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) |
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)) |
99.1 | Press release dated October 20, 2011 (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) |
THE CHUBB CORPORATION |
||||
Date: October 20, 2011 | By: | /s/ John J.Kennedy | ||
Name: | John J. Kennedy | |||
Title: | Senior Vice President and Chief Accounting Officer |
|||
Exhibit No. | Description | |
99.1
|
Press release dated October 20, 2011 (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) |
News from The Chubb Corporation | ||||
The Chubb Corporation | ||||
15 Mountain View Road P.O. Box 1615 | ||||
Warren, New Jersey 07061-1615 | ||||
Telephone: 908-903-2000 |
2
3
4
5
For further information contact:
|
Investors: | Glenn A. Montgomery | ||
(908) 903-2365 | ||||
Media: | Mark E. Greenberg | |||
(908) 903-2682 |
6
7
| 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; |
8
| the occurrence of significant weather-related or other natural or human-made disasters, particularly in locations where we have concentrations of risk, or changes to our estimates (or the assessments of rating agencies and other third parties) of our potential exposure to such events; | |
| 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 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, regulatory and similar developments on our business, including those relating to terrorism, catastrophes, the financial markets, solvency standards, capital requirements and accounting guidance; | |
| any downgrade in our claims-paying, financial strength or other credit ratings; | |
| the ability of our subsidiaries to pay us dividends; | |
| general political, economic and market conditions, whether globally or in the markets in which we operate and/or invest, including: |
| changes in credit ratings, 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; and |
| our ability to implement managements strategic plans and initiatives. |
9
Periods Ended September 30 | ||||||||||||||||
Third Quarter | Nine Months | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(in millions) | ||||||||||||||||
PROPERTY AND CASUALTY INSURANCE |
||||||||||||||||
Underwriting |
||||||||||||||||
Net Premiums Written |
$ | 2,879 | $ | 2,732 | $ | 8,793 | $ | 8,383 | ||||||||
Decrease (Increase) in
Unearned Premiums |
53 | 66 | (94 | ) | (4 | ) | ||||||||||
Premiums Earned |
2,932 | 2,798 | 8,699 | 8,379 | ||||||||||||
Losses and Loss Expenses |
2,054 | 1,522 | 5,666 | 4,912 | ||||||||||||
Operating Costs and Expenses |
931 | 864 | 2,790 | 2,615 | ||||||||||||
Decrease (Increase) in Deferred
Policy Acquisition Costs |
(13 | ) | 7 | (70 | ) | (36 | ) | |||||||||
Dividends to Policyholders |
7 | 6 | 23 | 22 | ||||||||||||
Underwriting Income (Loss) |
(47 | ) | 399 | 290 | 866 | |||||||||||
Investments |
||||||||||||||||
Investment Income Before
Expenses |
404 | 398 | 1,200 | 1,187 | ||||||||||||
Investment Expenses |
8 | 8 | 29 | 25 | ||||||||||||
Investment Income |
396 | 390 | 1,171 | 1,162 | ||||||||||||
Other Income (Charges) |
8 | (2 | ) | 24 | (5 | ) | ||||||||||
Property and Casualty Income |
357 | 787 | 1,485 | 2,023 | ||||||||||||
CORPORATE AND OTHER |
(62 | ) | (57 | ) | (188 | ) | (160 | ) | ||||||||
CONSOLIDATED OPERATING INCOME
BEFORE INCOME TAX |
295 | 730 | 1,297 | 1,863 | ||||||||||||
Federal and Foreign Income Tax |
43 | 193 | 266 | 485 | ||||||||||||
CONSOLIDATED OPERATING INCOME |
252 | 537 | 1,031 | 1,378 | ||||||||||||
REALIZED INVESTMENT GAINS AFTER
INCOME TAX |
46 | 35 | 195 | 176 | ||||||||||||
CONSOLIDATED NET INCOME |
$ | 298 | $ | 572 | $ | 1,226 | $ | 1,554 | ||||||||
PROPERTY AND CASUALTY INVESTMENT
INCOME AFTER INCOME TAX |
$ | 321 | $ | 317 | $ | 949 | $ | 941 | ||||||||
10
Periods Ended September 30 | ||||||||||||||||
Third Quarter | Nine Months | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
OUTSTANDING SHARE DATA |
||||||||||||||||
(in millions) |
||||||||||||||||
Average
Common and Potentially Dilutive Shares |
287.8 | 317.3 | 294.4 | 326.3 | ||||||||||||
Actual
Common Shares at End of Period |
278.1 | 304.9 | 278.1 | 304.9 | ||||||||||||
DILUTED EARNINGS PER SHARE DATA |
||||||||||||||||
Operating Income |
$ | .88 | $ | 1.69 | $ | 3.50 | $ | 4.22 | ||||||||
Realized Investment Gains |
.16 | .11 | .66 | .54 | ||||||||||||
Net Income |
$ | 1.04 | $ | 1.80 | $ | 4.16 | $ | 4.76 | ||||||||
Effect of Catastrophes |
$ | (.95 | ) | $ | (.12 | ) | $ | (2.25 | ) | $ | (1.19 | ) | ||||
Sept. 30 | Dec. 31 | Sept. 30 | ||||||||||
2011 | 2010 | 2010 | ||||||||||
BOOK VALUE PER COMMON SHARE |
$ | 56.23 | $ | 52.24 | $ | 52.41 | ||||||
BOOK VALUE PER COMMON SHARE, |
||||||||||||
with Available-for-Sale Fixed Maturities
at Amortized Cost |
51.11 | 49.05 | 47.25 |
Third Quarter | Nine Months | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Losses and Loss Expenses to
Premiums Earned |
70.2 | % | 54.5 | % | 65.3 | % | 58.8 | % | ||||||||
Underwriting Expenses to
Premiums Written |
32.4 | 31.7 | 31.8 | 31.3 | ||||||||||||
Combined Loss and Expense Ratio |
102.6 | % | 86.2 | % | 97.1 | % | 90.1 | % | ||||||||
Effect of Catastrophes on
Combined Loss and Expense Ratio |
14.4 | % | 2.1 | % | 11.7 | % | 7.1 | % |
Third Quarter | Nine Months | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(in millions) | ||||||||||||||||
Paid Losses and Loss Expenses |
$ | 1,728 | $ | 1,581 | $ | 4,938 | $ | 4,699 | ||||||||
Increase (Decrease) in Unpaid Losses
and Loss Expenses |
326 | (59 | ) | 728 | 213 | |||||||||||
Total Losses and Loss Expenses |
$ | 2,054 | $ | 1,522 | $ | 5,666 | $ | 4,912 | ||||||||
11
Net Premiums Written | Combined Loss and | |||||||||||||||||||
% Increase | Expense Ratios | |||||||||||||||||||
2011 | 2010 | (Decrease) | 2011 | 2010 | ||||||||||||||||
(in millions) | ||||||||||||||||||||
NINE MONTHS ENDED SEPTEMBER 30 |
||||||||||||||||||||
Personal Insurance |
||||||||||||||||||||
Automobile |
$ | 517 | $ | 474 | 9 | % | 94.8 | % | 91.1 | % | ||||||||||
Homeowners |
1,872 | 1,795 | 4 | 106.2 | 96.1 | |||||||||||||||
Other |
597 | 593 | 1 | 96.1 | 90.7 | |||||||||||||||
Total Personal |
2,986 | 2,862 | 4 | 102.2 | 94.2 | |||||||||||||||
Commercial Insurance |
||||||||||||||||||||
Multiple Peril |
852 | 817 | 4 | 108.0 | 97.2 | |||||||||||||||
Casualty |
1,247 | 1,162 | 7 | 86.7 | 91.3 | |||||||||||||||
Workers Compensation |
662 | 586 | 13 | 92.5 | 92.1 | |||||||||||||||
Property and Marine |
1,058 | 969 | 9 | 119.0 | 88.1 | |||||||||||||||
Total Commercial |
3,819 | 3,534 | 8 | 101.4 | 91.9 | |||||||||||||||
Specialty Insurance |
||||||||||||||||||||
Professional Liability |
1,740 | 1,735 | | 87.9 | 87.5 | |||||||||||||||
Surety |
244 | 246 | (1 | ) | 49.9 | 42.5 | ||||||||||||||
Total Specialty |
1,984 | 1,981 | | 83.6 | 82.2 | |||||||||||||||
Total Insurance |
8,789 | 8,377 | 5 | 97.4 | 90.3 | |||||||||||||||
Reinsurance Assumed |
4 | 6 | * | * | * | |||||||||||||||
Total |
$ | 8,793 | $ | 8,383 | 5 | 97.1 | 90.1 | |||||||||||||
QUARTERS ENDED SEPTEMBER 30 |
||||||||||||||||||||
Personal Insurance |
||||||||||||||||||||
Automobile |
$ | 174 | $ | 160 | 9 | % | 99.3 | % | 91.7 | % | ||||||||||
Homeowners |
658 | 631 | 4 | 126.1 | 81.0 | |||||||||||||||
Other |
197 | 189 | 4 | 97.6 | 94.2 | |||||||||||||||
Total Personal |
1,029 | 980 | 5 | 115.6 | 85.4 | |||||||||||||||
Commercial Insurance |
||||||||||||||||||||
Multiple Peril |
290 | 277 | 5 | 95.6 | 84.5 | |||||||||||||||
Casualty |
392 | 350 | 12 | 92.5 | 94.9 | |||||||||||||||
Workers Compensation |
199 | 177 | 12 | 94.4 | 95.0 | |||||||||||||||
Property and Marine |
302 | 278 | 9 | 119.8 | 83.3 | |||||||||||||||
Total Commercial |
1,183 | 1,082 | 9 | 101.1 | 89.1 | |||||||||||||||
Specialty Insurance |
||||||||||||||||||||
Professional Liability |
594 | 582 | 2 | 92.5 | 89.3 | |||||||||||||||
Surety |
71 | 87 | (18 | ) | 55.5 | 40.0 | ||||||||||||||
Total Specialty |
665 | 669 | (1 | ) | 88.3 | 83.3 | ||||||||||||||
Total Insurance |
2,877 | 2,731 | 5 | 103.0 | 86.4 | |||||||||||||||
Reinsurance Assumed |
2 | 1 | * | * | * | |||||||||||||||
Total |
$ | 2,879 | $ | 2,732 | 5 | 102.6 | 86.2 | |||||||||||||
* | The change in net premiums written and the combined loss and expense ratios are no longer presented for Reinsurance Assumed since this business is in runoff. |
The
|
Supplementary | September 30, 2011 | ||
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. |
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 |
Sept. 30 | Dec. 31 | |||||||||||||||
2011 | 2010 | |||||||||||||||
% of Total | % of Total | |||||||||||||||
Invested Assets (at carrying value) |
||||||||||||||||
Short Term Investments |
$ | 2,289 | 5 | % | $ | 1,905 | 4 | % | ||||||||
Fixed Maturities |
||||||||||||||||
Tax Exempt |
20,134 | 47 | 19,774 | 47 | ||||||||||||
Taxable |
17,271 | 40 | 16,745 | 40 | ||||||||||||
Equity Securities |
1,366 | 3 | 1,550 | 4 | ||||||||||||
Other Invested Assets |
2,313 | 5 | 2,239 | 5 | ||||||||||||
Total Invested Assets |
$ | 43,373 | 100 | % | $ | 42,213 | 100 | % | ||||||||
Unrealized Appreciation of Investments |
||||||||||||||||
Fixed Maturities |
$ | 2,189 | $ | 1,458 | ||||||||||||
Equity Securities |
95 | 265 | ||||||||||||||
2,284 | 1,723 | |||||||||||||||
Deferred Income Tax Liability |
799 | 603 | ||||||||||||||
$ | 1,485 | $ | 1,120 | |||||||||||||
Capitalization |
||||||||||||||||
Long Term Debt |
$ | 3,975 | $ | 3,975 | ||||||||||||
Shareholders Equity |
15,638 | 15,530 | ||||||||||||||
Total Capitalization |
$ | 19,613 | $ | 19,505 | ||||||||||||
Debt as a Percentage of Total Capitalization |
20.3 | % | 20.4 | % | ||||||||||||
Actual Common Shares Outstanding |
278.1 | 297.3 | ||||||||||||||
Book Value Per Common Share |
$ | 56.23 | $ | 52.24 | ||||||||||||
Book Value Per Common Share, with Available-for-Sale Fixed Maturities at Amortized Cost |
$ | 51.11 | $ | 49.05 |
Page 1 of 17
Periods Ended September 30 | ||||||||||||
Third | Nine | From | ||||||||||
Quarter | Months | December 2005 | ||||||||||
2011 | 2011 | to September 30, 2011 | ||||||||||
Cost of Shares Repurchased |
$480 | $1,322 | $9,282 | |||||||||
Average Cost Per Share |
$59.97 | $61.24 | $52.12 | |||||||||
Shares Repurchased |
7,997,173 | 21,587,016 | 178,094,720 |
Page 2 of 17
Cost or | Carrying | |||||||||||||||
Amortized Cost | Value (a) | |||||||||||||||
Sept. 30 | Dec. 31 | Sept. 30 | Dec. 31 | |||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(in millions) | ||||||||||||||||
Short Term Investments |
$ | 1,322 | $ | 817 | $ | 1,322 | $ | 817 | ||||||||
Taxable Fixed
Maturities |
1,052 | 1,154 | 1,084 | 1,197 | ||||||||||||
Equity Securities |
200 | 205 | 145 | 171 | ||||||||||||
Other Invested Assets |
14 | 23 | 14 | 23 | ||||||||||||
TOTAL |
$ | 2,588 | $ | 2,199 | $ | 2,565 | $ | 2,208 | ||||||||
Cost or | Carrying | |||||||||||||||
Amortized Cost | Value (a) | |||||||||||||||
Sept. 30 | Dec. 31 | Sept. 30 | Dec. 31 | |||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(in millions) | ||||||||||||||||
Short Term Investments |
$ | 967 | $ | 1,088 | $ | 967 | $ | 1,088 | ||||||||
Fixed Maturities |
||||||||||||||||
Tax Exempt |
18,879 | 19,072 | 20,134 | 19,774 | ||||||||||||
Taxable |
15,285 | 14,835 | 16,187 | 15,548 | ||||||||||||
Equity Securities |
1,071 | 1,080 | 1,221 | 1,379 | ||||||||||||
Other Invested Assets |
2,299 | 2,216 | 2,299 | 2,216 | ||||||||||||
TOTAL |
$ | 38,501 | $ | 38,291 | $ | 40,808 | $ | 40,005 | ||||||||
(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 Chubbs equity in the net assets of the partnerships. |
Page 3 of 17
Periods Ended September 30 | ||||||||||||||||
Third Quarter | Nine Months | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(in millions) | ||||||||||||||||
CORPORATE INVESTMENT INCOME |
$ | 7 | $ | 8 | $ | 21 | $ | 38 | ||||||||
PROPERTY AND CASUALTY INVESTMENT INCOME |
||||||||||||||||
Tax Exempt Interest |
$ | 190 | $ | 190 | $ | 575 | $ | 569 | ||||||||
Taxable Interest |
119 | 116 | 352 | 351 | ||||||||||||
Other |
17 | 16 | 41 | 37 | ||||||||||||
Investment Expenses |
(5 | ) | (5 | ) | (19 | ) | (16 | ) | ||||||||
TOTAL |
$ | 321 | $ | 317 | $ | 949 | $ | 941 | ||||||||
Effective Tax Rate |
18.9 | % | 18.7 | % | 19.0 | % | 19.0 | % | ||||||||
After-Tax Annualized Yield |
3.28 | % | 3.32 | % | 3.24 | % | 3.28 | % |
Sept. 30 | Dec. 31 | Sept. 30 | ||||||||||
2011 | 2010 | 2010 | ||||||||||
(in millions) | ||||||||||||
Estimated Statutory
Policyholders Surplus |
$13,950 | $14,539 | $14,525 | |||||||||
Rolling Year Statutory Net Premiums Written |
$11,675 | $11,262 | $11,185 | |||||||||
Ratio of Statutory Net Premiums Written to Policyholders Surplus |
0.84:1 | 0.77:1 | 0.77:1 |
Page 4 of 17
All Other | ||||||||||||||||||||
Net Unpaid Losses | IBNR | Unpaid Losses | ||||||||||||||||||
Increase | Increase | Increase | ||||||||||||||||||
9/30/11 | 12/31/10 | (Decrease) | (Decrease) | (Decrease) | ||||||||||||||||
(in millions) | ||||||||||||||||||||
Personal Insurance |
||||||||||||||||||||
Automobile |
$ | 418 | $ | 395 | $ | 23 | $ | 3 | $ | 20 | ||||||||||
Homeowners |
965 | 692 | 273 | 207 | 66 | |||||||||||||||
Other |
897 | 877 | 20 | 2 | 18 | |||||||||||||||
Total Personal |
2,280 | 1,964 | 316 | 212 | 104 | |||||||||||||||
Commercial Insurance |
||||||||||||||||||||
Multiple Peril |
1,827 | 1,705 | 122 | 78 | 44 | |||||||||||||||
Casualty |
6,265 | 6,141 | 124 | 159 | (35 | ) | ||||||||||||||
Workers Compensation |
2,352 | 2,234 | 118 | 89 | 29 | |||||||||||||||
Property and Marine |
1,140 | 819 | 321 | 167 | 154 | |||||||||||||||
Total Commercial |
11,584 | 10,899 | 685 | 493 | 192 | |||||||||||||||
Specialty Insurance |
||||||||||||||||||||
Professional Liability |
7,351 | 7,388 | (37 | ) | (72 | ) | 35 | |||||||||||||
Surety |
69 | 58 | 11 | | 11 | |||||||||||||||
Total Specialty |
7,420 | 7,446 | (26 | ) | (72 | ) | 46 | |||||||||||||
Total Insurance |
21,284 | 20,309 | 975 | 633 | 342 | |||||||||||||||
Reinsurance Assumed |
500 | 592 | (92 | ) | (77 | ) | (15 | ) | ||||||||||||
Total |
$ | 21,784 | $ | 20,901 | $ | 883 | $ | 556 | $ | 327 | ||||||||||
Page 5 of 17
Personal | Other | Total | ||||||||||||||||||||||||||||||
Automobile | Homeowners | Personal | Personal | |||||||||||||||||||||||||||||
2011 | 2010 | 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | |||||||||||||||||||||||||
Net Premiums Written |
$ | 517 | $ | 474 | $ | 1,872 | $ | 1,795 | $ | 597 | $ | 593 | $ | 2,986 | $ | 2,862 | ||||||||||||||||
Decrease (Increase) in
Unearned Premiums |
(17 | ) | (16 | ) | (47 | ) | (24 | ) | 2 | (22 | ) | (62 | ) | (62 | ) | |||||||||||||||||
Net Premiums Earned |
500 | 458 | 1,825 | 1,771 | 599 | 571 | 2,924 | 2,800 | ||||||||||||||||||||||||
Net Losses Paid |
299 | 281 | 1,050 | 1,066 | 334 | 331 | 1,683 | 1,678 | ||||||||||||||||||||||||
Increase (Decrease) in
Outstanding Losses |
20 | (1 | ) | 267 | 51 | 13 | (4 | ) | 300 | 46 | ||||||||||||||||||||||
Net Losses Incurred |
319 | 280 | 1,317 | 1,117 | 347 | 327 | 1,983 | 1,724 | ||||||||||||||||||||||||
Expenses Incurred |
160 | 142 | 637 | 593 | 228 | 198 | 1,025 | 933 | ||||||||||||||||||||||||
Dividends Incurred |
| | | | | | | | ||||||||||||||||||||||||
Statutory Underwriting
Income (Loss) |
$ | 21 | $ | 36 | $ | (129 | ) | $ | 61 | $ | 24 | $ | 46 | $ | (84 | ) | $ | 143 | ||||||||||||||
Ratios After Dividends
to Policyholders: |
||||||||||||||||||||||||||||||||
Loss |
63.8 | % | 61.1 | % | 72.2 | % | 63.1 | % | 57.9 | % | 57.3 | % | 67.9 | % | 61.6 | % | ||||||||||||||||
Expense |
31.0 | 30.0 | 34.0 | 33.0 | 38.2 | 33.4 | 34.3 | 32.6 | ||||||||||||||||||||||||
Combined |
94.8 | % | 91.1 | % | 106.2 | % | 96.1 | % | 96.1 | % | 90.7 | % | 102.2 | % | 94.2 | % | ||||||||||||||||
Premiums Written
as a % of Total |
5.9 | % | 5.6 | % | 21.3 | % | 21.4 | % | 6.8 | % | 7.1 | % | 34.0 | % | 34.1 | % |
Page 6 of 17
Commercial | Commercial | |||||||||||||||||||||||||||||||||||||||
Commercial | Commercial | Workers | Property | Total | ||||||||||||||||||||||||||||||||||||
Multiple Peril | Casualty | Compensation | and Marine | Commercial | ||||||||||||||||||||||||||||||||||||
2011 | 2010 | 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | |||||||||||||||||||||||||||||||
Net Premiums Written |
$ | 852 | $ | 817 | $ | 1,247 | $ | 1,162 | $ | 662 | $ | 586 | $ | 1,058 | $ | 969 | $ | 3,819 | $ | 3,534 | ||||||||||||||||||||
Decrease (Increase) in
Unearned Premiums |
(4 | ) | 16 | (32 | ) | (18 | ) | (46 | ) | (36 | ) | (45 | ) | (21 | ) | (127 | ) | (59 | ) | |||||||||||||||||||||
Net Premiums Earned |
848 | 833 | 1,215 | 1,144 | 616 | 550 | 1,013 | 948 | 3,692 | 3,475 | ||||||||||||||||||||||||||||||
Net Losses Paid |
479 | 407 | 631 | 584 | 299 | 291 | 548 | 466 | 1,957 | 1,748 | ||||||||||||||||||||||||||||||
Increase (Decrease) in
Outstanding Losses |
118 | 94 | 78 | 133 | 117 | 68 | 311 | 43 | 624 | 338 | ||||||||||||||||||||||||||||||
Net Losses Incurred |
597 | 501 | 709 | 717 | 416 | 359 | 859 | 509 | 2,581 | 2,086 | ||||||||||||||||||||||||||||||
Expenses Incurred |
320 | 303 | 353 | 333 | 146 | 141 | 362 | 333 | 1,181 | 1,110 | ||||||||||||||||||||||||||||||
Dividends Incurred |
| | | | 20 | 17 | | | 20 | 17 | ||||||||||||||||||||||||||||||
Statutory Underwriting
Income (Loss) |
$ | (69 | ) | $ | 29 | $ | 153 | $ | 94 | $ | 34 | $ | 33 | $ | (208 | ) | $ | 106 | $ | (90 | ) | $ | 262 | |||||||||||||||||
Ratios After Dividends
to Policyholders: |
||||||||||||||||||||||||||||||||||||||||
Loss |
70.4 | % | 60.1 | % | 58.4 | % | 62.6 | % | 69.8 | % | 67.3 | % | 84.8 | % | 53.7 | % | 70.3 | % | 60.3 | % | ||||||||||||||||||||
Expense |
37.6 | 37.1 | 28.3 | 28.7 | 22.7 | 24.8 | 34.2 | 34.4 | 31.1 | 31.6 | ||||||||||||||||||||||||||||||
Combined |
108.0 | % | 97.2 | % | 86.7 | % | 91.3 | % | 92.5 | % | 92.1 | % | 119.0 | % | 88.1 | % | 101.4 | % | 91.9 | % | ||||||||||||||||||||
Premiums Written
as a % of Total |
9.7 | % | 9.7 | % | 14.2 | % | 13.9 | % | 7.5 | % | 7.0 | % | 12.0 | % | 11.6 | % | 43.4 | % | 42.2 | % |
Page 7 of 17
Professional | Total | |||||||||||||||||||||||
Liability | Surety | Specialty | ||||||||||||||||||||||
2011 | 2010 | 2011 | 2010 | 2011 | 2010 | |||||||||||||||||||
Net Premiums Written |
$ | 1,740 | $ | 1,735 | $ | 244 | $ | 246 | $ | 1,984 | $ | 1,981 | ||||||||||||
Decrease (Increase) in
Unearned Premiums |
95 | 104 | (2 | ) | 8 | 93 | 112 | |||||||||||||||||
Net Premiums Earned |
1,835 | 1,839 | 242 | 254 | 2,077 | 2,093 | ||||||||||||||||||
Net Losses Paid |
1,202 | 1,165 | 25 | 14 | 1,227 | 1,179 | ||||||||||||||||||
Increase (Decrease) in
Outstanding Losses |
(115 | ) | (66 | ) | 11 | 3 | (104 | ) | (63 | ) | ||||||||||||||
Net Losses Incurred |
1,087 | 1,099 | 36 | 17 | 1,123 | 1,116 | ||||||||||||||||||
Expenses Incurred |
499 | 482 | 84 | 86 | 583 | 568 | ||||||||||||||||||
Dividends Incurred |
| | 3 | 5 | 3 | 5 | ||||||||||||||||||
Statutory Underwriting
Income (Loss) |
$ | 249 | $ | 258 | $ | 119 | $ | 146 | $ | 368 | $ | 404 | ||||||||||||
Ratios After Dividends
to Policyholders: |
||||||||||||||||||||||||
Loss |
59.2 | % | 59.7 | % | 15.0 | % | 6.8 | % | 54.2 | % | 53.5 | % | ||||||||||||
Expense |
28.7 | 27.8 | 34.9 | 35.7 | 29.4 | 28.7 | ||||||||||||||||||
Combined |
87.9 | % | 87.5 | % | 49.9 | % | 42.5 | % | 83.6 | % | 82.2 | % | ||||||||||||
Premiums Written
as a % of Total |
19.8 | % | 20.7 | % | 2.8 | % | 2.9 | % | 22.6 | % | 23.6 | % |
Page 8 of 17
Total | Reinsurance | Worldwide | ||||||||||||||||||||||
Insurance | Assumed | Total | ||||||||||||||||||||||
2011 | 2010 | 2011 | 2010 | 2011 | 2010 | |||||||||||||||||||
Net Premiums Written |
$ | 8,789 | $ | 8,377 | $ | 4 | $ | 6 | $ | 8,793 | $ | 8,383 | ||||||||||||
Decrease (Increase) in
Unearned Premiums |
(96 | ) | (9 | ) | 2 | 5 | (94 | ) | (4 | ) | ||||||||||||||
Net Premiums Earned |
8,693 | 8,368 | 6 | 11 | 8,699 | 8,379 | ||||||||||||||||||
Net Losses Paid |
4,867 | 4,605 | 71 | 94 | 4,938 | 4,699 | ||||||||||||||||||
Increase (Decrease) in
Outstanding Losses |
820 | 321 | (92 | ) | (108 | ) | 728 | 213 | ||||||||||||||||
Net Losses Incurred |
5,687 | 4,926 | (21 | ) | (14 | ) | 5,666 | 4,912 | ||||||||||||||||
Expenses Incurred |
2,789 | 2,611 | 1 | 4 | 2,790 | 2,615 | ||||||||||||||||||
Dividends Incurred |
23 | 22 | | | 23 | 22 | ||||||||||||||||||
Statutory Underwriting
Income |
$ | 194 | $ | 809 | $ | 26 | $ | 21 | 220 | 830 | ||||||||||||||
Increase in Deferred
Acquisition Costs |
70 | 36 | ||||||||||||||||||||||
GAAP Underwriting Income |
$ | 290 | $ | 866 | ||||||||||||||||||||
Ratios After Dividends
to Policyholders: |
||||||||||||||||||||||||
Loss |
65.6 | % | 59.0 | % | * | % | * | % | 65.3 | % | 58.8 | % | ||||||||||||
Expense |
31.8 | 31.3 | * | * | 31.8 | 31.3 | ||||||||||||||||||
Combined |
97.4 | % | 90.3 | % | * | % | * | % | 97.1 | % | 90.1 | % | ||||||||||||
Premiums Written
as a % of Total |
100.0 | % | 99.9 | % | 0.0 | % | 0.1 | % | 100.0 | % | 100.0 | % |
* | Combined, loss and expense ratios are no longer presented for Reinsurance Assumed since this business is in runoff. |
Page 9 of 17
Outside | ||||||||||||||||||||||||
the | Worldwide | |||||||||||||||||||||||
United States | United States | Total | ||||||||||||||||||||||
2011 | 2010 | 2011 | 2010 | 2011 | 2010 | |||||||||||||||||||
Net Premiums Written |
$ | 6,349 | $ | 6,229 | $ | 2,444 | 2,154 | $ | 8,793 | $ | 8,383 | |||||||||||||
Decrease (Increase) in
Unearned Premiums |
(56 | ) | 21 | (38 | ) | (25 | ) | (94 | ) | (4 | ) | |||||||||||||
Net Premiums Earned |
6,293 | 6,250 | 2,406 | 2,129 | 8,699 | 8,379 | ||||||||||||||||||
Net Losses Paid |
3,791 | 3,722 | 1,147 | 977 | 4,938 | 4,699 | ||||||||||||||||||
Increase (Decrease) in
Outstanding Losses |
524 | 182 | 204 | 31 | 728 | 213 | ||||||||||||||||||
Net Losses Incurred |
4,315 | 3,904 | 1,351 | 1,008 | 5,666 | 4,912 | ||||||||||||||||||
Expenses Incurred |
1,889 | 1,848 | 901 | 767 | 2,790 | 2,615 | ||||||||||||||||||
Dividends Incurred |
23 | 22 | | | 23 | 22 | ||||||||||||||||||
Statutory Underwriting
Income |
$ | 66 | $ | 476 | $ | 154 | $ | 354 | 220 | 830 | ||||||||||||||
Increase in Deferred
Acquisition Costs |
70 | 36 | ||||||||||||||||||||||
GAAP Underwriting Income |
$ | 290 | $ | 866 | ||||||||||||||||||||
Ratios After Dividends
to Policyholders: |
||||||||||||||||||||||||
Loss |
68.8 | % | 62.7 | % | 56.2 | % | 47.3 | % | 65.3 | % | 58.8 | % | ||||||||||||
Expense |
29.9 | 29.8 | 36.9 | 35.6 | 31.8 | 31.3 | ||||||||||||||||||
Combined |
98.7 | % | 92.5 | % | 93.1 | % | 82.9 | % | 97.1 | % | 90.1 | % | ||||||||||||
Premiums Written
as a % of Total |
72.2 | % | 74.2 | % | 27.8 | % | 25.8 | % | 100.0 | % | 100.0 | % |
Page 10 of 17
Personal | Other | Total | ||||||||||||||||||||||||||||||
Automobile | Homeowners | Personal | Personal | |||||||||||||||||||||||||||||
2011 | 2010 | 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | |||||||||||||||||||||||||
Net Premiums Written |
$ | 174 | $ | 160 | $ | 658 | $ | 631 | $ | 197 | $ | 189 | $ | 1,029 | $ | 980 | ||||||||||||||||
Decrease (Increase) in
Unearned Premiums |
(4 | ) | (6 | ) | (43 | ) | (37 | ) | 5 | 5 | (42 | ) | (38 | ) | ||||||||||||||||||
Net Premiums Earned |
170 | 154 | 615 | 594 | 202 | 194 | 987 | 942 | ||||||||||||||||||||||||
Net Losses Paid |
106 | 90 | 388 | 361 | 101 | 111 | 595 | 562 | ||||||||||||||||||||||||
Increase (Decrease) in
Outstanding Losses |
10 | 5 | 182 | (71 | ) | 13 | 3 | 205 | (63 | ) | ||||||||||||||||||||||
Net Losses Incurred |
116 | 95 | 570 | 290 | 114 | 114 | 800 | 499 | ||||||||||||||||||||||||
Expenses Incurred |
54 | 48 | 220 | 203 | 81 | 67 | 355 | 318 | ||||||||||||||||||||||||
Dividends Incurred |
| | | | | | | | ||||||||||||||||||||||||
Statutory Underwriting
Income (Loss) |
$ | | $ | 11 | $ | (175 | ) | $ | 101 | $ | 7 | $ | 13 | $ | (168 | ) | $ | 125 | ||||||||||||||
Ratios After Dividends
to Policyholders: |
||||||||||||||||||||||||||||||||
Loss |
68.3 | % | 61.7 | % | 92.7 | % | 48.8 | % | 56.5 | % | 58.8 | % | 81.1 | % | 53.0 | % | ||||||||||||||||
Expense |
31.0 | 30.0 | 33.4 | 32.2 | 41.1 | 35.4 | 34.5 | 32.4 | ||||||||||||||||||||||||
Combined |
99.3 | % | 91.7 | % | 126.1 | % | 81.0 | % | 97.6 | % | 94.2 | % | 115.6 | % | 85.4 | % | ||||||||||||||||
Premiums Written
as a % of Total |
6.0 | % | 5.9 | % | 22.9 | % | 23.1 | % | 6.8 | % | 6.9 | % | 35.7 | % | 35.9 | % |
Page 11 of 17
Commercial | Commercial | |||||||||||||||||||||||||||||||||||||||
Commercial | Commercial | Workers | Property | Total | ||||||||||||||||||||||||||||||||||||
Multiple Peril | Casualty | Compensation | and Marine | Commercial | ||||||||||||||||||||||||||||||||||||
2011 | 2010 | 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | |||||||||||||||||||||||||||||||
Net Premiums Written |
$ | 290 | $ | 277 | $ | 392 | $ | 350 | $ | 199 | $ | 177 | $ | 302 | $ | 278 | $ | 1,183 | $ | 1,082 | ||||||||||||||||||||
Decrease (Increase) in
Unearned Premiums |
(9 | ) | | 18 | 31 | 14 | 4 | 43 | 42 | 66 | 77 | |||||||||||||||||||||||||||||
Net Premiums Earned |
281 | 277 | 410 | 381 | 213 | 181 | 345 | 320 | 1,249 | 1,159 | ||||||||||||||||||||||||||||||
Net Losses Paid |
173 | 148 | 198 | 211 | 92 | 90 | 219 | 164 | 682 | 613 | ||||||||||||||||||||||||||||||
Increase (Decrease) in
Outstanding Losses |
(6 | ) | (13 | ) | 61 | 33 | 52 | 31 | 63 | (15 | ) | 170 | 36 | |||||||||||||||||||||||||||
Net Losses Incurred |
167 | 135 | 259 | 244 | 144 | 121 | 282 | 149 | 852 | 649 | ||||||||||||||||||||||||||||||
Expenses Incurred |
105 | 99 | 115 | 108 | 48 | 46 | 115 | 102 | 383 | 355 | ||||||||||||||||||||||||||||||
Dividends Incurred |
| | | | 6 | 4 | | | 6 | 4 | ||||||||||||||||||||||||||||||
Statutory Underwriting
Income (Loss) |
$ | 9 | $ | 43 | $ | 36 | $ | 29 | $ | 15 | $ | 10 | $ | (52 | ) | $ | 69 | $ | 8 | $ | 151 | |||||||||||||||||||
Ratios After Dividends
to Policyholders: |
||||||||||||||||||||||||||||||||||||||||
Loss |
59.4 | % | 48.8 | % | 63.2 | % | 64.0 | % | 69.5 | % | 68.4 | % | 81.7 | % | 46.6 | % | 68.6 | % | 56.2 | % | ||||||||||||||||||||
Expense |
36.2 | 35.7 | 29.3 | 30.9 | 24.9 | 26.6 | 38.1 | 36.7 | 32.5 | 32.9 | ||||||||||||||||||||||||||||||
Combined |
95.6 | % | 84.5 | % | 92.5 | % | 94.9 | % | 94.4 | % | 95.0 | % | 119.8 | % | 83.3 | % | 101.1 | % | 89.1 | % | ||||||||||||||||||||
Premiums Written
as a % of Total |
10.1 | % | 10.1 | % | 13.6 | % | 12.8 | % | 6.9 | % | 6.5 | % | 10.5 | % | 10.2 | % | 41.1 | % | 39.6 | % |
Page 12 of 17
Professional | Total | |||||||||||||||||||||||
Liability | Surety | Specialty | ||||||||||||||||||||||
2011 | 2010 | 2011 | 2010 | 2011 | 2010 | |||||||||||||||||||
Net Premiums Written |
$ | 594 | $ | 582 | $ | 71 | $ | 87 | $ | 665 | $ | 669 | ||||||||||||
Decrease (Increase) in
Unearned Premiums |
21 | 25 | 7 | | 28 | 25 | ||||||||||||||||||
Net Premiums Earned |
615 | 607 | 78 | 87 | 693 | 694 | ||||||||||||||||||
Net Losses Paid |
420 | 371 | 10 | 6 | 430 | 377 | ||||||||||||||||||
Increase (Decrease) in
Outstanding Losses |
(22 | ) | 4 | 3 | (1 | ) | (19 | ) | 3 | |||||||||||||||
Net Losses Incurred |
398 | 375 | 13 | 5 | 411 | 380 | ||||||||||||||||||
Expenses Incurred |
165 | 160 | 27 | 29 | 192 | 189 | ||||||||||||||||||
Dividends Incurred |
| | 1 | 2 | 1 | 2 | ||||||||||||||||||
Statutory Underwriting
Income (Loss) |
$ | 52 | $ | 72 | $ | 37 | $ | 51 | $ | 89 | $ | 123 | ||||||||||||
Ratios After Dividends
to Policyholders: |
||||||||||||||||||||||||
Loss |
64.7 | % | 61.8 | % | 16.9 | % | 5.9 | % | 59.4 | % | 54.9 | % | ||||||||||||
Expense |
27.8 | 27.5 | 38.6 | 34.1 | 28.9 | 28.4 | ||||||||||||||||||
Combined |
92.5 | % | 89.3 | % | 55.5 | % | 40.0 | % | 88.3 | % | 83.3 | % | ||||||||||||
Premiums Written
as a % of Total |
20.6 | % | 21.3 | % | 2.5 | % | 3.2 | % | 23.1 | % | 24.5 | % |
Page 13 of 17
Total | Reinsurance | Worldwide | ||||||||||||||||||||||
Insurance | Assumed | Total | ||||||||||||||||||||||
2011 | 2010 | 2011 | 2010 | 2011 | 2010 | |||||||||||||||||||
Net Premiums Written |
$ | 2,877 | $ | 2,731 | $ | 2 | $ | 1 | $ | 2,879 | $ | 2,732 | ||||||||||||
Decrease (Increase) in
Unearned Premiums |
52 | 64 | 1 | 2 | 53 | 66 | ||||||||||||||||||
Net Premiums Earned |
2,929 | 2,795 | 3 | 3 | 2,932 | 2,798 | ||||||||||||||||||
Net Losses Paid |
1,707 | 1,552 | 21 | 29 | 1,728 | 1,581 | ||||||||||||||||||
Increase (Decrease) in
Outstanding Losses |
356 | (24 | ) | (30 | ) | (35 | ) | 326 | (59 | ) | ||||||||||||||
Net Losses Incurred |
2,063 | 1,528 | (9 | ) | (6 | ) | 2,054 | 1,522 | ||||||||||||||||
Expenses Incurred |
930 | 862 | 1 | 2 | 931 | 864 | ||||||||||||||||||
Dividends Incurred |
7 | 6 | | | 7 | 6 | ||||||||||||||||||
Statutory Underwriting
Income (Loss) |
$ | (71 | ) | $ | 399 | $ | 11 | $ | 7 | (60 | ) | 406 | ||||||||||||
Increase (Decrease) in
Deferred Acquisition Costs |
13 | (7 | ) | |||||||||||||||||||||
GAAP Underwriting Income (Loss) |
$ | (47 | ) | $ | 399 | |||||||||||||||||||
Ratios After Dividends
to Policyholders: |
||||||||||||||||||||||||
Loss |
70.6 | % | 54.8 | % | * | % | * | % | 70.2 | % | 54.5 | % | ||||||||||||
Expense |
32.4 | 31.6 | * | * | 32.4 | 31.7 | ||||||||||||||||||
Combined |
103.0 | % | 86.4 | % | * | % | * | % | 102.6 | % | 86.2 | % | ||||||||||||
Premiums Written
as a % of Total |
99.9 | % | 100.0 | % | 0.1 | % | 0.0 | % | 100.0 | % | 100.0 | % |
* | Combined, loss and expense ratios are no longer presented for Reinsurance Assumed since this business is in runoff. |
Page 14 of 17
Outside | ||||||||||||||||||||||||
the | Worldwide | |||||||||||||||||||||||
United States | United States | Total | ||||||||||||||||||||||
2011 | 2010 | 2011 | 2010 | 2011 | 2010 | |||||||||||||||||||
Net Premiums Written |
$ | 2,116 | $ | 2,082 | $ | 763 | $ | 650 | $ | 2,879 | $ | 2,732 | ||||||||||||
Decrease (Increase) in
Unearned Premiums |
(16 | ) | (5 | ) | 69 | 71 | 53 | 66 | ||||||||||||||||
Net Premiums Earned |
2,100 | 2,077 | 832 | 721 | 2,932 | 2,798 | ||||||||||||||||||
Net Losses Paid |
1,363 | 1,256 | 365 | 325 | 1,728 | 1,581 | ||||||||||||||||||
Increase (Decrease) in
Outstanding Losses |
278 | (56 | ) | 48 | (3 | ) | 326 | (59 | ) | |||||||||||||||
Net Losses Incurred |
1,641 | 1,200 | 413 | 322 | 2,054 | 1,522 | ||||||||||||||||||
Expenses Incurred |
628 | 625 | 303 | 239 | 931 | 864 | ||||||||||||||||||
Dividends Incurred |
7 | 6 | | | 7 | 6 | ||||||||||||||||||
Statutory Underwriting
Income (Loss) |
$ | (176 | ) | $ | 246 | $ | 116 | $ | 160 | (60 | ) | 406 | ||||||||||||
Increase (Decrease) in
Deferred Acquisition Costs |
13 | (7 | ) | |||||||||||||||||||||
GAAP Underwriting Income (Loss) |
$ | (47 | ) | $ | 399 | |||||||||||||||||||
Ratios After Dividends
to Policyholders: |
||||||||||||||||||||||||
Loss |
78.4 | % | 57.9 | % | 49.6 | % | 44.7 | % | 70.2 | % | 54.5 | % | ||||||||||||
Expense |
29.8 | 30.1 | 39.7 | 36.8 | 32.4 | 31.7 | ||||||||||||||||||
Combined |
108.2 | % | 88.0 | % | 89.3 | % | 81.5 | % | 102.6 | % | 86.2 | % | ||||||||||||
Premiums Written
as a % of Total |
73.5 | % | 76.2 | % | 26.5 | % | 23.8 | % | 100.0 | % | 100.0 | % |
Page 15 of 17
Page 16 of 17
Periods Ended September 30 | ||||||||||||||||
Third Quarter | Nine Months | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(dollars in millions) | ||||||||||||||||
Annualized Net Income |
$ | 1,192 | $ | 2,288 | $ | 1,635 | $ | 2,072 | ||||||||
Average Shareholders Equity |
$ | 15,715 | $ | 15,756 | $ | 15,635 | $ | 15,722 | ||||||||
Return on Equity |
7.6 | % | 14.5 | % | 10.5 | % | 13.2 | % | ||||||||
Annualized Operating Income |
$ | 1,008 | $ | 2,148 | $ | 1,375 | $ | 1,837 | ||||||||
Average Shareholders Equity Excluding Unrealized Appreciation or
Depreciation |
$ | 14,296 | $ | 14,315 | $ | 14,379 | $ | 14,452 | ||||||||
Operating Return on Equity |
7.1 | % | 15.0 | % | 9.6 | % | 12.7 | % |
Page 17 of 17