8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) October 22, 2009

THE CHUBB CORPORATION

(Exact name of registrant as specified in its charter)

New Jersey	1-8661	13-2595722
(State or other jurisdiction of	(Commission	(IRS Employer
incorporation)	File Number)	Identification No.)

15 Mountain View Road, Warren, New Jersey	07059
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (908) 903-2000

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

Item 2.02	Results of Operations and Financial Condition
Item 9.01	Financial Statements and Exhibits
Signatures
Exhibit Index to Current Report on Form 8-K filed on October 22, 2009
Press release dated October 22, 2009 (furnished pursuant to Item 2.02 of Form 8-K)
Supplementary Investor Information Report (furnished pursuant to Item 2.02 of Form 8-K)

Item 2.02 Results of Operations and Financial Condition.

(a) The following information, including the text of the exhibits attached hereto, is furnished pursuant to Item 2.02 of Form 8-K. On October 22, 2009, The Chubb Corporation (Chubb) issued a press release announcing its financial results for the quarter ended September 30, 2009. On October 22, 2009, Chubb also posted on its web site at www.chubb.com the Supplementary Investor Information Report (SIIR) relating to its 2009 third quarter results. Copies of the press release and the SIIR, both of which are incorporated by reference into this Item 2.02 as if fully set forth herein, are attached to this Form 8-K as Exhibits 99.1 and 99.2, respectively. In its press release, the SIIR and the conference call to discuss its 2009 third quarter results, scheduled to be webcast at 5:00 P.M. on October 22, 2009, Chubb presents, and will present, its results of operations in the manner that it believes is most meaningful to investors, which includes certain measures that are not based on accounting principles generally accepted in the United States.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

99.1	Press release dated October 22, 2009 (furnished pursuant to Item 2.02 of Form 8-K)
99.2	Supplementary Investor Information Report (furnished pursuant to Item 2.02 of Form 8-K)

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	THE CHUBB CORPORATION
Date: October 22, 2009	By:	/s/ John J. Kennedy
		Name:	John J. Kennedy
		Title:	Senior Vice President and Chief Accounting Officer

EXHIBIT INDEX TO CURRENT REPORT ON FORM 8-K
FILED ON OCTOBER 22, 2009

Exhibit No.	Description
99.1	Press release dated October 22, 2009 (furnished pursuant to Item 2.02 of Form 8-K)
99.2	Supplementary Investor Information Report (furnished pursuant to Item 2.02 of Form 8-K)

EX-99.1

Exhibit 99.1

	News from The Chubb Corporation
		The Chubb Corporation
		15 Mountain View Road • P.O. Box 1615
		Warren, New Jersey 07061-1615
FOR IMMEDIATE RELEASE		Telephone: 908-903-2000

Chubb Reports Third Quarter Net Income per Share of $1.69;
Operating Income per Share Is Up 68% to $1.56;
Combined Ratio Improves to 85.4%

2009 Operating Income per Share Guidance
Is Increased to Range of $5.90 to $6.00

     WARREN, New Jersey, October 22, 2009 — The Chubb Corporation [NYSE: CB] today reported that net income in the third quarter of 2009 was $596 million or $1.69 per share, compared to $264 million or $0.73 per share in the third quarter of 2008.

     Operating income, which the company defines as net income excluding after-tax realized investment gains and losses, increased 63% to $552 million from $338 million in the third quarter of 2008. Operating income per share increased 68% to $1.56 from $0.93.

     Total net written premiums for the third quarter declined 7% to $2.7 billion from $2.9 billion; they declined 5% excluding the effect of foreign currency translation. Premiums were down 7% in the U.S. and down 7% outside the U.S. (up 1% in local currencies).

     The third quarter combined loss and expense ratio was 85.4% in 2009, compared to 98.1% in 2008. Catastrophe losses in the third quarter of 2009 accounted for 0.8 percentage points of the combined ratio, compared to 13.6 points in the third quarter of 2008 which included Hurricane Ike. Excluding catastrophe losses, the third quarter combined ratio was 84.6% in 2009 and 84.5% in 2008. The expense ratio for the third quarter was 31.2% in 2009 and 30.2% in 2008.

     Property and casualty investment income after taxes for the third quarter declined 3% to $317 million in 2009 from $327 million in 2008.

     During the third quarter, Chubb repurchased 8,666,502 shares of its common stock at a total cost of $412 million. As of September 30, 2009, there were 7,002,869 shares of common stock remaining under the current repurchase authorization.

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     “Following a very strong second quarter, Chubb delivered even better financial results in the third quarter,” said John D. Finnegan, Chairman, President and Chief Executive Officer. “While the difficult economic environment continued to adversely affect premium growth, we remained focused on bottom-line earnings and increasing shareholder value through disciplined underwriting, our conservative investment strategy and active capital management. Successful execution has enabled us to deliver consistent profits, excellent returns on equity and robust growth in book value. Results for the third quarter also benefited from a benign hurricane season,” he said.

     “We were pleased by continued renewal rate increases for commercial and specialty insurance in the third quarter in what is a very competitive marketplace,” said Mr. Finnegan. “Finally, our strong capital position allowed us to repurchase 8.7 million shares in the third quarter, and we expect to complete the repurchase of all remaining 7 million shares under our current authorization by the end of 2009,” he said.

     “In light of these results, we are increasing our 2009 full-year operating income per share guidance to a range of $5.90 to $6.00 from the $5.20 to $5.50 range we provided in July. This revised guidance is based on operating income per share of $4.49 in the first nine months and our forecasted range of $1.41 to $1.51 for the fourth quarter,” said Mr. Finnegan.

     The revised guidance for 2009 operating income per share assumes 2 percentage points of catastrophe losses in the fourth quarter, bringing the catastrophe loss assumption for the year to 1.3 points, compared to the assumption of 3 points in the July guidance.

     Guidance and related assumptions are subject to the risks outlined in the company’s forward-looking information safe harbor statement below.

Nine-Month Results

     For the first nine months of 2009, net income was $1.5 billion or $4.18 per share, compared with $1.4 billion or $3.78 per share for the first nine months of 2008.

     Operating income for the first nine months increased 8% to $1.6 billion in 2009 from $1.5 billion in 2008. Operating income per share for the first nine months increased 13% to $4.49 from $3.99.

     Total net written premiums for the first nine months declined 7% to $8.3 billion from $8.9 billion; they were down 4% excluding the effect of foreign currency translation. Premiums declined 5% in the U.S. and declined 11% outside the U.S. (increased 3% in local currencies).

3

     The combined loss and expense ratio for the first nine months was 86.5% in 2009, compared to 90.2% in 2008. Catastrophe losses in the first nine months accounted for 1.1 percentage points of the combined ratio in 2009, compared to 6.9 points in 2008. Excluding catastrophe losses, the combined ratio for the first nine months was 85.4% in 2009 and 83.3% in 2008. The expense ratio for the first nine months was 30.7% in 2009 and 30.2% in 2008.

     Property and casualty investment income after taxes for the first nine months declined 5% to $935 million in 2009 from $981 million in 2008.

     During the first nine months of 2009, Chubb repurchased 12,781,031 shares of its common stock at a total cost of $576 million.

Third Quarter Operations Review

     Chubb Personal Insurance (CPI) net written premiums declined 5% in the third quarter of 2009 to $946 million. CPI’s combined ratio for the quarter was 81.6%, compared to 100.7% in the third quarter of 2008. The impact of catastrophes for the third quarter of 2009 improved the combined ratio by 1 percentage point, largely due to subrogation recoveries. In the third quarter of 2008, catastrophe losses were 16.3 percentage points.

     Net written premiums for Homeowners declined 4%, and the combined ratio was 77.3%. Personal Automobile net written premiums declined 3%, and the combined ratio was 87.2%. Other Personal lines premiums were down 10%, and the combined ratio was 90.9%.

     Chubb Commercial Insurance (CCI) net written premiums declined 8% in the third quarter to $1.1 billion. CCI’s combined ratio for the quarter was 90.5% in 2009 and 106.0% in 2008. Catastrophe losses accounted for 2.6 percentage points of the combined ratio in the third quarter of 2009 and 19.9 points in the third quarter of 2008.

     Average third quarter renewal rates in the U.S. were up 3% for CCI, which retained 82% of the U.S. premiums that came up for renewal. In the U.S., the ratio of new to lost business was 0.8 to 1.

     Chubb Specialty Insurance (CSI) net written premiums declined 6% in the third quarter to $669 million. CSI’s combined ratio for the quarter was 83.6%, compared to 82.3% in the third quarter of 2008.

4

     Professional Liability (PL) net written premiums declined 5%, and the business had a combined ratio of 90.0%. Average third quarter renewal rates in the U.S. were up 3% for PL, which retained 84% of the U.S. premiums that came up for renewal. In the U.S., the ratio of new to lost business was 0.9 to 1.

     Surety net written premiums declined 12%, and the combined ratio was 32.5%.

Webcast Conference Call to be Held Today at 5 P.M.

     Chubb’s senior management will discuss the company’s third quarter performance with investors and analysts today, October 22nd at 5 P.M. Eastern Daylight Time. The conference call will be webcast live on the Internet at http://www.chubb.com and archived later in the day for replay.

About Chubb

     Founded in 1882, the Chubb Group of Insurance Companies provides property and casualty insurance for personal and commercial customers worldwide through 8,500 independent agents and brokers. Chubb’s global network includes branches and affiliates throughout North America, Europe, Latin America, Asia and Australia.

     Chubb’s Supplementary Investor Information Report has been posted on its Internet site at http://www.chubb.com.

     All financial results in this release and attachments are unaudited.

For further information contact:	Investors:	Glenn A. Montgomery
		(908) 903-2365
	Media:	Mark E. Greenberg
		(908) 903-2682

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Definitions of Key Terms

Operating Income: Operating income, a non-GAAP financial measure, is net income excluding after-tax realized investment gains and losses. Management uses operating income, among other measures, to evaluate its performance because the realization of investment gains and losses in any given period is largely discretionary as to timing and can fluctuate significantly, which could distort the analysis of trends.

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 tax.

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 (loss), the after-tax appreciation or depreciation, including unrealized other-than-temporary impairment losses, of the Corporation’s available-for-sale fixed maturities, which are carried at fair value. The appreciation or depreciation of 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.

Net Written Premiums Growth (Decrease) Excluding the Impact of Currency Fluctuation: Management uses net written premiums growth (decrease) excluding the impact of currency fluctuation, a non-GAAP financial measure, to evaluate the trends in net written premiums, exclusive of the effect of fluctuations in exchange rates between the U.S. dollar and the currencies in which our international business is transacted.

6

FORWARD-LOOKING INFORMATION

     Certain statements in this document are “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995 (PSLRA). These forward-looking statements are made pursuant to the safe harbor provisions of the PSLRA and include statements regarding management’s 2009 operating income per share guidance and related assumptions as well as Chubb’s share repurchase program. Forward-looking statements are made based upon management’s current expectations and beliefs concerning trends and future developments and their potential effects on Chubb. These statements are not guarantees of future performance. Actual results may differ materially from those suggested by forward-looking statements as a result of risks and uncertainties, which include, among others, those discussed or identified from time to time in Chubb’s public filings with the Securities and Exchange Commission and those associated with:

• global political conditions and the occurrence of terrorist attacks, including any nuclear, biological, chemical or radiological events;

• the effects of the outbreak or escalation of war or hostilities;

• premium pricing and profitability or growth estimates overall or by lines of business or geographic area, and related expectations with respect to the timing and terms of any required regulatory approvals;

• adverse changes in loss cost trends;

• our ability to retain existing business and attract new business;

• our expectations with respect to cash flow and investment income and with respect to other income;

• the adequacy of our loss reserves, including:

- our expectations relating to reinsurance recoverables;

- the willingness of parties, including us, to settle disputes;

- developments in judicial decisions or regulatory or legislative actions relating to coverage and liability, in particular, for asbestos, toxic waste and other mass tort claims;

- development of new theories of liability;

- our estimates relating to ultimate asbestos liabilities;

- the impact from the bankruptcy protection sought by various asbestos producers and other related businesses; and

- the effects of proposed asbestos liability legislation, including the impact of claims patterns arising from the possibility of legislation and those that may arise if legislation is not passed;

• the availability and cost of reinsurance coverage;

• the occurrence of significant weather-related or other natural or human-made disasters, particularly in locations where we have concentrations of risk;

7

• the impact of economic factors on companies on whose behalf we have issued surety bonds, and in particular, on those companies that file for bankruptcy or otherwise experience deterioration in creditworthiness;

• the effects of disclosures by, and investigations of, companies relating to possible accounting irregularities, practices in the financial services industry, investment losses or other corporate governance issues, including:

- claims and litigation arising out of stock option “backdating,” “spring loading” and other equity grant practices by public companies;

- the effects on the capital markets and the markets for directors and officers and errors and omissions insurance;

- claims and litigation arising out of actual or alleged accounting or other corporate malfeasance by other companies;

- claims and litigation arising out of practices in the financial services industry;

- claims and litigation relating to uncertainty in the credit and broader financial markets; and

- legislative or regulatory proposals or changes;

• the effects of changes in market practices in the U.S. property and casualty insurance industry, in particular contingent commissions and loss mitigation and finite reinsurance arrangements, arising from any legal or regulatory proceedings, related settlements and industry reform, including changes that have been announced and changes that may occur in the future;

• the impact of legislative and regulatory developments on our business, including those relating to terrorism, catastrophes and the financial markets;

• any downgrade in our claims-paying, financial strength or other credit ratings;

• the ability of our subsidiaries to pay us dividends;

• general economic and market conditions including:

- changes in interest rates, market credit spreads and the performance of the financial markets;

- currency fluctuations;

- the effects of inflation;

- changes in domestic and foreign laws, regulations and taxes;

- changes in competition and pricing environments;

- regional or general changes in asset valuations;

- the inability to reinsure certain risks economically; and

- changes in the litigation environment;

• our ability to implement management’s strategic plans and initiatives.

Chubb assumes no obligation to update any forward-looking information set forth in this document, which speak as of the date hereof.

8

THE CHUBB CORPORATION

SUPPLEMENTARY FINANCIAL DATA
(Unaudited)

	Periods Ended September 30
	Third Quarter						Nine Months
	2009			2008			2009			2008
	(in millions)
PROPERTY AND CASUALTY INSURANCE
Underwriting
Net Premiums Written	$	2,705		$	2,900		$	8,294		$	8,883
Decrease in Unearned Premiums		131			64			196			43
Premiums Earned		2,836			2,964			8,490			8,926
Losses and Loss Expenses		1,534			2,006			4,721			5,339
Operating Costs and Expenses		841			871			2,541			2,669
Decrease (Increase) in Deferred Policy Acquisition Costs		31			7			11			(29	)
Dividends to Policyholders		7			11			22			29
Underwriting Income		423			69			1,195			918
Investments
Investment Income Before Expenses		400			418			1,180			1,254
Investment Expenses		10			7			24			23
Investment Income		390			411			1,156			1,231
Other Income (Charges)		(12	)		4			(7	)		7
Property and Casualty Income		801			484			2,344			2,156
CORPORATE AND OTHER		(61	)		(53	)		(182	)		(159	)
CONSOLIDATED OPERATING INCOME BEFORE INCOME TAX		740			431			2,162			1,997
Federal and Foreign Income Tax		188			93			563			521
CONSOLIDATED OPERATING INCOME		552			338			1,599			1,476
REALIZED INVESTMENT GAINS (LOSSES) AFTER INCOME TAX		44			(74	)		(111	)		(79	)
CONSOLIDATED NET INCOME	$	596		$	264		$	1,488		$	1,397
PROPERTY AND CASUALTY INVESTMENT INCOME AFTER INCOME TAX	$	317		$	327		$	935		$	981

9

	Periods Ended September 30
	Third Quarter						Nine Months
	2009			2008			2009			2008
OUTSTANDING SHARE DATA
(in millions)
Average Common and Potentially Dilutive Shares		353.5			362.3			356.4			369.2
Actual Common Shares at End of Period		341.6			355.7			341.6			355.7
DILUTED EARNINGS PER SHARE DATA
Operating Income	$	1.56		$	.93		$	4.49		$	3.99
Realized Investment Gains (Losses)		.13			(.20	)		(.31	)		(.21	)
Net Income	$	1.69		$	.73		$	4.18		$	3.78
Effect of Catastrophes	$	(.04	)	$	(.72	)	$	(.17	)	$	(1.09	)

	Sept. 30		Dec. 31		Sept. 30
	2009		2008		2008
BOOK VALUE PER COMMON SHARE	$	45.43	$	38.13	$	38.25
BOOK VALUE PER COMMON SHARE,
with Available-for-Sale Fixed Maturities at Amortized Cost		42.31		38.38		39.14

PROPERTY AND CASUALTY UNDERWRITING RATIOS
PERIODS ENDED SEPTEMBER 30

	Third Quarter						Nine Months
	2009			2008			2009			2008
Losses and Loss Expenses to Premiums Earned		54.2	%		67.9	%		55.8	%		60.0	%
Underwriting Expenses to Premiums Written		31.2			30.2			30.7			30.2
Combined Loss and Expense Ratio		85.4	%		98.1	%		86.5	%		90.2	%
Effect of Catastrophes on Combined Loss and Expense Ratio		.8	%		13.6	%		1.1	%		6.9	%

PROPERTY AND CASUALTY LOSSES AND LOSS EXPENSES COMPONENTS
PERIODS ENDED SEPTEMBER 30

	Third Quarter				Nine Months
	2009		2008		2009		2008
	(in millions)
Paid Losses and Loss Expenses	$	1,399	$	1,633	$	4,415	$	4,546
Increase in Unpaid Losses and Loss Expenses		135		373		306		793
Total Losses and Loss Expenses	$	1,534	$	2,006	$	4,721	$	5,339

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PROPERTY AND CASUALTY PRODUCT MIX

								Combined Loss and
	Net Premiums Written							Expense Ratios
	2009		2008		% Decrease			2009			2008
	(in millions)
NINE MONTHS ENDED SEPTEMBER 30
Personal Insurance
Automobile	$	428	$	457		(6	)%		89.1	%		88.5	%
Homeowners		1,771		1,859		(5	)		81.9			85.8
Other		551		571		(4	)		92.8			100.5
Total Personal		2,750		2,887		(5	)		85.2			89.1
Commercial Insurance
Multiple Peril		835		915		(9	)		85.5			87.0
Casualty		1,161		1,281		(9	)		96.4			94.6
Workers’ Compensation		610		666		(8	)		91.5			80.5
Property and Marine		953		957		—			85.0			116.0
Total Commercial		3,559		3,819		(7	)		89.9			95.6
Specialty Insurance
Professional Liability		1,725		1,847		(7	)		90.4			84.0
Surety		243		276		(12	)		36.5			76.1
Total Specialty		1,968		2,123		(7	)		84.2			83.2
Total Insurance		8,277		8,829		(6	)		87.0			90.5
Reinsurance Assumed		17		54		(69	)		*			*
Total	$	8,294	$	8,883		(7	)		86.5			90.2
QUARTERS ENDED SEPTEMBER 30
Personal Insurance
Automobile	$	150	$	154		(3	)%		87.2	%		85.7	%
Homeowners		620		646		(4	)		77.3			102.9
Other		176		195		(10	)		90.9			105.8
Total Personal		946		995		(5	)		81.6			100.7
Commercial Insurance
Multiple Peril		274		308		(11	)		91.0			103.6
Casualty		346		385		(10	)		93.9			99.8
Workers’ Compensation		186		205		(9	)		95.7			81.3
Property and Marine		280		280		—			83.0			133.3
Total Commercial		1,086		1,178		(8	)		90.5			106.0
Specialty Insurance
Professional Liability		588		617		(5	)		90.0			84.3
Surety		81		92		(12	)		32.5			65.0
Total Specialty		669		709		(6	)		83.6			82.3
Total Insurance		2,701		2,882		(6	)		85.8			98.4
Reinsurance Assumed		4		18		(78	)		*			*
Total	$	2,705	$	2,900		(7	)		85.4			98.1

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

EX-99.2

Exhibit 99.2

The
Chubb
Corporation Supplementary
Investor
Information September 30, 2009

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.

THE CHUBB CORPORATION

SUPPLEMENTARY INVESTOR INFORMATION

TABLE OF CONTENTS

SEPTEMBER 30, 2009

	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 — Year-To-Date	6-10
Underwriting Results — Quarterly	11-15
Definitions of Key Terms	16-17

THE CHUBB CORPORATION

CONSOLIDATED BALANCE SHEET HIGHLIGHTS
(in millions, except per share amounts)

	Sept. 30						Dec. 31
	2009						2008
				% of Total						% of Total
Invested Assets (at carrying value)
Short Term Investments	$	2,587			6	%	$	2,478			7	%
Fixed Maturities
Tax Exempt		19,758			47			18,345			47
Taxable		16,510			39			14,410			37
Equity Securities		1,353			3			1,479			4
Other Invested Assets		1,838			5			2,026			5
Total Invested Assets	$	42,046			100	%	$	38,738			100	%
Unrealized Appreciation (Depreciation) of Investments
Fixed Maturities	$	1,639					$	(136	)
Equity Securities		129						(84	)
		1,768						(220	)
Deferred Income Tax Liability (Asset)		619						(77	)
	$	1,149					$	(143	)
Capitalization
Long Term Debt	$	3,975					$	3,975
Shareholders’ Equity		15,518						13,432
Total Capitalization	$	19,493					$	17,407
Debt as a Percentage of Total Capitalization		20.4	%					22.8	%
Actual Common Shares Outstanding		341.6						352.3
Book Value Per Common Share	$	45.43					$	38.13
Book Value Per Common Share, with Available-for-Sale Fixed Maturities at Amortized Cost	$	42.31					$	38.38

Page 1 of 17

THE CHUBB CORPORATION

SHARE REPURCHASE ACTIVITY
(dollars in millions, except per share amounts)

	Periods Ended September 30
	Third		Nine		From
	Quarter		Months		December 2005
	2009		2009		to September 30, 2009
Cost of Shares Repurchased		$412		$576		$5,463
Average Cost Per Share		$47.57		$45.11		$50.12
Shares Repurchased		8,666,502		12,781,031		108,997,131

In December 2005 and December 2006, the Board of Directors authorized the repurchase of up to 28,000,000 shares and 20,000,000 shares, respectively, 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 2006. In December 2007, the Board of Directors authorized the repurchase of up to 28,000,000 shares of the Corporation’s common stock. No shares remain under these share repurchase authorizations.

In December 2008, the Board of Directors authorized the repurchase of up to 20,000,000 shares of the Corporation’s common stock. The authorization has no expiration date. As of September 30, 2009, 7,002,869 shares remained under the share repurchase authorization.

Page 2 of 17

THE CHUBB CORPORATION

SUMMARY OF INVESTED ASSETS

CORPORATE

	Cost or Amortized Cost				Carrying Value (a)
	Sept. 30		Dec. 31		Sept. 30		Dec. 31
	2009		2008		2009		2008
	(in millions)
Short Term Investments	$	1,181	$	1,602	$	1,181	$	1,602
Taxable Fixed Maturities		1,302		774		1,350		780
Equity Securities		205		451		194		504
TOTAL	$	2,688	$	2,827	$	2,725	$	2,886

PROPERTY AND CASUALTY

	Cost or Amortized Cost				Carrying Value (a)
	Sept. 30		Dec. 31		Sept. 30		Dec. 31
	2009		2008		2009		2008
	(in millions)
Short Term Investments	$	1,406	$	876	$	1,406	$	876
Fixed Maturities
Tax Exempt		18,672		18,299		19,758		18,345
Taxable		14,655		13,818		15,160		13,630
Equity Securities		1,019		1,112		1,159		975
Other Invested Assets		1,838		2,026		1,838		2,026
TOTAL	$	37,590	$	36,131	$	39,321	$	35,852

(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 17

THE CHUBB CORPORATION

INVESTMENT INCOME AFTER TAXES

	Periods Ended September 30
	Third Quarter						Nine Months
	2009			2008			2009			2008
	(in millions)
CORPORATE INVESTMENT INCOME	$	9		$	13		$	27		$	39
PROPERTY AND CASUALTY INVESTMENT INCOME
Tax Exempt Interest	$	190		$	185		$	563		$	554
Taxable Interest		118			125			346			379
Other		16			21			42			62
Investment Expenses		(7	)		(4	)		(16	)		(14	)
TOTAL	$	317		$	327		$	935		$	981
Effective Tax Rate		18.7	%		20.4	%		19.1	%		20.3	%
After-Tax Annualized Yield		3.39	%		3.48	%		3.40	%		3.49	%

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

	Sept. 30		Dec. 31		Sept. 30
	2009		2008		2008
	(in millions)
Estimated Statutory Policyholders’ Surplus	$	13,650	$	12,281	$	12,750
Rolling Year Statutory Net Premiums Written	$	11,180	$	11,759	$	11,866
Ratio of Statutory Net Premiums Written to Policyholders’ Surplus		0.82:1		0.96:1		0.93:1

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

Page 4 of 17

THE CHUBB CORPORATION

PROPERTY AND CASUALTY

CHANGE IN NET UNPAID LOSSES
NINE MONTHS ENDED SEPTEMBER 30, 2009

	Net Unpaid Losses
											All Other
								IBNR			Unpaid Losses
					Increase			Increase			Increase
	9/30/09		12/31/08		(Decrease)			(Decrease)			(Decrease)
	(in millions)
Personal Insurance
Automobile	$	397	$	391	$	6		$	(13	)	$	19
Homeowners		673		715		(42	)		(8	)		(34	)
Other		874		815		59			58			1
Total Personal		1,944		1,921		23			37			(14	)
Commercial Insurance
Multiple Peril		1,619		1,586		33			35			(2	)
Casualty		5,931		5,660		271			153			118
Workers’ Compensation		2,109		1,982		127			67			60
Property and Marine		792		839		(47	)		(3	)		(44	)
Total Commercial		10,451		10,067		384			252			132
Specialty Insurance
Professional Liability		7,516		7,175		341			363			(22	)
Surety		61		68		(7	)		(1	)		(6	)
Total Specialty		7,577		7,243		334			362			(28	)
Total Insurance		19,972		19,231		741			651			90
Reinsurance Assumed		788		924		(136	)		(83	)		(53	)
Total	$	20,760	$	20,155	$	605		$	568		$	37

Page 5 of 17

THE CHUBB CORPORATION — WORLDWIDE
PROPERTY AND CASUALTY UNDERWRITING RESULTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
(DOLLARS IN MILLIONS)

	Personal												Other						Total
	Automobile						Homeowners						Personal						Personal
	2009			2008			2009			2008			2009			2008			2009			2008
Net Premiums Written	$	428		$	457		$	1,771		$	1,859		$	551		$	571		$	2,750		$	2,887
Decrease (Increase) in Unearned Premiums		1			8			8			(33	)		(5	)		(25	)		4			(50	)
Net Premiums Earned		429			465			1,779			1,826			546			546			2,754			2,837
Net Losses Paid		256			279			929			845			283			287			1,468			1,411
Increase (Decrease) in Outstanding Losses		2			(3	)		(53	)		132			50			84			(1	)		213
Net Losses Incurred		258			276			876			977			333			371			1,467			1,624
Expenses Incurred		124			133			579			601			175			186			878			920
Dividends Incurred		—			—			—			—			—			—			—			—
Statutory Underwriting Income (Loss)	$	47		$	56		$	324		$	248		$	38		$	(11	)	$	409		$	293
Ratios After Dividends to Policyholders:
Loss		60.1	%		59.4	%		49.2	%		53.5	%		61.0	%		67.9	%		53.3	%		57.2	%
Expense		29.0			29.1			32.7			32.3			31.8			32.6			31.9			31.9
Combined		89.1	%		88.5	%		81.9	%		85.8	%		92.8	%		100.5	%		85.2	%		89.1	%
Premiums Written as a % of Total		5.2	%		5.2	%		21.4	%		20.9	%		6.6	%		6.4	%		33.2	%		32.5	%

Page 6 of 17

THE CHUBB CORPORATION — WORLDWIDE
PROPERTY AND CASUALTY UNDERWRITING RESULTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
(DOLLARS IN MILLIONS)

													Commercial						Commercial
	Commercial						Commercial						Workers’						Property						Total
	Multiple Peril						Casualty						Compensation						and Marine						Commercial
	2009			2008			2009			2008			2009			2008			2009			2008			2009			2008
Net Premiums Written	$	835		$	915		$	1,161		$	1,281		$	610		$	666		$	953		$	957		$	3,559		$	3,819
Decrease (Increase) in Unearned Premiums		33			21			21			3			(7	)		(9	)		(21	)		(33	)		26			(18	)
Net Premiums Earned		868			936			1,182			1,284			603			657			932			924			3,585			3,801
Net Losses Paid		409			422			605			596			280			277			527			501			1,821			1,796
Increase (Decrease) in Outstanding Losses		15			61			195			256			116			81			(58	)		253			268			651
Net Losses Incurred		424			483			800			852			396			358			469			754			2,089			2,447
Expenses Incurred		306			324			333			362			142			152			330			329			1,111			1,167
Dividends Incurred		—			—			—			—			17			26			—			—			17			26
Statutory Underwriting Income (Loss)	$	138		$	129		$	49		$	70		$	48		$	121		$	133		$	(159	)	$	368		$	161
Ratios After Dividends to Policyholders:
Loss		48.9	%		51.6	%		67.7	%		66.3	%		67.6	%		56.7	%		50.3	%		81.6	%		58.5	%		64.8	%
Expense		36.6			35.4			28.7			28.3			23.9			23.8			34.7			34.4			31.4			30.8
Combined		85.5	%		87.0	%		96.4	%		94.6	%		91.5	%		80.5	%		85.0	%		116.0	%		89.9	%		95.6	%
Premiums Written as a % of Total		10.1	%		10.3	%		14.0	%		14.4	%		7.3	%		7.5	%		11.5	%		10.8	%		42.9	%		43.0	%

Page 7 of 17

THE CHUBB CORPORATION — WORLDWIDE
PROPERTY AND CASUALTY UNDERWRITING RESULTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
(DOLLARS IN MILLIONS)

	Professional												Total
	Liability						Surety						Specialty
	2009			2008			2009			2008			2009			2008
Net Premiums Written	$	1,725		$	1,847		$	243		$	276		$	1,968		$	2,123
Decrease (Increase) in Unearned Premiums		134			120			8			(24	)		142			96
Net Premiums Earned		1,859			1,967			251			252			2,110			2,219
Net Losses Paid		998			1,167			14			40			1,012			1,207
Increase (Decrease) in Outstanding Losses		182			(18	)		(7	)		72			175			54
Net Losses Incurred		1,180			1,149			7			112			1,187			1,261
Expenses Incurred		465			472			80			85			545			557
Dividends Incurred		—			—			5			3			5			3
Statutory Underwriting Income (Loss)	$	214		$	346		$	159		$	52		$	373		$	398
Ratios After Dividends to Policyholders:
Loss		63.4	%		58.4	%		2.9	%		45.0	%		56.4	%		56.9	%
Expense		27.0			25.6			33.6			31.1			27.8			26.3
Combined		90.4	%		84.0	%		36.5	%		76.1	%		84.2	%		83.2	%
Premiums Written as a % of Total		20.8	%		20.8	%		2.9	%		3.1	%		23.7	%		23.9	%

Page 8 of 17

THE CHUBB CORPORATION — WORLDWIDE
PROPERTY AND CASUALTY UNDERWRITING RESULTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
(DOLLARS IN MILLIONS)

	Total						Reinsurance						Worldwide
	Insurance						Assumed						Total
	2009			2008			2009			2008			2009			2008
Net Premiums Written	$	8,277		$	8,829		$	17		$	54		$	8,294		$	8,883
Decrease (Increase) in Unearned Premiums		172			28			24			15			196			43
Net Premiums Earned		8,449			8,857			41			69			8,490			8,926
Net Losses Paid		4,301			4,414			114			132			4,415			4,546
Increase (Decrease) in Outstanding Losses		442			918			(136	)		(125	)		306			793
Net Losses Incurred		4,743			5,332			(22	)		7			4,721			5,339
Expenses Incurred		2,534			2,644			7			25			2,541			2,669
Dividends Incurred		22			29			—			—			22			29
Statutory Underwriting Income (Loss)	$	1,150		$	852		$	56		$	37			1,206			889
Increase (Decrease) in Deferred Acquisition Costs														(11	)		29
GAAP Underwriting Income													$	1,195		$	918
Ratios After Dividends to Policyholders:
Loss		56.3	%		60.4	%		*	%		*	%		55.8	%		60.0	%
Expense		30.7			30.1			*			*			30.7			30.2
Combined		87.0	%		90.5	%		*	%		*	%		86.5	%		90.2	%
Premiums Written as a % of Total		99.8	%		99.4	%		0.2	%		0.6	%		100.0	%		100.0	%

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

Page 9 of 17

THE CHUBB CORPORATION — WORLDWIDE
PROPERTY AND CASUALTY UNDERWRITING RESULTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
(DOLLARS IN MILLIONS)

							Outside
							the						Worldwide
	United States						United States						Total
	2009			2008			2009			2008			2009			2008
Net Premiums Written	$	6,357		$	6,718		$	1,937		$	2,165		$	8,294		$	8,883
Decrease (Increase) in Unearned Premiums		207			43			(11	)		—			196			43
Net Premiums Earned		6,564			6,761			1,926			2,165			8,490			8,926
Net Losses Paid		3,603			3,657			812			889			4,415			4,546
Increase (Decrease) in Outstanding Losses		60			660			246			133			306			793
Net Losses Incurred		3,663			4,317			1,058			1,022			4,721			5,339
Expenses Incurred		1,849			1,900			692			769			2,541			2,669
Dividends Incurred		22			29			—			—			22			29
Statutory Underwriting Income (Loss)	$	1,030		$	515		$	176		$	374			1,206			889
Increase (Decrease) in Deferred Acquisition Costs														(11	)		29
GAAP Underwriting Income													$	1,195		$	918
Ratios After Dividends to Policyholders:
Loss		56.0	%		64.1	%		54.9	%		47.2	%		55.8	%		60.0	%
Expense		29.2			28.4			35.7			35.5			30.7			30.2
Combined		85.2	%		92.5	%		90.6	%		82.7	%		86.5	%		90.2	%
Premiums Written as a % of Total		76.6	%		75.6	%		23.4	%		24.4	%		100.0	%		100.0	%

Page 10 of 17

THE CHUBB CORPORATION — WORLDWIDE
PROPERTY AND CASUALTY UNDERWRITING RESULTS
FOR THE QUARTERS ENDED SEPTEMBER 30, 2009 AND 2008
(DOLLARS IN MILLIONS)

	Personal												Other						Total
	Automobile						Homeowners						Personal						Personal
	2009			2008			2009			2008			2009			2008			2009			2008
Net Premiums Written	$	150		$	154		$	620		$	646		$	176		$	195		$	946		$	995
Decrease (Increase) in Unearned Premiums		(3	)		—			(27	)		(42	)		14			(3	)		(16	)		(45	)
Net Premiums Earned		147			154			593			604			190			192			930			950
Net Losses Paid		89			88			278			298			88			95			455			481
Increase (Decrease) in Outstanding Losses		(3	)		(1	)		(11	)		129			20			46			6			174
Net Losses Incurred		86			87			267			427			108			141			461			655
Expenses Incurred		43			45			200			208			60			63			303			316
Dividends Incurred		—			—			—			—			—			—			—			—
Statutory Underwriting Income (Loss)	$	18		$	22		$	126		$	(31	)	$	22		$	(12	)	$	166		$	(21	)
Ratios After Dividends to Policyholders:
Loss		58.5	%		56.5	%		45.0	%		70.7	%		56.8	%		73.5	%		49.6	%		68.9	%
Expense		28.7			29.2			32.3			32.2			34.1			32.3			32.0			31.8
Combined		87.2	%		85.7	%		77.3	%		102.9	%		90.9	%		105.8	%		81.6	%		100.7	%
Premiums Written as a % of Total		5.5	%		5.3	%		23.0	%		22.3	%		6.5	%		6.7	%		35.0	%		34.3	%

Page 11 of 17

THE CHUBB CORPORATION — WORLDWIDE
PROPERTY AND CASUALTY UNDERWRITING RESULTS
FOR THE QUARTERS ENDED SEPTEMBER 30, 2009 AND 2008
(DOLLARS IN MILLIONS)

													Commercial						Commercial
	Commercial						Commercial						Workers’						Property						Total
	Multiple Peril						Casualty						Compensation						and Marine						Commercial
	2009			2008			2009			2008			2009			2008			2009			2008			2009			2008
Net Premiums Written	$	274		$	308		$	346		$	385		$	186		$	205		$	280		$	280		$	1,086		$	1,178
Decrease (Increase) in Unearned Premiums		12			—			46			35			8			12			40			28			106			75
Net Premiums Earned		286			308			392			420			194			217			320			308			1,192			1,253
Net Losses Paid		136			138			207			204			88			79			162			207			593			628
Increase (Decrease) in Outstanding Losses		21			73			42			92			45			38			(13	)		97			95			300
Net Losses Incurred		157			211			249			296			133			117			149			304			688			928
Expenses Incurred		99			108			105			113			45			49			102			97			351			367
Dividends Incurred		—			—			—			—			6			9			—			—			6			9
Statutory Underwriting Income (Loss)	$	30		$	(11	)	$	38		$	11		$	10		$	42		$	69		$	(93	)	$	147		$	(51	)
Ratios After Dividends to Policyholders:
Loss		54.9	%		68.5	%		63.5	%		70.5	%		70.7	%		56.3	%		46.6	%		98.7	%		58.0	%		74.6	%
Expense		36.1			35.1			30.4			29.3			25.0			25.0			36.4			34.6			32.5			31.4
Combined		91.0	%		103.6	%		93.9	%		99.8	%		95.7	%		81.3	%		83.0	%		133.3	%		90.5	%		106.0	%
Premiums Written as a % of Total		10.1	%		10.6	%		12.8	%		13.3	%		6.9	%		7.1	%		10.4	%		9.7	%		40.2	%		40.7	%

Page 12 of 17

THE CHUBB CORPORATION — WORLDWIDE
PROPERTY AND CASUALTY UNDERWRITING RESULTS
FOR THE QUARTERS ENDED SEPTEMBER 30, 2009 AND 2008
(DOLLARS IN MILLIONS)

	Professional												Total
	Liability						Surety						Specialty
	2009			2008			2009			2008			2009			2008
Net Premiums Written	$	588		$	617		$	81		$	92		$	669		$	709
Decrease (Increase) in Unearned Premiums		36			32			(1	)		(10	)		35			22
Net Premiums Earned		624			649			80			82			704			731
Net Losses Paid		321			462			—			14			321			476
Increase (Decrease) in Outstanding Losses		71			(76	)		1			14			72			(62	)
Net Losses Incurred		392			386			1			28			393			414
Expenses Incurred		160			153			25			27			185			180
Dividends Incurred		—			—			1			2			1			2
Statutory Underwriting Income (Loss)	$	72		$	110		$	53		$	25		$	125		$	135
Ratios After Dividends to Policyholders:
Loss		62.8	%		59.5	%		1.3	%		35.0	%		55.9	%		56.8	%
Expense		27.2			24.8			31.2			30.0			27.7			25.5
Combined		90.0	%		84.3	%		32.5	%		65.0	%		83.6	%		82.3	%
Premiums Written as a % of Total		21.7	%		21.2	%		3.0	%		3.2	%		24.7	%		24.4	%

Page 13 of 17

THE CHUBB CORPORATION — WORLDWIDE
PROPERTY AND CASUALTY UNDERWRITING RESULTS
FOR THE QUARTERS ENDED SEPTEMBER 30, 2009 AND 2008
(DOLLARS IN MILLIONS)

	Total						Reinsurance						Worldwide
	Insurance						Assumed						Total
	2009			2008			2009			2008			2009			2008
Net Premiums Written	$	2,701		$	2,882		$	4		$	18		$	2,705		$	2,900
Decrease (Increase) in Unearned Premiums		125			52			6			12			131			64
Net Premiums Earned		2,826			2,934			10			30			2,836			2,964
Net Losses Paid		1,369			1,585			30			48			1,399			1,633
Increase (Decrease) in Outstanding Losses		173			412			(38	)		(39	)		135			373
Net Losses Incurred		1,542			1,997			(8	)		9			1,534			2,006
Expenses Incurred		839			863			2			8			841			871
Dividends Incurred		7			11			—			—			7			11
Statutory Underwriting Income (Loss)	$	438		$	63		$	16		$	13			454			76
Decrease in Deferred Acquisition Costs														(31	)		(7	)
GAAP Underwriting Income													$	423		$	69
Ratios After Dividends to Policyholders:
Loss		54.7	%		68.3	%		*	%		*	%		54.2	%		67.9	%
Expense		31.1			30.1			*			*			31.2			30.2
Combined		85.8	%		98.4	%		*	%		*	%		85.4	%		98.1	%
Premiums Written as a % of Total		99.9	%		99.4	%		0.1	%		0.6	%		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 QUARTERS ENDED SEPTEMBER 30, 2009 AND 2008
(DOLLARS IN MILLIONS)

							Outside
							the						Worldwide
	United States						United States						Total
	2009			2008			2009			2008			2009			2008
Net Premiums Written	$	2,091		$	2,239		$	614		$	661		$	2,705		$	2,900
Decrease (Increase) in Unearned Premiums		65			—			66			64			131			64
Net Premiums Earned		2,156			2,239			680			725			2,836			2,964
Net Losses Paid		1,117			1,352			282			281			1,399			1,633
Increase (Decrease) in Outstanding Losses		65			320			70			53			135			373
Net Losses Incurred		1,182			1,672			352			334			1,534			2,006
Expenses Incurred		618			638			223			233			841			871
Dividends Incurred		7			11			—			—			7			11
Statutory Underwriting Income (Loss)	$	349		$	(82	)	$	105		$	158			454			76
Decrease in Deferred Acquisition Costs														(31	)		(7	)
GAAP Underwriting Income													$	423		$	69
Ratios After Dividends to Policyholders:
Loss		55.0	%		75.0	%		51.8	%		46.1	%		54.2	%		67.9	%
Expense		29.7			28.6			36.3			35.2			31.2			30.2
Combined		84.7	%		103.6	%		88.1	%		81.3	%		85.4	%		98.1	%
Premiums Written as a % of Total		77.3	%		77.2	%		22.7	%		22.8	%		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 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 (loss) , the after-tax appreciation or depreciation, including unrealized other-than-temporary impairment losses, of the Corporation’s available-for-sale fixed maturities, which are carried at fair value. The appreciation or depreciation of 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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THE CHUBB CORPORATION

Definitions of Key Terms

Operating Income

Operating income, a non-GAAP financial measure, is net income excluding after-tax realized investment gains and losses. Management uses operating income, among other measures, to evaluate its performance because the realization of investment gains and losses in any given period is largely discretionary as to timing and can fluctuate significantly, which could distort the analysis of trends.

Return on Equity and Operating Return on Equity

Return on equity is the ratio of annualized net income divided by average shareholders’ equity. Average shareholders’ equity is the average of the beginning and all quarter-end balances within the period.

Operating return on equity, a non-GAAP measure, is the ratio of annualized operating income divided by average shareholders’ equity excluding the after-tax unrealized appreciation or depreciation of investments. Consolidated shareholders’ equity includes, as part of accumulated other comprehensive income (loss), the after-tax appreciation or depreciation, including unrealized other-than-temporary impairment losses, of the Corporation’s available-for-sale fixed maturities and equity securities, which are carried at fair value. The appreciation or depreciation of available-for-sale fixed maturities and equity securities is subject to fluctuation and could distort the analysis of trends. Average shareholders’ equity excluding the after-tax unrealized appreciation or depreciation of investments is the average of the beginning and all quarter-end balances within the period. Management uses operating return on equity, among other measures, to assess the overall performance of the Corporation.

	Periods Ended September 30
	Third Quarter						Nine Months
	2009			2008			2009			2008
	(dollars in millions)
Annualized Net Income	$	2,384		$	1,056		$	1,984		$	1,863
Average Shareholders’ Equity	$	15,011		$	13,869		$	14,315		$	14,132
Return on Equity		15.9	%		7.6	%		13.9	%		13.2	%
Annualized Operating Income	$	2,208		$	1,352		$	2,132		$	1,968
Average Shareholders’ Equity Excluding Unrealized Appreciation or Depreciation	$	14,270		$	13,982		$	13,934		$	13,963
Operating Return on Equity		15.5	%		9.7	%		15.3	%		14.1	%

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