EX-99.3 4 d860486dex993.htm EX-99.3 EX-99.3
The Chubb Corporation
2014 Update on Asbestos
Reserves
Date of release: 01/29/2015
Exhibit 99.3


CHUBB
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Forward-Looking Statements
The following materials contain “forward-looking statements,”
including those relating to loss reserves and claim estimates, that
are subject to certain risks and uncertainties which could cause
actual results to differ materially from those expressed or
suggested by such statements.  Such risks or uncertainties
include but are not limited to those which may be noted more fully
in the materials themselves, as well as those discussed or
identified from time to time in The Chubb Corporation’s public
filings with the Securities and Exchange Commission.  The Chubb
Corporation assumes no obligation to update any forward-looking
information set forth in the following materials, which speak as
of
January 29, 2015 or as otherwise specified in the materials.


CHUBB
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Contents
Purpose of Updated Review
Evaluation Methodology
Exposure Analysis
Asbestos Payments and Reserves
Three Year Reserve Comparison
Conclusions


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Purpose of Review
Reassess Chubb’s ultimate liability regarding asbestos
exposures using an internal analysis, reviewed by our
independent outside consulting actuaries
Determine appropriate reserve levels
Ensure aggressive case management of asbestos claims
manage our exposure
identify trends or issues that may impact exposure
Provide relevant substantive information requested by
investors and rating agencies


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Evaluation Methodology
Chubb segmented its defendant policyholders into two
groups
Traditional defendant policyholders (Tiers 1 & 2)
Those engaged in asbestos mining, manufacturing and
building products industries
Peripheral defendant policyholders (Tiers 3 & 4)
Those who manufactured, distributed, or installed an
asbestos-containing product or who owned or operated
a facility where asbestos products were present


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Exposure Analysis
Within these policyholder categories:
All Tier 1 & 2 accounts and Tier 3 & 4 accounts with Chubb incurred
losses of at least $3M or judged to have high potential exposure
were
evaluated individually.  Claimant information and available coverage
were reviewed for each defendant policyholder, including terms of
coverage, policy limits and aggregate limits.
Tier 3 & 4 accounts not individually evaluated were analyzed in the
aggregate using statistical techniques.  Factors considered include
available coverage, claimant count, report year, bankruptcy, coverage
dispute and case reserve amount.
Future claims from unknown defendant policyholders were estimated
based on claim reporting patterns and projected claim severities.


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Asbestos Payments & Reserves by Category
#
$
$
Traditional Defendants Tier 1
1
33
Traditional Defendants Tier 2
8
42
46
Peripheral Defendants Tiers 3 & 4
333
43                  265
All Other
6
22
Reserves for future claims from
unknown policyholders
Unknown
134               
Total
342
91
500
Policyholders
Total Net
Net Asbestos
with Open Claims
Paid
Reserves
At 12/31/14
In 2014
At 12/31/14
($ in millions)


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Asbestos Payments & Reserves by Category
Total net asbestos reserves at 12/31/14: $500M
Case reserves of $179M
Established by Claim Department on known claims
IBNR reserves of $321M
Includes provision for:
potential reserve development on known defendant
policyholders (development)
future claims from unknown defendant policyholders
(pure IBNR)
future declaratory judgment actions and other
litigation


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Asbestos Net Loss Reserve Comparison
($ in Millions)
2014
2012
Beginning Reserves
$566
Incurred Losses & LAE
25
51
Calendar Year Payments
for Losses
(72)
(52)
(19)
(22)
Ending Reserves
$500
$566
IBNR portion of
Ending Reserves
$321
$334
$589
Calendar Year Payments
for LAE
2013
$605
28
(25)
(19)
$589
$331


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Conclusions
Chubb’s asbestos net reserves of $500M at 12/31/14 are
based on our 2014 analysis of our ultimate asbestos liabilities
This reserve represents Chubb’s best estimate of our ultimate
asbestos liability at 12/31/14
This reserve amount is at full (undiscounted) value, and no
consideration has been given for legislative or judicial relief
The net reserve reflects a modest reinsurance recoverable
amount of approximately 4% of the gross reserve
Net payments for asbestos liabilities in 2014 were $91M
Reserves at 12/31/14 calculate to a 3 year survival ratio of 7.2