50.0 % 49.2 % 0.8 pts 49.7 % 49.5 % 0.2 pts Catastrophe losses 3.6 % 3.6 % — pts 2.9 % 3.7 % (0.8) pts Prior period development (1.5) % (0.2) % (1.3) pts (2.9) % (2.9) % — pts Loss and loss expense ratio 52.1 % 52.6 % (0.5) pts 49.7 % 50.3 % (0.6) pts Policy acquisition cost ratio 25.0 % 26.3 % (1.3) pts 25.4 % 26.0 % (0.6) pts Administrative expense ratio 9.9 % 9.6 % 0.3 pts 10.0 % 10.0 % — pts Combined ratio 87.0 % 88.5 % (1.5) pts 85.1 % 86.3 % (1.2) pts NM - Not meaningful Catastrophe Losses and Prior Period Development Three Months Ended Nine Months Ended September 30 September 30 (in millions of U.S. dollars) 2023 2022 2023 2022 Catastrophe losses $ 120 $ 98 $ 259 $ 298 Favorable prior period development $ 49 $ 5 $ 253 $ 238 76 Table of Contents Catastrophe losses through September 30, 2023 and 2022, were primarily from the following events: • 2023: Storms in New Zealand and international weather-related events. • 2022: Hurricane Ian losses, International weather-related events, and storms in Australia. Refer to Note 8 to the Consolidated Financial Statements for detail on prior period development. Net Premiums Written by Region Three months ended September 30 (in millions of U.S. dollars, except for percentages) 2023 2023 % of Total 2022 2022 % of Total C$ 2022 Q-23 vs. Q-22 C$ Q-23 vs. Q-22 Region Europe, Middle East, and Africa $ 1,264 39 % $ 1,133 43 % $ 1,176 11.5 % 7.5 % Latin America 695 22 % 565 21 % 628 23.0 % 10.7 % Asia Pacific (1) 1,099 34 % 816 31 % 809 34.5 % 35.9 % Japan 102 3 % 101 4 % 96 0.9 % 5.5 % Other (2) 51 2 % 30 1 % 29 77.7 % 76.6 % Net premiums written $ 3,211 100 % $ 2,645 100 % $ 2,738 21.4 % 17.3 % Nine months ended September 30 (in millions of U.S. dollars, except for percentages) 2023 2023 % of Total 2022 2022 % of Total C$ 2022 Y-23 vs. Y-22 C$ Y-23 vs. Y-22 Region Europe, Middle East, and Africa $ 4,292 46 % $ 3,990 48 % $ 3,921 7.6 % 9.4 % Latin America 1,969 21 % 1,719 21 % 1,827 14.5 % 7.8 % Asia Pacific (1) 2,644 28 % 2,192 26 % 2,127 20.6 % 24.3 % Japan 349 4 % 359 4 % 328 (2.8) % 6.2 % Other (2) 105 1 % 104 1 % 101 1.8 % 3.8 % Net premiums written $ 9,359 100 % $ 8,364 100 % $ 8,304 11.9 % 12.7 % (1) 2023 includes the consolidated results of Huatai P&C effective July 1,2023. (2) Includes the international supplemental A&H business of Combined Insurance and other international operations. Premiums Overall, net premiums written increased $566 million and $995 million, or $473 million and $1,055 million on a constant dollar basis, for the three and nine months ended September 30, 2023, respectively, reflecting growth in both commercial and consumer lines. For the three and nine months ended September 30, 2023, commercial lines grew 17.0 percent and 10.5 percent, or 14.6 percent and 12.4 percent on a constant-dollar basis, respectively, and consumer lines grew 28.4 percent and 14.1 percent, or 21.4 percent and 13.2 percent on a constant-dollar basis, respectively. Our European division increased for the three and nine months ended September 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 nine months ended September 30, 2023, driven by growth in commercial lines due to exposure increases, positive rate increases, and new business, primarily property and casualty lines. Growth in consumer was driven by an increase in personal lines. Asia Pacific increased for the three and nine months ended September 30, 2023, reflecting the consolidation of Huatai Group's P&C business effective July 1, 2023, higher new business, higher retention and positive rate increases in commercial lines, primarily property and casualty lines. Growth in consumer lines is attributable to the acquisition of Cigna's business in Asia, as well as increased travel in A&H. Japan increased for the three and nine months ended September 30, 2023, on a constant-dollar basis, primarily from higher new business in A&H. 77 Table of Contents Net premiums earned increased $570 million and $940 million, or $460 million and $956 million on a constant-dollar basis, for the three and nine months ended September 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 September 30, 2023, due to higher favorable prior period development. The loss and loss expense ratio decreased for the nine months ended September 30, 2023, due to lower catastrophe losses. The CAY loss ratio excluding catastrophe losses increased for the three and nine months ended September 30, 2023, primarily due to higher losses in personal lines. The policy acquisition cost ratio decreased for the three and nine months ended September 30, 2023, primarily due to a change in the mix of business, including higher premiums earned from commercial lines that have a lower acquisition cost ratio than consumer lines. The administrative expense ratio increased for the three months ended September 30, 2023, reflecting the impact from the consolidation of Huatai Group's P&C business effective July 1, 2023. 78 Table of Contents Global Reinsurance The Global Reinsurance segment represents our reinsurance operations comprising Chubb Tempest Re Bermuda, Chubb Tempest Re USA, Chubb Tempest Re International, and Chubb Tempest Re Canada. 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 Nine Months Ended September 30 % Change September 30 % Change (in millions of U.S. dollars, except for percentages) 2023 2022 Q-23 vs. Q-22 2023 2022 YTD-23 vs. YTD-22 Net premiums written $ 261 $ 265 (1.4) % $ 831 $ 780 6.5 % Net premiums written - constant dollars (1.8) % 6.9 % Net premiums earned 239 255 (6.5) % 720 712 1.0 % Losses and loss expenses 116 311 (62.9) % 319 565 (43.6) % Policy acquisition costs 69 59 18.6 % 196 178 10.2 % Administrative expenses 9 8 4.2 % 27 27 — Underwriting income 45 (123) NM 178 (58) NM Net investment income 47 71 (34.4) % 144 232 (37.9) % Other (income) expense — — — (1) 1 NM Segment income (loss) $ 92 $ (52) NM $ 323 $ 173 86.7 % Loss and loss expense ratio: CAY loss ratio excluding catastrophe losses 45.9 % 49.6 % (3.7) pts 47.2 % 49.8 % (2.6) pts Catastrophe losses 2.6 % 72.6 % (70.0) pts 1.0 % 26.1 % (25.1) pts Prior period development (0.1) % (0.1) % — pts (3.9) % 3.5 % (7.4) pts Loss and loss expense ratio 48.4 % 122.1 % (73.7) pts 44.3 % 79.4 % (35.1) pts Policy acquisition cost ratio 29.1 % 22.9 % 6.2 pts 27.2 % 25.0 % 2.2 pts Administrative expense ratio 3.8 % 3.4 % 0.4 pts 3.8 % 3.8 % — pts Combined ratio 81.3 % 148.4 % (67.1) pts 75.3 % 108.2 % (32.9) pts NM - not meaningful Catastrophe Losses and Prior Period Development Three Months Ended Nine Months Ended September 30 September 30 (in millions of U.S dollars) 2023 2022 2023 2022 Catastrophe losses $ 6 $ 157 $ 7 $ 160 Favorable (unfavorable) prior period development $ — $ — $ 25 $ (22) Catastrophe losses through September 30, 2023 and 2022, were primarily from the following events: • 2023: Hurricane Idalia. • 2022: Hurricane Ian, and storms in Australia and Canada. Refer to Note 8 in the Consolidated Financial Statements for detail on prior period development. Premiums Net premiums written decreased $4 million for the three months ended September 30, 2023, as continued growth in the portfolio, primarily in property lines, was more than offset by the impact of catastrophe reinstatement premiums recognized in the prior year. Net premiums written increased $51 million for the nine months ended September 30, 2023 reflecting continued growth in the portfolio, primarily in property lines, partially offset by the impact of catastrophe reinstatement premiums recognized in the prior year. 79 Table of Contents Net premiums earned decreased $16 million and increased $8 million for the three and nine months ended September 30, 2023, respectively, primarily reflecting the changes in net premiums written described above. The change in net premiums earned also reflects the impact of catastrophe reinstatement premiums recognized in the prior year, which are fully earned when written. Combined Ratio The loss and loss expense ratio decreased for the three and nine months ended September 30, 2023, mainly from lower catastrophe losses. The decrease in the loss and loss expense ratio for the nine months ended September 30, 2023, also reflects favorable prior period development compared with unfavorable development in the prior year period. The CAY loss ratio excluding catastrophe losses decreased for the three and nine months ended September 30, 2023, primarily from an improvement in market conditions in several lines of business, including property, casualty, and workers' compensation lines. The policy acquisition cost ratio increased for the three and nine months ended September 30, 2023, primarily due to lower catastrophe reinstatement premiums recognized in the prior year, which have a lower acquisition cost ratio. The administrative expense ratio increased for the three months ended September 30, 2023, reflecting the impact of lower net premiums earned, as described above. Life Insurance The Life Insurance segment comprises our international life operations, which commencing in the third quarter of 2022, includes Cigna's A&H and life business in Korea, Taiwan, New Zealand, Hong Kong, and Indonesia, acquired on July 1, 2022. Effective July 1, 2023, the Life Insurance segment includes 100 percent of the results of Huatai Group's life and asset management business as required under consolidation accounting. We previously included our share of Huatai results based on our equity method investment within Other (income) expense. 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 and nine months ended September 30, 2022, respectively, are adjusted to reflect the adoption of LDTI. Refer to Note 1 c). Three Months Ended Nine Months Ended September 30 % Change September 30 % Change (in millions of U.S. dollars, except for percentages) 2023 2022 Q-23 vs. Q-22 2023 2022 YTD-23 vs. YTD-22 Net premiums written $ 1,452 $ 1,265 14.9 % $ 4,015 $ 2,403 67.1 % Net premiums written - constant dollars 15.2 % 68.4 % Net premiums earned 1,442 1,244 15.9 % 3,962 2,325 70.4 % Losses and loss expenses 20 27 (29.6) % 87 78 11.5 % Policy benefits 866 666 30.2 % 2,283 1,275 79.1 % Policy acquisition costs 279 266 5.1 % 829 537 54.3 % Administrative expenses 216 174 23.0 % 553 346 59.5 % Net investment income 211 147 42.5 % 525 359 45.9 % Other (income) expense (28) 4 NM (69) (38) 90.3 % Amortization of purchased intangibles 12 2 NM 18 7 170.6 % Segment income $ 288 $ 252 14.8 % $ 786 $ 479 64.6 % NM - not meaningful Premiums Net premiums written increased $187 million and $1,612 million, or $191 million and $1,631 million on a constant-dollar basis, for the three and nine months ended September 30, 2023, respectively. For our international life operations, net premiums written increased 19.7 percent for the three months ended September 30, 2023, primarily due to the consolidation of Huatai Group's life business which contributed $149 million or 14.8 percentage points, and growth in Asia and Latin America. Our international life operations net premiums written increased 101.8 percent 80 Table of Contents for the nine months ended September 30, 2023, primarily due to the acquisition of Cigna's business in Asia, underlying growth in existing business from Latin America bank distribution channels, and Asia agency and partnership channels. Net premiums written in our North American Combined Insurance business declined 3.9 percent and 5.5 percent, for the three and nine months ended September 30, 2023, respectively, as growth in the supplemental A&H business was more than offset by the non-renewal of a large program. Deposits The following table presents deposits collected on universal life and investment contracts: Three Months Ended Nine Months Ended September 30 % Change September 30 % Change (in millions of U.S. dollars, except for percentages) 2023 2022 C$ 2022 Q-23 vs. Q-22 C$ Q-23 vs. Q-22 2023 2022 C$ 2022 Y-23 vs. Y-22 C$ Y-23 vs. Y-22 Deposits collected on universal life and investment contracts $ 388 $ 449 $ 433 (13.4) % (10.2) % $ 1,097 $ 1,433 $ 1,352 (23.4) % (18.8) % 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 $61 million and $336 million for the three and nine months ended September 30, 2023, respectively, primarily in Taiwan, reflecting challenging market conditions for deposit products due to market volatility and a rapid increase in interest rates. The decrease in collections was partially offset by deposit growth from the consolidation of Huatai Group. Life Insurance segment income Life Insurance segment income increased $36 million for the three months ended September 30, 2023 reflecting the growth in premiums described above, higher net investment income and higher income from Huatai. Life Insurance segment income growth of $307 million for the nine months ended September 30, 2023, also reflects the acquisition of Cigna's business in Asia in the third quarter of 2022, and higher net investment income due to a higher invested asset base. 81 Table of Contents Corporate 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. Effective July 1, 2023, 100 percent of Huatai Group’s non-insurance operations results, comprising real estate and holding company activity, are included in Corporate. Results for the three and nine months ended September 30, 2022, are adjusted to reflect the adoption of LDTI. Refer to Note 1 c). Three Months Ended Nine Months Ended September 30 % Change September 30 % Change (in millions of U.S. dollars, except for percentages) 2023 2022 Q-23 vs. Q-22 2023 2022 YTD-23 vs. YTD-22 Losses and loss expenses $ 61 $ 74 (16.0) % $ 133 $ 275 (51.5) % Administrative expenses 98 91 6.7 % 290 264 9.7 % Underwriting loss 159 165 (3.4) % 423 539 (21.5) % Net investment income (loss) 14 5 NM 28 (4) NM Other (income) expense (51) 194 NM (251) 73 NM Amortization of purchased intangibles 44 46 (1.7) % 129 137 (4.9) % Net realized gains (losses) (96) (437) (78.0) % (481) (927) (48.0) % Market risk benefits gains (losses) (32) 69 NM (154) 85 NM Interest expense 174 150 15.6 % 499 416 19.8 % Cigna integration expenses 14 23 (38.8) % 51 26 99.4 % Income tax expense 413 263 57.2 % 1,189 907 31.1 % Net loss (867) (1,204) (27.8) % (2,647) (2,944) (10.0) % Net loss attributable to noncontrolling interests (3) — NM (3) — NM Net loss attributable to Chubb $ (864) $ (1,204) (28.0) % $ (2,644) $ (2,944) (10.1) % NM - not meaningful Losses and loss expenses primarily includes unfavorable prior period development for molestation claims and legacy environmental claims. Administrative expenses increased $7 million and $26 million for the three and nine months ended September 30, 2023, respectively, primarily due to increased spending to support digital growth initiatives. Cigna integration expenses of $14 million and $51 million for the three and nine months ended September 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. The Chief Executive Officer does not manage segment results or allocate resources to segments when considering these costs and they are therefore excluded from our definition of segment income. Refer to the respective sections that follow for a discussion of Net realized gains (losses), Net investment income (loss), Amortization of purchased intangibles, and Income tax expense (benefit). Refer to Notes 11 and 17 to the Consolidated Financial Statements for additional information on Market risk benefits gains (losses) and Other (income) expense, respectively. Net Realized and Unrealized Gains (Losses) We take a long-term view with our investment strategy, and our investment managers manage our investment portfolio to maximize total return within specific guidelines designed to minimize risk. The majority of our investment portfolio is available for sale and reported at fair value. 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. For a further discussion related to how we assess the valuation allowance for expected credit losses and the related impact on Net income, refer to Note 1 e) to the Consolidated Financial Statements in our 2022 Form 10-K. Additionally, Net 82 Table of Contents 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. The following tables present our net realized and unrealized gains (losses): Three Months Ended September 30 2023 2022 (As Adjusted) (in millions of U.S. dollars) Net Realized Gains (Losses) Net Unrealized Gains (Losses) Net Impact Net Realized Gains (Losses) Net Unrealized Gains (Losses) Net Impact Fixed maturities $ (70) $ (2,181) $ (2,251) $ (279) $ (3,045) $ (3,324) Fixed income and investment derivatives 9 — 9 (198) — (198) Public equity Sales (45) — (45) (12) — (12) Mark-to-market (55) — (55) (68) — (68) Private equity (less than 3 percent ownership) Mark-to-market 40 — 40 (42) — (42) Total investment portfolio (121) (2,181) (2,302) (599) (3,045) (3,644) Other derivatives (7) — (7) (19) — (19) Foreign exchange (67) (317) (384) 202 (942) (740) Current discount rate on future policy benefits — 683 683 — 479 479 Instrument-specific credit risk on market risk benefits — (5) (5) — 8 8 Other (1) 92 48 140 (40) (59) (99) Net (losses), pre-tax $ (103) $ (1,772) $ (1,875) $ (456) $ (3,559) $ (4,015) (1) The three months ended September 30, 2023 includes a one-time realized gain of $116 million as a result of the consolidation of Huatai Group. 83 Table of Contents Nine Months Ended September 30 2023 2022 (As Adjusted) (in millions of U.S. dollars) Net Realized Gains (Losses) Net Unrealized Gains (Losses) Net Impact Net Realized Gains (Losses) Net Unrealized Gains (Losses) Net Impact Fixed maturities $ (357) $ (1,589) $ (1,946) $ (857) $ (12,041) $ (12,898) Fixed income and investment derivatives (92) — (92) (232) — (232) Public equity Sales (48) — (48) 406 — 406 Mark-to-market (13) — (13) (693) — (693) Private equity (less than 3 percent ownership) Mark-to-market 75 — 75 17 — 17 Total investment portfolio (435) (1,589) (2,024) (1,359) (12,041) (13,400) Other derivatives (6) — (6) (9) — (9) Foreign exchange (122) (279) (401) 546 (1,631) (1,085) Current discount rate on future policy benefits — 497 497 — 1,546 1,546 Instrument-specific credit risk on market risk benefits — 3 3 — 48 48 Other (1) 79 63 142 (114) (35) (149) Net gains (losses), pre-tax $ (484) $ (1,305) $ (1,789) $ (936) $ (12,113) $ (13,049) (1) The nine months ended September 30, 2023 Includes a one-time realized gain of $116 million as a result of the consolidation of Huatai Group. Pre-tax net unrealized losses of $2,181 million and $1,589 million in our investment portfolio for the three and nine months ended September 30, 2023, respectively, were primarily driven by higher interest rates. Refer to Note 3 a) to the Consolidated Financial Statements. Pre-tax net realized losses of $484 million for the nine months ended September 30, 2023 mainly comprised losses from sales and impairments of fixed maturities and derivative losses, as well as foreign exchange losses. Effective Income Tax Rate Our effective tax rate (ETR) reflects a mix of income or losses in jurisdictions with a wide range of tax rates, permanent differences between GAAP and local tax laws, and the impact of discrete items. A change in the geographic mix of earnings could impact our ETR. For the three and nine months ended September 30, 2023, our ETR was 16.8 percent and 17.2 percent, respectively. This compares to an ETR of 24.9 percent and 18.7 percent for the three and nine months ended September 30, 2022, respectively. The ETR for each period was impacted by our mix of earnings among various jurisdictions, most notably related to realized gains/(losses), the impact of the consolidation of Huatai Group, and an increase in the enacted UK tax rate, offset by discrete tax items. Non-GAAP Reconciliation In presenting our results, we included and discussed certain non-GAAP measures. These non-GAAP measures, which may be defined differently by other companies, are important for an understanding of our overall results of operations and financial condition. However, they should not be viewed as a substitute for measures determined in accordance with GAAP. 84 Table of Contents We provide financial measures, including net premiums written, net premiums earned, and underwriting income on a constant-dollar basis. We believe it is useful to evaluate the trends in our results exclusive of the effect of fluctuations in exchange rates between the U.S. dollar and the currencies in which our international business is transacted, as these exchange rates could fluctuate significantly between periods and distort the analysis of trends. The impact is determined by assuming constant foreign exchange rates between periods by translating prior period results using the same local currency exchange rates as the comparable current period. P&C performance metrics comprise consolidated operating results (including Corporate) and exclude the operating results of the Life Insurance segment. We believe that these measures are useful and meaningful to investors as they are used by management to assess the company’s P&C operations which are the most economically similar. We exclude the Life Insurance segment because the results of this business do not always correlate with the results of our P&C operations. P&C combined ratio is the sum of the loss and loss expense ratio, policy acquisition cost ratio and the administrative expense ratio excluding the life business and including the realized gains and losses on the crop derivatives. These derivatives were purchased to provide economic benefit, in a manner similar to reinsurance protection, in the event that a significant decline in commodity pricing impacts underwriting results. We view gains and losses on these derivatives as part of the results of our underwriting operations. CAY P&C combined ratio excluding catastrophe losses (CATs) excludes CATs and prior period development (PPD) from the P&C combined ratio. We exclude CATs as they are not predictable as to timing and amount and PPD as these unexpected loss developments on historical reserves are not indicative of our current underwriting performance. The combined ratio numerator is adjusted to exclude CATs, net premiums earned adjustments on PPD, prior period expense adjustments and reinstatement premiums on PPD, and the denomi nator is adjusted to exclude net premiums earned adjustments on PPD and reinstatement premiums on CATs and PPD. In periods where there are adjustments on loss sensitive policies, these adjustments are excluded from PPD and net premiums earned when calculating the ratios. We believe this measure provides a better evaluation of our underwriting performance and enhances the understanding of the trends in our P&C business that may be obscured by these items. This measure is commonly reported among our peer companies and allows for a better comparison. Reinstatement premiums are additional premiums paid on certain reinsurance agreements in order to reinstate coverage that had been exhausted by loss occurrences. The reinstatement premium amount is typically a pro rata portion of the original ceded premium paid based on how much of the reinsurance limit had been exhausted. Net premiums earned adjustments within PPD are adjustments to the initial premium earned on retrospectively rated policies based on actual claim experience that develops after the policy period ends. The premium adjustments correlate to the prior period loss development on these same policies and are fully earned in the period the adjustments are recorded. Prior period expense adjustments typically relate to adjustable 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. 85 Table of Contents The following tables present the calculation of combined ratio, as reported for each segment to P&C combined ratio, adjusted for CATs and PPD: 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 Three Months Ended September 30, 2023 (in millions of U.S. dollars except for ratios) Numerator Losses and loss expenses/policy benefits A $ 3,025 $ 900 $ 1,356 $ 1,726 $ 116 $ 61 $ 7,184 Catastrophe losses and related adjustments Catastrophe losses, net of related adjustments (246) (280) (18) (120) (6) — (670) Reinstatement premiums collected (expensed) on catastrophe losses — — — — — — — Catastrophe losses, gross of related adjustments (246) (280) (18) (120) (6) — (670) PPD and related adjustments PPD, net of related adjustments - favorable (unfavorable) 84 119 9 49 — (61) 200 Net premiums earned adjustments on PPD - unfavorable (favorable) 66 — — — — — 66 Expense adjustments - unfavorable (favorable) 7 — — — — — 7 PPD reinstatement premiums - unfavorable (favorable) — (1) — — (1) — (2) PPD, gross of related adjustments - favorable (unfavorable) 157 118 9 49 (1) (61) 271 CAY loss and loss expense ex CATs B $ 2,936 $ 738 $ 1,347 $ 1,655 $ 109 $ — $ 6,785 Policy acquisition costs and administrative expenses Policy acquisition costs and administrative expenses C $ 963 $ 371 $ 79 $ 1,154 $ 78 $ 98 $ 2,743 Expense adjustments - favorable (unfavorable) (7) — — — — — (7) CAY Policy acquisition costs and administrative expenses, adjusted D $ 956 $ 371 $ 79 $ 1,154 $ 78 $ 98 $ 2,736 Denominator Net premiums earned E $ 4,735 $ 1,407 $ 1,540 $ 3,311 $ 239 $ 11,232 Net premiums earned adjustments on PPD - unfavorable (favorable) 66 — — — — 66 PPD reinstatement premiums - unfavorable (favorable) — (1) — — (1) (2) Net premiums earned excluding adjustments F $ 4,801 $ 1,406 $ 1,540 $ 3,311 $ 238 $ 11,296 P&C Combined ratio Loss and loss expense ratio A/E 63.9 % 63.9 % 88.1 % 52.1 % 48.4 % 64.0 % Policy acquisition cost and administrative expense ratio C/E 20.3 % 26.4 % 5.1 % 34.9 % 32.9 % 24.4 % P&C Combined ratio 84.2 % 90.3 % 93.2 % 87.0 % 81.3 % 88.4 % CAY P&C Combined ratio ex CATs Loss and loss expense ratio, adjusted B/F 61.1 % 52.4 % 87.5 % 50.0 % 45.9 % 60.1 % Policy acquisition cost and administrative expense ratio, adjusted D/F 20.0 % 26.5 % 5.2 % 34.8 % 32.9 % 24.2 % CAY P&C Combined ratio ex CATs 81.1 % 78.9 % 92.7 % 84.8 % 78.8 % 84.3 % Combined ratio Combined ratio 88.3 % Add: impact of gains and losses on crop derivatives 0.1 % P&C Combined ratio 88.4 % Note: The ratios above are calculated using whole U.S. dollars. 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. 86 Table of Contents 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 Three Months Ended September 30, 2022 (in millions of U.S. dollars except for ratios) Numerator Losses and loss expenses/policy benefits A $ 3,036 $ 857 $ 1,444 $ 1,441 $ 311 $ 74 $ 7,163 Catastrophe losses and related adjustments Catastrophe losses, net of related adjustments (598) (274) (31) (98) (157) — (1,158) Reinstatement premiums collected (expensed) on catastrophe losses — — — — 55 — 55 Catastrophe losses, gross of related adjustments (598) (274) (31) (98) (212) — (1,213) PPD and related adjustments PPD, net of related adjustments - favorable (unfavorable) 166 133 (9) 5 — (73) 222 Net premiums earned adjustments on PPD - unfavorable (favorable) 80 — — — — — 80 Expense adjustments - unfavorable (favorable) (1) — — — — — (1) PPD, gross of related adjustments - favorable (unfavorable) 245 133 (9) 5 — (73) 301 CAY loss and loss expense ex CATs B $ 2,683 $ 716 $ 1,404 $ 1,348 $ 99 $ 1 $ 6,251 Policy acquisition costs and administrative expenses Policy acquisition costs and administrative expenses C $ 855 $ 345 $ 71 $ 984 $ 67 $ 91 $ 2,413 Expense adjustments - favorable (unfavorable) 1 — — — — — 1 CAY Policy acquisition costs and administrative expenses, adjusted D $ 856 $ 345 $ 71 $ 984 $ 67 $ 91 $ 2,414 Denominator Net premiums earned E $ 4,283 $ 1,334 $ 1,673 $ 2,741 $ 255 $ 10,286 Reinstatement premiums (collected) expensed on catastrophe losses — — — — (55) (55) Net premiums earned adjustments on PPD - unfavorable (favorable) 80 — — — — 80 Net premiums earned excluding adjustments F $ 4,363 $ 1,334 $ 1,673 $ 2,741 $ 200 $ 10,311 P&C Combined ratio Loss and loss expense ratio A/E 70.9 % 64.2 % 86.3 % 52.6 % 122.1 % 69.6 % Policy acquisition cost and administrative expense ratio C/E 20.0 % 25.9 % 4.3 % 35.9 % 26.3 % 23.5 % P&C Combined ratio 90.9 % 90.1 % 90.6 % 88.5 % 148.4 % 93.1 % CAY P&C Combined ratio ex CATs Loss and loss expense ratio, adjusted B/F 61.5 % 53.6 % 84.0 % 49.2 % 49.6 % 60.6 % Policy acquisition cost and administrative expense ratio, adjusted D/F 19.6 % 25.9 % 4.2 % 35.9 % 33.4 % 23.4 % CAY P&C Combined ratio ex CATs 81.1 % 79.5 % 88.2 % 85.1 % 83.0 % 84.0 % Combined ratio Combined ratio 92.9 % Add: impact of gains and losses on crop derivatives 0.2 % P&C Combined ratio 93.1 % Note: The ratios above are calculated using whole U.S. dollars. 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. 87 Table of Contents 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 Nine Months Ended September 30, 2023 (in millions of U.S. dollars except for ratios) Numerator Losses and loss expenses/policy benefits A $ 8,625 $ 2,634 $ 2,003 $ 4,477 $ 319 $ 133 $ 18,191 Catastrophe losses and related adjustments Catastrophe losses, net of related adjustments (639) (586) (37) (259) (7) — (1,528) Reinstatement premiums collected (expensed) on catastrophe losses — — — — — — — Catastrophe losses, gross of related adjustments (639) (586) (37) (259) (7) — (1,528) PPD and related adjustments PPD, net of related adjustments - favorable (unfavorable) 302 135 12 253 25 (131) 596 Net premiums earned adjustments on PPD - unfavorable (favorable) 78 — (2) — — — 76 Expense adjustments - unfavorable (favorable) 14 — — — — — 14 PPD reinstatement premiums - unfavorable (favorable) — (2) — — 5 — 3 PPD, gross of related adjustments - favorable (unfavorable) 394 133 10 253 30 (131) 689 CAY loss and loss expense ex CATs B $ 8,380 $ 2,181 $ 1,976 $ 4,471 $ 342 $ 2 $ 17,352 Policy acquisition costs and administrative expenses Policy acquisition costs and administrative expenses C 2,801 1,083 137 3,185 223 290 7,719 Expense adjustments - favorable (unfavorable) (14) — — — — — (14) CAY Policy acquisition costs and administrative expenses, adjusted D $ 2,787 $ 1,083 $ 137 $ 3,185 $ 223 $ 290 $ 7,705 Denominator Net premiums earned E $ 13,710 $ 4,084 $ 2,334 $ 9,005 $ 720 $ 29,853 Net premiums earned adjustments on PPD - unfavorable (favorable) 78 — (2) — — 76 PPD reinstatement premiums - unfavorable (favorable) — (2) — — 5 3 Net premiums earned excluding adjustments F $ 13,788 $ 4,082 $ 2,332 $ 9,005 $ 725 $ 29,932 P&C Combined ratio Loss and loss expense ratio A/E 62.9 % 64.5 % 85.8 % 49.7 % 44.3 % 60.9 % Policy acquisition cost and administrative expense ratio C/E 20.4 % 26.5 % 5.9 % 35.4 % 31.0 % 25.9 % P&C Combined ratio 83.3 % 91.0 % 91.7 % 85.1 % 75.3 % 86.8 % CAY P&C Combined ratio ex CATs Loss and loss expense ratio, adjusted B/F 60.8 % 53.4 % 84.7 % 49.7 % 47.2 % 58.0 % Policy acquisition cost and administrative expense ratio, adjusted D/F 20.2 % 26.6 % 5.9 % 35.3 % 30.8 % 25.7 % CAY P&C Combined ratio ex CATs 81.0 % 80.0 % 90.6 % 85.0 % 78.0 % 83.7 % Combined ratio Combined ratio 86.8 % Add: impact of gains and losses on crop derivatives — P&C Combined ratio 86.8 % Note: The ratios above are calculated using whole U.S. dollars. 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. 88 Table of Contents 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 Nine Months Ended September 30, 2022 (in millions of U.S. dollars except for ratios) Numerator Losses and loss expenses/policy benefits A $ 7,979 $ 2,343 $ 1,830 $ 4,054 $ 565 $ 275 $ 17,046 Catastrophe losses and related adjustments Catastrophe losses, net of related adjustments (803) (469) (52) (298) (160) — (1,782) Reinstatement premiums collected (expensed) on catastrophe losses — — — — 55 — 55 Catastrophe losses, gross of related adjustments (803) (469) (52) (298) (215) — (1,837) PPD and related adjustments PPD, net of related adjustments - favorable (unfavorable) 561 187 17 238 (22) (272) 709 Net premiums earned adjustments on PPD - unfavorable (favorable) 83 — 159 — — — 242 Expense adjustments - unfavorable (favorable) 4 — (1) — — — 3 PPD reinstatement premiums - unfavorable (favorable) — — — — (2) — (2) PPD, gross of related adjustments - favorable (unfavorable) 648 187 175 238 (24) (272) 952 CAY loss and loss expense ex CATs B $ 7,824 $ 2,061 $ 1,953 $ 3,994 $ 326 $ 3 $ 16,161 Policy acquisition costs and administrative expenses Policy acquisition costs and administrative expenses C $ 2,515 $ 1,005 $ 115 $ 2,907 $ 205 $ 264 $ 7,011 Expense adjustments - favorable (unfavorable) (4) — 1 — — — (3) CAY Policy acquisition costs and administrative expenses, adjusted D $ 2,511 $ 1,005 $ 116 $ 2,907 $ 205 $ 264 $ 7,008 Denominator Net premiums earned E $ 12,645 $ 3,852 $ 2,217 $ 8,065 $ 712 $ 27,491 Reinstatement premiums (collected) expensed on catastrophe losses — — — — (55) (55) Net premiums earned adjustments on PPD - unfavorable (favorable) 83 — 159 — — 242 PPD reinstatement premiums - unfavorable (favorable) — — — — (2) (2) Net premiums earned excluding adjustments F $ 12,728 $ 3,852 $ 2,376 $ 8,065 $ 655 $ 27,676 P&C Combined ratio Loss and loss expense ratio A/E 63.1 % 60.8 % 82.5 % 50.3 % 79.4 % 62.0 % Policy acquisition cost and administrative expense ratio C/E 19.9 % 26.1 % 5.3 % 36.0 % 28.8 % 25.5 % P&C Combined ratio 83.0 % 86.9 % 87.8 % 86.3 % 108.2 % 87.5 % CAY P&C Combined ratio ex CATs Loss and loss expense ratio, adjusted B/F 61.5 % 53.5 % 82.2 % 49.5 % 49.8 % 58.4 % Policy acquisition cost and administrative expense ratio, adjusted D/F 19.7 % 26.1 % 4.9 % 36.1 % 31.2 % 25.3 % CAY P&C Combined ratio ex CATs 81.2 % 79.6 % 87.1 % 85.6 % 81.0 % 83.7 % Combined ratio Combined ratio 87.5 % Add: impact of gains and losses on crop derivatives — P&C Combined ratio 87.5 % Note: The ratios above are calculated using whole U.S. dollars. 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. 89 Table of Contents Amortization of Purchased Intangibles and Other Amortization Amortization of purchased intangibles Amortization expense related to purchased intangibles was $84 million and $226 million for the three and nine months ended September 30, 2023, respectively, compared with $69 million and $211 million for the prior year periods, respectively. At September 30, 2023, the deferred tax liability associated with the Other intangible assets (excluding the fair value adjustment on Unpaid losses and loss expenses) was $1,577 million. Refer to Note 7 to the Consolidated Financial Statements for the expected pre-tax amortization expense of purchased intangibles, which are presented gross of noncontrolling interests. The following table presents, as of September 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 fourth quarter of 2023 and for the next five years: For the Years Ending December 31 (in millions of U.S. dollars) Reduction to deferred tax liability associated with intangible assets Fourth quarter of 2023 $ 24 2024 82 2025 73 2026 68 2027 63 2028 60 Total $ 370 Amortization of the fair value adjustment on acquired invested assets and assumed long-term debt The following table presents, as of September 30, 2023, the expected amortization expense of the fair value adjustment on acquired invested assets related to the acquisitions of Huatai Group, 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 fourth quarter of 2023 and for the next five years: Amortization (expense) benefit of the fair value adjustment on For the Years Ending December 31 (in millions of U.S. dollars) Total acquired invested assets (1) Assumed long-term debt (2) Fourth quarter of 2023 $ (8) $ 6 2024 (29) 21 2025 (13) 21 2026 2 21 2027 4 21 2028 6 21 Total $ (38) $ 111 (1) Recorded as an increase (reduction) to Net investment income in the Consolidated statements of operations. (2) Recorded as a reduction to Interest expense in the Consolidated statements of operations. The estimate of amortization expense of the fair value adjustment on acquired invested assets could vary based on current market conditions, bond calls, overall duration of the acquired investment portfolio, and foreign exchange. 90 Table of Contents Net Investment Income Three Months Ended September 30 Nine Months Ended September 30 (in millions of U.S. dollars) 2023 2022 2023 2022 Fixed maturities (1) $ 1,198 $ 932 $ 3,355 $ 2,584 Short-term investments 60 25 147 49 Other interest income 17 14 46 21 Equity securities 53 21 68 93 Private equities 18 24 38 50 Other investments 16 8 54 28 Gross investment income (1) 1,362 1,024 3,708 2,825 Investment expenses (48) (45) (142) (136) Net investment income (1) $ 1,314 $ 979 $ 3,566 $ 2,689 (1) Includes amortization expense related to fair value adjustment of acquired invested assets $ (9) $ (6) $ (14) $ (36) 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 34.2 percent and 32.6 percent for the three and nine months ended September 30, 2023, respectively, primarily due to higher reinvestment rates on fixed maturities and the consolidation of Huatai group. For private equities where we own less than three percent, investment income is included within Net investment income in the table above. For private equities where we own more than three percent, investment income is included within Other (income) expense in the Consolidated statements of operations. Excluded from Net investment income is the mark-to-market movement for private equities, which is recorded within either Other (income) expense or Net realized gains (losses) based on our percentage of ownership. The total mark-to-market movement for private equities excluded from Net investment income was as follows: Three Months Ended September 30 Nine Months Ended September 30 (in millions of U.S. dollars) 2023 2022 2023 2022 Total mark-to-market gain (loss) on private equity, pre-tax $ 90 $ (232) $ 364 $ (52) Investments 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 September 30, 2023. The portfolio is externally managed by independent, professional investment managers and is broadly diversified across geographies, sectors, and issuers. Huatai's portfolio is predominantly managed internally by Huatai’s asset management companies. Private equities principally comprises investment funds and limited partnerships. We hold no collateralized debt obligations in our investment portfolio, and we provide no credit default protection. We have long-standing global credit limits for our entire portfolio across the organization. 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 was 4.7 years, which excludes Huatai, and 4.5 years at September 30, 2023, and December 31, 2022, respectively. We exclude Huatai in order to make comparison to prior period meaningful . We estimate that a 100 basis point (bps) increase in interest rates would reduce the valuation of our fixed income portfolio by approximately $5 billion at September 30, 2023. The following table shows the fair value and cost/amortized cost, net of valuation allowance, of our invested assets: 91 Table of Contents September 30, 2023 December 31, 2022 (in millions of U.S. dollars) Fair Value Cost/ Amortized Cost, Net Fair Value Cost/ Amortized Cost, Net Short-term investments $ 5,454 $ 5,455 $ 4,960 $ 4,962 Fixed maturities available for sale 99,766 109,197 85,220 93,186 Fixed maturities held to maturity — — 8,439 8,848 Fixed income securities 105,220 114,652 98,619 106,996 Equity securities 3,395 3,395 827 827 Private debt held-for-investment 2,389 2,401 — — Private equities 13,362 13,362 12,355 12,355 Other investments 5,583 5,583 1,341 1,341 Total investments $ 129,949 $ 139,393 $ 113,142 $ 121,519 The fair value of our total investments increased $16.8 billion during the nine months ended September 30, 2023, primarily due to the consolidation of Huatai, which added $12.7 billion, and investing of operating cash flow, partially offset by unrealized losses, share repurchases, and dividend payments. On July 1, 2023, our ownership interest in Huatai increased to 69.6 percent and Huatai became a consolidated subsidiary of Chubb. Consolidation accounting requires including 100 percent of Huatai’s results of operations and financial position within our Consolidated financial statements. Therefore, at September 30, 2023, total investments included $12.7 billion related to Huatai's investment portfolio, of which $6.5 billion is economically owned by Chubb and $6.2 billion attributable to noncontrolling interests. The noncontrolling interests comprises both the portion that we do not own of Huatai based on our current ownership percentage, as well as the required consolidation of VIEs where we are the primary beneficiary, which is generally if we hold an economic interest of 10 percent or more. These VIEs are related to sponsored investment products, principally mutual funds, that are created and managed by Huatai’s asset management companies. These VIEs totaled $5.4 billion related to investments, of which our economic interest is $1.6 billion, with the remainder related to investors other than Chubb which are reported under Noncontrolling interests. Refer to Note 3 g) in the Consolidated Financial Statements for further detail on VIEs. The following table presents the investments included in our Consolidated balance sheet relating to Huatai's investment portfolio at September 30, 2023, which are presented gross of noncontrolling interests required by consolidation accounting. Also provided below is the portion of Huatai’s investments that is owned by Chubb based on our ownership interest (shown below as attributable to Chubb) as a gauge to measure Chubb’s net economic investment exposure: September 30, 2023 (in millions of U.S. dollars) Consolidated Noncontrolling Interests Attributable to Chubb Short-term investments $ 1,015 $ 491 $ 524 Fixed maturities available for sale 2,748 696 2,052 Private debt held-for-investment 2,401 656 1,745 Equity securities 2,286 1,329 957 Private equities 33 15 18 Other investments 4,187 3,031 1,156 Total $ 12,670 $ 6,218 $ 6,452 Huatai’s investment portfolio comprised investments of predominantly investment grade fixed maturities, private debt, and mutual funds that hold principally fixed income securities. Private debt are investments with stated interest rates and maturity dates with fixed or determinable payments. Mutual funds, for which a Huatai entity holds an economic interest of less than 10 percent, are recorded within equities securities on the Consolidated balance sheets and comprised principally of holdings in 92 Table of Contents fixed maturities. Other investments principally comprised fixed income securities that are managed by Huatai’s asset management companies and are carried at fair value with changes in fair value recorded through the Consolidated statements of operations. The average credit quality of Huatai’s fixed income portfolio is rated A. The following tables present the fair value of our fixed income securities at September 30, 2023, and December 31, 2022. The first table lists investments according to type and second according to S&P credit rating: September 30, 2023 December 31, 2022 (in millions of U.S. dollars, except for percentages) Fair Value % of Total Fair Value % of Total U.S. Treasury / Agency $ 3,681 3 % $ 3,996 4 % Corporate and asset-backed securities 40,855 37 % 38,535 40 % Mortgage-backed securities 19,605 18 % 17,202 17 % Municipal 2,908 3 % 6,964 7 % Non-U.S. 36,654 34 % 26,962 27 % Short-term investments 5,454 5 % 4,960 5 % Total $ 109,157 100 % $ 98,619 100 % AAA $ 13,567 12 % $ 14,779 15 % AA 31,204 29 % 31,195 32 % A 26,567 24 % 18,366 19 % BBB 19,102 18 % 16,802 17 % BB 9,880 9 % 8,722 9 % B 8,306 8 % 8,347 8 % Other 531 — % 408 — % Total $ 109,157 100 % $ 98,619 100 % Corporate and asset-backed securities The following table presents our 10 largest global exposures to corporate bonds by fair value at September 30, 2023: (in millions of U.S. dollars) Fair Value Bank of America Corp $ 739 Morgan Stanley 651 JP Morgan Chase & Co 647 Wells Fargo & Co 572 Citigroup Inc 505 Goldman Sachs Group Inc 505 UBS Group AG 391 HSBC Holdings Plc 377 Verizon Communications Inc 360 Comcast Corp 352 93 Table of Contents Mortgage-backed securities The following table shows the fair value and amortized cost, net of valuation allowance, of our mortgage-backed securities: S&P Credit Rating Fair Value Amortized Cost, Net September 30, 2023 (in millions of U.S. dollars) AAA AA A BBB BB and below Total Total Agency residential mortgage-backed securities (RMBS) $ 9 $ 16,587 $ — $ — $ — $ 16,596 $ 19,064 Non-agency RMBS 729 53 45 32 7 866 965 Commercial mortgage-backed securities 1,854 162 116 9 2 2,143 2,372 Total mortgage-backed securities $ 2,592 $ 16,802 $ 161 $ 41 $ 9 $ 19,605 $ 22,401 Municipal As part of our overall investment strategy, we may invest in states, municipalities, and other political subdivisions fixed maturity securities (Municipal). We apply the same investment selection process described previously to our Municipal investments. The portfolio is highly diversified primarily in state general obligation bonds and essential service revenue bonds including education and utilities (water, power, and sewers). Non-U.S. Our exposure to the euro results primarily from Chubb European Group SE which is headquartered in France and offers a broad range of coverages throughout the European Union, Central, and Eastern Europe. Chubb primarily invests in Euro denominated investments to support its local currency insurance obligations and required capital levels. Chubb’s local currency investment portfolios have strict contractual investment guidelines requiring managers to maintain a high quality and diversified portfolio to both sector and individual issuers. Investment portfolios are monitored daily to ensure investment manager compliance with portfolio guidelines. Our non-U.S. investment grade fixed income portfolios are currency-matched with the insurance liabilities of our non-U.S. operations. The average credit quality of our non-U.S. fixed income securities is A and 38 percent of our holdings are rated AAA or guaranteed by governments or quasi-government agencies. Within the context of these investment portfolios, our government and corporate bond holdings are highly diversified across industries and geographies. Issuer limits are based on credit rating (AA—two percent, A—one percent, BBB—0.5 percent of the total portfolio) and are monitored daily via an internal compliance system. We manage our indirect exposure using the same credit rating based investment approach. Accordingly, we do not believe our indirect exposure is material. The following table summarizes the fair value and amortized cost, net of valuation allowance, of our non-U.S. fixed income portfolio by country/sovereign for non-U.S. government securities at September 30, 2023: (in millions of U.S. dollars) Fair Value Amortized Cost, Net Republic of Korea $ 1,617 $ 1,701 People's Republic of China 1,345 1,340 Taiwan 955 923 Canada 883 969 Federative Republic of Brazil 663 669 United Mexican States 592 629 Province of Ontario 534 587 Kingdom of Thailand 525 528 Socialist Republic of Vietnam 482 364 Commonwealth of Australia 439 526 Other Non-U.S. Government Securities 5,408 5,946 Total $ 13,443 $ 14,182 94 Table of Contents The following table summarizes the fair value and amortized cost, net of valuation allowance, of our non-U.S. fixed income portfolio by country/sovereign for non-U.S. corporate securities at September 30, 2023: (in millions of U.S. dollars) Fair Value Amortized Cost, Net China $ 5,761 $ 5,802 United Kingdom 2,536 2,764 Canada 1,941 2,079 South Korea 1,422 1,475 United States (1) 1,380 1,482 France 1,378 1,477 Australia 1,035 1,125 Japan 759 819 Germany 575 631 Netherlands 563 613 Other Non-U.S. Corporate Securities 5,861 6,347 Total $ 23,211 $ 24,614 (1) The countries that are listed in the non-U.S. corporate fixed income portfolio above represent the ultimate parent company's country of risk. Non-U.S. corporate securities could be issued by foreign subsidiaries of U.S. corporations. The tables above include Huatai invested assets which are required to be reported at 100 percent within our Consolidated balance sheets. However, our economic exposure is limited to our ownership interest. Below-investment grade corporate fixed income portfolio Below-investment grade securities have different characteristics than investment grade corporate debt securities. Risk of loss from default by the borrower is greater with below-investment grade securities. Below-investment grade securities are generally unsecured and are often subordinated to other creditors of the issuer. 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 September 30, 2023, our corporate fixed income investment portfolio included below-investment grade and non-rated securities which, in total, comprised approximately 15 percent of our fixed income portfolio. Our below-investment grade and non-rated portfolio includes over 1,720 issuers, with the greatest single exposure being $154 million. We manage high-yield bonds as a distinct and separate asset class from investment grade bonds. The allocation to high-yield bonds is explicitly set by internal management and is targeted to securities in the upper tier of credit quality (BB/B). Our minimum rating for initial purchase is BB/B. Sixteen external investment managers are responsible for high-yield security selection and portfolio construction. Our high-yield managers have a conservative approach to credit selection and very low historical default experience. Holdings are highly diversified across industries and generally subject to a 1.5 percent issuer limit as a percentage of high-yield allocation. We monitor position limits daily through an internal compliance system. Derivative and structured securities (e.g., credit default swaps and collateralized debt obligations) are not permitted in the high-yield portfolio. 95 Table of Contents Critical Accounting Estimates Unpaid losses and loss expenses As an insurance and reinsurance company, we are required by applicable laws and regulations and GAAP to establish loss and loss expense reserves for the estimated unpaid portion of the ultimate liability for losses and loss expenses under the terms of our policies and agreements with our insured and reinsured customers. With the exception of certain structured settlements, for which the timing and amount of future claim payments are reliably determinable, and certain reserves for unsettled claims, our loss reserves are not discounted for the time value of money. The following table presents a roll-forward of our unpaid losses and loss expenses: (in millions of U.S. dollars) Gross Losses Reinsurance Recoverable (1) Net Losses Balance at December 31, 2022 $ 75,747 $ 17,086 $ 58,661 Losses and loss expenses incurred 23,189 5,252 17,937 Losses and loss expenses paid (19,831) (4,820) (15,011) Other (including foreign exchange translation) 600 290 310 Balance at September 30, 2023 $ 79,705 $ 17,808 $ 61,897 (1) Net of valuation allowance for uncollectible reinsurance. The estimate of the liabilities includes provisions for claims that have been reported but are unpaid at the balance sheet date (case reserves) and for obligations on claims that have been incurred but not reported (IBNR) at the balance sheet date. IBNR may also include provisions to account for the possibility that reported claims may settle for amounts that differ from the established case reserves. Loss reserves also include an estimate of expenses associated with processing and settling unpaid claims (loss expenses). Refer to Note 8 to the Consolidated Financial Statements for a discussion on the changes in the loss reserves. Future policy benefits Effective January 1, 2023, Chubb adopted the long-duration targeted improvement (LDTI) U.S. GAAP accounting guidance which affects the recognition, measurement, presentation, and disclosure requirements for long-duration contracts. For a discussion of our critical accounting estimates, refer to Item 7 in our 2022 Form 10-K. Asbestos and Environmental (A&E) During the three months and nine months ended September 30, 2023, we increased environmental net loss reserves for Brandywine managed operations by $50 million. A&E reserves are included in Corporate. Refer to our 2022 Form 10-K for further information on our A&E exposures. Fair value measurements Accounting guidance defines fair value as the price to sell an asset or transfer a liability (an exit price) in an orderly transaction between market participants and establishes a three-level valuation hierarchy based on the reliability of the inputs. The fair value hierarchy gives the highest priority to quoted prices in active markets (Level 1 inputs) and the lowest priority to unobservable data (Level 3 inputs). Level 2 includes inputs, other than quoted prices within Level 1, that are observable for assets or liabilities either directly or indirectly. Refer to Note 4 to the Consolidated Financial Statements for information on our fair value measurements. 96 Table of Contents Catastrophe Management We actively monitor and manage our catastrophe risk accumulation around the world from natural perils, including setting risk limits based on probable maximum loss (PML) and purchasing catastrophe reinsurance, to ensure sufficient liquidity and capital to meet the expectations of regulators, rating agencies, and policyholders, and to provide shareholders with an appropriate risk-adjusted return. 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 September 30, 2023, and does not represent our expected catastrophe losses for any one year. Modeled Net Probable Maximum Loss (PML) Pre-tax Worldwide (1) U.S. Hurricane (2) California Earthquake (3) Annual Aggregate Annual Aggregate Single Occurrence (in millions of U.S. dollars, except for percentages) Chubb % of Total Chubb Shareholders’ Equity Chubb % of Total Chubb Shareholders’ Equity Chubb % of Total Chubb Shareholders’ Equity 1-in-10 $ 2,327 4.4 % $ 1,182 2.3 % $ 147 0.3 % 1-in-100 $ 5,082 9.7 % $ 3,238 6.2 % $ 1,424 2.7 % 1-in-250 $ 8,489 16.2 % $ 6,237 11.9 % $ 1,685 3.2 % (1) Worldwide aggregate is comprised of losses arising from tropical cyclones, convective storms, earthquakes, U.S. wildfires, and floods in the U.S., Canada, and Europe, and excludes "non-modeled" perils such as man-made and other catastrophe risks including pandemic. (2) U.S. hurricane losses include losses from wind, storm-surge, and related precipitation-induced flooding. (3) California earthquakes include the fire-following sub-peril. The PML for worldwide and key U.S. peril regions are based on our in-force portfolio at July 1, 2023, and reflect the September 1, 2023, reinsurance program, as well as inuring reinsurance protection coverage. This includes a $500 million excess of loss program for named windstorms and earthquakes within Northeast states, purchased and effective September 1, 2023. Refer to the Global Property Catastrophe Reinsurance section for more information. 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 $3,238 million (or 6.2 percent of total Chubb shareholders’ equity at September 30, 2023). Effective December 31, 2022, our worldwide PMLs include losses from floods in Canada and Europe. Additionally, U.S. hurricane PMLs include losses from hurricane related precipitation-induced flooding. The above estimates of Chubb’s loss profile are inherently uncertain for many reasons, including the following: • While the use of third-party modeling packages to simulate potential catastrophe losses is prevalent within the insurance industry, the models are reliant upon significant meteorology, seismology, and engineering assumptions to estimate catastrophe losses. In particular, modeled catastrophe events are not always a representation of actual events and ensuing additional loss potential; • There is no universal standard in the preparation of insured data for use in the models, the running of the modeling software, and interpretation of loss output. These loss estimates do not represent our potential maximum exposures and it is highly likely that our actual incurred losses would vary materially from the modeled estimates; • The potential effects of climate change add to modeling complexity; and • Changing climate conditions could impact our exposure to natural catastrophe risks. Published studies by leading government, academic, and professional organizations combined with extensive research by Chubb climate scientists reveal the potential for increases in the frequency and severity of key natural perils such as tropical cyclones, inland flood, and wildfire. To understand the potential impacts on the Chubb portfolio, we have conducted stress tests on our peak exposure zone, namely in the U.S., using parameters outlined by the Intergovernmental Panel on Climate Change (IPCC) Climate Change 2021 report. These parameters consider the impacts of climate change and the resulting climate peril impacts over a timescale relevant to our business. The tests are conducted by adjusting our baseline view of risk for the perils of hurricane, inland flood, and wildfire in the U.S. to reflect increases in frequency and severity across the modeled domains for each of these perils. Based on these tests against the Chubb portfolio we do not expect material impacts to our baseline PMLs from climate change through December 31, 2023. These tests reflect current exposures only and exclude potentially mitigating factors such as changes to building codes, public or private risk mitigation, regulation, and public policy. Refer to Item 7 in our 2022 Form 10-K for more information on man-made and other catastrophes. 97 Table of Contents Global Property Catastrophe Reinsurance Program Chubb’s core property catastrophe reinsurance program provides protection against natural catastrophes impacting its primary property operations (i.e., excluding our Global Reinsurance and Life Insurance segments). We regularly review our reinsurance protection and corresponding property catastrophe exposures. This may or may not lead to the purchase of additional reinsurance prior to a program’s renewal date. In addition, prior to each renewal date, we consider how much, if any, coverage we intend to buy and we may make material changes to the current structure in light of various factors, including modeled PML assessment at various return periods, reinsurance pricing, our risk tolerance and exposures, and various other structuring considerations. Chubb renewed its Global Property Catastrophe Reinsurance Program for our North American and International operations effective April 1, 2023, through March 31, 2024, with no material changes in coverage from the expiring program. The program consists of three layers in excess of losses retained by Chubb on a per occurrence basis. In addition, Chubb renewed its terrorism coverage (excluding nuclear, biological, chemical and radiation coverage, with an inclusion of coverage for biological and chemical coverage for personal lines) for the United States from April 1, 2023, through March 31, 2024, with the same limits and retention and percentage placed except that the majority of terrorism coverage is on an aggregate basis above our retentions without a reinstatement. Effective September 1, 2023, Chubb purchased an additional layer of per occurrence coverage for named windstorms and earthquakes within Northeast states. Coverage is provided for North American and international operations losses within the territory through August 31, 2024. Loss Location Layer of Loss Comments Notes United States (excluding Alaska and Hawaii) $0 million – $1.1 billion Losses retained by Chubb (a) United States (excluding Alaska and Hawaii) $1.1 billion – $1.25 billion All natural perils and terrorism (b) United States (excluding Alaska and Hawaii) $1.25 billion – $2.35 billion All natural perils and terrorism (c) United States (excluding Alaska and Hawaii) $2.35 billion – $3.5 billion All natural perils and terrorism (d) United States (Northeast States Only) $3.5 billion – $4.0 billion Named windstorm and earthquake (e) International (including Alaska and Hawaii) $0 million – $200 million Losses retained by Chubb (a) International (including Alaska and Hawaii) $200 million – $1.3 billion All natural perils and terrorism (c) Alaska, Hawaii, and Canada $1.3 billion – $2.45 billion All natural perils and terrorism (d) (a) Ultimate retention will depend upon the nature of the loss and the interplay between the underlying per risk programs and certain other catastrophe programs purchased by individual business units. These other catastrophe programs have the potential to reduce our effective retention below the stated levels. (b) These coverages are partially placed with Reinsurers. (c) These coverages are both part of the same Second layer within the Global Property Catastrophe Reinsurance Program and are fully placed with Reinsurers. (d) These coverages are both part of the same Third layer within the Global Property Catastrophe Reinsurance Program and are fully placed with Reinsurers. (e) Northeast states are defined as Virginia to Maine. This coverage is fully placed with Reinsurers. 98 Table of Contents Capital Resources Capital resources consist of funds deployed or available to be deployed to support our business operations. September 30 December 31 2023 2022 (in millions of U.S. dollars, except for ratios) As Adjusted Short-term debt $ 700 $ 475 Long-term debt 13,736 14,402 Total financial debt 14,436 14,877 Trust preferred securities 308 308 Total Chubb shareholders’ equity 52,373 50,519 Total capitalization $ 67,117 $ 65,704 Ratio of financial debt to total capitalization 21.5 % 22.6 % Ratio of financial debt plus trust preferred securities to total capitalization 22.0 % 23.1 % Repurchase agreements are excluded from the table above and are disclosed separately from short-term debt in the Consolidated balance sheets. The repurchase agreements are collateralized borrowings where we maintain the right and ability to redeem the collateral on short notice, unlike short-term debt which comprises the current maturities of our long-term debt instruments. For the nine months ended September 30, 2023, we repurchased $1.8 billion of Common Shares in a series of open market transactions under the Board of Directors (Board) share repurchase authorizations. At September 30, 2023, there were 23,467,247 Common Shares in treasury with a weighted-average cost of $159.69 per share, and $4.4 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. This allows us capital market access for refinancing as well as for unforeseen or opportunistic capital needs. Dividends We have paid dividends each quarter since we became a public company in 1993. Under Swiss law, dividends must be stated in Swiss francs though dividend payments are made by Chubb in U.S. dollars. Refer to Note 14 to the Consolidated Financial Statements for a discussion of our dividend methodology. At our May 2023 annual general meeting, our shareholders approved an annual dividend for the following year of up to $3.44 per share, or CHF 3.09 per share, calculated using the USD/CHF exchange rate as published in the Wall Street Journal on May 17, 2023, expected to be paid in four quarterly installments of $0.86 per share after the general meeting by way of a distribution from capital contribution reserves, transferred to free reserves for payment. 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 annual dividend approved in May 2023 represented a $0.12 per share increase ($0.03 per quarter) over the prior year dividend. The following table represents dividends paid per Common Share to shareholders of record on each of the following dates: Shareholders of record as of: Dividends paid as of: December 16, 2022 January 6, 2023 $0.83 (CHF 0.79) March 17, 2023 April 10, 2023 $0.83 (CHF 0.77) June 16, 2023 July 7, 2023 $0.86 (CHF 0.77) September 15, 2023 October 6, 2023 $0.86 (CHF 0.75) 99 Table of Contents Liquidity We anticipate that positive cash flows from operations (underwriting activities and investment income) should be sufficient to cover cash outflows under most loss scenarios for the near term. In addition to cash from operations, routine sales of investments, and financing arrangements, we have agreements with a third-party bank provider which implemented two international multi-currency notional cash pooling programs to enhance cash management efficiency during periods of short-term timing mismatches between expected inflows and outflows of cash by currency. The programs allow us to optimize investment income by avoiding portfolio disruption. Should the need arise, we generally have access to capital markets and to credit facilities with letter of credit capacity of $4.0 billion, $3.0 billion of which can be used for revolving credit. At September 30, 2023, our usage under these facilities was $1.0 billion in letters of credit. Our access to credit under these facilities is dependent on the ability of the banks that are a party to the facilities to meet their funding commitments. The facilities require that we maintain certain financial covenants, all of which we met at September 30, 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. If we cannot obtain adequate capital or sources of credit on favorable terms, on a timely basis, or at all, our business, operating results, and financial condition could be adversely affected. To date, we have not experienced difficulty accessing our credit facility or establishing additional facilities when needed. 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 nine months ended September 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 $1.4 billion and $6.8 billion from its Bermuda subsidiaries during the nine months ended September 30, 2023 and 2022, respectively. Chubb Limited received cash dividends of $28 million and $32 million and non-cash dividends of $291 million and $348 million from Swiss subsidiaries during the nine months ended September 30, 2023 and 2022, respectively. The U.S. insurance subsidiaries of Chubb INA Holdings Inc. (Chubb INA) may pay dividends, without prior regulatory approval, subject to restrictions set out in state law of the subsidiary’s domicile (or, if applicable, commercial domicile). Chubb INA’s international subsidiaries are also subject to insurance laws and regulations particular to the countries in which the subsidiaries operate. These laws and regulations sometimes include restrictions that limit the amount of dividends payable without prior approval of regulatory insurance authorities. Chubb Limited received no dividends from Chubb INA during the nine months ended September 30, 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 $976 million and $1.8 billion from its subsidiaries during the nine months ended September 30, 2023 and 2022, respectively. Cash Flows Our sources of liquidity include cash from operations, routine sales of investments, and financing arrangements. The following is a discussion of our cash flows for the nine months ended September 30, 2023 and 2022. Operating cash flows were $9.4 billion in the nine months ended September 30, 2023, compared to $8.6 billion in the prior year period, primarily due to higher net investment income and net premiums collected, partially offset by higher net losses paid and income taxes paid. Cash used for investing was $5.4 billion in the nine months ended September 30, 2023, compared to $5.2 billion in the prior year period, an increase of $0.2 billion. Cash used for investing in the current period primarily included higher net purchases of fixed maturities and equity securities of $6.6 billion. This increase was partially offset by a decrease in cash used for the acquisition of subsidiaries of $5.3 billion and a decrease in private equity contributions, net of distributions of $1.2 billion. Cash used for financing was $3.3 billion in the nine months ended September 30, 2023, compared to $2.7 billion in the prior year period. The increase of $0.6 billion used for financing included net repayments of $1.1 billion from repurchase agreements and $475 million from long-term debt, partially offset by lower common shares repurchased of $935 million. We use repurchase agreements as a low-cost funding alternative. At September 30, 2023, there were $2.6 billion in repurchase agreements outstanding with various maturities over the next eight months. 100 Table of Contents Both internal and external forces influence our financial condition, results of operations, and cash flows. Claim settlements, premium levels, and investment returns may be impacted by changing rates of inflation and other economic conditions. In many cases, significant periods of time, ranging up to several years or more, may lapse between the occurrence of an insured loss, the reporting of the loss to us, and the settlement of the liability for that loss. Information provided in connection with outstanding debt of subsidiaries Chubb INA Holdings Inc. (Subsidiary Issuer) is an indirect 100 percent-owned and consolidated subsidiary of Chubb Limited (Parent Guarantor). The Parent Guarantor fully and unconditionally guarantees certain of the debt of the Subsidiary Issuer. The following table presents the condensed balance sheets of Chubb Limited and Chubb INA Holdings Inc., after elimination of investment in any non-guarantor subsidiary: Chubb Limited (Parent Guarantor) Chubb INA Holdings Inc. (Subsidiary Issuer) September 30 December 31 September 30 December 31 (in millions of U.S. dollars) 2023 2022 2023 2022 Assets Investments $ — $ — $ 100 $ 135 Cash 38 40 2 2 Due from parent guarantor/subsidiary issuer 2 2 1,165 586 Due from subsidiaries that are not issuers or guarantors 1,807 1,791 598 598 Other assets 1 16 2,425 2,106 Total assets $ 1,848 $ 1,849 $ 4,290 $ 3,427 Liabilities Due to parent guarantor/subsidiary issuer $ 1,165 $ 586 $ 2 $ 2 Due to subsidiaries that are not issuers or guarantors 232 248 1,645 1,710 Affiliated notional cash pooling programs 1,235 252 2,300 1,496 Short-term debt — — 700 475 Long-term debt — — 13,736 14,402 Trust preferred securities — — 308 308 Other liabilities 527 616 1,439 1,305 Total liabilities 3,159 1,702 20,130 19,698 Total shareholders’ equity (1,311) 147 (15,840) (16,271) Total liabilities and shareholders’ equity $ 1,848 $ 1,849 $ 4,290 $ 3,427 101 Table of Contents 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: Nine Months Ended September 30, 2023 Chubb Limited (Parent Guarantor) Chubb INA Holdings Inc. (Subsidiary Issuer) (in millions of U.S. dollars) Net investment income (loss) $ (13) $ (94) Net realized gains (losses) (1) (107) Administrative expenses 86 (9) Interest (income) expense (8) 332 Other (income) expense (33) 58 Cigna integration expenses — 3 Income tax expense (benefit) 10 (181) Net loss $ (69) $ (404) Comprehensive loss $ (69) $ (535)