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What changed in Chubb Limited's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Chubb Limited's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+586 added−563 removedSource: 10-K (2024-02-23) vs 10-K (2023-02-24)

Top changes in Chubb Limited's 2023 10-K

586 paragraphs added · 563 removed · 448 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

111 edited+45 added−32 removed132 unchanged
Biggest changeCGM differentiates itself from competitors through long standing experience in its product lines, its multiple insurance entities (Syndicate 2488 and CEG), and the quality of its underwriting and claims service. 8 Table of Contents Global Reinsurance (2 percent of 2022 Consolidated NPE) Overview The Global Reinsurance segment represents Chubb's reinsurance operations comprising Chubb Tempest Re Bermuda, Chubb Tempest Re USA, Chubb Tempest Re International, and Chubb Tempest Re Canada.
Biggest changeCompetition for international risks is also seen from domestic insurers in the country of origin of the insured. CGM differentiates itself from competitors through long standing experience in its product lines, its multiple insurance entities (Syndicate 2488 and CEG), and the quality of its underwriting and claims service.
Bermuda domiciled subsidiaries must prepare and file with the BMA, audited annual statutory financial statements and audited annual financial statements prepared in accordance with accounting principles generally accepted in the U.S. (GAAP), International Financial Reporting Standards (IFRS), or any such other generally accepted accounting principles as the BMA may recognize.
Bermuda domiciled subsidiaries must prepare and file with the BMA, audited annual statutory financial statements and audited annual financial statements prepared in accordance with accounting principles generally accepted in the U.S. (U.S. GAAP), International Financial Reporting Standards (IFRS), or any such other generally accepted accounting principles as the BMA may recognize. The U.S.
The GAAP audited financial statements are made public by the BMA. The Insurance Act prescribes rules for the preparation and content of the statutory financial statements that require Bermuda domiciled subsidiaries to give detailed information and analyses regarding premiums, claims, reinsurance, and investments.
GAAP audited financial statements are made public by the BMA. The Insurance Act prescribes rules for the preparation and content of the statutory financial statements that require Bermuda domiciled subsidiaries to give detailed information and analyses regarding premiums, claims, reinsurance, and investments.
Johns has more than 25 years of experience in insurance, wealth management and capital management. Mr.
Mr. Johns has more than 25 years of experience in insurance, wealth management and capital management. Mr.
Our global ERM framework is broadly multi-disciplinary and its strategic objectives include: • External Risks : identify, analyze, quantify, and where possible, mitigate significant external risks that could materially hamper the financial condition of Chubb and/or the achievement of corporate business objectives over the next 36 months; • Exposure Accumulations : identify and quantify the accumulation of exposure to individual counterparties, products or industry sectors , particularly those that materially extend across or correlate between business units or divisions and/or the balance sheet; • Risk Modeling : develop and use various data-sets, advanced analytics, metrics and processes (such as probabilistic exposure and economic capital models to assess aggregation risk from natural and other catastrophes) that help business and corporate leaders make informed underwriting, portfolio management and risk management decisions within a consistent risk/reward framework; • Governance : • establish and coordinate risk guidelines that reflect the corporate appetite for risk; • monitor exposure accumulations relative to established guidelines; and • ensure effective internal risk management communication up to management and the Board, (including our Risk & Finance Committee and our Nominating & Governance Committee), down to the various business units and legal entities, and across the firm; and • Disclosure : develop protocols and processes for risk-related disclosure internally as well as externally to rating agencies, regulators, shareholders and analysts.
Our global ERM framework is broadly multi-disciplinary and its strategic objectives include: • External Risks : identify, analyze, quantify, and where possible, mitigate significant external risks that could materially hamper the financial condition of Chubb and/or the achievement of corporate business objectives over the next 36 months; • Exposure Accumulations : identify and quantify the accumulation of exposure to individual counterparties, products or industry sectors , particularly those that materially extend across or correlate between business units or divisions and/or the balance sheet; • Risk Modeling : develop and use various data-sets, advanced analytics, metrics and processes (such as probabilistic exposure and economic capital models to assess aggregation risk from natural and other catastrophes) that help business and corporate leaders make informed underwriting, portfolio management and risk management decisions within a consistent risk/reward framework; • Governance : • establish and coordinate risk guidelines that reflect the corporate appetite for risk; • monitor exposure accumulations relative to established guidelines; and • ensure effective internal risk management communication up to management and the Board (including our Risk & Finance Committee), down to the various business units and legal entities, and across the firm; and • Disclosure : develop protocols and processes for risk-related disclosure internally as well as externally to rating agencies, regulators, shareholders and analysts.
In our opinion, no material part of our business is dependent upon a single insured or group of insureds. We do not believe that the loss of any one insured would have a material adverse effect on our financial condition or results of operations. 2 Table of Contents Competition Competition in the insurance and reinsurance marketplace is substantial.
In our 2 Table of Contents PART I opinion, no material part of our business is dependent upon a single insured or group of insureds. We do not believe that the loss of any one insured would have a material adverse effect on our financial condition or results of operations. Competition Competition in the insurance and reinsurance marketplace is substantial.
Chubb Group's Risk and Underwriting Committee (RUC) reports to and assists the Chief Executive Officer (CEO) in the oversight and review of the ERM framework which covers the processes and guidelines used to manage the entire landscape of insurance, financial, strategic, and operational risks. The RUC is chaired by Chubb Group’s Chief Risk Officer (Chair).
Chubb Group's Risk and Underwriting Committee (RUC) reports to and assists the Chief Executive Officer in the oversight and review of the ERM framework which covers the processes and guidelines used to manage the entire landscape of insurance, financial, strategic, and operational risks. The RUC is chaired by Chubb Group’s Chief Risk Officer (Chair).
Products are generally offered through a North American network of independent agents and brokers, as well as eTraditional, which are digital platforms where we electronically quote, bind, and issue for agents and brokers. An example of this is the Chubb Marketplace.
Products are generally offered through a North American network of independent agents and retail brokers, as well as eTraditional, which are digital platforms where we electronically quote, bind, and issue for agents and brokers. An example of this is the Chubb Marketplace.
While we are unable at this time to determine whether additional reserves may be necessary in the future, we believe that our reserves for unpaid losses and loss expenses are adequate at December 31, 2022. Future additions to reserves, if needed, could have a material adverse effect on our financial condition, results of operations, and cash flows.
While we are unable at this time to determine whether additional reserves may be necessary in the future, we believe that our reserves for unpaid losses and loss expenses are adequate at December 31, 2023. Future additions to reserves, if needed, could have a material adverse effect on our financial condition, results of operations, and cash flows.
Statutory surplus is an important measure used by the regulators and rating agencies to assess our U.S. insurance subsidiaries' ability to support business operations and provide dividend capacity. Our U.S. insurance subsidiaries are subject to various state statutory and regulatory restrictions that limit the amount of dividends that may be paid without prior approval from regulatory authorities.
Statutory surplus is an important measure used by the regulators and rating agencies to assess our U.S. insurance subsidiaries' ability to pay claims, support business operations, and provide dividend capacity. Our U.S. insurance subsidiaries are subject to various state statutory and regulatory restrictions that limit the amount of dividends that may be paid without prior approval from regulatory authorities.
We have also formed a reinsurance subsidiary named Chubb Reinsurance (Switzerland) Limited, which we operate as primarily a provider of reinsurance to Chubb entities. Both companies are licensed and governed by FINMA. 13 Table of Contents U.S. Operations Our U.S. insurance subsidiaries are subject to extensive regulation by the states in which they do business.
We have also formed a reinsurance subsidiary named Chubb Reinsurance (Switzerland) Limited, which we operate as primarily a provider of reinsurance to Chubb entities. Both companies are licensed and governed by FINMA. 14 Table of Contents U.S. Operations Our U.S. insurance subsidiaries are subject to extensive regulation by the states in which they do business.
Group Supervision The Pennsylvania Insurance Department (Department) is the group-wide supervisor for the Chubb Group of Companies. In consultation with other insurance regulatory bodies that oversee Chubb's insurance activities, the Department has convened the Chubb Supervisory College (College) bi-annually since 2012, with regulator-only interim Colleges held in intervening years since 2017. The most recent College was held in September 2022.
Group Supervision The Pennsylvania Insurance Department (Department) is the group-wide supervisor for the Chubb Group of Companies. In consultation with other insurance regulatory bodies that oversee Chubb's insurance activities, the Department has convened the Chubb Supervisory College (College) bi-annually since 2012, with regulator-only interim Colleges held in intervening years since 2017. The most recent College was held in September 2023.
There are various regulatory bodies and initiatives that impact Chubb in multiple international jurisdictions and the potential for significant impact on Chubb could be heightened as a result of recent industry and economic developments. 16 Table of Contents Enterprise Risk Management As an insurer, Chubb is in the business of profitably managing risk for its customers.
There are various regulatory bodies and initiatives that impact Chubb in multiple international jurisdictions and the potential for significant impact on Chubb could be heightened as a result of recent industry and economic developments. 17 Table of Contents Enterprise Risk Management As an insurer, Chubb is in the business of profitably managing risk for its customers.
There are progressive risk-based capital failure levels that trigger more stringent regulatory action. If an insurer's policyholders' surplus falls below the Mandatory Control Level (70 percent of the Authorized Control Level, as defined by the NAIC), the relevant insurance commissioner is required to place the insurer under regulatory control.
There are progressive risk-based capital failure levels that trigger more stringent and intrusive regulatory action. If an insurer's policyholders' surplus falls below the Mandatory Control Level (70 percent of the Authorized Control Level, as defined by the NAIC), the relevant insurance commissioner is required to place the insurer under regulatory control.
Within Chubb Global Casualty, Chubb Alternative Risk Solutions Group underwrites contractual indemnification policies which provides prospective coverage for loss events within the insured’s policy retention levels and underwrites assumed loss portfolio transfer (LPT) contracts in which insured loss events have occurred prior to the inception of the contract. • Property provides products and services including primary, quota share and excess all-risk insurance, risk management programs and services, commercial, inland marine, and aerospace products. • Casualty Risk provides coverages including umbrella and excess liability, environmental risk, casualty programs for commercial construction related projects for companies and institutions, and medical risk specialty liability products for the healthcare industry. • Surety offers a wide variety of surety products and specializes in underwriting both commercial and contract bonds and has the capacity for bond issuance on an international basis. • Accident & Health (A&H) products are targeted to middle market, large corporate and affinity groups, and include employee benefit plans, occupational accident, student accident, and worldwide travel accident and global medical programs.
Within Chubb Global Casualty, Chubb Alternative Risk Solutions Group underwrites contractual indemnification policies which provides prospective coverage for loss events within the insured’s policy retention levels, and underwrites assumed loss portfolio transfer (LPT) contracts in which insured loss events have occurred prior to the inception of the contract. • Property provides products and services including primary, quota share and excess all-risk insurance, risk management programs and services, commercial, inland marine, and aerospace products. 5 Table of Contents • Casualty Risk provides coverages including umbrella and excess liability, environmental risk, casualty programs for commercial construction related projects for companies and institutions, and medical risk specialty liability products for the healthcare industry. • Surety offers a wide variety of surety products and specializes in underwriting both commercial and contract bonds and has the capacity for bond issuance on an international basis. • Accident & Health (A&H) products are targeted to large corporate and affinity groups, and include employee benefit plans, occupational accident, student accident, and worldwide travel accident and global medical programs.
CGM, our London-based international specialty and excess and surplus lines wholesale business, includes Lloyd's of London (Lloyd's) Syndicate 2488, a wholly-owned Chubb syndicate supported by funds at Lloyd’s provided by Chubb Corporate Members. Syndicate 2488 has an underwriting capacity of £630 million for the Lloyd’s 2023 account year.
CGM, our London-based international specialty and excess and surplus lines wholesale business, includes Lloyd's of London (Lloyd's) Syndicate 2488, a wholly-owned Chubb syndicate supported by funds at Lloyd’s provided by Chubb Corporate Members. Syndicate 2488 has an underwriting capacity of £630 million for the Lloyd’s 2024 account year.
The policies written by Chubb Life generally provide funds to beneficiaries of insureds after death and/or protection and/or savings benefits while the contract owner is living. We earn income from both insurance contracts subject to mortality and morbidity risks and investment contracts not subject to insurance risks.
The policies written by Chubb Life generally provide funds to beneficiaries of insureds upon death and/or protection and/or savings benefits while the contract owner is living. We earn income from both insurance contracts subject to mortality and morbidity risks and investment contracts not subject to insurance risks.
A competitive strength of our international operations is our global network and breadth of insurance programs, which assist individuals and business organizations to meet their risk management objectives, while also having a significant presence in all of the countries in which we operate, giving us the advantage of accessing local technical expertise and regulatory environments, understanding local markets and culture, accomplishing a spread of risk, and offering a global network to service multinational accounts.
A competitive strength of our international operations is our global 8 Table of Contents network and breadth of insurance programs, which assist individuals and business organizations to meet their risk management objectives, while also having a significant presence in all of the countries in which we operate, giving us the advantage of accessing local technical expertise and regulatory environments, understanding local markets and culture, accomplishing a spread of risk, and offering a global network to service multinational accounts.
These restrictions differ by state, but are generally based on calculations incorporating statutory surplus, statutory net income, and/or investment income. The National Association of Insurance Commissioners (NAIC) has a risk-based capital requirement for P&C insurance companies.
These restrictions differ by state, but are generally based on calculations incorporating statutory surplus, statutory net income, and/or investment income. The National Association of Insurance Commissioners (NAIC) has promulgated a recommended risk-based capital requirement for P&C insurance companies.
In 2022, there was year over year progress on gender and racial diversity at the leadership level, most notably on gender and racial diversity at our senior vice president and above levels, and we also improved the diversity of hiring into our development programs.
In 2023, there was year-over-year progress on gender and racial diversity at the leadership level, most notably on racial diversity at our senior vice president and above levels, and we also improved the diversity of hiring into our development programs.
These requirements are designed to monitor capital adequacy using a formula that prescribes a series of risk measurements to determine a minimum capital amount for an insurance company, based on the profile of the individual company. The ratio of a company's actual policyholder surplus to its minimum capital requirement will determine whether any state regulatory action is required.
These requirements are designed to monitor capital adequacy using a formula that prescribes a series of risk measurements to determine a minimum capital amount for an insurance company, based on the profile of the individual company. The ratio of a company's adjusted policyholder surplus to its minimum capital requirement will determine whether state regulatory action is required.
These risks primarily include physical risks, and to a lesser extent transition risks and liability risks. Physical risks arise from direct weather–related events, such as floods, storms and wildfire and these risks may increase insurance claims. Our insurance contracts are typically renewable annually. Consequently, we can respond to changes as needed by adjusting our pricing or by restricting our exposure.
These risks primarily include physical risks, transition risks and liability risks. Physical risks arise from direct weather–related events, such as floods, storms and wildfire and these risks may increase insurance claims. Our insurance contracts are typically renewable annually. Consequently, we can respond to changes as needed by adjusting our pricing or by restricting our exposure.
Chubb mitigates exposure to climate change risk by hedging catastrophe risk in our insurance portfolio through both reinsurance and capital markets, and our investment portfolio through the diversification of risk, industry, location, type and duration of security.
Chubb mitigates exposure to climate change risk by ceding catastrophe risk in our insurance portfolio through both reinsurance and capital markets, and our investment portfolio through the diversification of risk, industry, location, type and duration of security.
The credit management units, 11 Table of Contents working with actuaries, determine reasonable exposure estimates (collateral calculations), ensure receipt of collateral in an acceptable form, and coordinate collateral adjustments as and when needed. Financial reviews and expected loss evaluations are performed annually for active captive accounts and as needed for run-off exposures.
The credit management units, working with actuaries, determine reasonable exposure estimates (collateral calculations), ensure receipt of collateral in an acceptable form, and coordinate collateral adjustments as and when needed. Financial reviews and expected loss evaluations are performed annually for active captive accounts and as needed for run-off exposures.
Lupica served in several senior management positions since joining Chubb in 2000, including President, North America Major Accounts and Specialty Insurance; Chairman, Insurance - North America; Chief Operating Officer, Insurance - North America; President of ACE USA; Division President of U.S. Professional Risk business and U.S. Regional Operations; and Executive Vice President of Professional Risk.
Lupica served in several senior management positions since joining Chubb in 2000, including President, North America Major Accounts and Specialty Insurance; Chairman, Insurance - North 20 Table of Contents America; Chief Operating Officer, Insurance - North America; President of ACE USA; Division President of U.S. Professional Risk business and U.S. Regional Operations; and Executive Vice President of Professional Risk.
A&H also provides specialty consumer lines products, including credit card enhancement programs (identity theft, rental car collision damage waiver, trip travel, and purchase protection benefits). • Financial Lines provides management liability and professional liability (D&O and E&O), transactional risk, and cyber risk products to public companies as well as to private and not for profit organizations. 5 Table of Contents • ESIS Inc.
A&H also provides specialty consumer lines products, including credit card enhancement programs (identity theft, rental car collision damage waiver, trip travel, and purchase protection benefits). • Financial Lines provides management liability and professional liability (D&O and E&O), transactional risk, and cyber risk products to public companies as well as to private and not for profit organizations. • ESIS Inc.
We are also required to file annually with the Department an enterprise risk report that identifies material risks within our system that could pose enterprise risk to our U.S. insurers, a disclosure report that identifies our corporate governance practices, a report reflecting our internal assessment of material risks associated with our current business plan and the sufficiency of our capital resources to support those risks, and a group capital calculation report that provides a baseline quantitative measure for group risks.
We are also required to file annually with our domiciliary state insurance regulators an enterprise risk report that identifies material risks within our system that could pose enterprise risk to our U.S. insurers, a disclosure report that identifies our corporate governance practices, a report reflecting our internal assessment of material risks associated with our current business plan and the sufficiency of our capital resources to support those risks, and a group capital calculation report that provides a baseline quantitative measure for group risks.
Chubb Asset Management determines the investment portfolio's allowable, targeted asset allocation and ranges for each of the segments. These asset allocation targets are derived from sophisticated asset and liability modeling that measures correlated 12 Table of Contents histories of returns and volatility of returns.
Chubb Asset Management determines the investment portfolio's allowable, targeted asset allocation and ranges for each of the segments. These asset allocation targets are derived from sophisticated asset and liability modeling that measures correlated histories of returns and volatility of returns.
This list is maintained by our Reinsurance Security Committee (RSC), a committee comprising senior management personnel and a dedicated reinsurer security team. Changes to the list are authorized by the RSC and recommended to the Chair of the Risk and Underwriting Committee.
This list is maintained by our Reinsurance Security Committee (RSC), a committee 11 Table of Contents comprising senior management personnel and a dedicated reinsurer security team. Changes to the list are authorized by the RSC and recommended to the Chair of the Risk and Underwriting Committee.
The FCR provides details of measures governing the 15 Table of Contents business operations, corporate governance framework, solvency and financial performance. The FCR must be filed with the BMA and requires Bermuda insurance companies to make the FCR publicly available.
The FCR provides details of measures governing the business operations, corporate governance framework, solvency and financial performance. The FCR must be filed with the BMA and requires Bermuda insurance companies to make the FCR publicly available.
This segment includes: • Commercial Insurance (40 percent of this segment's 2022 NPE), which includes the retail division focused on middle market customers and small businesses • Major Accounts (39 percent of this segment's 2022 NPE), the retail division focused on large institutional organizations and corporate companies • Westchester (17 percent of this segment's 2022 NPE), our wholesale and specialty division • Chubb Bermuda (4 percent of this segment’s 2022 NPE), our high excess retail division Products and Distribution The Commercial Insurance operations, which include Small Commercial, provides a broad range of P&C, financial lines, and A&H products targeted to U.S and Canadian-based middle market customers in a variety of industries, while the Small 4 Table of Contents Commercial operations provide a broad range of property and casualty, workers' compensation, small commercial management and professional liability for small businesses based in the U.S. • Commercial Insurance products and services offered include traditional property and casualty lines of business, including Package, which combines property and general liability, workers' compensation, automobile, umbrella; financial lines of business, including professional liability, management liability and cyber risk coverage; and other lines including environmental, A&H, and international coverages.
This segment includes: • Commercial Insurance (40 percent of this segment's 2023 NPE), which includes our retail division focused on middle market customers and small businesses • Major Accounts (38 percent of this segment's 2023 NPE), our retail division focused on large institutional organizations and corporate companies • Westchester (17 percent of this segment's 2023 NPE), our wholesale and specialty division • Chubb Bermuda (5 percent of this segment’s 2023 NPE), our high excess retail division Products and Distribution The Commercial Insurance operations provide a broad range of P&C, financial lines, and A&H products targeted to U.S and Canadian-based middle market customers in a variety of industries, while the Small Commercial operations provide a broad range of property and casualty, workers' compensation, small commercial management and professional liability for small businesses based in the U.S. • Commercial Insurance products and services offered include traditional property and casualty lines of business, including Package, which combines property and general liability, workers' compensation, automobile, umbrella; financial lines of business, including professional liability, management liability and cyber risk coverage; and other lines including environmental, A&H, and international coverages.
The RUC meets at least twice a quarter, and is comprised of Chubb Group's most senior executives which, in addition to the Chair, includes the CEO, President and Chief Operating Officer, Chief Financial Officer, Chief Investment Officer, Chief Actuary, Chief Claims Officer, General Counsel, President – North America Insurance, President – Overseas General Insurance, Deputy Chief Risk Officer, and Chief Underwriting Officer.
The RUC meets at least twice a quarter, and is comprised of Chubb Group's most senior executives which, in addition to the Chair, includes the Chief Executive Officer, President and Chief Operating Officer, Chief Financial Officer, Chief Investment Officer, Chief Actuary, Chief Claims Officer, General Counsel, President – North America Insurance, President – Overseas General Insurance, and Chief Underwriting Officer.
We are subject to the New York Department of Financial Services’ Cybersecurity Regulation (the NYDFS Cybersecurity Regulation) which mandates detailed cybersecurity standards for all institutions, including insurance entities, authorized by the NYDFS to operate in New York.
We are subject to the New York Department of Financial Services’ Cybersecurity Regulation (the NYDFS Cybersecurity Regulation) which mandates detailed cybersecurity standards and other obligations for all institutions, including insurance entities, authorized by the NYDFS to operate in New York.
Others within the overall ERM structure contribute toward accomplishing Chubb's ERM objectives, including regional management, Corporate Underwriting, Internal Audit, Compliance, external consultants, and managers of our internal control processes and procedures. 17 Table of Contents Climate Change Risk Management Chubb has a comprehensive, coordinated global environmental program that is embedded in all areas of the organization and its activities and performance are reported to the RUC and executive team.
Others within the overall ERM structure contribute toward accomplishing Chubb's ERM objectives, including regional management, Corporate Underwriting, Internal Audit, Compliance, external consultants, and managers of our internal control processes and procedures. 18 Table of Contents Chubb has a comprehensive, coordinated global environmental program that is embedded in all areas of the organization and its activities and performance are reported to the executive team.
We have grown our business through increased premium volume, expansion of product offerings and geographic reach, and the acquisition of other companies, to become a global property and casualty (P&C) leader. We have also expanded our personal accident and supplemental health (A&H), and life insurance business with the acquisition of Cigna's business in several Asian markets.
We have grown our business through increased premium volume, expansio n of product offerings and geographic reach, and the acquisition of other companies, to become a global property and casualty (P&C) leader. We expanded our personal accident and supplemental health (A&H), and life insurance business with the acquisition of Cigna's business in several Asian markets in 2022.
North America Personal P&C Insurance (13 percent of 2022 Consolidated NPE) Overview The North America Personal P&C Insurance segment includes the business written by Chubb Personal Risk Services division, which includes high net worth personal lines business, with operations in the U.S. and Canada.
North America Personal P&C Insurance (12 percent of 2023 Consolidated NPE) Overview The North America Personal P&C Insurance segment includes the business written by Chubb Personal Risk Services division, which includes high net worth personal lines business, with operations in the U.S. and Canada.
However, FINMA acknowledges the Department's assumption of group supervision over us. In 2008, we formed Chubb Insurance (Switzerland) Limited which offers property and casualty insurance to Swiss companies, A&H and personal lines insurance for individuals of Swiss companies, and reinsurance predominantly in continental Europe.
However, FINMA acknowledges the Department's assumption of group supervision over us. In 2008, we formed Chubb Insurance (Switzerland) Limited which offers property and casualty insurance to Swiss companies, A&H, and personal lines insurance for individuals of Swiss companies.
Our U.S. insurance subsidiaries are required to file detailed annual and quarterly reports with state insurance regulators. In addition, our U.S. insurance subsidiaries' operations and financial records are subject to examination at regular intervals by state regulators. All states have enacted legislation that regulates insurance holding companies.
Our U.S. insurance subsidiaries are required to file detailed annual and quarterly statutory financial statements with state insurance regulators. In addition, our U.S. insurance subsidiaries' operational and financial records are subject to examination at regular intervals by state regulators. All states have enacted legislation that regulates insurance holding companies.
The GCO has executive management responsibility for Chubb's climate-related strategies, including business and policy initiatives and the execution of related underwriting and portfolio management processes. The potential impacts of climate change on the insurance industry, including Chubb, are complex, myriad and will develop over a multi-year time horizon.
The GCO has executive management responsibility for Chubb's climate-related strategies, including business and policy initiatives and coordination with the Chief Risk Officer and Chief Underwriting Officer regarding the execution of related underwriting and portfolio management processes. The potential impacts of climate change on the insurance industry, including Chubb, are complex, myriad and will develop over a multi-year time horizon.
The key competitors in our markets vary by geographic region and product line. An advantage of our international platform is that we can change our mix of business in response to changes in competitive conditions in the territories in which we operate.
The key competitors in Global Reinsurance's markets vary by geographic region and product line. An advantage of Global Reinsurance's international platform is that we can change our mix of business in response to changes in competitive conditions in the territories in which it operates.
CGM also has a presence outside London, in the U.S., Canada, Europe, Asia and Latin America, for certain specialty lines of business (political risk and trade credit as well as aviation) which are underwritten by local Chubb entities. All business underwritten by CGM is accessed through registered brokers.
CGM also has a presence outside London, in the U.S., Canada, Europe, Asia and Latin America, for certain specialty lines of business (political risk and trade credit as well as aviation) which are underwritten by local Chubb entities.
Johns led the bancassurance for Citigroup globally and held a leadership role for regional branch distribution in Asia. Earlier in his career, Mr. Johns held leadership roles at Manulife Asia in Hong Kong and at Old Mutual Group in South Africa, India and the U.K. 20 Table of Contents
Johns led bancassurance for Citigroup globally and held a leadership role for regional branch distribution in Asia. Earlier in his career, Mr. Johns held leadership roles at Manulife Asia in Hong Kong and at Old Mutual Group in South Africa, India and the U.K. John W.
The insurance industry is changing rapidly. Our ability to compete is dependent on a number of factors, particularly our ability to maintain the appropriate financial strength ratings as assigned by independent rating agencies and effectively using digital capabilities in an everchanging competitive landscape and incorporating, among other things, climate and environmental changes into our insurance processes, products, and services.
Our ability to compete is dependent on a number of factors, particularly our ability to maintain the appropriate financial strength ratings as assigned by independent rating agencies and effectively using digital capabilities, including the growth of new digital-based distribution models, in an everchanging competitive landscape and incorporating, among other things, climate and environmental changes into our insurance processes, products, and services.
We also continued our leadership and involvement externally in the Black Insurance Industry Collective (BIIC), whose mission is to accelerate the advancement of Black professionals within the insurance industry and to increase representation of Black leaders at the executive level through leadership development, mentoring, sponsorships and networking within the industry.
In 2023, we also continued our leadership and involvement externally in the Black Insurance Industry Collective (BIIC), whose mission is to accelerate the advancement of Black professionals within the insurance industry and to increase representation of Black leaders at the executive level.
(Huatai Life) and Huatai Asset Management Co., L td. Chubb Life offers a broad portfolio of protection and savings products including whole life, endowment plans, individual term life, group term life, medical and health, personal accident, credit life, universal life, Group Employee benefits, unit linked contracts, and credit protection insurance for automobile, motorcycle, and home loans.
Chubb Life offers a broad portfolio of protection and savings products including whole life, universal life, unit linked contracts, endowment plans, individual and life, group term life, health protection, personal accident, credit life, group employee benefits, and credit protection insurance for automobile, motorcycle, and home loans.
All transactions within a system must be fair and equitable. Notice to the insurance departments is required prior to the consummation of transactions affecting the ownership or control of an insurer and of certain material transactions between an insurer and an entity in its system. In addition, certain transactions may not be consummated without the department's prior approval.
All transactions within a system must be fair and equitable. Notice to the appropriate insurance departments is required prior to the consummation of transactions affecting the ownership or control of an insurer and of certain material transactions between an insurer and an entity in its system.
Tax Matters Refer to “Risk Factors”, under Item 1A and Note 1 p) and Note 8 to the Consolidated Financial Statements, under Item 8. 18 Table of Contents Information about our Executive Officers The following sets forth information regarding our executive officers as of February 24, 2023: Name Age Position Evan G.
Tax Matters Refer to “Risk Factors”, under Item 1A and Note 1 t) and Note 12 to the Consolidated Financial Statements, under Item 8. 19 Table of Contents Information about our Executive Officers The following sets forth information regarding our executive officers as of February 23, 2024: Name Age Position Evan G.
Greenberg has been a director of Chubb Limited since August 2002. Mr. Greenberg was elected Chairman of the Board of Directors in May 2007. Mr. Greenberg was appointed to the position of President and Chief Executive Officer of Chubb Limited in May 2004, and in June 2003, was appointed President and Chief Operating Officer of Chubb Limited. Mr.
Greenberg was elected Chairman of the Board of Directors in May 2007. Mr. Greenberg was appointed to the position of President and Chief Executive Officer of Chubb Limited in May 2004, and in June 2003, was appointed President and Chief Operating Officer of Chubb Limited. Mr.
At December 31, 2022, we had total assets of $199 billion and shareholders’ equity of $51 billion. Chubb was incorporated in 1985 at which time it opened its first business office in Bermuda and continues to maintain operations in Bermuda.
At December 31, 2023, we had total assets of $231 billion and total Chubb shareholders’ equity, which excludes noncontrolling interests, of $60 billion. Chubb was incorporated in 1985 at which time it opened its first business office in Bermuda and continues to maintain operations in Bermuda.
Products and Distribution Chubb International maintains a presence in every major insurance market in the world and is organized geographically along product lines as follows: Europe, Middle East and Africa, Asia Pacific, Japan, and Latin America. Products offered include commercial P&C and corporate A&H lines, including specialty coverages and services, and consumer lines, including A&H and personal lines insurance products.
Products and Distribution Chubb International maintains a presence in every major insurance market in the world and is organized geographically along product lines as follows: Europe, Middle East and Africa, Asia Pacific (including Huatai P&C), Japan, and Latin America.
In January 2023, Chubb appointed a Global Climate Officer (GCO) as the senior executive responsible for overseeing the global environmental program. The GCO reports to both the CEO, who approves the goals and objectives of the environmental program, and Chubb's General Counsel.
The senior executive responsible for overseeing the global environmental program is the Global Climate Officer (GCO). The GCO reports to both the CEO, who approves the goals and objectives of the environmental program, and Chubb's General Counsel.
From time to time, Chubb and its subsidiaries and affiliates receive inquiries from state agencies and attorneys general, with which we generally comply, seeking information concerning business practices, such as underwriting and non-traditional or loss 14 Table of Contents mitigation insurance products.
From time to time, Chubb and its subsidiaries and affiliates receive inquiries from state agencies and attorneys general, with which we generally comply, seeking information concerning business practices, such as underwriting, claims handling, loss 15 Table of Contents experience, and insurance availability.
In order to minimize the risk of a shortfall in capital arising from an unexpected adverse deviation the BMA has established a threshold capital level, (termed the Target Capital Level (TCL)), set at 120 percent of ECR, that serves as an early warning tool for the BMA.
The EBS framework is embedded as part of the BSCR and forms the basis of our ECR. 16 Table of Contents In order to minimize the risk of a shortfall in capital arising from an unexpected adverse deviation the BMA has established a threshold capital level, (termed the Target Capital Level (TCL)), set at 120 percent of ECR, that serves as an early warning tool for the BMA.
Combined Insurance competes for A&H business in the U.S. against numerous A&H and life insurance companies across various industry segments. 10 Table of Contents Corporate Corporate results primarily include results of all run-off asbestos and environmental (A&E) exposures, the results of our run-off Brandywine business, the results of Westchester specialty operations for 1996 and prior years, certain other run-off exposures including molestation exposures, and income and expenses not attributable to reportable segments and the results of our non-insurance companies.
Corporate Corporate results primarily include results of all run-off asbestos and environmental (A&E) exposures, the results of our run-off Brandywine business, the results of Westchester specialty operations for 1996 and prior years, certain other run-off exposures including molestation exposures, and income and expenses not attributable to reportable segments and the results of our non-insurance companies.
Keogh joined Chubb in 2006 as Chairman, Insurance – Overseas General. Before joining Chubb, Mr. Keogh held a range of positions with increasing responsibility during a 20-year career with AIG, including Senior Vice President, Domestic General Insurance, and President and Chief Executive Officer of National Union Fire Insurance Company of Pittsburgh, an AIG member company.
Keogh held a range of positions with increasing responsibility during a 20-year career with AIG, including Senior Vice President, Domestic General Insurance, and President and Chief Executive Officer of National Union Fire Insurance Company of Pittsburgh, an AIG member company. He began his insurance career as an underwriter with AIG in 1986. John J.
Those exclusions may reflect environmental, social and governance (ESG) and climate-related considerations, such as restricted participation in certain industries, including mining and reclamation operations, oil refining, pipeline and related distribution operations, and chemical manufacturing and distribution. Chubb adopted a policy limiting underwriting in companies involved in thermal coal.
Those exclusions may reflect risk-based environmental and climate-related considerations, such as restricted participation in certain industries, including mining and reclamation operations, oil refining, pipeline and related distribution operations, and chemical manufacturing and distribution. Chubb adopted a policy limiting underwriting in companies involved in thermal coal and projects involving direct mining or in-situ extraction and processing of bitumen from oil sands.
Combined Insurance distributes specialty supplemental A&H and life insurance products targeted to middle income consumers and businesses in the U.S. and Canada through both direct marketing and worksite sales, through our Chubb Workplace Benefits platform.
Combined Insurance distributes specialty supplemental A&H and life insurance products targeted to middle income consumers and businesses in the U.S. and Canada through both worksite and direct marketing sales. In the U.S., worksite products for mid and large-market employers are distributed through our Chubb Workplace Benefits division while the U.S. Agency division focuses on the small to mid-market employers.
Ortega previously served as Senior Vice President, Chubb Group and Regional President of Latin America from 2016 to 2019, and Regional President of Asia Pacific from 2013 to 2016. Mr.
Juan Luis Ortega was appointed Executive Vice President, Chubb Group and President, Overseas General Insurance in August 2019. Mr. Ortega previously served as Senior Vice President, Chubb Group and Regional President of Latin America from 2016 to 2019, and Regional President of Asia Pacific from 2013 to 2016. Mr.
The A&H operations primarily offer personal accident and supplemental medical coverages including accidental death, business/holiday travel, specified disease, disability, medical and hospital indemnity, and income protection. We are not in the primary healthcare business.
A&H and other consumer lines products are distributed through brokers, agents, direct marketing programs, including thousands of telemarketers, and sponsor relationships. The A&H operations primarily offer personal accident and supplemental medical coverages including accidental death, business/holiday travel, specified disease, disability, medical and hospital indemnity, and income protection. We are not in the primary healthcare business.
This segment provides affluent and high net worth individuals and families with homeowners, high value automobile and collector cars, valuable articles (including fine arts), personal and excess liability, travel insurance, cyber, and recreational marine insurance and services. Our homeowners business, including valuable articles, represented 69 percent of North America Personal P&C Insurance’s net premiums earned in 2022.
This segment provides affluent and high net worth individuals and families with homeowners, high value automobile and collector cars, valuable articles (including fine arts), personal and excess liability/umbrella, travel insurance, cyber, and recreational marine insurance and services.
For the A&H and personal lines businesses, locally based competitors also include financial institutions and bank owned insurance subsidiaries. Our international operations have the distinct advantage of being part of one of the few international insurance groups with a global network of licensed companies able to write policies on a locally admitted basis.
Our international operations have the distinct advantage of being part of one of the few international insurance groups with a global network of licensed companies able to write policies on a locally admitted basis.
To accomplish this mission, we seek to attract and retain the very best insurance professionals and to provide an inclusive and supportive culture that allows all of our employees to reach their full potential as we deliver insurance solutions and claims service for individuals, families and businesses of all sizes.
We seek to attract, retain, and develop the very best insurance professionals and to provide an inclusive and supportive culture that allows all of our employees to reach their full potential.
Among the requirements are the maintenance of a cybersecurity program with governance controls, risk-based minimum data security standards for technology systems, cyber breach preparedness and response requirements, including reporting obligations, vendor oversight, training, program record keeping, and certification obligations. Because our North America systems are integrated, our companies domiciled in other states may also be impacted by this requirement.
Among the requirements are the maintenance of a cybersecurity program with governance controls, risk-based minimum data security standards for technology systems, cyber breach preparedness and response requirements, including reporting obligations, vendor oversight, training, program record keeping, audit and risk assessment requirements, and certification obligations.
North America Commercial P&C Insurance (42 percent of 2022 Consolidated NPE) Overview The North America Commercial P&C Insurance segment comprises operations that provide P&C and A&H insurance and services to large, middle market, and small commercial businesses in the U.S., Canada, and Bermuda.
Refer to Note 19 to the Consolidated Financial Statements for additional information about our segments. 4 Table of Contents North America Commercial P&C Insurance (40 percent of 2023 Consolidated NPE) Overview The North America Commercial P&C Insurance segment comprises operations that provide P&C and A&H insurance and services to large, middle market, and small commercial businesses in the U.S., Canada, and Bermuda.
Enns held several senior positions through 2017 during a more than 20-year career at Goldman Sachs, including Chairman and CEO of Goldman Sachs Canada, Head of the Asia Financial Institutions Group, and Partner of the U.S. Financial Institutions Group. John J.
Prior to HSBC, Mr. Enns held several senior positions through 2017 during a more than 20-year career at Goldman Sachs, including Chairman and CEO of Goldman Sachs Canada, Head of the Asia Financial Institutions Group, and Partner of the U.S. Financial Institutions Group. Bryce L. Johns was appointed Senior Vice President, Chubb Group and President, Chubb Life in April 2022.
Boroughs was Director of Fixed Income at Tudor Investment Corporation from 1997 to 2000, and Managing Partner and Director of Global Leveraged Investment Activity at Fischer Francis Trees & Watts from 1976 to 1997. Juan Luis Ortega was appointed Executive Vice President, Chubb Group and President, Overseas General Insurance in August 2019. Mr.
Boroughs was Director of Fixed Income at Tudor Investment Corporation from 1997 to 2000, and Managing Partner and Director of Global Leveraged Investment Activity at Fischer Francis Trees & Watts from 1976 to 1997. Peter C. Enns was appointed Executive Vice President and Chief Financial Officer of Chubb Limited in July 2021. Mr.
Segment Information Chubb operates 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. In 2022 , consolidated net premiums earned (NPE) was $40.4 billion. Additional financial information about our segments is included in Note 15 to the Consolidated Financial Statements.
Segment Information Chubb operates 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. In 2023, consolidated net premiums earned (NPE) was $45.7 billion.
Wayland joined Chubb from the law firm of Simpson Thacher & Bartlett LLP, where he was a partner since 1994. From 2010 to 2012, he served in the United States Department of Justice, first as Deputy Assistant Attorney General of the Antitrust Division, and was later appointed as the Acting Assistant Attorney General in charge of that division.
From 2010 to 2012, he served in the United States Department of Justice, first as Deputy Assistant Attorney General of the Antitrust Division, and was later appointed as the Acting Assistant Attorney General in charge of that division. 21 Table of Contents
Ortega joined Chubb in 1999 and advanced through a series of accident and health and credit insurance management positions in Miami, Puerto Rico, and Mexico, before being named Country President of Chile in 2005. Bryce L. Johns was appointed Senior Vice President, Chubb Group and President, Chubb Life in April 2022. Mr.
Ortega joined Chubb in 1999 and advanced through a series of accident and health and credit insurance management positions in Miami, Puerto Rico, and Mexico, before being named Country President of Chile in 2005. Joseph F. Wayland was appointed Executive Vice President of Chubb Limited in January 2016, and General Counsel and Secretary of Chubb Limited in July 2013. Mr.
Competitive Environment Chubb Personal Risk Services competes against insurance companies of varying sizes that sell personal lines products through various distribution channels, including retail agents as well as online distribution channels.
These coverages are offered on both an admitted and excess and surplus lines basis through independent regional agents and brokers, as well as digital partnerships. Competitive Environment Chubb Personal Risk Services competes against insurance companies of varying sizes that sell personal lines products through various distribution channels, including retail agents as well as online distribution channels.
Combined Insurance's substantial North American sales force distributes a wide range of supplemental accident and sickness insurance products, including personal accident, short-term disability, critical illness, Medicare supplement products, and hospital confinement/recovery. Most of these products are primarily fixed-indemnity benefit obligations and are not directly subject to escalating medical cost inflation.
Combined Insurance's substantial sales force distributes a wide range of supplemental accident and sickness insurance products, including personal accident, short-term disability, critical illness, Medicare supplement products, and hospital confinement/recovery.
Additionally, the NAIC adopted an Insurance Data Security Model Law, which requires licensed insurance entities to comply with detailed information security requirements. The NAIC model law is similar in many respects to the NYDFS Cybersecurity Regulation.
Because our North America systems are integrated, our companies domiciled in other states may also be impacted by this requirement. Additionally, the NAIC adopted an Insurance Data Security Model Law, which requires licensed insurance entities to comply with detailed information security requirements. The NAIC model law is similar in many respects to the NYDFS Cybersecurity Regulation.
Other internal programs include Chubb Start, which supports the continuous professional development of women who are early in their careers; Chubb Signatures, a global and regional lecture series for successful senior women, diverse men and inclusion champions to share their unique backgrounds, experi ences and hard-earned lessons in business; inclusive hiring practices and intentional inclusion training for managers to mitigate unconscious bias and to create greater awareness and proficiency in attracting and hiring diverse talent and building diverse teams.
Other internal programs include: Chubb Start, which supports the continuous professional development of women who are early in their careers; Chubb Signatures, a global and regional lecture series for successful senior women, diverse men and inclusion champions to share their unique backgrounds, experiences and hard-earned lessons in business; and Advancing Women Leaders, a global program to enable executives to understand challenges and opportunities for advancing women.
We achieve a competitive advantage through our ability to address the specific needs of high net worth families and individuals, to provide superior service to our customers, and to develop and deploy digital production and processes. 6 Table of Contents North America Agricultural Insurance (7 percent of 2022 Consolidated NPE) Overview The North America Agricultural Insurance segment comprises our U.S. and Canadian based businesses that provide a variety of coverages including crop insurance, primarily Multiple Peril Crop Insurance (MPCI) and crop-hail insurance through Rain and Hail Insurance Service, Inc.
North America Agricultural Insurance (7 percent of 2023 Consolidated NPE) Overview The North America Agricultural Insurance segment comprises our U.S. and Canadian based businesses that provide a variety of coverages including crop insurance, primarily Multiple Peril Crop Insurance (MPCI) and crop-hail insurance through Rain and Hail Insurance Service, Inc.
The A&E liabilities principally relate to claims arising from bodily-injury claims related to asbestos products and remediation costs associated with hazardous waste sites. Underwriting Chubb is an underwriting company and we strive to emphasize quality of underwriting rather than volume of business or market share. Our underwriting strategy is to manage risk by employing consistent, disciplined pricing and risk selection.
Underwriting Chubb is an underwriting company and we strive to emphasize quality of underwriting rather than volume of business or market share. Our underwriting strategy is to manage risk by employing consistent, disciplined pricing and risk selection.
Enns held several management positions at HSBC from 2018 to 2020, including Global Head of Financial Institutions Group, Global Co-Head of Corporate Finance Coverage, and Global Co-Head of Investment Banking Coverage. Prior to HSBC, Mr.
Enns, who joined Chubb in April 2021 as Executive Vice President, Finance, has more than 30 years of finance and investment banking experience. Before joining Chubb, Mr. Enns held several management positions at HSBC from 2018 to 2020, including Global Head of Financial Institutions Group, Global Co-Head of Corporate Finance Coverage, and Global Co-Head of Investment Banking Coverage.
As such, Chubb's investment portfolio is invested primarily in investment-grade fixed-income securities as measured by the major rating agencies. We also invest in limited partnerships and investment funds. We do not allow leverage in our investment portfolio. The critical aspects of the investment process are controlled by Chubb Asset Management, an indirect wholly-owned subsidiary of Chubb.
We also invest in limited partnerships and investment funds. We do not allow leverage in our investment portfolio. The critical aspects of the investment process are controlled by Chubb Asset Management, an indirect wholly-owned subsidiary of Chubb. These aspects include asset allocation, portfolio and guideline design, risk management, and oversight of external asset managers.
For additional information refer to “Critical Accounting Estimates – Unpaid losses and loss expenses”, under Item 7, and Note 7 to the Consolidated Financial Statements, under Item 8. Investments Our objective is to maximize investment income and total return while ensuring an appropriate level of liquidity, investment quality, and diversification.
For additional information, refer to Note 10 to the Consolidated Financial Statements, under Item 8. Investments Our objective is to maximize investment income and total return while ensuring an appropriate level of liquidity, investment quality, and diversification. As such, Chubb's investment portfolio is invested primarily in investment-grade fixed-income securities as measured by the major rating agencies.
Funds received from policyholders for investment contracts are not recorded as premium revenue, but rather as a policyholder deposits with an offsetting policy holder account balance liability on the balance sheet. We earn income on investment contracts from both net investment spreads on policy holder account balances and fees for management and administrative services.
Net investment income is a significant component of Segment income and is earned through strategic asset allocation based on asset liability matching. Funds received from policyholders for investment contracts are not recorded as premium revenue, but rather as policyholder deposits with an offsetting policyholder account balance liability on the balance sheet.
Our dedicated captive agency distribution channel, whereby agents sell Chubb Life products exclusively, enables us to maintain direct contact with the individual consumer, promote quality sales practices, and exercise greater control over the future of the business. We have developed a substantial sales force of agents principally located in our Asia-Pacific countries.
Our captive agency distribution and telemarketing channels sell Chubb Life products exclusively and enable us to maintain direct contact with the individual consumer, promote quality sales practices, and generate higher persistency. We have developed a substantial sales force of agents principally located in our Asia businesses and have market leading positions in telemarketing industry in South Korea, Taiwan and Indonesia.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn some instances, these changes may not become apparent until after we have issued insurance or reinsurance contracts that are affected by the changes. For example, "reviver" legislation in certain states does allow civil claims relating to molestation to be asserted against policyholders that would otherwise be barred by statutes of limitations.
Biggest changeFor example, "reviver" legislation in certain states does allow civil claims relating to molestation to be asserted against policyholders that would otherwise be barred by statutes of limitations. As a result, the full extent of liability under our insurance or reinsurance contracts may not be known for many years after issuance.
The Organization for Economic Cooperation and Development (OECD), European Union (EU), Swiss Federal Council, and other jurisdictions are considering or have passed measures that might change long standing tax principles that could increase our taxes. The OECD has published a framework for taxation that in many respects is different than long standing international tax principles.
The Organization for Economic Cooperation and Development (OECD), European Union (EU), Swiss Federal Council, and other jurisdictions are considering, have considered, or have passed measures that might change long standing tax principles that could increase our taxes. The OECD has published a framework for taxation that in many respects is different than long standing international tax principles.
A decline in our debt ratings could increase our borrowing costs and impact our ability to access capital markets. Ratings are an important factor in establishing the competitive position of insurance and reinsurance companies. The objective of these rating systems is to provide an opinion of an insurer's financial strength and ability to meet ongoing obligations to its policyholders.
A decline in our credit ratings could increase our borrowing costs and impact our ability to access capital markets. Ratings are an important factor in establishing the competitive position of insurance and reinsurance companies. The objective of these rating systems is to provide an opinion of an insurer's financial strength and ability to meet ongoing obligations to its policyholders.
Key tax provisions included in the IRA include a 15 percent corporate alternative minimum tax (CAMT) on adjusted financial statement income for corporations with average profits over $1 billion, and a 1 percent excise tax on repurchases of corporate stock. The CAMT and the excise tax on share repurchases are effective for tax years beginning after December 31, 2022.
Key tax provisions included in the IRA include a 15 percent corporate alternative minimum tax (CAMT) on adjusted financial statement income for corporations with average profits over $1 billion, and a 1 percen t excise tax on repurchases of corporate stock. The CAMT and the excise tax on share repurchases are effective for tax years beginning after December 31, 2022.
If a disruption occurs in one location and Chubb employees in that location are unable to occupy our offices and conduct business or communicate with or travel to other locations, our ability to service and interact with clients may suffer and we may not be able to successfully implement contingency plans that depend on communication or travel.
If a disruption occurs in one location and Chubb employees in that location are unable to conduct business or communicate with or travel to other locations, our ability to service and interact with clients may suffer and we may not be able to successfully implement contingency plans that depend on communication or travel.
Cyber catastrophic scenarios are not bound by time or geographic limitations and cyber catastrophic perils don’t have well-established definitions and fundamental physical properties. Rather, cyber risks are engineered by human actors and thus are continuously evolving, often in ways that are engineered specifically to evade established loss mitigation controls.
Cyber catastrophic scenarios are not bound by time or geographic limitations and cyber catastrophic perils do not have well-established definitions and fundamental physical properties. Rather, cyber risks are engineered by human actors and thus are continuously evolving, often in ways that are engineered specifically to evade established loss mitigation controls.
Repayment of loans receivable, guarantee fees and dividends and other permitted distributions from our insurance subsidiaries are its primary sources of funds to meet ongoing cash requirements, including any future debt service payments, other expenses, repurchases of its shares, and to pay dividends to our shareholders.
Repayment of loans receivable, guarantee fees and dividends and other permitted distributions from our insurance subsidiaries are its primary sources of funds to meet ongoing cash requirements, including any future debt service payments, other expenses, repurchases of its shares, and paying dividends to our shareholders.
As a result, one or more natural or man-made catastrophes, terrorism, or other events could result in claims that substantially exceed our expectations, which could have an adverse effect on our results of operations and financial condition. 22 Table of Contents We may be unable to purchase reinsurance, and/or if we successfully purchase reinsurance, we are subject to the possibility of non-payment.
As a result, one or more natural or man-made catastrophes, terrorism, or other events could result in claims that substantially exceed our expectations, which could have an adverse effect on our results of operations and financial condition. We may be unable to purchase reinsurance, and/or if we successfully purchase reinsurance, we are subject to the possibility of non-payment.
As the breadth and complexity of our security infrastructure continues to grow, the potential risk of a Security Event increases.
As the breadth and complexity of our security infrastructure continues to grow, the risk of a Security Event increases.
Both current and future foreign operations could be adversely affected by unfavorable geopolitical developments, including law changes; tax changes; changes in trade policies; changes to visa or immigration policies; regulatory restrictions; government leadership changes; political events and upheaval; sociopolitical instability; social, political or economic instability resulting from climate change; and nationalization of our 27 Table of Contents operations without compensation.
Both current and future foreign operations could be adversely affected by unfavorable geopolitical developments, including law changes; tax changes; changes in trade policies; changes to visa or immigration policies; regulatory restrictions; government leadership changes; political events and upheaval; sociopolitical instability; social, political or economic instability resulting from climate change; and nationalization of our operations without compensation.
The process of establishing MRB liabilities relies on our ability to accurately estimate insured events that have not yet occurred but that are expected to occur in future periods. Significant deviations in actual experience from assumptions used for pricing and for MRB liabilities could have an adverse effect on the profitability of our products and our business.
The process of establishing MRB liabilities relies on our ability to accurately estimate insured events that have not yet occurred but that are expected to occur in future periods. Significant deviations in actual experience from a ssumptions used for pricing and for MRB liabilities could have an adverse effect on the profitability of our products and our business.
Should Century's loss reserves experience adverse development in the future and sho uld Century be placed into rehabilitation or liquidation, the reinsurance recoverables due from Century to its affiliates would be payable only after the payment in full of third-party expenses and liabilities, including administrative expenses and direct policy liabilities.
Should Century's loss reserves experience adverse development in the future and sho uld Century be placed into rehabilitation or liquidation, the reinsurance recoverables due from Century to its affiliates would be payable only after the payment in full of third-party expenses and liabilities, including administrative expenses 23 Table of Contents and direct policy liabilities.
Any equity or debt financing or refinancing, if available at all, may be on terms that are not favorable to us. In the case of equity financings, dilution to our shareholders could result, and in any case, such securities may have rights, preferences, and privileges that are senior to those of our Common Shares.
Any equity or debt financing or refinancing, if available at all, may be on terms that are not favorable to us. In the case of equity financings, dilution to our shareholders could result, and in any case, such securities may have rights, preferences, and privileges that are senior to those of our Common 25 Table of Contents Shares.
In addition, if Chubb Limited were considered a PFIC, upon the death of any U.S. individual owning shares, such individual's heirs or estate would not be entitled to a "step-up" in the basis of the shares which might otherwise be available under U.S. federal income tax laws.
In addition, if Chubb Limited were considered a PFIC, upon the death of any U.S. individual owning shares, such individual's heirs or estate would not be entitled to a "step-up" in the basis of the shares which might otherwise be available under U.S. federal 33 Table of Contents income tax laws.
If the financial 23 Table of Contents condition of these companies were adversely affected by the economy or otherwise, we may experience an increase in filed claims and may incur high severity losses, which could have an adverse effect on our results of operations.
If the financial condition of these companies were adversely affected by the economy or otherwise, we may experience an increase in filed claims and may incur high severity losses, which could have an adverse effect on our results of operations.
Additionally, we could be 25 Table of Contents required to post collateral or be faced with the cancellation of policies and resulting premium in certain circumstances. We cannot give any assurance regarding whether or to what extent any of the rating agencies might downgrade our ratings in the future.
Additionally, we could be required to post collateral or be faced with the cancellation of policies and resulting premium in certain circumstances. We cannot give any assurance regarding whether or to what extent any of the rating agencies might downgrade our ratings in the future.
Laws and regulations not specifically related to the insurance industry include trade sanctions that relate to certain countries, anti-money 26 Table of Contents laundering laws, and anti-corruption laws. The insurance industry is also affected by political, judicial, and legal developments that may create new and expanded regulations and theories of liability.
Laws and regulations not specifically related to the insurance industry include trade sanctions that relate to certain countries, anti-money laundering laws, and anti-corruption laws. The insurance industry is also affected by political, judicial, and legal developments that may create new and expanded regulations and theories of liability.
During the loss settlement 21 Table of Contents period, which can be many years in duration for some of our lines of business, additional facts regarding individual claims and trends often will become known which may result in a change in overall reserves.
During the loss settlement period, which can be many years in duration for some of our lines of business, additional facts regarding individual claims and trends often will become known which may result in a change in overall reserves.
Some remedies available under the laws of U.S. jurisdictions, including some remedies available under the U.S. federal securities laws, would not be allowed in Swiss courts as contrary to that nation's public policy. 31 Table of Contents Shareholders may be subject to Swiss withholding taxes on the payment of dividends.
Some remedies available under the laws of U.S. jurisdictions, including some remedies available under the U.S. federal securities laws, would not be allowed in Swiss courts as contrary to that nation's public policy. Shareholders may be subject to Swiss withholding taxes on the payment of dividends.
As a part of our ongoing analysis of our investment portfolio, we are required to assess current expected credit losses for all held-to-maturity securities and evaluate expected credit losses for available-for-sale securities when fair value is below amortized cost, which considers reasonable and supportable forecasts of future economic conditions in addition to information about past events and current conditions.
As a part of our ongoing analysis of our investment portfolio, we are required to assess current expected credit losses for our private debt held-for-investment and evaluate expected credit losses for available-for-sale securities when fair value is below amortized cost, which considers reasonable and supportable forecasts of future economic conditions in addition to information about past events and current conditions.
Also applicable to Chubb businesses are the requirements of the Swiss Financial Market Supervisory Authority (FINMA) whose regulations include Swiss Solvency Tests. There are also Risk Based Capital (RBC) requirements in the U.S. which are also subject to revision in response to global developments.
Also applicable to Chubb businesses are the requirements of the Swiss Financial Market Supervisory Authority (FINMA) whose regulations include Swiss Solvency Tests. There are also Risk Based 27 Table of Contents Capital (RBC) requirements in the U.S. which are also subject to revision in response to global developments.
This range may vary depending upon changes in annual dividends, special dividends, certain share repurchases, fluctuations in U.S. dollar/Swiss franc exchange rate, changes in par value or capital contribution reserves or changes or new interpretations to Swiss corporate or tax law or regulations. Under certain circumstances, U.S. shareholders may be subject to adverse U.S. federal income tax consequences.
This range may vary depending upon changes in annual dividends, special dividends, certain share repurchases, the U.S. dollar/Swiss franc exchange rate, changes in par value or capital contribution reserves or adoption of changes or new interpretations to Swiss corporate or tax law or regulations. Under certain circumstances, U.S. shareholders may be subject to adverse U.S. federal income tax consequences.
Consequently, the insolvency of these counterparties, or the inability, or unwillingness of any of our present or future reinsurers to make timely payments to us under the terms of our reinsurance or retrocessional agreements could have an adverse effect on us. At December 31, 2022, we had $19.2 billion of reinsurance recoverables, net of reserves for uncollectible recoverables.
Consequently, the insolvency of these counterparties, or the inability, or unwillingness of any of our present or future reinsurers to make timely payments to us under the terms of our reinsurance or retrocessional agreements could have an adverse effect on us. At December 31, 2023, we had $20.2 billion of reinsurance recoverables, net of reserves for uncollectible recoverables.
However, the voting rights exercisable by a shareholder may be limited so that 30 Table of Contents certain persons or groups are not deemed to hold 10 percent or more of the voting power conferred by our Common Shares.
However, the voting rights exercisable by a shareholder may be limited so that certain persons or groups are not deemed to hold 10 percent or more of the voting power conferred by our Common Shares.
For example, we are subject to the New York Department of Financial Services’ Cybersecurity Regulation (the NYDFS Cybersecurity Regulation) which mandates detailed cybersecurity standards for all institutions, including insurance entities, authorized by the NYDFS to operate in New York.
For example, we are subject to the New York Department of Financial Services’ Cybersecurity Regulation (the NYDFS Cybersecurity Regulation) which mandates detailed cybersecurity standards and other obligations for all institutions, including insurance entities, authorized by the NYDFS to operate in New York.
Such an event or events may jeopardize Chubb's or its clients' or counterparties' confidential and other information processed and stored within Chubb, and transmitted through its computer systems and networks, or otherwise cause interruptions, delays, or malfunctions in Chubb's, its clients', its counterparties', or third parties' operations, or result in data loss or loss of assets which could result in significant losses, reputational damage or an adverse effect on our operations and critical business functions.
Such an event or events may jeopardize Chubb's or its clients' or counterparties' confidential and other information processed and stored within Chubb, and transmitted through its information systems, or otherwise cause interruptions, delays, or malfu nctions in Chubb's, its clients', its counterparties', or third parties' operations, or result in data loss or loss of assets which could result in significant losses, reputational damage or an adverse effect on our operations and critical business functions.
Certain active Chubb companies are primarily liable for A&E and other exposures they have reinsured to our inactive run-off company Century Indemnity Company (Century). At December 31, 2022, the aggregate reinsurance balances ceded by our active subsidiaries to Century were approximately $1.9 billion.
Certain active Chubb companies are primarily liable for A&E and other exposures they have reinsured to our inactive run-off company Century Indemnity Company (Century). At December 31, 2023, the aggregate reinsurance balances ceded by our active subsidiaries to Century were approximately $1.8 billion.
Accordingly, the ultimate settlement of losses, arising from either latent or non-latent causes, may be significantly greater or less than the loss and loss expense reserves held at the balance sheet date.
Accordingly, the ultimate settlement of losses, arising from either latent or non-latent causes, may be significantly greater or less than the loss and loss 22 Table of Contents expense reserves held at the balance sheet date.
If an agreement is terminated before closing, the result would be that our proposed acquisition would not occur, which could, among other things, expose us to damages or liability and adversely impact our stock price and future operations.
If an agreement is terminated before closing, the result would be that our 30 Table of Contents proposed acquisition would not occur, which could, among other things, expose us to damages or liability and adversely impact our stock price and future operations.
We include in our loss reserves liabilities for latent claims such as asbestos and environmental (A&E), which are principally related to claims arising from remediation costs associated with hazardous waste sites and bodily-injury claims related to exposure to asbestos products and environmental hazards. At December 31, 2022, gross A&E liabilities represented approximately 2.0 percent of our gross loss reserves.
We include in our loss reserves liabilities for latent claims, such as asbestos and environmental (A&E), which are principally related to claims arising from remediation costs associated with hazardous waste sites and bodily-injury claims related to exposure to asbestos products and environmental hazards. At December 31, 2023, gross A&E liabilities represented approximately 1.8 percent of our gross loss reserves.
Although we have implemented administrative and technical controls and have taken protective actions to reduce the risk of cyber incidents and to protect our information technology and assets, including conducting due diligence security reviews and negotiating agreements with third-party service providers, and we additionally endeavor to modify such procedures and agreements as circumstances warrant, such measures may be insufficient to prevent unauthorized access, computer viruses, malware or other malicious code or cyber-attack, business compromise attacks, catastrophic events, system failures and disruptions, employee errors, negligence or malfeasance, loss of assets or data and other events that could have security consequences (each, a Security Event).
Although we have implemented administrative and technical controls and have taken protective actions designed to reduce the risk of cyber incidents and to protect our information technology and assets, including conducting due diligence security reviews and negotiating agreements with third-party service providers, and we additionally endeavor to modify such procedures and agreements as circumstances warrant, such measures may be insufficient to prevent unauthorized access, computer viruses, malware or other malicious code or cyber-attack, ransomware, phishing scams, or similar attempts to fraudulently induce our employees or others to take actions which compromise our information or information systems, business compromise attacks, catastrophic events, system failures and disruptions, employee errors, negligence or malfeasance, loss of assets or data and other events that could have security consequences (each, a Security Event).
This obligation subjects us to credit risk from these customers. While we generally seek to mitigate this risk through collateral agreements and maintain a provision for uncollectible accounts associated with this credit exposure, an increased inability of customers to reimburse us in this context could have an adverse effect on our financial condition and results of operations.
While we generally seek to mitigate this risk 24 Table of Contents through collateral agreements and maintain a provision for uncollectible accounts associated with this credit exposure, an increased inability of customers to reimburse us in this context could have an adverse effect on our financial condition and results of operations.
If our shareholders do not approve the cancellation of repurchased shares or, if necessary, ratify our share repurchase program, we may be restricted or unable to return capital to shareholders t hrough share repurchases in the future. Furthermore, our current repurchase program relies on Swiss tax rulings.
If our shareholders do not approve the cancellation of repurchased shares or, if necessary, ratify our share repurchase program, we may be restricted or unable to return capital to shareholders t hrough share repurchases in the future.
Our ability to adequately price products and services, to establish reserves, to provide effective, efficient and secure service to our custome rs, to value our investments and to timely and accurately report our financial results also depends significantly on the integrity and availability of the data we maintain, including that within our information systems, as well as data in and assets held through third-party service providers and systems.
Our business depends on effective information security and systems and the integrity and timeliness of the data our information systems use to run our business. 28 Table of Contents Our ability to adequately price products and services, to establish reserves, to provide effective, efficient and secure service to our customers, to value our investments and to timely and accurately report our financial results also depends significantly on the integrity and availability of the data we maintain, including that within our information systems, as well as data in and assets held through third-party service providers and systems.
The insurance and reinsurance markets have historically been cyclical, characterized by periods of intense price competition due to excessive underwriting capacity as well as periods when shortages of capacity permitted favorable premium levels.
Insurance and reinsurance markets are historically cyclical, and we expect to experience periods with excess underwriting capacity and unfavorable premium rates. The insurance and reinsurance markets have historically been cyclical, characterized by periods of intense price competition due to excessive underwriting capacity as well as periods when shortages of capacity permitted favorable premium levels.
This could have an adverse effect on our results of operations and financial condition. Our net income may be volatile because certain products sold by our Life Insurance business expose us to future policy benefit (FPB) reserve and fair value liability changes that are directly affected by market and other factors and assumptions.
This could have an adverse effect on our results of operations and financial condition. Our net income and Shareholders' equity may be volatile because certain products sold by our life insurance businesses e xpose us to future policy benefit (FPB) reserve and market risk benefits changes that are directly affected by market and other factors and assumptions.
If, based upon these models or other factors, we misprice our products or underestimate the frequency and/or severity of loss events, or overestimate the risks we are exposed to, new business growth and retention of our existing business may be adversely affected which could have an adverse effect on our results of operations and financial condition. 28 Table of Contents We could be adversely affected by the loss of one or more key executives or by an inability to attract and retain qualified personnel.
If, based upon these models or other factors, we misprice our products or underestimate the frequency and/or severity of loss events, or overestimate the risks we are exposed to, new business growth and retention of our existing business may be adversely affected which could have an adverse effect on our results of operations and financial condition.
Under reinsurance programs covering variable annuity guarantees, we assumed the risk of GMDB and GMIB, associated with variable annuity contracts. We ceased writing this business in 2007. Our net income is directly impacted by the change in the fair value of the MRB liability.
Under reinsurance programs covering variable annuity guarantees, we assumed the risk of GMDB and GMIB associated with variable annuity contracts. We ceased writing this business in 2007. Our net income is directly impacted by the changes in the MRB liability reflecting market conditions, policyholder behavior, and other changes in assumptions.
This risk may be particularly acute for us relative to some of our competitors because some of our senior executives work in countries where they are not citizens and work permit and immigration issues could adversely affect the ability to retain or hire key persons. We do not maintain key person life insurance policies with respect to our employees.
This risk may be 29 Table of Contents particularly acute for us relative to some of our competitors because some of our senior executives work in countries where they are not citizens, and work permit and immigration issues could adversely affect the ability to retain or hire key persons.
Chubb has been advised by its Swiss counsel that there is doubt as to whether the courts in Switzerland would enforce: • judgments of U.S. courts based upon the civil liability provisions of the U.S. federal securities laws obtained in actions against it or its directors and officers, who reside outside the U.S.; or • original actions brought in Switzerland against these persons or Chubb predicated solely upon U.S. federal securities laws.
Chubb has been advised by its Swiss counsel that there is doubt as to whether the courts in Switzerland would enforce: • judgments of U.S. courts based upon the civil liability provisions of the U.S. federal securities laws obtained in actions against it or its directors and officers, who reside outside the U.S.; or • original actions brought in Switzerland against these persons or Chubb predicated solely upon U.S. federal securities laws. 32 Table of Contents Chubb has also been advised by its Swiss counsel that there is no treaty in effect between the U.S. and Switzerland providing for this enforcement, and there are grounds upon which Swiss courts may not enforce judgments of U.S. courts.
This may include a disruption involving electrical, communications, transportation, or other services used by Chubb.
This may include a disruption involving electrical, communications, transportation, or other services used by Chubb or third parties on whom we rely.
We cannot assure, however, that the Tax Information Exchange Agreements (TIEAs) that have been entered into by Switz erland and Bermuda will be sufficient to preclude all of the sanctions described above, which, if ultimately adopted, could adversely affect us or our shareholders.
We cannot assure, however, that the Tax Information Exchange Agreements (TIEAs) that have been entered into by Switz erland and Bermuda will be sufficient to preclude all of the sanctions described above, which, if ultimately adopted, could adversely affect us or our shareholders. 31 Table of Contents Shareholders There are provisions in our charter documents that may reduce the voting rights and diminish the value of our Common Shares.
Our life insurance investments typically focus on longer duration bonds to better match the obligations of this business. For the life 24 Table of Contents insurance business, policyholder behavior may be influenced by changing interest rate conditions and require a re-balancing of duration to effectively manage our asset/liability position.
Our life insurance investments typically focus on longer duration bonds to better match the obligations of this business. For the life insurance business, policyholder behavior may be influenced by changing interest rate conditions and require a re-balancing of duration to effectively manage our asset/liability position. As stated, our fixed income portfolio is primarily invested in high quality, investment-grade securities.
The current economic and financial climates present additional uncertainties and risks relating to increased regulation and the potential for increased involvement of the U.S. and other governments in the financial services industry.
The current economic and financial climates present additional uncertainties and risks relating to increased regulation and the potential for increased involvement of the U.S. and other governments in the financial services industry. Furthermore, governments, regulators, investors, customers, and other stakeholders have increased their focus on climate change risk reporting.
Shareholders There are provisions in our charter documents that may reduce the voting rights and diminish the value of our Common Shares. Our Articles of Association generally provide that shareholders have one vote for each Common Share held by them and are entitled to vote at all meetings of shareholders.
Our Articles of Association generally provide that shareholders have one vote for each Common Share held by them and are entitled to vote at all meetings of shareholders.
In instances where we rely on third parties to perform business functions and process data on our behalf, Chubb may be exposed to additional data security risk.
In instances where we rely on third parties to perform business functions and process data on our behalf, Chubb may be exposed to additional data security risk as a result of Security Events that impact the third party or others upon whom they rely.
Our success depends on our ability to retain the services of our existing key executives and to attract and retain additional qualified personnel in the future.
We could be adversely affected by the loss of one or more key executives or by an inability to attract and retain qualified personnel. Our success depends on our ability to retain the services of our existing key executives and to attract and retain additional qualified personnel in the future.
In accordance with industry practice, we generally pay amounts owed on claims to brokers who, in turn, remit these amounts to the insured or ceding insurer.
This includes exposure to financial institutions in the form of secured and unsecured debt instruments and equity securities. In accordance with industry practice, we generally pay amounts owed on claims to brokers who, in turn, remit these amounts to the insured or ceding insurer.
Any future revocation or loss of our Swiss tax rulings or the inability to conduct repurchases in accordance with these rulings could jeopardize our ability to continue repurchasing our shares. Our operating results and shareholders' equity may be adversely affected by currency fluctuations. Our reporting currency is the U.S. dollar. In general, we match assets and liabilities in local currencies.
Furthermore, our current repurchase program relies on Swiss tax rulings. 26 Table of Contents Any future revocation, lapse, expiration, or loss of our Swiss tax rulings or the inability to conduct repurchases in accordance with these rulings could jeopardize our ability to continue repurchasing our shares. Our operating results and shareholders' equity may be adversely affected by currency fluctuations.
These securities, which pay a higher rate of interest, also have a higher degree of credit or default risk and may also be less liquid in times of economic weakness or market disruptions.
However, a smaller portion of the portfolio, approximately 17 percent at December 31, 2023, is invested in below investment-grade securities. These securities, which pay a higher rate of interest, also have a higher degree of credit or default risk and may also be less liquid in times of economic weakness or market disruptions.
Like all global companies, our systems have and those of our third-party service providers, have been, and will likely continue to be, subject to threats from viruses or other malicious codes, unauthorized access, cyber-attacks, cyber frauds or other computer-related penetrations.
Like all global companies, our systems and those of our third-party service providers, have been, and will likely continue to be, targeted by or subject to viruses, malware or other malicious codes, unauthorized access, cyber-attacks, cyber frauds, ransomware or other unauthorized occurrences, on or conducted through our information systems, which jeopardize the confidentiality, integrity or availability of our information or information systems.
We seek to manage our loss exposure by maintaining a disciplined underwriting process throughout our insurance operations. We also look to limit our loss exposure by writing a number of our insurance and reinsurance contracts on an excess of loss basis. Excess of loss insurance and reinsurance indemnifies the insured against losses in excess of a specified amount.
We also look to limit our loss exposure by writing a number of our insurance and reinsurance contracts on an excess of loss basis. Excess of loss insurance and reinsurance indemnifies the insured against losses in excess of a specified amount. In addition, we limit program size for each client and purchase third-party reinsurance for our own account.
Advancements in technology are occurring in underwriting, claims, distribution and operations at a pace that may quicken, including as companies increase use of data analytics and technology as part of their business strategy. We will be at a competitive disadvantage if, over time, our competitors are more effective than us in their utilization of technology and evolving data analytics.
Advancements in technology are occurring in underwriting, claims, distribution, and operations at a pace that may quicken, including as companies increase use of data analytics, artificial intelligence and other technology as part of their business strategy.
Employee error and misconduct may be difficult to detect and prevent and could adversely affect our business, results of operations, and financial condition. Losses may result from, among other things, fraud, errors, failure to document transactions properly, failure to obtain proper internal authorization, failure to comply with underwriting or other internal guidelines, or failure to comply with regulatory requirements.
Losses may result from, among other things, fraud, errors, failure to document transactions properly, failure to obtain proper internal authorization, failure to comply with underwriting or other internal guidelines, or failure to comply with regulatory requirements.
In addition, we limit program size for each client and purchase third-party reinsurance for our own account. In the case of our assumed proportional reinsurance treaties, we seek per occurrence limitations or loss and loss expense ratio caps to limit the impact of losses ceded by the client.
In the case of our assumed proportional reinsurance treaties, we seek per occurrence limitations or loss and loss expense ratio caps to limit the impact of losses ceded by the client. In proportional reinsurance, the reinsurer shares a proportional part of the premiums and losses of the reinsured. We also seek to limit our loss exposure by geographic diversification.
This framework and proposed changes could redefine what income is taxed in which country and institute a 15 percent global minimum tax in 2024 or later years. The enactment of these reforms is very uncertain at this time, but if enacted could cause uncertainties to and increases in our income taxes.
This framework and proposed changes could redefine what income is taxed in which country and institute a 15 percent global minimum tax in 2024 or later years. To date, many EU and other countries have enacted the 15 percent global minimum tax.
Treasury Department contain new rules that may affect the application of the PFIC provisions to an insurance company. The final regulations are effective for tax years beginning after January 15, 2021 and applied to us in 2022. Shareholders are advised to consult their tax advisors. 32 Table of Contents
Treasury Department contain new rules that may affect the application of the PFIC provisions to an insurance company. Shareholders are advised to consult their tax advisors.
Our pricing, establishment of liabilities for life insurance and annuity products, including reinsurance programs, are based upon various assumptions, including but not limited to equity market changes, interest rates, mortality rates, morbidity rates, and policyholder behavior. Effective January 1, 2023, we adopted new U.S.
Our pricing, establishment of liabilities for life insurance and annuity products, including reinsurance programs, are based upon various assumptions, including but not limited to equity market changes, interest rates, mortality rates, morbidity rates, and policyholder behavior. With the adoption of long-duration targeted improvements (LDTI), the accounting for our FPB reserves is also sensitive to changing interest rate conditions.
In addition, goodwill and intangible assets recorded in connection with 29 Table of Contents insurance company acquisitions may be impaired if premium growth, underwriting profitability, agency retention and policy persistency, among other factors, differ from expectations.
In addition, goodwill and intangible assets recorded in connection with insurance company acquisitions may be impaired if premium growth, underwriting profitability, agency retention and policy persistency, among other factors, differ from expectations. There is also the potential that proposed acquisitions that have been publicly announced will not be consummated, even if a definitive agreement has been signed by the parties.
Our insurance and reinsurance subsidiaries conduct business globally. Our businesses in each jurisdiction are subject to varying degrees of regulation and supervision.
We may from time-to-time face challenges resulting from changes in applicable law and regulations in particular jurisdictions, or changes in approach to oversight of our business from insurance or other regulators. Our insurance and reinsurance subsidiaries conduct business globally. Our businesses in each jurisdiction are subject to varying degrees of regulation and supervision.
In proportional reinsurance, the reinsurer shares a proportional part of the premiums and losses of the reinsured. We also seek to limit our loss exposure by geographic diversification. Geographic zone limitations involve significant underwriting judgments, including the determination of the area of the zones and the inclusion of a particular policy within a particular zone's limits.
Geographic zone limitations involve significant underwriting judgments, including the determination of the area of the zones and the inclusion of a particular policy within a particular zone's limits.
We cannot be certain that we will not be subject to any Bermuda tax after March 31, 2035. We could be adversely affected by certain features of the Inflation Reduction Act. On August 16, 2022, President Biden signed the Inflation Reduction Act (IRA) of 2022 (H.R. 5376).
The imposition of the Bermuda corporate income tax could have an adverse effect on our results of operations beginning in 2025. We could be adversely affected by certain features of the Inflation Reduction Act. On August 16, 2022, President Biden signed the Inflation Reduction Act (IRA) of 2022 (H.R. 5376).
As a result, the occurrence of one or more catastrophic events could have an adverse effect on our results of operations and financial condition. COVID-19, the effects of global actions taken to contain its spread, and its economic and societal impact could adversely impact our businesses, invested assets, financial condition, and results of operations.
As a result, the occurrence of one or more catastrophic events could have an adverse effect on our results of operations and financial condition. If actual claims exceed our loss reserves, our financial results could be adversely affected.
If we do not anticipate or keep pace with these technological and other changes impacting the insurance industry, it could limit our ability to compete in desired markets. Insurance and reinsurance markets are historically cyclical, and we expect to experience periods with excess underwriting capacity and unfavorable premium rates.
We will be at a competitive disadvantage if, over time, our competitors are more effective than us in their utilization of technology and evolving data analytics. If we do not anticipate or keep pace with these technological and other changes impacting the insurance industry, it could limit our ability to compete in desired markets.
At December 31, 2022, approximately 33.3 percent of our unhedged net assets were denominated in foreign currencies. We may experience losses resulting from fluctuations in the values of non-U.S. currencies, which could adversely impact our results of operations and financial condition.
We may experience losses resulting from fluctuations in the values of non-U.S. currencies, which could adversely impact our results of operations and financial condition. Operational The regulatory and political regimes under which we operate, and their volatility, could have an adverse effect on our business.
As a result, the full extent of liability under our insurance or reinsurance contracts may not be known for many years after issuance. The failure of any of the loss limitation methods we use could have an adverse effect on our results of operations and financial condition.
The failure of any of the loss limitation methods we use could have an adverse effect on our results of operations and financial condition. We seek to manage our loss exposure by maintaining a disciplined underwriting process throughout our insurance operations.
GAAP accounting guidance for long-duration contracts (LDTI) that affects the accounting for guaranteed minimum death benefits (GMDB) and guaranteed living benefits (GLB), principally guaranteed minimum income benefits (GMIB), associated with variable annuity contracts, collectively referred to as market risk benefits (MRB).
We are required to update for changes in discount rates quarterly and review assumptions at least annually, which could cause volatility in our net income and shareholders' equity. Guaranteed minimum death benefits (GMDB) and guaranteed living benefits (GLB), principally guaranteed minimum income benefits (GMIB), associated with variable annuity contracts, are collectively referred to as market risk benefits (MRB).
Where possible, capital levels in local currencies are limited to satisfy minimum regulatory requirements and to support local insurance operations. The principal currencies creating foreign exchange risk are the Korean won, Chinese yuan, Canadian dollar, Australian dollar, Mexican peso, Brazilian real, Thai baht, Japanese yen, euro, and Hong Kong dollar.
The principal currencies creating foreign exchange risk are the Korean won, Chinese yuan, Canadian dollar, Australian dollar, Taiwan dollar, Mexican peso, Brazilian real, Thai baht, British pound sterling, and euro. At December 31, 2023, approximately 31.8 percent of our unhedged net assets were denominated in foreign currencies.
Removed
Although the adverse impact of COVID-19 and related variants (the “pandemic”) is lessening through medical advances (including the widespread distribution of vaccines, antiviral medicines, and other treatments) and the removal or lessening of government restrictions on economic and social activity, COVID-19 continues to threaten further disruption to public health, the global economy, financial markets, and commercial, social and community activity generally.
Added
This obligation subjects us to credit risk from these customers.
Removed
Depending on the course of the pandemic, including the spread of new variants, and government responses, COVID-19 may continue to affect our current and future financial results.
Added
Our reporting currency is the U.S. dollar. In general, we match assets and liabilities in local currencies. Where possible, capital levels in local currencies are limited to satisfy minimum regulatory requirements and to support local insurance operations.
Removed
We may experience higher levels of loss and, claims activity in certain lines of business in excess of losses we have already recognized, and our premiums could also be adversely affected by any repeated or further suppression of global commercial activity that results in a reduction in insurable assets and other exposure.
Added
A variety of governments and regulators have adopted or are in the process of adopting climate change and greenhouse gas emissions disclosure requirements for which Chubb and certain of its individual subsidiaries are or will be subject to in the future.
Removed
Financial conditions resulting from the pandemic and the economic consequences of the resulting fiscal and monetary policy may also have a negative effect on the value and quality of our portfolio of invested assets, thereby adversely affecting our investment returns and increasing our credit and related risk.
Added
Chubb also receives requests for information from investors, customers and other stakeholders from time to time on various aspects of its policies and strategies relating to climate change.
Removed
Certain lines of our business, such as our va riable annuity life reinsurance business, may require additional forms of collateral in the event of a decline in the securities and benchmarks to which those repayment mechanisms are linked. If actual claims exceed our loss reserves, our financial results could be adversely affected.
Added
This has resulted in expanded and increasingly complex expectations related to reporting under multiple, various, disparate and potentially inconsistent reporting requirements, increased due diligence, and potential requirements for the reporting of scope 3 emissions. Responding to such disclosure requirements and requests involves risks and uncertainties, including depending in part on estimates and third-party data that is outside our control.
Removed
With the adoption of LDTI, effective January 1, 2023, the accounting for our FPB reserves will also be sensitive to changing interest rate conditions. The LDTI guidance requires that we update FPB reserves for changes in discount rates quarterly which could cause volatility in our shareholders' equity.
Added
New reporting standards, regulations and requirements with various aims and goals could expose us to legal, regulatory, investor and other stakeholder scrutiny, and customers that disagree with our actions or reporting on climate change may determine not to do business with us, all of which may adversely affect our business, reputation and results of operations.

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Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed0 unchanged
Biggest changeManagement considers its office facilities suitable and adequate for the current level of operations.
Biggest changeMost of our office facilities are leased, although we own major facilities in Hamilton, Bermuda; Seoul, South Korea; Beijing and Shanghai, China; and in the U.S., including in Philadelphia, Pennsylvania; Wilmington, Delaware; and Simsbury, Connecticut. Management considers its office facilities suitable and adequate for the current level of operations.
ITEM 2. Properties We maintain office facilities around the world including in North America, Europe (including our principal executive offices in Switzerland), Bermuda, Latin America, Asia Pacific, and Japan. Most of our office facilities are leased, although we own major facilities in Hamilton, Bermuda; Seoul, South Korea; and in the U.S., including in Philadelphia, Pennsylvania; Wilmington, Delaware; and Simsbury, Connecticut.
ITEM 2. Properties We maintain office facilities around the world including in North America, China, Europe (including our principal executive offices in Switzerland), Bermuda, Latin America, Asia Pacific, and Japan.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+0 added−0 removed4 unchanged
Biggest changeThe chart depicts the value on December 31, 2018, 2019, 2020, 2021, and 2022, of a $100 investment made on December 31, 2017, with all dividends reinvested. 12/31/2017 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 Chubb Limited $100 $90 $111 $113 $144 $167 S&P 500 Index $100 $96 $126 $149 $192 $157 S&P 500 P&C Index $100 $95 $120 $128 $153 $182
Biggest changeThe chart depicts the value on December 31, 2019, 2020, 2021, 2022, and 2023, of a $100 investment made on December 31, 2018, with all dividends reinvested. 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 Chubb Limited $100 $123 $125 $159 $185 $193 S&P 500 Index $100 $131 $156 $200 $164 $207 S&P 500 P&C Index $100 $126 $135 $161 $191 $212
We have paid dividends each quarter since we became a public company in 1993. In 2022 and 2021, our annual dividends were paid by way of a distribution from capital contribution reserves (Additional paid-in capital) through the transfer of dividends from Additional paid-in capital to Retained earnings (free reserves) as approved by our shareholders.
We have paid dividends each quarter since we became a public company in 1993. In 2023 and 2022, our annual dividends were paid by way of a distribution from capital contribution reserves (Additional paid-in capital) through the transfer of dividends from Additional paid-in capital to Retained earnings (free reserves) as approved by our shareholders.
ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our Common Shares have been listed on the New York Stock Exchange since March 25, 1993, with a current par value of CHF 24.15 per share. The trading symbol for our Common Shares is "CB".
ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our Common Shares have been listed on the New York Stock Exchange since March 25, 1993, with a current par value of CHF 0.50 per share. The trading symbol for our Common Shares is "CB".
(2) The aggregate value of shares purchased in the three months ended December 31, 2022 as part of the publicly announced plan was $199 million. Refer to Note 11 to the Consolidated Financial Statements for more information on the Chubb Limited securities repurchase authorizations.
(2) The aggregate value of shares purchased in the three months ended December 31, 2023 as part of the publicly announced plan was $720 million. Refer to Note 15 to the Consolidated Financial Statements for more information on the Chubb Limited securities repurchase authorizations.
As of February 23, 2023, $1.27 billion in share repurchase authorization remained through June 30, 2023. 34 Table of Contents Performance Graph Set forth below is a line graph comparing the dollar change in the cumulative total shareholder return on Chubb's Common Shares from December 31, 2017, through December 31, 2022, as compared to the cumulative total return of the Standard & Poor's 500 Stock Index and the cumulative total return of the Standard & Poor's Property-Casualty Insurance Index.
As of February 22, 2024, $3.62 billion in share repurchase authorization remained. 37 Table of Contents Performance Graph Set forth below is a line graph comparing the dollar change in the cumulative total shareholder return on Chubb's Common Shares from December 31, 2018, through December 31, 2023, as compared to the cumulative total return of the Standard & Poor's 500 Stock Index and the cumulative total return of the Standard & Poor's Property-Casualty Insurance Index.
Refer to Part I, Item 1A and Part II, Item 7 for additional information. The number of record holders of Common Shares as of February 17, 2023 was 5,985.
Refer to Part I, Item 1A and Part II, Item 7 for additional information. The number of record holders of Common Shares as of February 16, 2024 was 6,922.
(3) For the period January 1, 2023 through February 23, 2023, we repurchased 1,633,300 Common Shares for a total of $347 million in a series of open market transactions.
(3) For the period January 1, 2024 through February 22, 2024, we repurchased 269,450 Common Shares for a total of $67 million in a series of open market transactions.
Issuer's Repurchases of Equity Securities for the Three Months Ended December 31, 2022 Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plan (2) Approximate Dollar Value of Shares that May Yet be Purchased Under the Plan (3) October 1 through October 31 3,810 $ 201.60 — $ 1.82 billion November 1 through November 30 2,092 $ 214.82 — $ 1.82 billion December 1 through December 31 907,152 $ 221.65 902,300 $ 1.62 billion Total 913,054 $ 221.55 902,300 (1) This column represents open market share repurchases and the surrender to Chubb of Common Shares to satisfy tax withholding obligations in connection with the vesting of restricted stock issued to employees and to cover the cost of the exercise of options by employees through stock swaps.
Issuer's Repurchases of Equity Securities for the Three Months Ended December 31, 2023 Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plan (2) Approximate Dollar Value of Shares that May Yet be Purchased Under the Plan (3) October 1 through October 31 98,280 $ 209.37 96,000 $ 4.38 billion November 1 through November 30 955,371 $ 224.25 953,000 $ 4.17 billion December 1 through December 31 2,146,123 $ 226.90 2,142,000 $ 3.68 billion Total 3,199,774 $ 225.57 3,191,000 (1) This column represents open market share repurchases and the surrender to Chubb of Common Shares to satisfy tax withholding obligations in connection with the vesting of restricted stock issued to employees and to cover the cost of the exercise of options by employees through stock swaps.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

234 edited+77 added−62 removed204 unchanged
Biggest changeThe acquisition of Cigna's business in Asia contributed $1,434 million in 2022. • Commercial casualty grew primarily in North America, Europe, and Asia, driven by strong new business and retention, including exposure and rate increases. • Workers' compensation growth was due to exposure increases in North America. • Financial lines grew on a constant dollar basis primarily from renewal retention, including exposure and positive rate increases in North America, Asia, and Latin America. • Surety increased due to strong new business and renewal retention in North America. • Commercial multiple peril increased due to strong new business and renewal retention, including exposure and positive rate increases in North America. • Property and other short-tail lines grew globally due to strong new business and renewal retention, including positive rate increases and increased exposure. • Agriculture increased due to underlying growth in crop insurance, reflecting higher commodity prices, higher reported acreage from policyholders, and policy count growth, partially offset by a return of premium to the U.S. government in the first quarter of 2022 of $161 million. • Personal lines grew in most regions reflecting new business, strong renewal retention, and both rate and exposure increases, primarily in high net worth homeowners and automobile in North America, high net worth and specialty lines in Asia, and specialty lines and automobile in Latin America.
Biggest changeGrowth was partially offset by the unfavorable impact of planned corrective underwriting actions in North America in the fourth quarter of 2023. 54 Table of Contents • Commercial multiple peril increased due to strong premium retention, including both rate and exposure increases, and strong new business in North America. • Surety growth reflects strong new business in North America. • Agriculture growth reflects lower premium cessions to the U.S. government of $386 million due to higher losses experienced in certain states in 2023 and strong new business in Chubb Agribusiness. • Personal lines grew principally in North America and Latin America, with growth strongest in homeowners.
As shown in our loss triangle disclosure, the vast majority (almost 95 percent) of Personal Lines net ultimate losses and allocated loss adjustment expenses are typically paid within five years of the accident date and 80 percent within two years.
As shown in our loss triangle disclosure, the vast majority (almost 95 percent) of Personal Lines net ultimate losses and allocated loss adjustment expenses are typically paid within five years of the accident date and almost 80 percent within two years.
Letters A, B, C, D, E and F included in the table are references for calculating the ratios above. 64 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 For the Year Ended December 31, 2021 (in millions of U.S. dollars except for ratios) Numerator Losses and loss expenses A $ 10,015 $ 2,924 $ 1,962 $ 5,143 $ 632 $ 572 $ 21,248 Catastrophe losses and related adjustments Catastrophe losses, net of related adjustments (1,112) (679) (40) (358) (212) — (2,401) Reinstatement premiums collected (expensed) on catastrophe losses — (16) (2) — 28 — 10 Catastrophe losses, gross of related adjustments (1,112) (663) (38) (358) (240) — (2,411) PPD and related adjustments PPD, net of related adjustments - favorable (unfavorable) 762 305 (10) 441 (3) (569) 926 Net premiums earned adjustments on PPD - unfavorable (favorable) 67 — (25) — — — 42 Expense adjustments - unfavorable (favorable) 6 — (3) — — — 3 PPD reinstatement premiums - unfavorable (favorable) 6 (1) — 7 3 — 15 PPD, gross of related adjustments - favorable (unfavorable) 841 304 (38) 448 — (569) 986 CAY loss and loss expense ex CATs B $ 9,744 $ 2,565 $ 1,886 $ 5,233 $ 392 $ 3 $ 19,823 Policy acquisition costs and administrative expenses Policy acquisition costs and administrative expenses C $ 3,134 $ 1,277 $ 121 $ 3,877 $ 235 $ 365 $ 9,009 Expense adjustments - favorable (unfavorable) (6) — 3 — — — (3) Policy acquisition costs and administrative expenses, adjusted D $ 3,128 $ 1,277 $ 124 $ 3,877 $ 235 $ 365 $ 9,006 Denominator Net premiums earned E $ 15,461 $ 4,915 $ 2,338 $ 10,441 $ 798 $ 33,953 Reinstatement premiums (collected) expensed on catastrophe losses — 16 2 — (28) (10) Net premiums earned adjustments on PPD - unfavorable (favorable) 67 — (25) — — 42 PPD reinstatement premiums - unfavorable (favorable) 6 (1) — 7 3 15 Net premiums earned excluding adjustments F $ 15,534 $ 4,930 $ 2,315 $ 10,448 $ 773 $ 34,000 P&C Combined ratio Loss and loss expense ratio A/E 64.8 % 59.5 % 83.9 % 49.3 % 79.2 % 62.6 % Policy acquisition cost and administrative expense ratio C/E 20.2 % 26.0 % 5.2 % 37.1 % 29.5 % 26.5 % P&C Combined ratio 85.0 % 85.5 % 89.1 % 86.4 % 108.7 % 89.1 % CAY P&C Combined ratio ex CATs Loss and loss expense ratio, adjusted B/F 62.7 % 52.0 % 81.5 % 50.1 % 50.7 % 58.3 % Policy acquisition cost and administrative expense ratio, adjusted D/F 20.2 % 25.9 % 5.3 % 37.1 % 30.5 % 26.5 % CAY P&C Combined ratio ex CATs 82.9 % 77.9 % 86.8 % 87.2 % 81.2 % 84.8 % Combined ratio Combined ratio 89.1 % Add: impact of gains and losses on crop derivatives — P&C Combined ratio 89.1 % Note: The ratios above are calculated using whole U.S. dollars.
Letters A, B, C, D, E and F included in the table are references for calculating the ratios above. 70 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 For the Year Ended December 31, 2021 (in millions of U.S. dollars except for ratios) Numerator Losses and loss expenses/policy benefits A $ 10,015 $ 2,924 $ 1,962 $ 5,143 $ 632 $ 572 $ 21,248 Catastrophe losses and related adjustments Catastrophe losses, net of related adjustments (1,112) (679) (40) (358) (212) — (2,401) Reinstatement premiums collected (expensed) on catastrophe losses — (16) (2) — 28 — 10 Catastrophe losses, gross of related adjustments (1,112) (663) (38) (358) (240) — (2,411) PPD and related adjustments PPD, net of related adjustments - favorable (unfavorable) 762 305 (10) 441 (3) (569) 926 Net premiums earned adjustments on PPD - unfavorable (favorable) 67 — (25) — — — 42 Expense adjustments - unfavorable (favorable) 6 — (3) — — — 3 PPD reinstatement premiums - unfavorable (favorable) 6 (1) — 7 3 — 15 PPD, gross of related adjustments - favorable (unfavorable) 841 304 (38) 448 — (569) 986 CAY loss and loss expense ex CATs B $ 9,744 $ 2,565 $ 1,886 $ 5,233 $ 392 $ 3 $ 19,823 Policy acquisition costs and administrative expenses Policy acquisition costs and administrative expenses C $ 3,134 $ 1,277 $ 121 $ 3,877 $ 235 $ 365 $ 9,009 Expense adjustments - favorable (unfavorable) (6) — 3 — — — (3) Policy acquisition costs and administrative expenses, adjusted D $ 3,128 $ 1,277 $ 124 $ 3,877 $ 235 $ 365 $ 9,006 Denominator Net premiums earned E $ 15,461 $ 4,915 $ 2,338 $ 10,441 $ 798 $ 33,953 Reinstatement premiums (collected) expensed on catastrophe losses — 16 2 — (28) (10) Net premiums earned adjustments on PPD - unfavorable (favorable) 67 — (25) — — 42 PPD reinstatement premiums - unfavorable (favorable) 6 (1) — 7 3 15 Net premiums earned excluding adjustments F $ 15,534 $ 4,930 $ 2,315 $ 10,448 $ 773 $ 34,000 P&C Combined ratio Loss and loss expense ratio A/E 64.8 % 59.5 % 83.9 % 49.3 % 79.2 % 62.6 % Policy acquisition cost and administrative expense ratio C/E 20.2 % 26.0 % 5.2 % 37.1 % 29.5 % 26.5 % P&C Combined ratio 85.0 % 85.5 % 89.1 % 86.4 % 108.7 % 89.1 % CAY P&C Combined ratio ex CATs Loss and loss expense ratio, adjusted B/F 62.7 % 52.0 % 81.5 % 50.1 % 50.7 % 58.3 % Policy acquisition cost and administrative expense ratio, adjusted D/F 20.2 % 25.9 % 5.3 % 37.1 % 30.5 % 26.5 % CAY P&C Combined ratio ex CATs 82.9 % 77.9 % 86.8 % 87.2 % 81.2 % 84.8 % Combined ratio Combined ratio 89.1 % Add: impact of gains and losses on crop derivatives — P&C Combined ratio 89.1 % Note: The ratios above are calculated using whole U.S. dollars.
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; • infection rates and severity of COVID-19 and related risks, and their effects on our business operations and claims activity, and any adverse impact to our insureds, brokers, agents, and employees; actual claims may exceed our best estimate of ultimate insurance losses incurred which could change including as a result of, among other things, the impact of legislative or regulatory actions taken in response to COVID-19; • changes in the distribution or placement of risks due to increased consolidation of insurance and reinsurance brokers; 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; • 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.
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 outstanding purchases of additional interests in Huatai Insurance Group Co., Ltd.
In addition to routine analytical reviews of ceding company reports to ensure reported claims information appears reasonable, we perform regular underwriting and claims audits of certain ceding companies to ensure reported claims information is accurate, complete, and timely. As appropriate, audit findings are used to adjust claims in the reserving process.
In addition to routine analytical reviews of ceding company reports to ensure reported claims information appears reasonable, we perform regular underwriting and claims audits of ceding companies to ensure reported claims information is accurate, complete, and timely. As appropriate, audit findings are used to adjust claims in the reserving process.
We consider each of the following sensitivity analyses to represent a reasonably likely deviation in the underlying assumption. 40 Table of Contents North America Commercial P&C Insurance - Workers' Compensation Given the long reporting and paid development patterns for workers' compensation business, the development factors used to project actual current losses to ultimate losses for our current exposure require considerable judgment that could be material to consolidated loss and loss expense reserves.
We consider each of the following sensitivity analyses to represent a reasonably likely deviation in the underlying assumption. 43 Table of Contents North America Commercial P&C Insurance - Workers' Compensation Given the long reporting and paid development patterns for workers' compensation business, the development factors used to project actual current losses to ultimate losses for our current exposure require considerable judgment that could be material to consolidated loss and loss expense reserves.
Our assessment also incorporates the impact of a severe economic downturn which, as stated above under Financial Risk, includes an adverse impact to our investment portfolio and to our insurance products sensitive to certain system-wide financial conditions. 74 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).
Our assessment also incorporates the impact of a severe economic downturn which, as stated above under Financial Risk, includes an adverse impact to our investment portfolio and to our insurance products sensitive to certain system-wide financial conditions. 80 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).
Interest payments related to these obligations total $6.6 billion with $0.5 billion due over the next twelve months. These estimates are based on current exchange rates.
Interest payments related to these obligations total $6.1 billion with $0.5 billion due over the next twelve months. These estimates are based on current exchange rates.
Sensitivity to underlying assumptions While we believe that our reserve for unpaid losses and loss expenses at December 31, 2022, is adequate, new information or emerging trends that differ from our assumptions may lead to future development of losses and loss expenses that is significantly greater or less than the recorded reserve, which could have a material effect on future operating results.
Sensitivity to underlying assumptions While we believe that our reserve for unpaid losses and loss expenses at December 31, 2023, is adequate, new information or emerging trends that differ from our assumptions may lead to future development of losses and loss expenses that is significantly greater or less than the recorded reserve, which could have a material effect on future operating results.
The vast majority of the current liability relates to exposure from recently enacted "reviver" legislation in certain states that allow civil claims relating to molestation to be asserted against policyholders that would otherwise be barred by statutes of limitations. For additional information refer to the “Asbestos and Environmental (A&E)” section and to Note 7 to the Consolidated Financial Statements.
The vast majority of the current liability relates to exposure from recently enacted "reviver" legislation in certain states that allow civil claims relating to molestation to be asserted against policyholders that would otherwise be barred by statutes of limitations. For additional information refer to the “Asbestos and Environmental (A&E)” section and to Note 8 to the Consolidated Financial Statements.
Our minimum rating for initial purchase is BB/B. Fifteen 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.
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.
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, 2022, through March 31, 2023, 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.
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.
However, when a recoverable is expected to be paid in a brief period of time by a highly-rated reinsurer, such as certain property catastrophe claims, a default factor may not be applied; 45 Table of Contents • For balances recoverable from reinsurers that are both unrated by a major rating agency and for which management is unable to determine a credible rating equivalent based on a parent or affiliated company, we may determine a rating equivalent based on our analysis of the reinsurer that considers an assessment of the creditworthiness of the particular entity, industry benchmarks, or other factors as considered appropriate.
However, when a recoverable is expected to be paid in a brief period of time by a highly-rated reinsurer, such as certain property catastrophe claims, a default factor may not be applied; • For balances recoverable from reinsurers that are both unrated by a major rating agency and for which management is unable to determine a credible rating equivalent based on a parent or affiliated company, we may determine a rating equivalent based on our analysis of the reinsurer that considers an assessment of the creditworthiness of the particular entity, industry benchmarks, or other factors as considered appropriate.
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. 73 Table of Contents Man-made and other catastrophes We have substantial exposure to losses resulting from man-made catastrophes including terrorism, cyber-attack, financial events, and other catastrophe events, including pandemics.
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. 79 Table of Contents Man-made and other catastrophes We have substantial exposure to losses resulting from man-made catastrophes including terrorism, cyber-attack, financial events, and other catastrophe events, including pandemics.
Derivative and structured securities (e.g., credit default swaps and collateralized debt obligations) are not permitted in the high-yield portfolio. 71 Table of Contents Asbestos and Environmental (A&E) Asbestos and environmental (A&E) reserving considerations For asbestos, Chubb faces claims relating to policies issued to manufacturers, distributors, installers, and other parties in the chain of commerce for asbestos and products containing asbestos.
Derivative and structured securities (e.g., credit default swaps and collateralized debt obligations) are not permitted in the high-yield portfolio. 77 Table of Contents Asbestos and Environmental (A&E) Asbestos and environmental (A&E) reserving considerations For asbestos, Chubb faces claims relating to policies issued to manufacturers, distributors, installers, and other parties in the chain of commerce for asbestos and products containing asbestos.
During 2022, we were able to meet all our obligations, including the payments of dividends on our Common Shares, with our net cash flows. We assess which subsidiaries to draw dividends from based on a number of factors. Considerations such as regulatory and legal restrictions as well as the subsidiary's financial condition are paramount to the dividend decision.
During 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.
The facilities noted above require that we maintain certain financial covenants, all of which have been met at December 31, 2022. These covenants include: (i) a minimum consolidated net worth of not less than $41.959 billion; and (ii) a ratio of consolidated debt to total capitalization of not greater than 0.35 to 1.
The facilities noted above require that we maintain certain financial covenants, all of which have been met at December 31, 2023. These covenants include: (i) a minimum consolidated net worth of not less than $41.959 billion; and (ii) a ratio of consolidated debt to total capitalization of not greater than 0.35 to 1.
Chubb renewed its Global Property Catastrophe Reinsurance Program for our North American and International operations effective April 1, 2022, through March 31, 2023, with no material changes in coverage to the expired program. The program consists of three layers in excess of losses retained by Chubb on a per occurrence basis.
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 to the expired program. The program consists of three layers in excess of losses retained by Chubb on a per occurrence basis.
Comparisons between 2021 and 2020 have been omitted from this Form 10-K, but can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Form 10-K for the year ended December 31, 2021. All comparisons in this discussion are to the prior year unless otherwise indicated.
Comparisons between 2022 and 2021 have been omitted from this Form 10-K, but can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Form 10-K for the year ended December 31, 2022. All comparisons in this discussion are to the prior year unless otherwise indicated.
The reserve portfolio for our Chubb Bermuda operations contains exposure to predominantly high excess liability coverage on an occurrence-first-reported basis (typically with attachment points in excess of $325 million and gross limits of up to $150 million) and D&O and other professional liability coverage on a claims-made basis (typically with attachment points in excess of $125 million and gross limits of up to $75 million).
The reserve portfolio for our Chubb Bermuda operations contains exposure to predominantly high excess liability coverage on an occurrence-first-reported basis (typically with attachment points in excess of $325 million and gross limits of up to $150 million) and D&O and other professional liability coverage on a claims-made basis (typically with attachment points in excess of $100 million and gross limits of up to $75 million).
Refer to “Liquidity” and “Capital Resources” for additional information. 38 Table of Contents Critical Accounting Estimates Our Consolidated Financial Statements include amounts that, either by their nature or due to requirements of generally accepted accounting principles in the U.S. (GAAP), are determined using best estimates and assumptions.
Refer to “Liquidity” and “Capital Resources” for additional information. 41 Table of Contents Critical Accounting Estimates Our Consolidated Financial Statements include amounts that, either by their nature or due to requirements of generally accepted accounting principles in the U.S. (U.S. GAAP), are determined using best estimates and assumptions.
Determining management's best estimate Our recorded reserves represent management's best estimate of the provision for unpaid claims as of the balance sheet date, and establishing them involves a process that includes collaboration with various relevant parties in the company. For information on our reserving process, refer to Note 7 to the Consolidated Financial Statements.
Determining management's best estimate Our recorded reserves represent management's best estimate of the provision for unpaid claims as of the balance sheet date, and establishing them involves a process that includes collaboration with various relevant parties in the company. For information on our reserving process, refer to Note 8 to the Consolidated Financial Statements.
For additional information regarding estimates of future claim payments over the next twelve months, refer to our discussion of Cash Requirements within "Capital Resources". Sources of liquidity include cash from operations, routine sales of investments, and financing arrangements. The following is a discussion of our cash flows for 2022, 2021, and 2020.
For additional information regarding estimates of future claim payments over the next twelve months, refer to our discussion of Cash Requirements within "Capital Resources". Sources of liquidity include cash from operations, routine sales of investments, and financing arrangements. The following is a discussion of our cash flows for 2023, 2022, and 2021.
At December 31, 2022 , our long-term cash requirements under our various contractual obligations and commitments include: • Gross loss payments under insurance and reinsurance contracts - We are obligated to pay claims under insurance and reinsurance contracts for specified loss events covered under those contracts. Total cash requirements are not determinable from underlying contracts and must be estimated.
At December 31, 2023 , our long-term cash requirements under our various contractual obligations and commitments include: • Gross loss payments under insurance and reinsurance contracts - We are obligated to pay claims under insurance and reinsurance contracts for specified loss events covered under those contracts. Total cash requirements are not determinable from underlying contracts and must be estimated.
We believe the items that require the most subjective and complex estimates are: • unpaid loss and loss expense reserves, including long-tail asbestos and environmental (A&E) reserves and non-A&E casualty exposures; • future policy benefits reserves; • the valuation of value of business acquired (VOBA) and amortization of deferred policy acquisition costs and VOBA; • the assessment of risk transfer for certain structured insurance and reinsurance contracts; • reinsurance reco verable, including a valuation allowance for uncollectible reinsurance; • the valuation of our investment portfolio and assessment of valuation allowance for expected credit losses; • the valuation of deferred income taxes; and • the assessment of goodwill for impairment.
We believe the items that require the most subjective and complex estimates are: • unpaid loss and loss expense reserves, including long-tail asbestos and environmental (A&E) reserves and non-A&E casualty exposures; • future policy benefits reserves; • the valuation of value of business acquired (VOBA); • the assessment of risk transfer for certain structured insurance and reinsurance contracts; • reinsurance reco verable, including a valuation allowance for uncollectible reinsurance; • the valuation of our investment portfolio and assessment of valuation allowance for expected credit losses; • the valuation of deferred income taxes; and • the assessment of goodwill for impairment.
The average credit quality of our non-U.S. fixed income securities is A and 45 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.
The average credit quality of our non-U.S. fixed income securities is A and 39 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.
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.
Unpaid losses and loss expenses As an insurance and reinsurance company, we are required by applicable laws and regulations and U.S. 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.
Best financial strength ratings of Chubb fall, we may be faced with the cancellation of premium or be required to post collateral on our underlying obligation associated with this premium. 82 Table of Contents Information provided in connection with outstanding debt of subsidiaries Chubb INA Holdings Inc.
Best financial strength ratings of Chubb fall, we may be faced with the cancellation of premium or be required to post collateral on our underlying obligation associated with this premium. 88 Table of Contents Information provided in connection with outstanding debt of subsidiaries Chubb INA Holdings Inc.
The table below presents our modeled pre-tax estimates of natural catastrophe PML, net of reinsurance, at December 31, 2022, and does not represent our expected catastrophe losses for any one year. Modeled Net Probable Maximum Loss (PML) Pre-tax Worldwide (1) U.S.
The table below presents our modeled pre-tax estimates of natural catastrophe PML, net of reinsurance, at December 31, 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.
North America Agricultural Insurance Approximately 58 percent of the reserves for this segment are from the crop related lines, which all have short payout patterns, with the majority of the liabilities expected to be resolved in the ensuing twelve months.
North America Agricultural Insurance Approximately 69 percent of the reserves for this segment are from the crop related lines, which all have short payout patterns, with the majority of the liabilities expected to be resolved in the ensuing twelve months.
For example, a 20 percent shortening or lengthening of the development patterns used for U.S. long-tail lines would cause the loss reserve estimate derived by the reported Bornhuetter-Ferguson method for these lines to change by approximately $205 million.
For example, a 20 percent shortening or lengthening of the development patterns used for U.S. long-tail lines would cause the loss reserve estimate derived by the reported Bornhuetter-Ferguson method for these lines to change by approximately $185 million.
These estimated payments, which are not determinable from the contracts, are gross of fees or premiums from the underlying contracts. These estimated payments are higher than the future policy benefits reserves and GLB liability presented on our Consolidated balance sheets which are discounted and are reflected net of fees and premiums due from the underlying contracts.
These estimated payments, which are not determinable from the contracts, are gross of fees or premiums from the underlying contracts. These estimated payments are higher than the future policy benefits reserves and MRB liability presented on our Consolidated balance sheets which are discounted and are reflected net of fees and premiums due from the underlying contracts.
The following table presents the gross and net 3-year survival ratios for Asbestos and Environmental loss and ALAE reserves: (in years) Gross loss and ALAE reserves Net loss and ALAE reserves Asbestos 4.7 5.1 Environmental 3.3 3.9 The survival ratios provide only a very rough depiction of reserves and are significantly impacted by a number of factors such as aggressive settlement practices, variations in gross to ceded relationships within the asbestos or environmental claims, and levels of coverage provided.
The following table presents the gross and net 3-year survival ratios for Asbestos and Environmental loss and ALAE reserves: (in years) Gross loss and ALAE reserves Net loss and ALAE reserves Asbestos 4.4 4.3 Environmental 3.1 3.4 The survival ratios provide only a very rough depiction of reserves and are significantly impacted by a number of factors such as aggressive settlement practices, variations in gross to ceded relationships within the asbestos or environmental claims, and levels of coverage provided.
Goodwill is assigned to applicable reporting units of acquired entities at the time of acquisition. Our reporting units are the same as our reportable segments. For goodwill balances by reporting units, refer to Note 6 to the Consolidated Financial Statements, under item 8.
Goodwill is assigned to applicable reporting units of acquired entities at the time of acquisition. Our reporting units are the same as our reportable segments. For Goodwill balances by reporting units, refer to Note 7 to the Consolidated Financial Statements, under item 8.
Department of Agriculture’s Risk Management Agency (RMA), is a federal subsidized insurance program that covers revenue shortfalls or production losses due to natural causes such as drought, excessive moisture, hail, wind, freeze, insects, and disease. These revenue products are defined as providing both commodity price and yield coverages.
Department of Agriculture’s Risk Management Agency (RMA), is a federal subsidized insurance program that covers revenue shortfalls or production losses due to natural causes such as drought, 82 Table of Contents excessive moisture, hail, wind, freeze, insects, and disease. These revenue products are defined as providing both commodity price and yield coverages.
Refer to the respective sections that follow for a discussion of Net investment income, Other (income) expense, Net realized gains (losses), Interest expense, Amortization of purchased intangibles, and Income tax expense. 52 Table of Contents Segment Operating Results – Years Ended December 31, 2022, 2021, and 2020 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.
Refer to the respective sections that follow for a discussion of Net investment income, Other (income) expense, Net realized gains (losses), Interest expense, Amortization of purchased intangibles, and Income tax expense. 57 Table of Contents Segment Operating Results – Years Ended December 31, 2023, 2022, and 2021 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.
However, based on the composition (particularly the average credit quality) of the reinsurance recoverable balance at December 31, 2022, we estimate that a ratings downgrade of one notch for all rated reinsurers (e.g., from A to A- or A- to BBB+) could increase our valuation allowance for uncollectible reinsurance by approximately $93 million or approximately 0.5 percent of the gross reinsurance recoverable balance, assuming no other changes relevant to the calculation.
However, based on the composition (particularly the average credit quality) of the reinsurance recoverable balance at December 31, 2023, we estimate that a ratings downgrade of one notch for all rated reinsurers (e.g., from A to A- or A- to BBB+) could increase our valuation allowance for uncollectible reinsurance by approximately $97 million or approximately 0.5 percent of the gross reinsurance recoverable balance, assuming no other changes relevant to the calculation.
As a result of the low frequency/high severity nature of the book, a small difference in the actual vs. expected claim frequency, either positive or negative, could result in a material change to the projected ultimate loss if such change in claim frequency was related to a policy where close to maximum limits were deployed.
As a result of the low frequency/high severity nature of the book, a small difference in the actual vs. expected claim frequency, either positive or negative, could result in a material change to the projected ultimate loss if such change in claim frequency was related to a policy where significant limits were deployed.
Our below-investment grade and non-rated portfolio includes over 1,700 issuers, with the greatest single exposure being $152 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 below-investment grade and non-rated portfolio includes over 1,600 issuers, with the greatest single exposure being $168 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).
ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The following is a discussion of our financial condition and results of operations for the years ended December 31, 2022 and 2021 and comparisons between 2022 and 2021.
ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The following is a discussion of our financial condition and results of operations for the years ended December 31, 2023 and 2022 and comparisons between 2023 and 2022.
The remaining favorable development of $1,452 million, including favorable development of $430 million for COVID-related claims, is primarily comprised of 39 percent in long-tail lines, principally from accident years 2020 and 2017 and prior, and 61 percent in short-tail lines, mainly in homeowners, accident and health, property, and surety lines.
The remaining favorable development of $1,452 million, including favorable development of $430 million for COVID-related claims, primarily comprises 39 percent in long-tail lines, principally from accident years 2020 and 2017 and prior, and 61 percent in short-tail lines, mainly in homeowners, accident and health, property, and surety lines.
Therefore, we urge caution in using these very simplistic ratios to gauge reserve adequacy. 72 Table of Contents Catastrophe Management We activel y 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.
Therefore, we urge caution in using these very simplistic ratios to gauge reserve adequacy. 78 Table of Contents Catastrophe Management We activel y monitor and manage our catastrophe risk accumulation around the world from natural perils, which includes 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.
To date, we have not experienced difficulty accessing our credit facility or establishing additional facilities when needed . 77 Table of Contents To further ensure the sufficiency of funds to settle unforeseen claims, we hold certain invested assets in cash and short-term investments.
To date, we have not experienced difficulty accessing our credit facility or establishing additional facilities when needed . To further ensure the sufficiency of funds to settle unforeseen claims, we hold certain invested assets in cash and short-term investments.
Our syndicated letter of credit facility allows for same day drawings to fund a net pool overdraft should participating Chubb entities withdraw contributed funds from the pool. Capital Resources Capital resources consist of funds deployed or available to be deployed to support our business operations.
Our syndicated letter of credit facility allows for same day drawings to fund a net pool overdraft should participating Chubb entities withdraw contributed funds from the pool. 85 Table of Contents Capital Resources Capital resources consist of funds deployed or available to be deployed to support our business operations.
(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; 37 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).
(Huatai Group); • 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; 40 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).
The judgments involved in projecting the ultimate losses may pertain to the use and interpretation of various standard actuarial reserving methods that place reliance on the extrapolation of actual historical data, loss development patterns, industry data, and other benchmarks as appropriate.
The judgments involved in projecting the ultimate losses may pertain to the use and interpretation of various standard actuarial reserving methods that place reliance on the extrapolation of actual historical data, lo ss development patterns, industry data, and other benchmarks as appropriate.
To the extent the creditworthiness of our reinsurers was to deteriorate due to an adverse event affecting the reinsurance industry, such as a large number of major catastrophes, actual uncollectible amounts could be significantly greater than our valuation allowance for uncollectible reinsurance.
To the extent the creditworthiness of our reinsurers was to deteriorate due to an adverse 50 Table of Contents event affecting the reinsurance industry, such as a large number of major catastrophes, actual uncollectible amounts could be significantly greater than our valuation allowance for uncollectible reinsurance.
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 December 31, 2022, our corporate fixed income investment portfolio included below-investment grade and non-rated securities which, in total, comprised approximately 16 percent of our fixed income portfolio.
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 December 31, 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.
At December 31, 2022, the use of different assumptions within our approach could have a material effect on the valuation allowance for uncollectible reinsurance.
At December 31, 2023, the use of different assumptions within our approach could have a material effect on the valuation allowance for uncollectible reinsurance.
The Board will determine the record and payment dates at which the annual dividend may be paid until the date of the 2023 annual general meeting, and is authorized to abstain from distributing a dividend at its discretion. The first three quarterly installments each of $0.83 per share, have been distributed by the Board as expected.
The Board will determine 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 first three quarterly installments each of $0.86 per share, have been distributed by the Board as expected.
Each year the RMA issues a final SRA for the subsequent reinsurance year (i.e., the 2023 SRA covers the 2023 reinsurance year from July 1, 2022 through June 30, 2023).
Each year the RMA issues a final SRA for the subsequent reinsurance year (i.e., the 2024 SRA covers the 2024 reinsurance year from July 1, 2023 through June 30, 2024).
IBNR 39 Table of Contents 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).
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).
The average duration of our fixed income securities, including the effect of options and swaps, was 4.5 years and 4.1 years at December 31, 2022 and 2021, respectively. We estimate that a 100 basis point (bps) increase in interest rates would reduce the valuation of our fixed income portfolio by approximately $4.4 billion at December 31, 2022.
The average duration of our fixed income securities, including the effect of options and swaps, was 4.8 years and 4.5 years at December 31, 2023 and 2022, respectively. We estimate that a 100 basis point (bps) increase in interest rates would reduce the valuation of our fixed income portfolio by approximately $5.5 billion at December 31, 2023.
The remaining favorable development of $1,144 million is primarily comprised of 18 percent in long-tail lines, principally from accident years 2011 through 2017, and 82 percent in short-tail lines, mainly in property and A&H lines.
The remaining favorable development of $1,144 million primarily comprises 18 percent in long-tail lines, principally from accident years 2011 through 2017, and 82 percent in short-tail lines, mainly in property and A&H lines.
At our largest exposure location in the U.S., our maximum modeled losses from a 10-ton truck-bomb explosion are estimated to be $1.9 billion pre-tax based on the exposures, net of reinsurance and TRIPRA as of December 31, 2022.
At our largest exposure location in the U.S., our maximum modeled losses from a 10-ton truck-bomb explosion are estimated to be $2.1 billion pre-tax based on the exposures, net of reinsurance and TRIPRA, as of December 31, 2023.
In addition, in the case of loans to government-owned entities or loans that have a government guarantee, political risk policies cover 75 Table of Contents scheduled payments against risks of non-payment or non-honoring of government guarantees.
In addition, in the case of loans to government-owned entities or loans that have a government guarantee, political risk policies cover scheduled payments against risks of non-payment or non-honoring of government guarantees.
At December 31, 2022, the valuation allowance of $916 million reflects management's assessment that it is more likely than not that a portion of the deferred tax assets will not be realized due to the inability of certain subsidiaries to generate sufficient taxable income.
At December 31, 2023, the valuation allowance of $716 million reflects management's assessment that it is more likely than not that a portion of the deferred tax assets will not be realized due to the inability of certain subsidiaries to generate sufficient taxable income.
For example, when applying the reported loss development method, the lengthening of our selected loss development patterns by six months would increase reserve estimates on long-tail casualty and financial lines for accident years 2020 and prior by approximately $582 million.
For example, when applying the reported loss development method, the lengthening of our selected loss development patterns by six months would increase reserve estimates on long-tail casualty and financial lines for accident years 2021 and prior by approximately $556 million.
The expense adjustments correlate to the prior period loss development on these same policies. 63 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 For the Year Ended December 31, 2022 (in millions of U.S. dollars except for ratios) Numerator Losses and loss expenses A $ 10,828 $ 3,186 $ 2,557 $ 5,252 $ 670 $ 363 $ 22,856 Catastrophe losses and related adjustments Catastrophe losses, net of related adjustments (961) (631) (64) (365) (161) — (2,182) Reinstatement premiums collected (expensed) on catastrophe losses (1) (2) — (3) 55 — 49 Catastrophe losses, gross of related adjustments (960) (629) (64) (362) (216) — (2,231) PPD and related adjustments PPD, net of related adjustments - favorable (unfavorable) 562 186 61 448 (22) (359) 876 Net premiums earned adjustments on PPD - unfavorable (favorable) 88 — 168 — — — 256 Expense adjustments - unfavorable (favorable) 24 — (2) — 1 — 23 PPD reinstatement premiums - unfavorable (favorable) — — — — (2) — (2) PPD, gross of related adjustments - favorable (unfavorable) 674 186 227 448 (23) (359) 1,153 CAY loss and loss expense ex CATs B $ 10,542 $ 2,743 $ 2,720 $ 5,338 $ 431 $ 4 $ 21,778 Policy acquisition costs and administrative expenses Policy acquisition costs and administrative expenses C $ 3,426 $ 1,348 $ 116 $ 3,888 $ 276 $ 385 $ 9,439 Expense adjustments - favorable (unfavorable) (24) — 2 — (1) — (23) Policy acquisition costs and administrative expenses, adjusted D $ 3,402 $ 1,348 $ 118 $ 3,888 $ 275 $ 385 $ 9,416 Denominator Net premiums earned E $ 17,107 $ 5,180 $ 2,838 $ 10,803 $ 922 $ 36,850 Reinstatement premiums (collected) expensed on catastrophe losses 1 2 — 3 (55) (49) Net premiums earned adjustments on PPD - unfavorable (favorable) 88 — 168 — — 256 PPD reinstatement premiums - unfavorable (favorable) — — — — (2) (2) Net premiums earned excluding adjustments F $ 17,196 $ 5,182 $ 3,006 $ 10,806 $ 865 $ 37,055 P&C Combined ratio Loss and loss expense ratio A/E 63.3 % 61.5 % 90.1 % 48.6 % 72.6 % 62.0 % Policy acquisition cost and administrative expense ratio C/E 20.0 % 26.0 % 4.1 % 36.0 % 30.0 % 25.6 % P&C Combined ratio 83.3 % 87.5 % 94.2 % 84.6 % 102.6 % 87.6 % CAY P&C Combined ratio ex CATs Loss and loss expense ratio, adjusted B/F 61.3 % 52.9 % 90.5 % 49.4 % 49.7 % 58.8 % Policy acquisition cost and administrative expense ratio, adjusted D/F 19.8 % 26.0 % 3.9 % 36.0 % 31.8 % 25.4 % CAY P&C Combined ratio ex CATs 81.1 % 78.9 % 94.4 % 85.4 % 81.5 % 84.2 % Combined ratio Combined ratio 87.6 % Add: impact of gains and losses on crop derivatives — P&C Combined ratio 87.6 % Note: The ratios above are calculated using whole U.S. dollars.
Letters A, B, C, D, E, and F included in the table are references for calculating the ratios above. 69 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 For the Year Ended December 31, 2022 (in millions of U.S. dollars except for ratios) Numerator Losses and loss expenses/policy benefits A $ 10,828 $ 3,186 $ 2,557 $ 5,252 $ 670 $ 363 $ 22,856 Catastrophe losses and related adjustments Catastrophe losses, net of related adjustments (961) (631) (64) (365) (161) — (2,182) Reinstatement premiums collected (expensed) on catastrophe losses (1) (2) — (3) 55 — 49 Catastrophe losses, gross of related adjustments (960) (629) (64) (362) (216) — (2,231) PPD and related adjustments PPD, net of related adjustments - favorable (unfavorable) 562 186 61 448 (22) (359) 876 Net premiums earned adjustments on PPD - unfavorable (favorable) 88 — 168 — — — 256 Expense adjustments - unfavorable (favorable) 24 — (2) — 1 — 23 PPD reinstatement premiums - unfavorable (favorable) — — — — (2) — (2) PPD, gross of related adjustments - favorable (unfavorable) 674 186 227 448 (23) (359) 1,153 CAY loss and loss expense ex CATs B $ 10,542 $ 2,743 $ 2,720 $ 5,338 $ 431 $ 4 $ 21,778 Policy acquisition costs and administrative expenses Policy acquisition costs and administrative expenses C $ 3,426 $ 1,348 $ 116 $ 3,888 $ 276 $ 385 $ 9,439 Expense adjustments - favorable (unfavorable) (24) — 2 — (1) — (23) Policy acquisition costs and administrative expenses, adjusted D $ 3,402 $ 1,348 $ 118 $ 3,888 $ 275 $ 385 $ 9,416 Denominator Net premiums earned E $ 17,107 $ 5,180 $ 2,838 $ 10,803 $ 922 $ 36,850 Reinstatement premiums (collected) expensed on catastrophe losses 1 2 — 3 (55) (49) Net premiums earned adjustments on PPD - unfavorable (favorable) 88 — 168 — — 256 PPD reinstatement premiums - unfavorable (favorable) — — — — (2) (2) Net premiums earned excluding adjustments F $ 17,196 $ 5,182 $ 3,006 $ 10,806 $ 865 $ 37,055 P&C Combined ratio Loss and loss expense ratio A/E 63.3 % 61.5 % 90.1 % 48.6 % 72.6 % 62.0 % Policy acquisition cost and administrative expense ratio C/E 20.0 % 26.0 % 4.1 % 36.0 % 30.0 % 25.6 % P&C Combined ratio 83.3 % 87.5 % 94.2 % 84.6 % 102.6 % 87.6 % CAY P&C Combined ratio ex CATs Loss and loss expense ratio, adjusted B/F 61.3 % 52.9 % 90.5 % 49.4 % 49.7 % 58.8 % Policy acquisition cost and administrative expense ratio, adjusted D/F 19.8 % 26.0 % 3.9 % 36.0 % 31.8 % 25.4 % CAY P&C Combined ratio ex CATs 81.1 % 78.9 % 94.4 % 85.4 % 81.5 % 84.2 % Combined ratio Combined ratio 87.6 % Add: impact of gains and losses on crop derivatives — P&C Combined ratio 87.6 % Note: The ratios above are calculated using whole U.S. dollars.
Effective Income Tax Rate Our effective tax rate (ETR) was 19.1 percent, 13.0 percent, and 15.1 percent in 2022, 2021, and 2020, respectively. Our ETR reflects a mix of income or losses in jurisdictions with a wide range of tax rates, permanent differences between U.S. GAAP and local tax laws, and the impact of discrete items.
Effective Income Tax Rate Our effective tax rate (ETR) was 5.4 percent, 19.1 percent, and 13.0 percent in 2023, 2022, and 2021, respectively. Our ETR reflects a mix of income or losses in jurisdictions with a wide range of tax rates, permanent differences between U.S. GAAP and local tax laws, and the impact of discrete items.
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 in 2022 and 2021.
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 84 Table of Contents approval of regulatory insurance authorities. Chubb Limited received no dividends from Chubb INA in 2023 and 2022.
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 $3,188 million (or 6.3 percent of our total shareholders’ equity at December 31, 2022).
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 $3,827 million (or 6.4 percent of total Chubb shareholders’ equity at December 31, 2023).
This represents an impact of 28 percent relative to recorded net loss and loss expense reserves of approximately $745 million. 42 Table of Contents Corporate Within Corporate, we have exposure to certain liability insurance and reinsurance lines that have been in run-off, generally, since 1994. Unpaid losses and loss expenses relating to this run-off business reside within the Brandywine Division.
This represents an impact of 23 percent relative to recorded net loss and loss expense reserves of approximately $815 million. 45 Table of Contents Corporate Within Corporate, we have exposure to certain liability insurance and reinsurance lines that have been in run-off, generally, since 1994. Unpaid losses and loss expenses relating to this run-off business reside within the Brandywine Division.
The total mark-to-market movement for private equities excluded from Net investment income was as follows: (in millions of U.S. dollars) 2022 2021 2020 Total mark-to-market gain (loss) on private equity, pre-tax $ (250) $ 2,115 $ 714 Interest Expense Interest expense was $570 million, $492 million, and $516 million for the years ended December 31, 2022, 2021, and 2020, respectively.
The total mark-to-market movement for private equities excluded from Net investment income was as follows: (in millions of U.S. dollars) 2023 2022 2021 Total mark-to-market gain (loss) on private equity, pre-tax $ 504 $ (250) $ 2,115 Interest Expense Interest expense was $672 million, $570 million, and $492 million for the years ended December 31, 2023, 2022, and 2021, respectively.
At December 31, 2022, the amount of dividends available to be paid to Chubb INA in 2023 from its subsidiaries without prior approval of insurance regulatory authorities totals $3.1 billion. Cash Flows Our insurance and reinsurance operations provide liquidity in that premiums are received in advance, sometimes substantially in advance, of the time claims are paid.
At December 31, 2023, the amount of dividends available to be paid to Chubb INA in 2024 from its subsidiaries without prior approval of insurance regulatory authorities totals $4.0 billion. Cash Flows Our insurance and reinsurance operations provide liquidity in that premiums are received in advance, sometimes substantially in advance, of the time claims are paid.
Excess/Umbrella portfolios, a five percentage point change in the tail factor (e.g., 1.10 changed to either 1.15 or 1.05) would cause a change of approximately $637 million, either positive or negative, for the projected net loss and loss expense reserves.
Excess/Umbrella portfolios, a five percentage point change in the tail factor (e.g., 1.10 changed to either 1.15 or 1.05) would cause a change of approximately $0.7 billion, either positive or negative, for the projected net loss and loss expense reserves.
If a reporting unit fails this qualitative assessment, a single quantitative analysis is used to measure and record the amount of the impairment.
If a reporting unit fails this qualitative assessment, a single quantitative analysis is used to measure and 51 Table of Contents record the amount of the impairment.
We generally maintain the ability to issue certain classes of debt and equity securities via an unlimited Securities and Exchange Commission (SEC) shelf registration which is renewed every three years. This allows us capital market access for refinancing as well as for unforeseen or opportunistic capital needs.
We have accessed both the debt and equity markets from time to time. We generally maintain the ability to issue certain classes of debt and equity securities via an unlimited Securities and Exchange Commission (SEC) shelf registration which is renewed every three years. This allows us capital market access for refinancing as well as for unforeseen or opportunistic capital needs.
At our May 2021 annual general meeting, our shareholders approved an annual dividend for the following year of up to $3.20 per share, which was paid in four quarterly installments of $0.80 per share at dates determined by the Board after the annual general meeting by way of distribution from capital contribution reserves, transferred to free reserves for payment.
At our May 2022 annual general meeting, our shareholders approved an annual dividend for the following year of up to $3.32 per share, which was paid in four quarterly installments of $0.83 per share at dates determined by the Board after the annual general meeting by way of distribution from capital contribution reserves, transferred to free reserves for payment.
At our May 2022 annual general meeting, our shareholders approved an annual dividend for the following year of up to $3.32 per share, expected to be paid in four quarterly installments of $0.83 per share after the annual general meeting by way of distribution from capital contribution reserves, transferred to free reserves for payment.
At our May 2023 annual general meeting, our shareholders approved an annual dividend for the following year of up to $3.44 per share, expected to be paid in four quarterly installments of $0.86 per share after the annual general meeting by way of distribution from capital contribution reserves, transferred to free reserves for payment.
Generally, we use a default analysis to estimate uncollectible reinsurance. The primary components of the default analysis are reinsurance recoverable balances by reinsurer, net of collateral, and forward looking default factors used to estimate the probability that the reinsurer may be unable to meet its future obligations in full.
The primary components of the default analysis are reinsurance recoverable balances by reinsurer, net of collateral, and forward looking default factors used to estimate the probability that the reinsurer may be unable to meet its future obligations in full.
At December 31, 2022, the deferred tax liability associated with the Other intangible assets (excluding the fair value adjustment on Unpaid losses and loss expenses) was $1,213 million.
At December 31, 2023, the deferred tax liability associated with the Other intangible assets (excluding the fair value adjustment on Unpaid losses and loss expenses) was $1,558 million.
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.
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.
Gross loss payments under insurance and reinsurance contracts are estimated at $76.4 billion with $21.7 billion estimated due over the next twelve months. These estimated gross loss payments are inherently uncertain and the amount and timing of actual loss payments are likely to differ from these estimates and the differences could be material.
Gross loss payments under insurance and reinsurance contracts are estimated at $80.2 billion with $22.4 billion estimated due over the next twelve months. These estimated gross loss payments are inherently uncertain and the amount and timing of actual loss payments are likely to differ from these estimates and the differences could be material.
Our letter of credit capacity for the new and existing facilities is $4.0 billion, $3.0 billion of which can be used for revolving credit. At December 31, 2022, our usage under these facilities was $1.4 billion in LOCs.
Our letter of credit capacity for the new and existing facilities is $4.0 billion, $3.0 billion of which can be used for revolving credit. At December 31, 2023, our usage under these facilities was $948 million in LOCs.
Refer to Note 2 to the Consolidated Financial Statements for additional information. • Deposit liabilities - Total obligations for deposit liabilities, including contract holder deposit funds, are $2.6 billion with $102 million due over the next twelve months.
Refer to Note 2 to the Consolidated Financial Statements for additional information. • Deposit liabilities - Total obligations for deposit liabilities, including contract holder deposit funds, are $13.5 billion with $827 million due over the next twelve months.
With respect to assumed reinsurance and insurance contracts, products giving rise to judgments regarding risk transfer were primarily sold by our financial solutions business. Although we have significantly curtailed writing financial solutions business, several contracts remain in-force and principally include multi-year retrospectively-rated contracts and loss portfolio transfers.
We have not purchased any other retroactive ceded reinsurance contracts since 1999. With respect to assumed reinsurance and insurance contracts, products giving rise to judgments regarding risk transfer were primarily sold by our financial solutions business. Although we have significantly curtailed writing financial solutions business, several contracts remain in-force and principally include multi-year retrospectively-rated contracts and loss portfolio transfers.
The amortization of purchased intangibles expense in 2023 is expected to be $281 million, or approximately $70 million each quarter. Refer to Note 6 to the Consolidated Financial Statements, under Item 8, for more information on the expected pre-tax amortization expense of purchased intangibles, at current foreign currency exchange rates for the next five years.
The amortization of purchased intangibles expense in 2024 is expected to be $312 million, or approximately $78 million each quarter. Refer to Note 7 to the Consolidated Financial Statements, under Item 8, for more information on the expected pre-tax amortization expense of purchased intangibles, at current foreign currency exchange rates, for the next five years.
Refer to Note 4 and Note 13 to the Consolidated Financial Statements, under item 8, for information on our fair value measurements. 46 Table of Contents Assessment of investment portfolio credit losses Each quarter, we evaluate current expected credit losses (CECL) for fixed maturity securities classified as held to maturity and expected credit losses (ECL) for fixed maturity securities classified as available for sale.
Refer to Note 4 and Note 17 to the Consolidated Financial Statements, under item 8, for information on our fair value measurements. Assessment of investment portfolio credit losses Each quarter, we evaluate expected credit losses (ECL) for fixed maturity securities classified as available-for-sale.
In 2022, TRIPRA covers 80 percent of insured losses above a deductible, estimated to be approximately $3.0 billion. Refer to “Global Property Catastrophe Reinsurance Program” for information on our reinsurance protection purchased.
In 2023, TRIPRA covers 81 percent of insured losses above a deductible, estimated to be approximately $3.2 billion. Refer to “Global Property Catastrophe Reinsurance Program” for information on our reinsurance protection purchased.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe following table summarizes the unhedged portion of net assets (liabilities) in non-U.S. currencies at December 31, 2022 and 2021: 2022 2021 2022 vs. 2021 % change in exchange rate per USD (in millions of U.S. dollars, except for percentages) Value of net assets (liabilities) Exchange rate per USD Value of net assets (liabilities) Exchange rate per USD Korean won (KRW) (x100) $ 5,333 0.0793 $ 805 0.0840 (5.6) % Chinese yuan renminbi (CNY) (1) 4,664 0.1450 3,519 0.1573 (7.9) % Canadian dollar (CAD) 2,166 0.7378 2,624 0.7914 (6.8) % Australian dollar (AUD) 1,269 0.6813 1,347 0.7263 (6.2) % New Taiwan dollar (TWD) 880 0.0325 359 0.0361 (10.0) % Mexican peso (MXN) 801 0.0513 728 0.0487 5.3 % Brazilian real (BRL) 624 0.1892 577 0.1795 5.4 % Baht (THB) 522 0.0289 413 0.0301 (4.0) % British pound sterling (GBP) 486 1.2083 2,333 1.3532 (10.7) % Euro (EUR) (2) (2,006) 1.0705 (3,013) 1.1370 (5.8) % Other foreign currencies 2,106 various 2,840 various NM Value o f unhedged portion of net assets denominated in foreign currencies (3) $ 16,845 $ 12,532 As a percentage of total net assets 33.3 % 21.0 % Pre-tax decrease to Shareholders' equity of a hypothetical 10 percent strengthening of the USD $ 1,531 $ 1,139 NM – not meaningful (1) Includes deposits relating to purchases of incremental ownership interests in Huatai Group.
Biggest changeThe following table summarizes the unhedged portion of net assets (liabilities) in non-U.S. currencies at December 31, 2023 and 2022, and excludes noncontrolling interests: 2023 2022 2023 vs. 2022 % change in exchange rate per USD (in millions of U.S. dollars, except for percentages) Value of net assets (liabilities) Exchange rate per USD Value of net assets (liabilities) Exchange rate per USD Korean won (KRW) (x100) $ 6,115 0.0775 $ 5,333 0.0793 (2.3) % Chinese yuan renminbi (CNY) 5,172 0.1408 4,664 0.1450 (2.9) % Canadian dollar (CAD) 2,362 0.7551 2,166 0.7378 2.3 % Australian dollar (AUD) 1,661 0.6812 1,269 0.6813 — Mexican peso (MXN) 973 0.0589 801 0.0513 14.9 % Brazilian real (BRL) 718 0.2061 624 0.1892 8.9 % New Taiwan dollar (TWD) 647 0.0327 880 0.0325 0.5 % British pound sterling (GBP) 588 1.2731 486 1.2083 5.4 % Baht (THB) 575 0.0292 522 0.0289 1.0 % Euro (EUR) (1) (1,835) 1.1039 (2,006) 1.0705 3.1 % Other foreign currencies 1,952 various 2,106 various NM Value o f unhedged portion of net assets denominated in foreign currencies (2) $ 18,928 $ 16,845 As a percentage of total net assets 31.8 % 33.3 % Pre-tax decrease to Chubb Shareholders' equity of a hypothetical 10 percent strengthening of the USD $ 1,721 $ 1,531 NM – not meaningful (1) Includes unhedged portion of euro denominated debt of $3.1 billion and net assets of $1.3 billion in 2023, and $3.0 billion and $1.0 billion, respectively, in 2022.
From time-to-time, we use derivatives to hedge planned cross border transactions and, beginning in September 2022, we designated certain derivatives to hedge foreign currency risk on our euro denominated debt and exposure in the net investments of certain foreign subsidiaries. The following is a discussion of our primary market risk exposures at December 31, 2022.
From time-to-time, we use derivatives to hedge planned cross border transactions and, beginning in September 2022, we designated certain derivatives to hedge foreign currency risk on our euro denominated debt and exposure in the net investments of certain foreign subsidiaries. The following is a discussion of our primary market risk exposures at December 31, 2023.
Treasury curve in the following proportions: 5 percent—15 percent short-term rates (maturing in less than 5 years), 15 percent—25 percent medium-term rates (maturing between 5 years and 10 years, inclusive), and 70 percent—80 percent long-term rates (maturing beyond 10 years). • A change in AA-rated credit spreads impacts the rate used to discount cash flows in the fair value model.
Treasury curve in the following proportions: up to 15 percent short-term rates (maturing in less than 5 years), 15 percent—25 percent medium-term rates (maturing between 5 years and 10 years, inclusive), and 70 percent—80 percent long-term rates (maturing beyond 10 years). • A change in AA-rated credit spreads impacts the rate used to discount cash flows in the fair value model.
AA-rated credit spreads are a proxy for both our own credit spreads and the credit spreads of the ceding insurers. • The hedge sensitivity is from December 31, 2022, market levels and only applicable to the equity and interest rate sensitivities table below. • The sensitivities do not scale linearly and may be proportionally greater for larger movements in the market factors.
AA-rated credit spreads are a proxy for both our own credit spreads and the credit spreads of the ceding insurers. • The hedge sensitivity is from December 31, 2023, market levels and only applicable to the equity and interest rate sensitivities table below. • The sensitivities do not scale linearly and may be proportionally greater for larger movements in the market factors.
The majority of our fixed income portfolio is classified as available for sale. 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 allowance for expected credit losses.
The effect of market movements on our fixed maturities available-for-sale 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 allowance for expected credit losses.
The following table presents the impact at December 31, 2022 and 2021, on the fair value of our fixed income portfolio of a hypothetical increase in interest rates of 100 bps applied instantly across the U.S. yield curve (an immediate time horizon was used as this presents the worst case scenario): (in billions of U.S. dollars, except for percentages) 2022 2021 Fair value of fixed income portfolio $ 98.6 $ 106.9 Pre-tax impact of 100 bps increase in interest rates: Decrease in dollars $ 4.4 $ 4.4 As a percentage of total fixed income portfolio at fair value 4.5 % 4.1 % Changes in interest rates will have an immediate effect on Comprehensive income and Shareholders' equity but will not ordinarily have an immediate effect on Net income.
The following table presents the impact at December 31, 2023 and 2022, on the fair value of our fixed income portfolio of a hypothetical increase in interest rates of 100 bps applied instantly across the U.S. yield curve (an immediate time horizon was used as this presents the worst case scenario): (in billions of U.S. dollars, except for percentages) 2023 2022 Fair value of fixed income portfolio $ 114.9 $ 98.6 Pre-tax impact of 100 bps increase in interest rates: Decrease in dollars $ 5.5 $ 4.4 As a percentage of total fixed income portfolio at fair value 4.8 % 4.5 % Changes in interest rates will have an immediate effect on Comprehensive income and Shareholders' equity for our available-for- sale portfolio but will not ordinarily have an immediate effect on Net income.
The tables below are estimates of the sensitivities to instantaneous changes in economic inputs (e.g., equity shock, interest rate shock, etc.) at December 31, 2022, of both the fair value of the MRB liability (FVL) and the fair value of specific derivative instruments held (hedge value) to partially offset the risk in the variable annuity guarantee reinsurance portfolio.
The tables below are estimates of the sensitivities to instantaneous changes in economic inputs (e.g., equity shock, interest rate shock, etc.) at December 31, 2023, for both the fair value of the MRB liability (FVL) and the fair value of specific derivative instruments held (hedge value) to partially offset the risk in the MRB reinsurance portfolio.
The following table presents the impact at December 31, 2022 and 2021, on the fair value of our debt obligations of a hypothetical decrease in interest rates of 100 bps applied instantly across the U.S. yield curve (an immediate time horizon was used as this presents the worst case scenario): (in millions of U.S. dollars, except for percentages) 2022 2021 Fair value of debt obligations, including repurchase agreements $ 14,770 $ 19,733 Pre-tax impact of 100 bps decrease in interest rates: Increase in dollars $ 1,085 $ 1,799 As a percentage of total debt obligations at fair value 7.4 % 9.1 % 85 Table of Contents Foreign currency management As a global company , Chubb entities transact business in multiple currencies.
The following table presents the impact at December 31, 2023 and 2022, on the fair value of our debt obligations of a hypothetical decrease in interest rates of 100 bps applied instantly across the U.S. yield curve (an immediate time horizon was used as this presents the worst case scenario): (in billions of U.S. dollars, except for percentages) 2023 2022 Fair value of debt obligations, including repurchase agreements $ 16.6 $ 14.8 Pre-tax impact of 100 bps decrease in interest rates: Increase in dollars $ 1.1 $ 1.1 As a percentage of total debt obligations at fair value 6.6 % 7.4 % 91 Table of Contents Foreign currency management As a global company , Chubb entities transact business in multiple currencies.
We do not currently anticipate significant changes in our primary market risk exposures or in how those exposures are managed in future reporting periods based upon what is known or expected to be in effect in future reporting periods.
Our policies to address these risks in 2023 were not materially different from 2022. We do not currently anticipate significant changes in our primary market risk exposures or in how those exposures are managed in future reporting periods based upon what is known or expected to be in effect in future reporting periods.
As the shocks in the table above become incrementally more negative, the impact on the NAR and claims at 100 percent mortality begin to drop due to the specific nature of these claim limits, many of which are annual claim limits calculated as a percentage of the reinsured account value.
As the shocks in the table above become incrementally more negative, the impacts begin to drop due to the specific nature of these claim limits, many of which are annual claim limits calculated as a percentage of the reinsured account value.
From time to time, we also use derivative instruments such as futures, options, swaps, and foreign currency forward contracts to manage the duration of our investment portfolio and foreign currency exposures and also to obtain exposure to a particular financial market. At December 31, 2022 and 2021, our notional exposure to derivative instruments was $9.8 billion and $20.0 billion, respectively.
From time to time, we also use derivative instruments such as futures, options, swaps, and foreign currency forward contracts to manage the duration of our investment portfolio and foreign currency exposures and also to obtain exposure to a particular financial market.
The tables below present the net amount at risk at December 31, 2022, following an immediate change in equity market levels, assuming all global equity markets are impacted equally. a) Reinsurance covering the GMDB risk only Equity Shock (in millions of U.S. dollars) +20 % Flat -20 % -40 % -60 % -80 % GMDB net amount at risk $ 275 $ 468 $ 731 $ 817 $ 746 $ 620 Claims at 100% immediate mortality 158 163 156 145 131 118 The treaty claim limits function as a ceiling as equity markets fall.
The tables below present the net amount at risk at December 31, 2023, following an immediate change in equity market levels, assuming all global equity markets are impacted equally. a) Reinsurance covering the GMDB risk only Equity Shock (in millions of U.S. dollars) +20 % Flat -20 % -40 % -60 % -80 % GMDB net amount at risk $ 233 $ 252 $ 478 $ 685 $ 668 $ 544 Claims at 100% immediate mortality 136 148 151 141 129 115 The treaty limits function as a ceiling as equity markets fall.
Changes in the fair value of TBAs are included in Net realized gains (losses) and, therefore, have an immediate effect on both our Net income and Shareholders' equity.
As part of our investing activities, from time to time we purchase to be announced mortgage backed securities (TBAs). Changes in the fair value of TBAs are included in Net realized gains (losses) and, therefore, have an immediate effect on both our Net income and Shareholders' equity.
(3) The unhedged net assets denominated in foreign currencies comprised goodwill and other intangible assets of approximately 37 percent and 45 percent at December 31, 2022 and 2021, respectively.
Excludes hedged euro denominated debt of $1.6 billion in 2023 and 2022. (2) The unhedged net assets denominated in foreign currencies comprised goodwill and other intangible assets of approximately 54 percent and 37 percent at December 31, 2023 and 2022, respectively.
Variations in market interest rates could produce significant changes in the timing of prepayments due to available prepayment options. For these reasons, actual results could differ from those reflected in the tables.
Variations in market interest rates could produce significant changes in the timing of prepayments due to available prepayment options. For these reasons, actual results could differ from those reflected in the tables. Changes in interest rates for our fixed income – consolidated investment products will have an immediate impact on Net income (through Net realized gains (losses)).
The hedged risk is designated as the foreign currency exposure arising between the functional currency of the foreign subsidiary and the functional currency of its parent entity. For additional information refer to Note 10 to the Consolidated Financial Statements.
The hedged risk is designated as the foreign currency exposure arising between the functional currency of the foreign subsidiary and the functional currency of its parent entity. For additional information refer to Note 14 to the Consolidated Financial Statements. 92 Table of Contents Reinsurance of market risk benefits Effective January 1, 2023, we adopted new U.S.
Adverse changes in market factors and policyholder behavior will have an impact on both realized gains (losses) and net income. When evaluating these risks, we expect to be compensated for taking both the risk of a cumulative long-term economic net loss, as well as the short-term accounting variations caused by these market movements.
When evaluating these risks, we expect to be compensated for taking both the risk of a cumulative long-term economic net loss, as well as the short-term accounting variations caused by these market movements. Therefore, we evaluate this business in terms of its long-term economic risk and reward.
Further, through writing the GLB and GMDB products, we are exposed to volatility in the equity and credit markets, as well as interest rates. Our investment portfolio consists primarily of fixed income securities, denominated in both U.S. dollars and foreign currencies, which are sensitive to changes in interest rates and foreign currency exchange rates.
Our investment portfolio consists primarily of fixed income securities, denominated in both U.S. dollars and foreign currencies, which are sensitive to changes in interest rates and foreign currency exchange rates. The majority of our fixed income portfolio is classified as available-for-sale.
There is also some impact due to a small portion of the GMDB reinsurance under which claims are positively correlated to equity markets (claims decrease as equity markets fall). b) Reinsurance covering the GLB risk only Equity Shock (in millions of U.S. dollars) +20 % Flat -20 % -40 % -60 % -80 % GLB net amount at risk $ 1,059 $ 1,442 $ 2,074 $ 2,504 $ 2,878 $ 3,085 The treaty claim limits cause the net amount at risk to increase at a declining rate as equity markets fall. 88 Table of Contents c) Reinsurance covering both the GMDB and GLB risks on the same underlying policyholders Equity Shock (in millions of U.S. dollars) +20 % Flat -20 % -40 % -60 % -80 % GMDB net amount at risk $ 51 $ 61 $ 72 $ 82 $ 90 $ 96 GLB net amount at risk 433 537 660 783 901 909 Claims at 100% immediate mortality 32 32 32 32 32 32 The treaty limits control the increase in the GMDB net amount at risk as equity markets fall.
There is also an impact due to a portion of the reinsurance under which claims are positively correlated to equity markets (claims decrease as equity markets fall). b) Reinsurance covering the GLB risk only Equity Shock (in millions of U.S. dollars) +20 % Flat -20 % -40 % -60 % -80 % GLB net amount at risk $ 846 $ 1,136 $ 1,596 $ 2,121 $ 2,486 $ 2,767 The treaty limits cause the net amount at risk to increase at a declining rate as equity markets fall. 94 Table of Contents c) Reinsurance covering both the GMDB and GLB risks on the same underlying policyholders Equity Shock (in millions of U.S. dollars) +20 % Flat -20 % -40 % -60 % -80 % GMDB net amount at risk $ 41 $ 48 $ 59 $ 69 $ 78 $ 85 GLB net amount at risk 351 436 546 668 790 817 Claims at 100% immediate mortality 30 29 29 29 29 29 The treaty limits cause the GMDB and GLB net amount at risk to increase at a declining rate as equity markets fall.
Changes in interest rates and foreign currency exchange rates will have an immediate effect on Shareholders' equity and Comprehensive income and, in certain instances, Net income.
Changes in interest rates and foreign currency exchange rates will have an immediate effect on Shareholders' equity and Comprehensive income and, in certain instances, Net income. The effect of market movements on fixed maturities related to consolidated investment products in the Huatai portfolio (Fixed maturities - CIP) impacts Net income (through Net realized gains (losses)).
Upon adoption of this accounting guidance, changes in fair value will be recorded to Market risk benefits gains (losses) in the Consolidated statements of operations, except for the change in fair value due to a change in the instrument-specific credit risk which will be recognized in Other comprehensive income. Previously, only the GLB were measured at fair value.
Changes in fair value are recorded to Market risk benefits gains (losses) in the Consolidated statements of operations, except for the change in fair value due to a change in the instrument-specific credit risk which is recognized in Other comprehensive income. For additional information refer to Note 1 m) and Note 11 to the Consolidated Financial Statements, under Item 8.
Reinsurance of GMDB and GLB guarantees Chubb views its variable annuity reinsurance business, including guaranteed living benefits (GLB) and guaranteed living death benefits (GMDB), as having a similar risk profile to that of catastrophe reinsurance with the probability of long-term economic loss relatively small, at the time of pricing.
Chubb views its MRB reinsurance business as having a similar risk profile to that of catastrophe reinsurance, with the probability of long-term economic loss relatively small at the time of pricing. Adverse changes in market factors and policyholder behavior will have an impact on both MRB gains (losses) and net income.
Actual sensitivity of our net income may differ from those disclosed in the tables below due to fluctuations in short-term market movements. 87 Table of Contents Sensitivities to equity and interest rate movements (in millions of U.S. dollars) Worldwide Equity Shock Interest Rate Shock +10 % Flat -10 % -20 % -30 % -40 % +100 bps (Increase)/decrease in FVL $ 304 $ 199 $ 72 $ (90) $ (302) $ (552) Increase/(decrease) in hedge value (91) — 91 181 272 362 Increase/(decrease) in net income $ 213 $ 199 $ 163 $ 91 $ (30) $ (190) Flat (Increase)/decrease in FVL $ 124 $ — $ (155) $ (357) $ (596) $ (874) Increase/(decrease) in hedge value (91) — 91 181 272 362 Increase/(decrease) in net income $ 33 $ — $ (64) $ (176) $ (324) $ (512) -100 bps (Increase)/decrease in FVL $ (99) $ (249) $ (443) $ (671) $ (938) $ (1,240) Increase/(decrease) in hedge value (91) — 91 181 272 362 Increase/(decrease) in net income $ (190) $ (249) $ (352) $ (490) $ (666) $ (878) Sensitivities to Other Economic Variables AA-rated Credit Spreads Interest Rate Volatility Equity Volatility (in millions of U.S. dollars) +100 bps -100 bps +2 % -2 % +2 % -2 % (Increase)/decrease in FVL $ 56 $ (63) $ (2) $ 2 $ (15) $ 14 Increase/(decrease) in net income $ 56 $ (63) $ (2) $ 2 $ (15) $ 14 Variable Annuity Net Amount at Risk All our VA reinsurance treaties include annual or aggregate claim limits and many include an aggregate deductible which limit the net amount at risk under these programs.
Actual sensitivity of our net income may differ from those disclosed in the tables below due to fluctuations in short-term market movements. 93 Table of Contents Sensitivities to equity and interest rate movements (in millions of U.S. dollars) Worldwide Equity Shock Interest Rate Shock +10 % Flat -10 % -20 % -30 % -40 % +100 bps (Increase)/decrease in FVL $ 283 $ 187 $ 73 $ (69) $ (263) $ (507) Increase/(decrease) in hedge value (119) — 119 239 358 478 Increase/(decrease) in net income $ 164 $ 187 $ 192 $ 170 $ 95 $ (29) Flat (Increase)/decrease in FVL $ 113 $ — $ (135) $ (313) $ (539) $ (813) Increase/(decrease) in hedge value (119) — 119 239 358 478 Increase/(decrease) in net income $ (6) $ — $ (16) $ (74) $ (181) $ (335) -100 bps (Increase)/decrease in FVL $ (100) $ (231) $ (398) $ (608) $ (860) $ (1,160) Increase/(decrease) in hedge value (119) — 119 239 358 478 Increase/(decrease) in net income $ (219) $ (231) $ (279) $ (369) $ (502) $ (682) Sensitivities to Other Economic Variables AA-rated Credit Spreads Interest Rate Volatility Equity Volatility (in millions of U.S. dollars) +100 bps -100 bps +2 % -2 % +2 % -2 % (Increase)/decrease in FVL $ 54 $ (61) $ (1) $ 1 $ (18) $ 17 Increase/(decrease) in net income $ 54 $ (61) $ (1) $ 1 $ (18) $ 17 Market Risk Benefits Net Amount at Risk All our MRB reinsurance treaties include annual or aggregate claim limits and many include an aggregate deductible which limit the net amount at risk under these programs.
These instruments are recognized as assets or liabilities in our Consolidated Financial Statements and are sensitive to changes in interest rates, foreign currency exchange rates, and equity security prices. As part of our investing activities, from 84 Table of Contents time to time we purchase to be announced mortgage backed securities (TBAs).
At December 31, 2023 and 2022, our notional exposure to derivative instruments was $10.4 90 Table of Contents billion and $9.8 billion, respectively. These instruments are recognized as assets or liabilities in our Consolidated Financial Statements and are sensitive to changes in interest rates, foreign currency exchange rates, and equity security prices.
Under the new accounting guidance, MRB will be measured at fair value using a valuation model based on current exposures, market data, our experience, and other factors.
GAAP accounting guidance for long-duration contracts that affected the accounting for guaranteed minimum death benefits (GMDB) and guaranteed living benefits (GLB) liabilities, collectively referred to as market risk benefits (MRB). MRB are measured at fair value using a valuation model based on current net exposures, market data, our experience, and other factors.
Removed
Except hedging certain non-U.S. net asset or liability positions discussed above, our policies to address these risks in 2022 were not materially different from 2021.
Added
Further, through writing the GLB and GMDB products, collectively referred to as market risk benefits (MRB), we are exposed to volatility in the equity and credit markets, as well as interest rates.
Removed
(2) Includes unhedged portion of euro denominated debt of $3.0 billion and net assets of $1.0 billion in 2022, and $4.9 billion and $1.9 billion, respectively, in 2021. Excludes hedged euro denominated debt of $1.6 billion in 2022 and none in 2021.
Added
The additional 17 percentage point increase in goodwill and other intangible assets was driven by the consolidation of Huatai Group in 2023.
Removed
Net asset exposure is higher in 2022 compared to 2021, reflecting the acquisition of Cigna's business in Asia, with net assets principally denominated in KRW. This is partially offset by the strengthening of the U.S. dollar against most foreign currencies during 2022.
Removed
Effective April 1, 2022, Turkey was designated as a highly inflationary economy and therefore we changed the functional currency for our Turkish operations from Turkish lira to the U.S. dollar. Our net assets denominated in the Turkish lira 86 Table of Contents represented less than 0.1% of consolidated shareholders' equity.
Removed
Therefore, this change in functional currency of our Turkish operations did not have a material impact on our financial condition or results of operations.
Removed
Therefore, we evaluate this business in terms of its long-term economic risk and reward. Effective January 1, 2023, we adopted new U.S. GAAP accounting guidance for long-duration contracts that affects the accounting for GMDB and GLB liabilities, collectively referred to as market risk benefits (MRB).
Removed
The quantitative disclosures below reflect the market risk sensitivities under this new accounting guidance effective for 2023 reporting periods.
Removed
The GMDB net amount at risk continues to increase as equity markets fall because most of these reinsurance treaties do not have annual claim limits calculated as a percentage of the underlying account value. The treaty limits cause the GLB net amount at risk to increase at a declining rate as equity markets fall.

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