EX-99.2 3 y55283exv99w2.htm EX-99.2: SUPPLEMENTARY INVESTOR INFORMATION REPORT (FURNISHED PURSUANT TO ITEM 2.02 OF FORM 8-K) EX-99.2
 

Exhibit 99.2

         
The
  Supplementary   March 31, 2008
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
SUPPLEMENTARY INVESTOR INFORMATION
TABLE OF CONTENTS
MARCH 31, 2008
     
    Page
The Chubb Corporation:
   
Consolidated Balance Sheet Highlights
  1
Share Repurchase Activity
  2
 
   
Summary of Invested Assets:
   
Corporate
  3
Property and Casualty
  3
 
   
Investment Income After Taxes:
   
Corporate
  4
Property and Casualty
  4
 
   
Property and Casualty Insurance Group:
   
Statutory Policyholders’ Surplus
  4
Change in Net Unpaid Losses
  5
Underwriting Results
  6-10
 
   
Definitions of Key Terms
  11

 


 

THE CHUBB CORPORATION
CONSOLIDATED BALANCE SHEET HIGHLIGHTS
                 
    Mar. 31     Dec. 31  
    2008     2007  
    (in millions)  
Invested Assets (at carrying value)
               
Short Term Investments
  $ 1,892     $ 1,839  
Fixed Maturities
               
Tax Exempt
    18,459       18,559  
Taxable
    15,612       15,312  
Equity Securities
    2,008       2,320  
Other Invested Assets
    2,108       2,051  
 
           
Total Invested Assets
  $ 40,079     $ 40,081  
 
           
 
               
Capitalization
               
Long Term Debt
  $ 3,460     $ 3,460  
Shareholders’ Equity
    14,347       14,445  
 
           
Total Capitalization
  $ 17,807     $ 17,905  
 
           
 
               
DEBT AS A PERCENTAGE OF TOTAL CAPITALIZATION
    19.4 %     19.3 %
 
               
Actual Common Shares Outstanding
    365.5       374.6  
 
               
Book Value Per Common Share
  $ 39.25     $ 38.56  
 
               
Book Value Per Common Share, with Available-for-Sale Fixed Maturities at Amortized Cost
  $ 38.47     $ 37.87  

Page 1 of 11


 

THE CHUBB CORPORATION
SHARE REPURCHASE ACTIVITY
(dollars in millions, except per share amounts)
                 
    Three Months   From
    Ended   December 2005
    March 31, 2008   to March 31, 2008
Cost of Shares Repurchased
    $582       $4,158  
 
               
Average Cost Per Share
    $51.37       $51.20  
 
               
Shares Repurchased
    11,319,984       81,207,314  
In December 2005, the Board of Directors authorized the repurchase of up to 28,000,000 shares of the Corporation’s common stock. No shares remain under the 2005 share repurchase authorization.
In December 2006, the Board of Directors authorized the repurchase of up to 20,000,000 shares of the Corporation’s common stock. In March 2007, the Board of Directors authorized an increase of 20,000,000 shares to the authorization approved in December 2006. No shares remain under the 2006 share repurchase authorization.
In December 2007, the Board of Directors authorized the repurchase of up to 28,000,000 shares of the Corporation’s common stock. The authorization has no expiration date. As of March 31, 2008, 14,792,686 shares remained under the share repurchase authorization.

Page 2 of 11


 

THE CHUBB CORPORATION
SUMMARY OF INVESTED ASSETS
CORPORATE
                                 
    Cost or     Carrying  
    Amortized Cost     Value (a)  
    Mar. 31     Dec. 31     Mar. 31     Dec. 31  
    2008     2007     2008     2007  
            (in millions)          
Short Term Investments
  $ 658     $ 934     $ 658     $ 934  
 
                               
Taxable Fixed Maturities
    1,033       1,050       1,038       1,045  
 
                               
Equity Securities
    289       289       380       478  
 
                       
 
                               
TOTAL
  $ 1,980     $ 2,273     $ 2,076     $ 2,457  
 
                       
PROPERTY AND CASUALTY
                                 
    Cost or     Carrying  
    Amortized Cost     Value (a)  
    Mar. 31     Dec. 31     Mar. 31     Dec. 31  
    2008     2007     2008     2007  
            (in millions)          
Short Term Investments
  $ 1,234     $ 905     $ 1,234     $ 905  
 
                               
Fixed Maturities
                               
 
Tax Exempt
    18,180       18,208       18,459       18,559  
 
Taxable
    14,415       14,216       14,574       14,267  
 
                               
Equity Securities
    1,580       1,618       1,628       1,842  
 
                               
Other Invested Assets
    2,108       2,051       2,108       2,051  
 
                       
 
                               
TOTAL
  $ 37,517     $ 36,998     $ 38,003     $ 37,624  
 
                       
(a)   Short term investments are carried at amortized cost, which approximates fair value. Fixed maturities and equity securities are carried at fair value. Other invested assets, which include private equity limited partnerships, are carried at Chubb’s equity in the net assets of the partnerships.

Page 3 of 11


 

THE CHUBB CORPORATION
INVESTMENT INCOME AFTER TAXES
                 
    THREE MONTHS ENDED  
    MARCH 31  
    2008     2007  
    (in millions)  
CORPORATE INVESTMENT INCOME
  $ 13     $ 14  
 
           
 
               
PROPERTY AND CASUALTY INVESTMENT INCOME
               
Tax Exempt Interest
  $ 185     $ 178  
Taxable Interest
    127       118  
Other
    20       16  
Investment Expenses
    (5 )     (7 )
 
           
TOTAL
  $ 327     $ 305  
 
           
 
               
Effective Tax Rate
    20.2 %     19.9 %
After-Tax Annualized Yield
    3.50 %     3.45 %
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 fair value.
STATUTORY POLICYHOLDERS’ SURPLUS
                         
    Mar. 31     Dec. 31     Mar. 31  
    2008     2007     2007  
    (in millions)  
Estimated Statutory Policyholders’ Surplus
  $ 13,300     $ 12,998     $ 11,950  
 
                       
Rolling Year Statutory Net Premiums Written
  $ 11,910     $ 11,829     $ 11,899  
 
                       
Ratio of Statutory Net Premiums Written to Policyholders’ Surplus
    0.90:1       0.91:1       1.00:1  
Statutory Policyholders’ Surplus and Net Premiums Written include all domestic and foreign property and casualty subsidiaries.

Page 4 of 11


 

THE CHUBB CORPORATION
PROPERTY AND CASUALTY
CHANGE IN NET UNPAID LOSSES
THREE MONTHS ENDED MARCH 31, 2008
                                         
    Net Unpaid Losses             All Other  
          IBNR     Unpaid Losses  
                    Increase     Increase     Increase  
    3/31/08     12/31/07     (Decrease)     (Decrease)     (Decrease)  
    (in millions)  
Personal Insurance
                                       
 
Automobile
  $ 407     $ 411     $ (4 )   $     $ (4 )
 
Homeowners
    717       705       12       1       11  
 
Other
    780       748       32       22       10  
 
                             
 
Total Personal
    1,904       1,864       40       23       17  
 
                             
 
Commercial Insurance
                                       
 
Multiple Peril
    1,616       1,619       (3 )     28       (31 )
 
Casualty
    5,692       5,540       152       145       7  
 
Workers’ Compensation
    1,939       1,910       29       21       8  
 
Property and Marine
    702       677       25       17       8  
 
                             
 
Total Commercial
    9,949       9,746       203       211       (8 )
 
                             
 
Specialty Insurance
                                       
 
Professional Liability
    7,605       7,526       79       154       (75 )
 
Surety
    60       71       (11 )           (11 )
 
                             
 
Total Specialty
    7,665       7,597       68       154       (86 )
 
                             
 
Total Insurance
    19,518       19,207       311       388       (77 )
 
Reinsurance Assumed
    1,078       1,109       (31 )     (19 )     (12 )
 
                             
 
                                       
Total
  $ 20,596     $ 20,316     $ 280     $ 369     $ (89 )
 
                             

Page 5 of 11


 

THE CHUBB CORPORATION — WORLDWIDE
PROPERTY AND CASUALTY UNDERWRITING RESULTS
FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007
(MILLIONS OF DOLLARS)
                                                                 
    Personal                     Other     Total  
    Automobile     Homeowners     Personal     Personal  
    2008     2007     2008     2007     2008     2007     2008     2007  
Net Premiums Written
  $ 142     $ 147     $ 539     $ 520     $ 196     $ 173     $ 877     $ 840  
Increase (Decrease) in Unearned Premiums
    (14 )     (18 )     (70 )     (55 )     21       19       (63 )     (54 )
 
                                               
 
                                                               
Net Premiums Earned
    156       165       609       575       175       154       940       894  
 
                                               
 
                                                               
Net Losses Paid
    102       110       268       243       77       80       447       433  
Increase (Decrease) in Outstanding Losses
    (4 )     (2 )     12       (23 )     32       17       40       (8 )
 
                                               
 
                                                               
Net Losses Incurred
    98       108       280       220       109       97       487       425  
 
                                               
 
                                                               
Expenses Incurred
    43       44       184       171       62       52       289       267  
 
                                                               
Dividends Incurred
                                               
 
                                               
 
                                                               
Statutory Underwriting Income
  $ 15     $ 13     $ 145     $ 184     $ 4     $ 5     $ 164     $ 202  
 
                                               
 
                                                               
Ratios After Dividends to Policyholders:
                                                               
 
                                                               
Loss
    62.8 %     65.5 %     46.0 %     38.2 %     62.3 %     63.0 %     51.8 %     47.5 %
Expense
    30.3       29.9       34.1       32.9       31.6       30.1       33.0       31.8  
 
                                               
 
                                                               
Combined
    93.1 %     95.4 %     80.1 %     71.1 %     93.9 %     93.1 %     84.8 %     79.3 %
 
                                               
 
                                                               
Premiums Written as a % of Total
    4.8 %     5.1 %     18.4 %     18.1 %     6.7 %     6.0 %     29.9 %     29.2 %

Page 6 of 11


 

THE CHUBB CORPORATION — WORLDWIDE
PROPERTY AND CASUALTY UNDERWRITING RESULTS
FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007
(MILLIONS OF DOLLARS)
                                                                                 
                                    Commercial     Commercial        
    Commercial     Commercial     Workers’     Property     Total  
    Multiple Peril     Casualty     Compensation     and Marine     Commercial  
    2008     2007     2008     2007     2008     2007     2008     2007     2008     2007  
Net Premiums Written
  $ 295     $ 307     $ 460     $ 441     $ 248     $ 257     $ 337     $ 301     $ 1,340     $ 1,306  
Increase (Decrease) in Unearned Premiums
    (23 )     (13 )     25       12       31       29       41       1       74       29  
 
                                                           
 
                                                                               
Net Premiums Earned
    318       320       435       429       217       228       296       300       1,266       1,277  
 
                                                           
 
                                                                               
Net Losses Paid
    138       160       128       230       98       86       147       145       511       621  
Increase (Decrease) in Outstanding Losses
    (3 )     (5 )     152       55       29       41       25       24       203       115  
 
                                                           
 
                                                                               
Net Losses Incurred
    135       155       280       285       127       127       172       169       714       736  
 
                                                           
 
                                                                               
Expenses Incurred
    106       107       129       123       53       52       118       111       406       393  
 
                                                                               
Dividends Incurred
                            8       4                   8       4  
 
                                                           
 
                                                                               
Statutory Underwriting Income
  $ 77     $ 58     $ 26     $ 21     $ 29     $ 45     $ 6     $ 20     $ 138     $ 144  
 
                                                           
 
                                                                               
Ratios After Dividends to Policyholders:
                                                                               
 
                                                                               
Loss
    42.5 %     48.4 %     64.4 %     66.4 %     60.8 %     56.7 %     58.1 %     56.3 %     56.7 %     57.8 %
Expense
    35.9       34.9       28.0       27.9       22.1       20.6       35.0       36.9       30.5       30.2  
 
                                                           
 
                                                                               
Combined
    78.4 %     83.3 %     92.4 %     94.3 %     82.9 %     77.3 %     93.1 %     93.2 %     87.2 %     88.0 %
 
                                                           
 
                                                                               
Premiums Written as a % of Total
    10.0 %     10.7 %     15.7 %     15.4 %     8.4 %     9.0 %     11.5 %     10.5 %     45.6 %     45.6 %

Page 7 of 11


 

THE CHUBB CORPORATION — WORLDWIDE
PROPERTY AND CASUALTY UNDERWRITING RESULTS
FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007
(MILLIONS OF DOLLARS)
                                                 
    Professional                     Total  
    Liability     Surety     Specialty  
    2008     2007     2008     2007     2008     2007  
Net Premiums Written
  $ 604     $ 597     $ 99     $ 84     $ 703     $ 681  
Increase (Decrease) in Unearned Premiums
    (64 )     (66 )     17       6       (47 )     (60 )
 
                                   
 
                                               
Net Premiums Earned
    668       663       82       78       750       741  
 
                                   
 
                                               
Net Losses Paid
    302       354       12       1       314       355  
Increase (Decrease) in Outstanding Losses
    79       63       (11 )           68       63  
 
                                   
 
                                               
Net Losses Incurred
    381       417       1       1       382       418  
 
                                   
 
                                               
Expenses Incurred
    161       156       29       25       190       181  
 
                                               
Dividends Incurred
                1       1       1       1  
 
                                   
 
                                               
Statutory Underwriting Income
  $ 126     $ 90     $ 51     $ 51     $ 177     $ 141  
 
                                   
 
                                               
Ratios After Dividends to Policyholders:
                                               
 
                                               
Loss
    57.0 %     62.9 %     1.2 %     1.3 %     51.0 %     56.5 %
Expense
    26.7       26.1       29.6       30.1       27.1       26.6  
 
                                   
 
                                               
Combined
    83.7 %     89.0 %     30.8 %     31.4 %     78.1 %     83.1 %
 
                                   
 
                                               
Premiums Written as a % of Total
    20.6 %     20.9 %     3.4 %     2.9 %     24.0 %     23.8 %

Page 8 of 11


 

THE CHUBB CORPORATION — WORLDWIDE
PROPERTY AND CASUALTY UNDERWRITING RESULTS
FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007
(MILLIONS OF DOLLARS)
                                                 
    Total     Reinsurance     Worldwide  
    Insurance     Assumed     Total  
    2008     2007     2008     2007     2008     2007  
Net Premiums Written
  $ 2,920     $ 2,827     $ 16     $ 40     $ 2,936     $ 2,867  
Increase (Decrease) in Unearned Premiums
    (36 )     (85 )     (4 )     (33 )     (40 )     (118 )
 
                                   
 
                                               
Net Premiums Earned
    2,956       2,912       20       73       2,976       2,985  
 
                                   
 
                                               
Net Losses Paid
    1,272       1,409       32       51       1,304       1,460  
Increase (Decrease) in Outstanding Losses
    311       170       (31 )     (50 )     280       120  
 
                                   
 
                                               
Net Losses Incurred
    1,583       1,579       1       1       1,584       1,580  
 
                                   
 
                                               
Expenses Incurred
    885       841       9       29       894       870  
 
                                               
Dividends Incurred
    9       5                   9       5  
 
                                   
 
                                               
Statutory Underwriting Income
  $ 479     $ 487     $ 10     $ 43       489       530  
 
                                       
 
                                               
Increase (Decrease) in Deferred Acquisition Costs
                                    13       (3 )
 
                                           
 
                                               
GAAP Underwriting Income
                                  $ 502     $ 527  
 
                                           
 
                                               
Ratios After Dividends to Policyholders:
                                               
 
                                               
Loss
    53.7 %     54.3 %     * %     * %     53.4 %     53.0 %
Expense
    30.4       29.8       *       *       30.5       30.4  
 
                                   
 
                                               
Combined
    84.1 %     84.1 %     * %     * %     83.9 %     83.4 %
 
                                   
 
                                               
Premiums Written as a % of Total
    99.5 %     98.6 %     0.5 %     1.4 %     100.0 %     100.0 %

*   Combined, loss and expense ratios are no longer presented for Reinsurance Assumed since this business is in run-off.

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THE CHUBB CORPORATION — WORLDWIDE
PROPERTY AND CASUALTY UNDERWRITING RESULTS
FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007
(MILLIONS OF DOLLARS)
                                                 
                    Outside        
                    the     Worldwide  
    United States     United States     Total  
    2008     2007     2008     2007     2008     2007  
Net Premiums Written
  $ 2,135     $ 2,166     $ 801     $ 701     $ 2,936     $ 2,867  
Increase (Decrease) in Unearned Premiums
    (132 )     (183 )     92       65       (40 )     (118 )
 
                                   
 
                                               
Net Premiums Earned
    2,267       2,349       709       636       2,976       2,985  
 
                                   
 
                                               
Net Losses Paid
    1,140       1,167       164       293       1,304       1,460  
Increase (Decrease) in Outstanding Losses
    110       113       170       7       280       120  
 
                                   
 
Net Losses Incurred
    1,250       1,280       334       300       1,584       1,580  
 
                                   
 
Expenses Incurred
    614       623       280       247       894       870  
 
                                               
Dividends Incurred
    9       5                   9       5  
 
                                   
 
                                               
Statutory Underwriting Income
  $ 394     $ 441     $ 95     $ 89       489       530  
 
                                       
 
                                               
Increase (Decrease) in Deferred Acquisition Costs
                                    13       (3 )
 
                                           
 
                                               
GAAP Underwriting Income
                                  $ 502     $ 527  
 
                                           
 
                                               
Ratios After Dividends to Policyholders:
                                               
 
                                               
Loss
    55.4 %     54.6 %     47.1 %     47.2 %     53.4 %     53.0 %
Expense
    28.9       28.8       35.0       35.2       30.5       30.4  
 
                                   
 
                                               
Combined
    84.3 %     83.4 %     82.1 %     82.4 %     83.9 %     83.4 %
 
                                   
 
                                               
Premiums Written as a % of Total
    72.7 %     75.5 %     27.3 %     24.5 %     100.0 %     100.0 %

Page 10 of 11


 

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 measured based on statutory underwriting results. Statutory accounting principles applicable to property and casualty insurance companies 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 common 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 fair 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 Ratio or Combined Loss and Expense 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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