Segment information

We implemented organizational changes in 2016 that resulted in new business segments: North America Commercial P&C Insurance, North America Personal P&C Insurance, North America Agricultural Insurance, Overseas General Insurance, Global Reinsurance, and Life Insurance. In addition, the results of all run-off asbestos and environmental (A&E) exposures, the results of our run-off Brandywine business, the results of Westchester specialty operations for 1996 and prior years, and certain other run-off exposures are now presented within Corporate. Prior period amounts of Chubb Limited (i.e., excluding the historical results of Chubb Corp) have been adjusted to conform to the new segment presentation.

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The North America Commercial P&C Insurance segment includes the business written by Chubb divisions that provide property and casualty (P&C) insurance and services to large, middle market and small commercial businesses in the U.S., Canada, and Bermuda. This segment includes our retail divisions: Major Accounts, Commercial Insurance, including Small Commercial Insurance; and our wholesale and specialty divisions: Westchester and Chubb Bermuda. These divisions write a variety of coverages, including traditional commercial property, marine, general casualty, workers’ compensation, package policies, and risk management; specialty categories such as professional lines, marine and construction risk, environmental and cyber risk, excess casualty, as well as group accident and health (A&H) insurance.

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The North America Personal P&C Insurance segment includes the business written by Chubb Personal Risk Services division, which comprises Chubb high net worth personal lines business and ACE Private Risk Services, with operations in the U.S. and Canada. This segment provides affluent and high net worth individuals and families with homeowners, automobile and collector cars, valuable articles (including fine arts), personal and excess liability, travel insurance, and recreational marine insurance and services.


•	The North America Agricultural Insurance segment includes the business written by Rain and Hail Insurance Service, Inc. which provides comprehensive multiple peril crop insurance (MPCI) and crop-hail insurance, and Chubb Agribusiness, which offers farm and ranch property as well as specialty P&C coverages, including commercial agriculture products.

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The Overseas General Insurance segment includes the business written by two Chubb divisions that provide P&C insurance and services in the 51 countries outside of North America where the company operates. Chubb International provides commercial P&C traditional and specialty lines serving large corporations, middle market and small customers, A&H and traditional and specialty personal lines through retail brokers, agents and other channels locally around the world. Chubb Global Markets (CGM) provides commercial P&C excess and surplus lines and A&H through wholesale brokers in the London market and through Lloyd’s. These divisions write a variety of coverages, including traditional commercial P&C, specialty categories such as financial lines, marine, energy, aviation, political risk and construction risk, as well as group A&H and traditional and specialty personal lines. The reinsurance operations of CGM are included in the Global Reinsurance segment.


•	The Global Reinsurance segment primarily includes the reinsurance business written by Chubb Tempest Re. The Global Reinsurance segment also includes CGM's reinsurance operations. Chubb Tempest Re provides a broad range of traditional and specialty reinsurance coverages to a diverse array of primary P&C companies.


•	The Life Insurance segment includes Chubb's international life operations written by Chubb Life, Chubb Tempest Life Re and the North American supplemental A&H and life business of Combined Insurance.

Corporate primarily includes loss and loss expenses of asbestos and environmental (A&E) run-off liabilities, and the results of our non-insurance companies including Chubb Limited, Chubb Group Management and Holdings Ltd, and Chubb INA Holdings Inc. Our exposure to A&E claims principally arises out of liabilities acquired when we purchased Westchester Specialty in 1998, CIGNA’s P&C business in 1999, and legacy Chubb Corp run-off business in 2016.

In addition, revenue and expenses managed at the corporate level, including realized gains and losses, interest expense, the non-operating income of our partially-owned entities, and income taxes are reported within Corporate. Chubb integration expenses and other merger-related expenses (both included in Chubb integration expenses in the Consolidated statements of operations), and the one-time benefit recorded in 2016 related to the harmonization of our U.S. pension plans, are also reported within Corporate. Chubb integration expenses are one-time costs that are directly attributable to the achievement of the annualized savings, including employee severance, third-party consulting fees, and systems integration expenses. Other merger-related expenses are one-time costs directly attributable to the merger, including rebranding, employee retention costs and other professional and legal fees related to the Chubb Corp acquisition. These items will not be allocated to the segment level as they are one-time in nature and are not related to the ongoing business activities of the segment. The Chief Executive Officer does not manage segment results or allocate resources to segments when considering these costs and they are therefore excluded from our definition of segment income. Therefore, the segment income statement will only include underwriting income, net investment income, and other operating income and expense items such as each segment's share of the operating income (loss) related to partially-owned entities and miscellaneous income and expense items for which the segments are held accountable. Segment income also includes amortization of purchased intangibles related to business combination intangible assets acquired by the segment and other purchase accounting related intangible assets, including agency relationships, renewal rights, and client lists. The amortization of intangible assets purchased as part of the Chubb Corp acquisition is considered a Corporate cost as these are incurred by the overall company. We determined that this definition of segment income is appropriate and aligns with how the business is managed. The prior periods have been adjusted to reflect the new segment income measure. As we progress through the integration and refine our processes, we may continue to further refine our segments and segment income measures.

For segment reporting purposes, certain items have been presented in a different manner below than in the consolidated financial statements. Management uses underwriting income as the main measure of segment performance. Chubb calculates underwriting income by subtracting Losses and loss expenses, Policy benefits, Policy acquisition costs, and Administrative expenses from Net premiums earned. To calculate segment income, include net investment income, the operating portion of other (income) expense, and amortization of purchased intangibles. For the North America Agricultural Insurance segment, management includes gains and losses on crop derivatives as a component of underwriting income. For example, for the year ended December 31, 2016, underwriting income in our North America Agricultural Insurance segment was $341 million. This amount includes $5 million of realized losses related to crop derivatives which are reported in Net realized gains (losses) in the Corporate column below.

For the Life Insurance segment, management includes Net investment income and (Gains) losses from fair value changes in separate account assets that do not qualify for separate account reporting under GAAP as components of Life Insurance underwriting income. For example, for the year ended December 31, 2016, Life Insurance underwriting income of $282 million includes Net investment income of $283 million and gains from fair value changes in separate account assets of $11 million. The gains from fair value changes in separate account assets are reported in Other (income) expense in the table below.

The following tables present the Statement of Operations by segment:



For the Year Ended December 31, 2016 (in millions of U.S. dollars)	North America Commercial P&C Insurance			North America Personal P&C Insurance		North America Agricultural Insurance			Overseas General Insurance			Global Reinsurance			Life Insurance			Corporate			Chubb Consolidated
Net premiums written	$	11,740		$	4,153	$	1,328		$	8,124		$	676		$	2,124		$	—		$	28,145
Net premiums earned	12,217			4,319		1,316			8,132			710			2,055			—			28,749
Losses and loss expenses	7,439			2,558		893			4,005			325			663			169			16,052
Policy benefits	—			—		—			—			—			588			—			588
Policy acquisition costs	2,023			966		83			2,136			187			509			—			5,904
Administrative expenses	1,125			363		(6		)	1,057			52			307			183			3,081
Underwriting income (loss)	1,630			432		346			934			146			(12		)	(352		)	3,124
Net investment income	1,860			207		20			600			263			283			(368		)	2,865
Other (income) expense	(2		)	6		1			(11		)	(4		)	5			(217		)	(222		)
Amortization expense (benefit) of purchased intangibles	—			19		29			48			—			3			(80		)	19
Segment income (loss)	3,492			614		336			1,497			413			263			(423		)	6,192
Net realized gains (losses) including OTTI																		(145		)	(145		)
Interest expense																		605			605
Chubb integration expenses																		492			492
Income tax expense																		815			815
Net income (loss)																		$	(2,480	)	$	4,135



For the Year Ended December 31, 2015 (in millions of U.S. dollars)	North America Commercial P&C Insurance			North America Personal P&C Insurance		North America Agricultural Insurance		Overseas General Insurance			Global Reinsurance			Life Insurance		Corporate			Chubb Consolidated
Net premiums written	$	5,715		$	1,192	$	1,346	$	6,634		$	828		$	1,998	$	—		$	17,713
Net premiums earned	5,634			948		1,364		6,471			849			1,947		—			17,213
Losses and loss expenses	3,661			590		1,088		3,052			290			601		202			9,484
Policy benefits	—			—		—		—			—			543		—			543
Policy acquisition costs	531			69		69		1,581			214			476		1			2,941
Administrative expenses	621			123		1		997			49			291		188			2,270
Underwriting income (loss)	821			166		206		841			296			36		(391		)	1,975
Net investment income	1,032			25		23		534			300			265		15			2,194
Other (income) expense	(7		)	2		1		(17		)	(6		)	23		(47		)	(51		)
Amortization expense of purchased intangibles	—			78		30		61			—			2		—			171
Segment income (loss)	1,860			111		198		1,331			602			276		(329		)	4,049
Net realized gains (losses) including OTTI																(420		)	(420		)
Interest expense																300			300
Chubb integration expense																33			33
Income tax expense																462			462
Net income (loss)																$	(1,544	)	$	2,834



For the Year Ended December 31, 2014 (in millions of U.S. dollars)	North America Commercial P&C Insurance			North America Personal P&C Insurance		North America Agricultural Insurance		Overseas General Insurance			Global Reinsurance			Life Insurance		Corporate			Chubb Consolidated
Net premiums written	$	5,685		$	578	$	1,590	$	6,999		$	935		$	2,012	$	—		$	17,799
Net premiums earned	5,547			560		1,526		6,805			1,026			1,962		—			17,426
Losses and loss expenses	3,476			368		1,351		3,189			431			589		245			9,649
Policy benefits	—			—		—		—			—			517		—			517
Policy acquisition costs	518			116		81		1,625			257			478		—			3,075
Administrative expenses	599			74		9		1,026			54			285		198			2,245
Underwriting income (loss)	954			2		85		965			284			93		(443		)	1,940
Net investment income	1,060			22		26		545			316			268		15			2,252
Other (income) expense	(12		)	1		2		(18		)	(4		)	3		(162		)	(190		)
Amortization expense of purchased intangibles	—			—		31		74			—			3		—			108
Segment income (loss)	2,026			23		78		1,454			604			355		(266		)	4,274
Net realized gains (losses) including OTTI																(507		)	(507		)
Interest expense																280			280
Income tax expense																634			634
Net income (loss)																$	(1,687	)	$	2,853

Underwriting assets are reviewed in total by management for purposes of decision-making. Other than Unpaid losses and loss expenses, Reinsurance recoverables, Goodwill and Other intangible assets, Chubb does not allocate assets to its segments.

The following table presents net premiums earned for each segment by line of business:




	For the Year Ended December 31
(in millions of U.S. dollars)	2016		2015		2014
North America Commercial P&C Insurance
Property & other short-tail lines	$	1,963	$	1,040	$	1,113
Casualty & all other	9,552		4,175		4,021
A&H	702		419		413
Total North America Commercial P&C Insurance	12,217		5,634		5,547
North America Personal P&C Insurance
Personal automobile	699		186		130
Personal homeowners	3,007		579		309
Personal other	613		183		121
Total North America Personal P&C Insurance	4,319		948		560
North America Agricultural Insurance	1,316		1,364		1,526
Overseas General Insurance
Property & other short-tail lines	2,133		1,833		1,892
Casualty & all other	2,177		1,361		1,425
Personal lines	1,626		1,211		1,204
A&H	2,196		2,066		2,284
Total Overseas General Insurance	8,132		6,471		6,805
Global Reinsurance
Property & other short-tail lines	118		155		246
Property catastrophe	185		219		253
Casualty & all other	407		475		527
Total Global Reinsurance	710		849		1,026
Life Insurance
Life	1,002		931		981
A&H	1,053		1,016		981
Total Life Insurance	2,055		1,947		1,962
Total net premiums earned	$	28,749	$	17,213	$	17,426

The following table presents net premiums earned by geographic region. Allocations have been made on the basis of location of risk:



	North America		Europe⁽¹⁾		Asia Pacific/Far East		Latin America
2016	70	%	12	%	11	%	7	%
2015	60	%	15	%	15	%	10	%
2014	58	%	16	%	16	%	10	%

⁽¹⁾Europe includes Eurasia and Africa region.