EX-99.2 3 y08114exv99w2.htm EX-99.2: SUPPLEMENTARY INVESTOR INFORMATION REPORT EX-99.2:
 

Exhibit 99.2

         
   
The
  Supplementary   March 31, 2005
Chubb
  Investor    
Corporation
  Information    

This report is for informational purposes only. It should be read in conjunction with documents filed by The Chubb Corporation with the Securities and Exchange Commission, including the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

(CHUBB LOGO)



 


 

THE CHUBB CORPORATION

Beginning with the first quarter of 2005, the reporting format for property and casualty underwriting results by line of business has been changed to more closely reflect the way the business is now managed. The new reporting format provides additional clarity in that all Professional Liability business is now reported in one line within Chubb Specialty Insurance, all commercial business is now reported in Chubb Commercial Insurance and Reinsurance Assumed (Chubb Re) is now reported as a separate business unit. For additional information, see the first quarter 2005 earnings release.

Property and casualty underwriting results for the first quarter of 2004 presented herein have been reclassified to conform to the new reporting format.

 


 

THE CHUBB CORPORATION
SUPPLEMENTARY INVESTOR INFORMATION
TABLE OF CONTENTS
MARCH 31, 2005

     
    Page
The Chubb Corporation:
   
Consolidated Balance Sheet Highlights
   1 
Summary of Invested Assets:
   
Corporate
   2 
Property and Casualty
   2 
Investment Income After Taxes:
   
Corporate
   3 
Property and Casualty
   3 
Property and Casualty Insurance Group:
   
Statutory Policyholders’ Surplus
   3 
Change in Net Unpaid Losses
   4 
Underwriting Results
   5-9 
Definitions of Key Terms
   10 

 


 

THE CHUBB CORPORATION
CONSOLIDATED BALANCE SHEET HIGHLIGHTS

                 
    Mar. 31     Dec. 31  
    2005     2004  
    (in millions)  
Invested Assets (at carrying value)
               
Short Term Investments
  $ 1,415.7     $ 1,307.5  
Fixed Maturities
               
Tax Exempt
    14,756.5       14,388.5  
Taxable
    13,782.5       13,620.8  
Equity Securities
    1,969.6       1,841.3  
 
           
Total Invested Assets
  $ 31,924.3     $ 31,158.1  
 
           
Unrealized Appreciation of Fixed Maturities Carried at Amortized Cost
  $ 16.6     $ 21.1  
 
           
Capitalization
               
Long Term Debt
  $ 2,808.8     $ 2,813.7  
Shareholders’ Equity
    10,401.3       10,126.4  
 
           
Total Capitalization
  $ 13,210.1     $ 12,940.1  
 
           
DEBT AS A PERCENTAGE OF TOTAL CAPITALIZATION
    21.3 %     21.7 %
Actual Common Shares Outstanding
    195.3       192.7  
Book Value Per Common Share
  $ 53.26     $ 52.55  
Book Value Per Common Share, with Available-for-Sale Fixed Maturities at Amortized Cost
  $ 51.92     $ 49.83  

Page 1 of 10


 

THE CHUBB CORPORATION

SUMMARY OF INVESTED ASSETS

CORPORATE

                                                 
    Cost or     Market     Carrying  
    Amortized Cost     Value     Value  
    Mar. 31     Dec. 31     Mar. 31     Dec. 31     Mar. 31     Dec. 31  
    2005     2004     2005     2004     2005     2004  
    (in millions)  
Short Term Investments
  $ 422.7     $ 219.8     $ 422.7     $ 219.8     $ 422.7     $ 219.8  
Taxable Fixed Maturities
    1,098.5       1,098.5       1,090.8       1,108.7       1,090.8       1,108.7  
Equity Securities
    4.7       4.7       7.4       7.3       7.4       7.3  
 
                                   
TOTAL
  $ 1,525.9     $ 1,323.0     $ 1,520.9     $ 1,335.8     $ 1,520.9     $ 1,335.8  
 
                                   

PROPERTY AND CASUALTY

                                                 
    Cost or     Market     Carrying  
    Amortized Cost     Value     Value  
    Mar. 31     Dec. 31     Mar. 31     Dec. 31     Mar. 31     Dec. 31  
    2005     2004     2005     2004     2005     2004  
    (in millions)  
Short Term Investments
  $ 993.0     $ 1,087.7     $ 993.0     $ 1,087.7     $ 993.0     $ 1,087.7  
Fixed Maturities
                                               
Tax Exempt
    14,449.6       13,839.8       14,773.1       14,409.6       14,756.5       14,388.5  
Taxable
    12,587.7       12,264.2       12,691.7       12,512.1       12,691.7       12,512.1  
Common Stocks
    1,786.0       1,645.7       1,919.9       1,791.3       1,919.9       1,791.3  
Preferred Stocks
    37.3       36.9       42.3       42.7       42.3       42.7  
 
                                   
TOTAL
  $ 29,853.6     $ 28,874.3     $ 30,420.0     $ 29,843.4     $ 30,403.4     $ 29,822.3  
 
                                   

Page 2 of 10


 

THE CHUBB CORPORATION

INVESTMENT INCOME AFTER TAXES

                 
    THREE MONTHS ENDED  
    MARCH 31  
    2005     2004  
    (in millions)  
CORPORATE INVESTMENT INCOME
  $ 8.1     $ 7.2  
 
           
PROPERTY AND CASUALTY INVESTMENT INCOME
               
(Amounts are shown net of applicable income taxes)
               
Dividends
  $ 11.6     $ 6.6  
Taxable Interest
    96.2       90.0  
Tax Exempt Interest
    149.4       129.3  
Investment Expenses
    (5.0 )     (4.1 )
 
           
TOTAL
  $ 252.2     $ 221.8  
 
           
Effective Tax Rate
    19.5 %     20.1 %
After Tax Annualized Yield
    3.42 %     3.51 %

                After tax annualized yield is based on the average invested assets for the periods presented with fixed maturities at amortized cost and equity securities at market value.

STATUTORY POLICYHOLDERS’ SURPLUS

                         
    Mar. 31     Mar. 31     Dec. 31  
    2005     2004     2004  
            (in millions)          
Estimated Statutory Policyholders’ Surplus
  $ 8,250     $ 6,750     $ 7,848  
Rolling Year Statutory Net Premiums Written
  12,043       11,415       12,005  
Ratio of Statutory Net Premiums Written to Policyholders’ Surplus
    1.46:1       1.69:1       1.53:1  

Statutory Policyholders’ Surplus and Net Premiums Written include all domestic and foreign property and casualty subsidiaries.

Page 3 of 10


 

THE CHUBB CORPORATION

PROPERTY AND CASUALTY

CHANGE IN NET UNPAID LOSSES
THREE MONTHS ENDED MARCH 31, 2005

                                         
    Net Unpaid Losses             All Other  
                            IBNR     Unpaid Losses  
                    Increase     Increase     Increase  
    3/31/05     12/31/04     (Decrease)     (Decrease)     (Decrease)  
    (in millions)  
Personal Insurance
                                       
Automobile
  $ 390.0     $ 378.4     $ 11.6     $ 6.3     $ 5.3  
Homeowners
    666.9       679.6       (12.7 )     3.1       (15.8 )
Other
    549.4       521.3       28.1       13.1       15.0  
 
                             
Total Personal
    1,606.3       1,579.3       27.0       22.5       4.5  
 
                             
Commercial Insurance
                                       
Multiple Peril
    1,474.5       1,466.7       7.8       23.8       (16.0 )
Casualty
    4,540.7       4,405.9       134.8       114.1       20.7  
Workers’ Compensation
    1,377.7       1,311.2       66.5       66.2       .3  
Property and Marine
    609.4       622.2       (12.8 )     (23.3 )     10.5  
 
                             
Total Commercial
    8,002.3       7,806.0       196.3       180.8       15.5  
 
                             
Specialty Insurance
                                       
Professional Liability
    6,391.1       6,191.3       199.8       164.7       35.1  
Surety
    115.5       83.3       32.2       (2.8 )     35.0  
 
                             
Total Specialty
    6,506.6       6,274.6       232.0       161.9       70.1  
 
                             
Total Insurance
    16,115.2       15,659.9       455.3       365.2       90.1  
Reinsurance Assumed
    1,204.0       1,148.8       55.2       59.8       (4.6 )
 
                             
Total
  $ 17,319.2     $ 16,808.7     $ 510.5     $ 425.0     $ 85.5  
 
                             

The net unpaid losses as of December 31, 2004 include certain reclassifications to conform with the 2005 presentation. The total net unpaid losses is not affected.

Page 4 of 10


 

THE CHUBB CORPORATION — WORLDWIDE
PROPERTY AND CASUALTY UNDERWRITING RESULTS
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004
(MILLIONS OF DOLLARS)

                                                                 
    Personal                     Other     Total  
    Automobile     Homeowners     Personal     Personal  
    2005     2004     2005     2004     2005     2004     2005     2004  
Net Premiums Written
  $ 145.8     $ 144.6     $ 451.9     $ 412.8     $ 157.8     $ 162.1     $ 755.5     $ 719.5  
Increase (Decrease) in Unearned Premiums
    (10.7 )     (5.5 )     (45.2 )     (39.3 )     18.6       28.8       (37.3 )     (16.0 )
 
                                               
Net Premiums Earned
    156.5       150.1       497.1       452.1       139.2       133.3       792.8       735.5  
 
                                               
Net Losses Paid
    94.2       95.2       251.2       238.9       53.4       60.5       398.8       394.6  
Increase (Decrease) in Outstanding Losses
    11.6       6.0       (12.7 )     63.3       28.1       11.6       27.0       80.9  
 
                                               
Net Losses Incurred
    105.8       101.2       238.5       302.2       81.5       72.1       425.8       475.5  
 
                                               
Expenses Incurred
    40.9       41.6       147.2       147.4       44.5       47.0       232.6       236.0  
Dividends Incurred
    0.0       0.0       0.0       0.0       0.0       0.0       0.0       0.0  
 
                                               
Statutory Underwriting Income (Loss)
  $ 9.8     $ 7.3     $ 111.4     $ 2.5     $ 13.2     $ 14.2     $ 134.4     $ 24.0  
 
                                               
Ratios After Dividends to Policyholders:
                                                               
Loss
    67.6 %     67.4 %     48.0 %     66.9 %     58.6 %     54.1 %     53.7 %     64.7 %
Expense
    28.1       28.8       32.6       35.7       28.2       29.0       30.8       32.8  
 
                                               
Combined
    95.7 %     96.2 %     80.6 %     102.6 %     86.8 %     83.1 %     84.5 %     97.5 %
 
                                               
Premiums Written as a % of Total
    4.7 %     4.8 %     14.8 %     13.7 %     5.2 %     5.3 %     24.7 %     23.8 %

    The property and casualty underwriting results for 2004 include certain reclassifications to conform with the 2005 presentation. The worldwide totals are not affected.

Page 5 of 10


 

THE CHUBB CORPORATION — WORLDWIDE
PROPERTY AND CASUALTY UNDERWRITING RESULTS
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004
(MILLIONS OF DOLLARS)

                                                                                 
                                    Commercial     Commercial        
    Commercial     Commercial     Workers'     Property     Total  
    Multiple Peril     Casualty     Compensation     and Marine     Commercial  
    2005     2004     2005     2004     2005     2004     2005     2004     2005     2004  
Net Premiums Written
  $ 336.4     $ 335.4     $ 452.2     $ 445.0     $ 277.4     $ 273.4     $ 299.4     $ 286.4     $ 1,365.4     $ 1,340.2  
Increase (Decrease) in Unearned Premiums
    5.0       28.7       25.8       69.3       48.8       74.5       28.6       22.7       108.2       195.2  
 
                                                           
Net Premiums Earned
    331.4       306.7       426.4       375.7       228.6       198.9       270.8       263.7       1,257.2       1,145.0  
 
                                                           
Net Losses Paid
    156.4       126.9       150.1       178.1       80.0       72.6       105.9       107.5       492.4       485.1  
Increase (Decrease) in Outstanding Losses
    7.8       29.0       134.8       35.7       66.5       59.1       (12.8 )     (5.6 )     196.3       118.2  
 
                                                           
Net Losses Incurred
    164.2       155.9       284.9       213.8       146.5       131.7       93.1       101.9       688.7       603.3  
 
                                                           
Expenses Incurred
    109.9       115.1       121.4       124.7       54.7       53.4       106.9       105.5       392.9       398.7  
Dividends Incurred
    0.0       0.0       0.0       0.0       6.3       6.6       0.0       0.0       6.3       6.6  
 
                                                           
Statutory Underwriting Income (Loss)
  $ 57.3     $ 35.7     $ 20.1     $ 37.2     $ 21.1     $ 7.2     $ 70.8     $ 56.3     $ 169.3     $ 136.4  
 
                                                           
Ratios After Dividends to Policyholders:
                                                                               
Loss
    49.5 %     50.9 %     66.8 %     56.9 %     65.9 %     68.5 %     34.4 %     38.7 %     55.1 %     53.0 %
Expense
    32.7       34.3       26.9       28.0       20.2       20.0       35.7       36.8       28.9       29.9  
 
                                                           
Combined
    82.2 %     85.2 %     93.7 %     84.9 %     86.1 %     88.5 %     70.1 %     75.5 %     84.0 %     82.9 %
 
                                                           
Premiums Written as a % of Total
    11.0 %     11.1 %     14.8 %     14.8 %     9.1 %     9.1 %     9.8 %     9.5 %     44.7 %     44.5 %

    The property and casualty underwriting results for 2004 include certain reclassifications to conform with the 2005 presentation. The worldwide totals are not affected.

Page 6 of 10


 

THE CHUBB CORPORATION — WORLDWIDE
PROPERTY AND CASUALTY UNDERWRITING RESULTS
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004
(MILLIONS OF DOLLARS)

                                                 
    Professional                     Total  
    Liability     Surety     Specialty  
    2005     2004     2005     2004     2005     2004  
Net Premiums Written
  $ 646.0     $ 640.7     $ 53.2     $ 48.9     $ 699.2     $ 689.6  
Increase (Decrease) in Unearned Premiums
    (32.4 )     5.2       9.7       7.1       (22.7 )     12.3  
 
                                   
Net Premiums Earned
    678.4       635.5       43.5       41.8       721.9       677.3  
 
                                   
Net Losses Paid
    325.8       291.7       18.0       0.3       343.8       292.0  
Increase (Decrease) in Outstanding Losses
    199.8       219.6       32.2       2.3       232.0       221.9  
 
                                   
Net Losses Incurred
    525.6       511.3       50.2       2.6       575.8       513.9  
 
                                   
Expenses Incurred
    156.0       171.8       19.5       19.1       175.5       190.9  
Dividends Incurred
    0.0       0.0       0.6       0.7       0.6       0.7  
 
                                   
Statutory Underwriting Income (Loss)
  $ (3.2 )   $ (47.6 )   $ (26.8 )   $ 19.4     $ (30.0 )   $ (28.2 )
 
                                   
Ratios After Dividends to Policyholders:
                                               
Loss
    77.5 %     80.5 %     117.0 %     6.3 %     79.9 %     76.0 %
Expense
    24.1       26.8       37.1       39.7       25.1       27.7  
 
                                   
Combined
    101.6 %     107.3 %     154.1 %     46.0 %     105.0 %     103.7 %
 
                                   
Premiums Written as a % of Total
    21.1 %     21.2 %     1.8 %     1.6 %     22.9 %     22.8 %

    The property and casualty underwriting results for 2004 include certain reclassifications to conform with the 2005 presentation. The worldwide totals are not affected.

Page 7 of 10


 

THE CHUBB CORPORATION — WORLDWIDE
PROPERTY AND CASUALTY UNDERWRITING RESULTS
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004
(MILLIONS OF DOLLARS)

                                                 
    Total     Reinsurance     Worldwide  
    Insurance     Assumed     Total  
    2005     2004     2005     2004     2005     2004  
Net Premiums Written
  $ 2,820.1     $ 2,749.3     $ 236.1     $ 268.1     $ 3,056.2     $ 3,017.4  
Increase (Decrease) in Unearned Premiums
    48.2       191.5       (27.1 )     31.9       21.1       223.4  
 
                                   
Net Premiums Earned
    2,771.9       2,557.8       263.2       236.2       3,035.1       2,794.0  
 
                                   
Net Losses Paid
    1,235.0       1,171.7       89.5       55.6       1,324.5       1,227.3  
Increase (Decrease) in Outstanding Losses
    455.3       421.0       55.2       92.3       510.5       513.3  
 
                                   
Net Losses Incurred
    1,690.3       1,592.7       144.7       147.9       1,835.0       1,740.6  
 
                                   
Expenses Incurred
    801.0       825.6       78.0       81.7       879.0       907.3  
Dividends Incurred
    6.9       7.3       0.0       0.0       6.9       7.3  
 
                                   
Statutory Underwriting Income (Loss)
  $ 273.7     $ 132.2     $ 40.5     $ 6.6       314.2       138.8  
 
                                       
Increase in Deferred Acquisition Costs
                                    5.0       39.6  
 
                                           
GAAP Underwriting Income
                                  $ 319.2     $ 178.4  
 
                                           
Ratios After Dividends to Policyholders:
                                               
Loss
    61.1 %     62.5 %     55.0 %     62.6 %     60.6 %     62.5 %
Expense
    28.5       30.1       33.0       30.5       28.8       30.1  
 
                                   
Combined
    89.6 %     92.6 %     88.0 %     93.1 %     89.4 %     92.6 %
 
                                   
Premiums Written as a % of Total
    92.3 %     91.1 %     7.7 %     8.9 %     100.0 %     100.0 %

    The property and casualty underwriting results for 2004 include certain reclassifications to conform with the 2005 presentation. The worldwide totals are not affected.

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THE CHUBB CORPORATION — WORLDWIDE
PROPERTY AND CASUALTY UNDERWRITING RESULTS
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004
(MILLIONS OF DOLLARS)

                                                 
                                    Worldwide  
    United States     Foreign     Total  
    2005     2004     2005     2004     2005     2004  
Net Premiums Written
  $ 2,389.6     $ 2,396.0     $ 666.6     $ 621.4     $ 3,056.2     $ 3,017.4  
Increase (Decrease) in Unearned Premiums
    (76.2 )     118.7       97.3       104.7       21.1       223.4  
 
                                   
Net Premiums Earned
    2,465.8       2,277.3       569.3       516.7       3,035.1       2,794.0  
 
                                   
Net Losses Paid
    1,169.3       1,068.4       155.2       158.9       1,324.5       1,227.3  
Increase (Decrease) in Outstanding Losses
    355.5       386.7       155.0       126.6       510.5       513.3  
 
                                   
Net Losses Incurred
    1,524.8       1,455.1       310.2       285.5       1,835.0       1,740.6  
 
                                   
Expenses Incurred
    656.3       690.2       222.7       217.1       879.0       907.3  
Dividends Incurred
    6.9       7.3       0.0       0.0       6.9       7.3  
 
                                   
Statutory Underwriting Income (Loss)
  $ 277.8     $ 124.7     $ 36.4     $ 14.1       314.2       138.8  
 
                                       
Increase in Deferred Acquisition Costs
                                    5.0       39.6  
 
                                           
GAAP Underwriting Income
                                  $ 319.2     $ 178.4  
 
                                           
Ratios After Dividends to Policyholders:
                                               
Loss
    62.0 %     64.1 %     54.5 %     55.3 %     60.6 %     62.5 %
Expense
    27.5       28.9       33.4       34.9       28.8       30.1  
 
                                   
Combined
    89.5 %     93.0 %     87.9 %     90.2 %     89.4 %     92.6 %
 
                                   
Premiums Written as a % of Total
    78.2 %     79.4 %     21.8 %     20.6 %     100.0 %     100.0 %

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THE CHUBB CORPORATION

Definitions of Key Terms

Underwriting Income (Loss)
Management evaluates underwriting results separately from investment results. The underwriting operations consist of four separate business units: personal insurance, commercial insurance, specialty insurance and reinsurance assumed. Performance of the business units is based on statutory underwriting results. Statutory accounting principles differ in certain respects from generally accepted accounting principles (GAAP). Under statutory accounting principles, policy acquisition and other underwriting expenses are recognized immediately, not at the time premiums are earned. Statutory underwriting income (loss) is arrived at by reducing premiums earned by losses and loss expenses incurred and statutory underwriting expenses incurred.

Management uses underwriting results determined in accordance with GAAP, among other measures, to assess the overall performance of the underwriting operations. To convert statutory underwriting results to a GAAP basis, policy acquisition expenses are deferred and amortized over the period in which the related premiums are earned. Underwriting income (loss) determined in accordance with GAAP is defined as premiums earned less losses and loss expenses incurred and GAAP underwriting expenses incurred.

Property and Casualty Investment Income After Income Tax
Management uses property and casualty investment income after income tax, a non-GAAP financial measure, to evaluate its investment performance because it reflects the impact of any change in the proportion of the investment portfolio invested in tax-exempt securities and is therefore more meaningful for analysis purposes than investment income before income taxes.

Book Value per Common Share with Available-for-Sale Fixed Maturities at Amortized Cost
Book value per share represents the portion of consolidated shareholders’ equity attributable to one share of common stock outstanding as of the balance sheet date. Consolidated shareholders’ equity includes, as part of accumulated other comprehensive income, the after-tax appreciation or depreciation on the Corporation’s available-for-sale fixed maturities, which are carried at market value. The appreciation or depreciation on available-for-sale fixed maturities is subject to fluctuation due to changes in interest rates and therefore could distort the analysis of trends. Management believes that book value per common share with available-for-sale fixed maturities at amortized cost, a non-GAAP financial measure, is an important measure of the underlying equity attributable to one share of common stock.

Combined Loss and Expense Ratio or Combined Ratio
The combined loss and expense ratio, expressed as a percentage, is the key measure of underwriting profitability. Management uses the combined loss and expense ratio calculated in accordance with statutory accounting principles applicable to property and casualty insurance companies to evaluate the performance of the underwriting operations. It is the sum of the ratio of losses and loss expenses to premiums earned (loss ratio) plus the ratio of statutory underwriting expenses to premiums written (expense ratio) after reducing both premium amounts by dividends to policyholders.

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