EX-99.3 4 y86587exv99w3.htm EX-99.3 exv99w3
Exhibit 99.3
         
The
  Supplementary   March 31, 2010
Chubb
  Investor   (Revised)
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
In October 2010, page 10 of this Supplementary Investor Information Report was revised to reflect a reclassification between the United States results and the Outside the United States results. This reclassification had no impact on Worldwide Total results.

 

 

THE CHUBB CORPORATION
SUPPLEMENTARY INVESTOR INFORMATION
TABLE OF CONTENTS
MARCH 31, 2010
         
    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
     11-12  

 

 

THE CHUBB CORPORATION
CONSOLIDATED BALANCE SHEET HIGHLIGHTS
(in millions, except per share amounts)
                                 
    Mar. 31     Dec. 31  
    2010     2009  
            % of Total             % of Total  
Invested Assets (at carrying value)
                                
Short Term Investments
   $ 2,394       6 %   $ 1,918       5 %
Fixed Maturities
                                
Tax Exempt
     19,462       46       19,587       47  
Taxable
     16,825       40       16,991       40  
Equity Securities
     1,497       3       1,433       3  
Other Invested Assets
     2,151       5       2,075       5  
 
                        
Total Invested Assets
   $ 42,329       100 %   $ 42,004       100 %
 
                        
Unrealized Appreciation of Investments
                                
Fixed Maturities
   $ 1,499             $ 1,388          
Equity Securities
     276               218          
 
                            
 
     1,775               1,606          
Deferred Income Tax Liability
     621               562          
 
                            
 
   $ 1,154             $ 1,044          
 
                            
Capitalization
                                
Long Term Debt
   $ 3,975             $ 3,975          
Shareholders’ Equity
     15,741               15,634          
 
                            
Total Capitalization
   $ 19,716             $ 19,609          
 
                            
Debt as a Percentage of Total Capitalization
     20.2 %             20.3 %        
 
                                
Actual Common Shares Outstanding
     326.8               332.0          
 
                                
Book Value Per Common Share
   $ 48.17             $ 47.09          
 
                                
Book Value Per Common Share, with Available-for-Sale Fixed Maturities at Amortized Cost
   $ 45.19             $ 44.37          

Page 1 of 12

 

THE CHUBB CORPORATION
SHARE REPURCHASE ACTIVITY
(dollars in millions, except per share amounts)
                 
    Three Months     From  
    Ended     December 2005  
    March 31, 2010     to March 31, 2010  
Cost of Shares Repurchased
   $ 344     $ 6,296  
Average Cost Per Share
   $ 49.47     $ 50.05  
Shares Repurchased
     6,961,667       125,801,542  
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 and 2008, 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. No shares remain under these share repurchase authorizations.
In December 2009, the Board of Directors authorized the repurchase of up to 25,000,000 shares of the Corporation’s common stock. The authorization has no expiration date. As of March 31, 2010, 15,198,458 shares remained under the share repurchase authorization.

Page 2 of 12

 

THE CHUBB CORPORATION
SUMMARY OF INVESTED ASSETS
CORPORATE
                                 
    Cost or     Carrying  
    Amortized Cost     Value (a)  
    Mar. 31     Dec. 31     Mar. 31     Dec. 31  
    2010     2009     2010     2009  
            (in millions)          
Short Term Investments
   $ 868     $ 1,017     $ 868     $ 1,017  
Taxable Fixed Maturities
     1,276       1,286       1,326       1,327  
Equity Securities
     204       205       199       202  
Other Invested Assets
     23       25       23       25  
 
                        
 
                                
TOTAL
   $ 2,371     $ 2,533     $ 2,416     $ 2,571  
 
                        
PROPERTY AND CASUALTY
                                 
    Cost or     Carrying  
    Amortized Cost     Value (a)  
    Mar. 31     Dec. 31     Mar. 31     Dec. 31  
    2010     2009     2010     2009  
            (in millions)          
Short Term Investments
   $ 1,526     $ 901     $ 1,526     $ 901  
Fixed Maturities
                                
Tax Exempt
     18,604       18,720       19,462       19,587  
Taxable
     14,908       15,184       15,499       15,664  
Equity Securities
     1,017       1,010       1,298       1,231  
Other Invested Assets
     2,128       2,050       2,128       2,050  
 
                        
 
                                
TOTAL
   $ 38,183     $ 37,865     $ 39,913     $ 39,433  
 
                        
 
(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 include private equity limited partnerships carried at Chubb’s equity in the net assets of the partnerships.

Page 3 of 12

 

THE CHUBB CORPORATION
INVESTMENT INCOME AFTER TAXES
                 
    Three Months Ended  
    March 31  
    2010     2009  
    (in millions)  
CORPORATE INVESTMENT INCOME
   $ 8     $ 9  
 
            
PROPERTY AND CASUALTY INVESTMENT INCOME
                
Tax Exempt Interest
   $ 189     $ 186  
Taxable Interest
     121       114  
Other
     9       11  
Investment Expenses
     (6 )     (5 )
 
            
TOTAL
   $ 313     $ 306  
 
            
 
                
Effective Tax Rate
     19.1 %     19.3 %
After-Tax Annualized Yield
     3.27 %     3.41 %
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  
    2010     2009     2009  
            (in millions)          
Estimated Statutory Policyholders’ Surplus
   $  14,800     $ 14,526     $ 12,450  
Rolling Year Statutory Net Premiums Written
   $ 11,105     $ 11,074     $ 11,565  
Ratio of Statutory Net Premiums Written to Policyholders’ Surplus
     0.75:1       0.76:1       0.93:1  
Statutory Policyholders’ Surplus and Net Premiums Written include all domestic and foreign property and casualty subsidiaries.

Page 4 of 12

 

THE CHUBB CORPORATION
PROPERTY AND CASUALTY
CHANGE IN NET UNPAID LOSSES
THREE MONTHS ENDED MARCH 31, 2010
                                         
    Net Unpaid Losses             All Other  
                            IBNR     Unpaid Losses  
                    Increase     Increase     Increase  
    3/31/10     12/31/09     (Decrease)     (Decrease)     (Decrease)  
                (in millions)              
Personal Insurance
                                        
Automobile
   $ 399     $ 400     $ (1 )   $ (5 )   $ 4  
Homeowners
     851       665       186       179       7  
Other
     874       872       2       12       (10 )
 
                              
Total Personal
     2,124       1,937       187       186       1  
 
                              
Commercial Insurance
                                        
Multiple Peril
     1,681       1,615       66       84       (18 )
Casualty
     6,037       5,988       49       101       (52 )
Workers’ Compensation
     2,160       2,138       22       31       (9 )
Property and Marine
     788       758       30       32       (2 )
 
                              
Total Commercial
     10,666       10,499       167       248       (81 )
 
                              
Specialty Insurance
                                        
Professional Liability
     7,488       7,552       (64 )     (43 )     (21 )
Surety
     56       58       (2 )     1       (3 )
 
                              
Total Specialty
     7,544       7,610       (66 )     (42 )     (24 )
 
                              
Total Insurance
     20,334       20,046       288       392       (104 )
Reinsurance Assumed
     694       740       (46 )     (32 )     (14 )
 
                              
Total
   $ 21,028     $ 20,786     $ 242     $ 360     $ (118 )
 
                              

Page 5 of 12

 

THE CHUBB CORPORATION — WORLDWIDE
PROPERTY AND CASUALTY UNDERWRITING RESULTS
FOR THE THREE MONTHS ENDED MARCH 31, 2010 AND 2009
(DOLLARS IN MILLIONS)
                                                                 
    Personal                     Other     Total  
    Automobile     Homeowners     Personal     Personal  
    2010     2009     2010     2009     2010     2009     2010     2009  
Net Premiums Written
   $ 146     $ 131     $ 517     $ 514     $ 211     $ 198     $ 874     $ 843  
Decrease (Increase) in Unearned Premiums
     4       9       73       80       (26 )     (25 )     51       64  
 
                                                
 
                                                                
Net Premiums Earned
     150       140       590       594       185       173       925       907  
 
                                                
 
                                                                
Net Losses Paid
     94       85       276       348       99       101       469       534  
Increase (Decrease) in Outstanding Losses
     (3 )     (1 )     185       (30 )     5       16       187       (15 )
 
                                                
 
                                                                
Net Losses Incurred
     91       84       461       318       104       117       656       519  
 
                                                
 
                                                                
Expenses Incurred
     45       39       182       178       66       59       293       276  
 
Dividends Incurred
     —       —       —       —       —       —       —       —  
 
                                                
 
                                                                
Statutory Underwriting Income (Loss)
   $ 14     $ 17     $ (53 )   $ 98     $ 15     $ (3 )   $ (24 )   $ 112  
 
                                                
 
                                                                
Ratios After Dividends to Policyholders:
                                                                
 
                                                                
Loss
     60.7 %     60.0 %     78.1 %     53.6 %     56.2 %     67.6 %     70.9 %     57.2 %
Expense
     30.8       29.8       35.2       34.6       31.3       29.8       33.5       32.8  
 
                                                
 
                                                                
Combined
     91.5 %     89.8 %     113.3 %     88.2 %     87.5 %     97.4 %     104.4 %     90.0 %
 
                                                
 
                                                                
Premiums Written as a % of Total
     5.3 %     4.8 %     18.7 %     18.7 %     7.6 %     7.2 %     31.6 %     30.7 %

Page 6 of 12

 

THE CHUBB CORPORATION — WORLDWIDE
PROPERTY AND CASUALTY UNDERWRITING RESULTS
FOR THE THREE MONTHS ENDED MARCH 31, 2010 AND 2009
(DOLLARS IN MILLIONS)
                                                                                 
                                    Commercial     Commercial        
    Commercial     Commercial     Workers’     Property     Total  
    Multiple Peril     Casualty     Compensation     and Marine     Commercial  
    2010     2009     2010     2009     2010     2009     2010     2009     2010     2009  
Net Premiums Written
   $ 254     $ 269     $ 414     $ 409     $ 222     $ 236     $ 353     $ 346     $ 1,243     $ 1,260  
Decrease (Increase) in Unearned Premiums
     15       24       (28 )     (12 )     (36 )     (30 )     (42 )     (44 )     (91 )     (62 )
 
                                                            
 
                                                                                
Net Premiums Earned
     269       293       386       397       186       206       311       302       1,152       1,198  
 
                                                            
 
                                                                                
Net Losses Paid
     129       151       175       196       93       89       139       182       536       618  
Increase (Decrease) in Outstanding Losses
     67       (10 )     59       101       29       42       34       (39 )     189       94  
 
                                                            
 
                                                                                
Net Losses Incurred
     196       141       234       297       122       131       173       143       725       712  
 
                                                            
 
                                                                                
Expenses Incurred
     101       101       115       114       48       51       113       116       377       382  
 
                                                                                
Dividends Incurred
     —       —       —       —       7       6       —       —       7       6  
 
                                                            
 
                                                                                
Statutory Underwriting Income (Loss)
   $ (28 )   $ 51     $ 37     $ (14 )   $ 9     $ 18     $ 25     $ 43     $ 43     $ 98  
 
                                                            
 
                                                                                
Ratios After Dividends to Policyholders:
                                                                                
 
                                                                                
Loss
     72.9 %     48.1 %     60.6 %     74.8 %     68.2 %     65.5 %     55.6 %     47.4 %     63.3 %     59.7 %
Expense
     39.7       37.6       27.8       27.9       22.3       22.2       32.0       33.5       30.5       30.5  
 
                                                            
 
                                                                                
Combined
     112.6 %     85.7 %     88.4 %     102.7 %     90.5 %     87.7 %     87.6 %     80.9 %     93.8 %     90.2 %
 
                                                            
 
                                                                                
Premiums Written as a % of Total
     9.2 %     9.8 %     15.0 %     14.9 %     8.0 %     8.6 %     12.8 %     12.6 %     45.0 %     45.9 %

Page 7 of 12

 

THE CHUBB CORPORATION — WORLDWIDE
PROPERTY AND CASUALTY UNDERWRITING RESULTS
FOR THE THREE MONTHS ENDED MARCH 31, 2010 AND 2009
(DOLLARS IN MILLIONS)
                                                 
    Professional                     Total  
    Liability     Surety     Specialty  
    2010     2009     2010     2009     2010     2009  
Net Premiums Written
   $ 570     $ 553     $ 76     $ 77     $ 646     $ 630  
Decrease (Increase) in Unearned Premiums
     50       64       5       7       55       71  
 
                                    
 
                                                
Net Premiums Earned
     620       617       81       84       701       701  
 
                                    
 
                                                
Net Losses Paid
     387       307       5       8       392       315  
Increase (Decrease) in Outstanding Losses
     (29 )     82       (3 )     (5 )     (32 )     77  
 
                                    
 
                                                
Net Losses Incurred
     358       389       2       3       360       392  
 
                                    
 
                                                
Expenses Incurred
     162       156       28       26       190       182  
 
                                                
Dividends Incurred
     —       —       1       2       1       2  
 
                                    
 
                                                
Statutory Underwriting Income (Loss)
   $ 100     $ 72     $ 50     $ 53     $ 150     $ 125  
 
                                    
 
                                                
Ratios After Dividends to Policyholders:
                                                
 
                                                
Loss
     57.8 %     63.1 %     2.5 %     3.6 %     51.4 %     56.1 %
Expense
     28.4       28.2       37.3       34.7       29.5       29.0  
 
                                    
 
                                                
Combined
     86.2 %     91.3 %     39.8 %     38.3 %     80.9 %     85.1 %
 
                                    
 
                                                
Premiums Written as a % of Total
     20.6 %     20.2 %     2.7 %     2.8 %     23.3 %     23.0 %

Page 8 of 12

 

THE CHUBB CORPORATION — WORLDWIDE
PROPERTY AND CASUALTY UNDERWRITING RESULTS
FOR THE THREE MONTHS ENDED MARCH 31, 2010 AND 2009
(DOLLARS IN MILLIONS)
                                                 
    Total     Reinsurance     Worldwide  
    Insurance     Assumed     Total  
    2010     2009     2010     2009     2010     2009  
Net Premiums Written
   $ 2,763     $ 2,733     $ 2     $ 10     $ 2,765     $ 2,743  
Decrease (Increase) in Unearned Premiums
     15       73       2       10       17       83  
 
                                    
 
                                                
Net Premiums Earned
     2,778       2,806       4       20       2,782       2,826  
 
                                    
 
                                                
Net Losses Paid
     1,397       1,467       35       42       1,432       1,509  
Increase (Decrease) in Outstanding Losses
     344       156       (46 )     (50 )     298       106  
 
                                    
 
                                                
Net Losses Incurred
     1,741       1,623       (11 )     (8 )     1,730       1,615  
 
                                    
 
                                                
Expenses Incurred
     860       840       2       3       862       843  
 
                                                
Dividends Incurred
     8       8       —       —       8       8  
 
                                    
 
                                                
Statutory Underwriting Income (Loss)
   $ 169     $ 335     $ 13     $ 25       182       360  
 
                                        
 
                                                
Increase in Deferred Acquisition Costs
                                     22       16  
 
                                            
 
                                                
GAAP Underwriting Income
                                   $ 204     $ 376  
 
                                            
 
                                                
Ratios After Dividends to Policyholders:
                                                
 
                                                
Loss
     62.9 %     58.0 %     * %     * %     62.3 %     57.3 %
Expense
     31.2       30.8       *       *       31.3       30.8  
 
                                    
 
                                                
Combined
     94.1 %     88.8 %     * %     * %     93.6 %     88.1 %
 
                                    
 
                                                
Premiums Written as a % of Total
     99.9 %     99.6 %     0.1 %     0.4 %     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, 2010 AND 2009
(DOLLARS IN MILLIONS)
                                                 
                    Outside        
                    the     Worldwide  
    United States     United States     Total  
    2010     2009     2010     2009     2010     2009  
    (Revised)           (Revised)                    
Net Premiums Written
   $ 1,948     $ 2,037     $ 817     $ 706     $ 2,765     $ 2,743  
Decrease (Increase) in Unearned Premiums
     148       190       (131 )     (107 )     17       83  
 
                                    
 
                                                
Net Premiums Earned
     2,096       2,227       686       599       2,782       2,826  
 
                                    
 
                                                
Net Losses Paid
     1,106       1,248       326       261       1,432       1,509  
Increase (Decrease) in Outstanding Losses
     253       29       45       77       298       106  
 
                                    
 
                                                
Net Losses Incurred
     1,359       1,277       371       338       1,730       1,615  
 
                                    
 
                                                
Expenses Incurred
     589       600       273       243       862       843  
 
                                                
Dividends Incurred
     8       8       —       —       8       8  
 
                                    
 
                                                
Statutory Underwriting Income (Loss)
   $ 140     $ 342     $ 42     $ 18       182       360  
 
                                        
 
                                                
Increase in Deferred Acquisition Costs
                                     22       16  
 
                                            
 
                                                
GAAP Underwriting Income
                                   $ 204     $ 376  
 
                                            
 
                                                
Ratios After Dividends to Policyholders:
                                                
 
                                                
Loss
     65.1 %     57.5 %     54.1 %     56.4 %     62.3 %     57.3 %
Expense
     30.4       29.6       33.4       34.4       31.3       30.8  
 
                                    
 
                                                
Combined
     95.5 %     87.1 %     87.5 %     90.8 %     93.6 %     88.1 %
 
                                    
 
                                                
Premiums Written as a % of Total
     70.5 %     74.3 %     29.5 %     25.7 %     100.0 %     100.0 %
The Net Losses Incurred amounts have been revised from those originally reported to reflect a reclassification between the United States results and the Outside the United States results. This reclassification had no impact on Worldwide Total results.

Page 10 of 12

 

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.

Page 11 of 12

 

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.
                 
    Three Months Ended
    March 31
    2010   2009
    (dollars in milllions)
 
                
Annualized Net Income
   $ 1,856     $ 1,364  
Average Shareholders’ Equity
   $ 15,688     $ 13,618  
 
                
Return on Equity
     11.8 %     10.0 %
 
                
Annualized Operating Income
   $ 1,524     $ 2,056  
Average Shareholders’ Equity Excluding Unrealized Appreciation or Depreciation
   $ 14,589     $ 13,598  
 
                
Operating Return on Equity
     10.4 %     15.1 %

Page 12 of 12