Segment information

Chubb operates through six 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. These segments distribute their products through various forms of brokers, agencies, and direct marketing programs. All business segments have established relationships with reinsurance intermediaries.

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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, construction, environmental, medical, cyber risk, surety, and 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 includes high net worth personal lines business, 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. in the U.S. and Canada, 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 and territories outside of North America where the company operates. Chubb International provides commercial P&C, A&H and traditional and specialty personal lines for large corporations, middle markets and small customers 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 Global Reinsurance segment primarily includes the reinsurance business written by Chubb Tempest Re. 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 the results of all run-off asbestos and environmental (A&E) exposures, our run-off Brandywine business, and our Westchester specialty operations for 1996 and prior years, and certain other run-off exposures. In addition, Corporate includes 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 the 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, segment income 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. We continue to evaluate our segments as our business continues to evolve and may further refine our segments and segment income measures.

For segment reporting purposes, certain items are presented in a different manner below than in the consolidated financial statements. Management uses underwriting income as the main measures 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, 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, 2018, underwriting income in our North America Agricultural Insurance segment was $385 million. This amount includes $3 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, 2018, Life Insurance underwriting income of $298 million includes Net investment income of $341 million and losses from fair value changes in separate account assets of $38 million. The losses 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, 2018 (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	$	12,485		$	4,674	$	1,577		$	8,902	$	671		$	2,270		$	—		$	30,579
Net premiums earned	12,402			4,593		1,569			8,612		670			2,218			—			30,064
Losses and loss expenses	8,000			3,229		1,111			4,429		479			766			53			18,067
Policy benefits	—			—		—			—		—			590			—			590
Policy acquisition costs	1,829			939		79			2,346		162			557			—			5,912
Administrative expenses	966			269		(9		)	1,014		41			310			295			2,886
Underwriting income (loss)	1,607			156		388			823		(12		)	(5		)	(348		)	2,609
Net investment income (loss)	2,033			236		28			619		257			341			(209		)	3,305
Other (income) expense	(25		)	1		2			—		(32		)	26			(406		)	(434		)
Amortization expense of purchased intangibles	—			13		28			41		—			2			255			339
Segment income (loss)	$	3,665		$	378	$	386		$	1,401	$	277		$	308		$	(406	)	$	6,009
Net realized gains (losses) including OTTI																	(652		)	(652		)
Interest expense																	641			641
Chubb integration expenses																	59			59
Income tax expense																	695			695
Net income (loss)																	$	(2,453	)	$	3,962



For the Year Ended December 31, 2017 (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	$	12,019	$	4,533		$	1,516		$	8,350		$	685		$	2,141		$	—		$	29,244
Net premiums earned	12,191		4,399			1,508			8,131			704			2,101			—			29,034
Losses and loss expenses	8,287		3,265			1,036			4,281			561			739			285			18,454
Policy benefits	—		—			—			—			—			676			—			676
Policy acquisition costs	1,873		899			81			2,221			177			530			—			5,781
Administrative expenses	981		264			(8		)	982			44			303			267			2,833
Underwriting income (loss)	1,050		(29		)	399			647			(78		)	(147		)	(552		)	1,290
Net investment income (loss)	1,961		226			25			610			273			313			(283		)	3,125
Other (income) expense	1		4			2			(4		)	(1		)	(84		)	(318		)	(400		)
Amortization expense of purchased intangibles	—		16			29			45			—			2			168			260
Segment income (loss)	$	3,010	$	177		$	393		$	1,216		$	196		$	248		$	(685	)	$	4,555
Net realized gains (losses) including OTTI																		84			84
Interest expense																		607			607
Chubb integration expense																		310			310
Income tax benefit																		(139		)	(139		)
Net income (loss)																		$	(1,379	)	$	3,861



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 (loss)	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 Expense																		492			492
Income tax expense																		815			815
Net income (loss)																		$	(2,480	)	$	4,135

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)	2018		2017		2016
North America Commercial P&C Insurance
Property & other short-tail lines	$	1,861	$	1,899	$	1,963
Casualty & all other	9,773		9,554		9,552
A&H	768		738		702
Total North America Commercial P&C Insurance	12,402		12,191		12,217
North America Personal P&C Insurance
Personal automobile	803		742		699
Personal homeowners	3,127		3,014		3,007
Personal other	663		643		613
Total North America Personal P&C Insurance	4,593		4,399		4,319
North America Agricultural Insurance	1,569		1,508		1,316
Overseas General Insurance
Property & other short-tail lines	2,134		2,076		2,133
Casualty & all other	2,429		2,266		2,177
Personal lines	1,784		1,609		1,626
A&H	2,265		2,180		2,196
Total Overseas General Insurance	8,612		8,131		8,132
Global Reinsurance
Property & other short-tail lines	123		132		118
Property catastrophe	170		198		185
Casualty & all other	377		374		407
Total Global Reinsurance	670		704		710
Life Insurance
Life	1,022		980		1,002
A&H	1,196		1,121		1,053
Total Life Insurance	2,218		2,101		2,055
Total net premiums earned	$	30,064	$	29,034	$	28,749

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
2018	70	%	11	%	12	%	7	%
2017	70	%	11	%	12	%	7	%
2016	70	%	12	%	11	%	7	%


⁽¹⁾	Europe includes Eurasia and Africa regions.