Segment information

12 Months Ended

Dec. 31, 2019

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 property, casualty, workers’ compensation, package policies, risk management, financial lines, marine, construction, environmental, medical risk, 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, as well as group A&H and traditional and specialty personal lines.

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The Global Reinsurance segment includes the reinsurance business written by Chubb Tempest Re, comprising Chubb Tempest Re Bermuda, Chubb Tempest Re USA, Chubb Tempest Re International, and Chubb Tempest Re Canada. Chubb Tempest Re provides a broad range of traditional and specialty reinsurance coverages to a diverse array of primary P&C companies, including small, mid-sized, and multinational ceding 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 non-A&E 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 Chubb Corp 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 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. 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 (loss). Therefore, segment income (loss) will only include underwriting income (loss), net investment income (loss), 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 (loss) 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 (loss) 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 (loss) measures.

For segment reporting purposes, certain items are presented in a different manner below than in the consolidated financial statements. Management uses underwriting income (loss) as the main measures of segment performance. Chubb calculates underwriting income (loss) by subtracting Losses and loss expenses, Policy benefits, Policy acquisition costs, and Administrative expenses from Net premiums earned. To calculate Segment income (loss), include Net investment income (loss), Other (income) expense, and Amortization expense of purchased intangibles. For the North America Agricultural Insurance segment, management includes gains and losses on crop derivatives as a component of underwriting income (loss). For example, for the year ended December 31, 2019, underwriting income in our North America Agricultural Insurance segment was $89 million. This amount includes $8 million of realized losses related to crop derivatives which are reported in Net realized gains (losses) including OTTI in the Corporate column below.

For the Life Insurance segment, management includes Net investment income (loss) 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 (loss). For example, for the year ended December 31, 2019, Life Insurance underwriting income of $320 million includes Net investment income of $373 million and gains from fair value changes in separate account assets of $44 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, 2019 (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	$	13,375		$	4,787	$	1,810	$	9,262	$	649		$	2,392		$	—		$	32,275
Net premiums earned	12,922			4,694		1,795		8,882		654			2,343			—			31,290
Losses and loss expenses	8,206			3,043		1,608		4,606		352			757			158			18,730
Policy benefits	—			—		—		—		—			740			—			740
Policy acquisition costs	1,831			948		84		2,501		169			620			—			6,153
Administrative expenses	1,028			286		6		1,033		35			323			319			3,030
Underwriting income (loss)	1,857			417		97		742		98			(97		)	(477		)	2,637
Net investment income (loss)	2,082			258		30		588		220			373			(125		)	3,426
Other (income) expense	(3		)	3		1		12		(58		)	(92		)	(459		)	(596		)
Amortization expense of purchased intangibles	—			12		28		45		—			2			218			305
Segment income (loss)	$	3,942		$	660	$	98	$	1,273	$	376		$	366		$	(361	)	$	6,354
Net realized gains (losses) including OTTI																(530		)	(530		)
Interest expense																552			552
Chubb integration expenses																23			23
Income tax expense																795			795
Net income (loss)																$	(2,261	)	$	4,454



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 expenses																		310			310
Income tax benefit																		(139		)	(139		)
Net income (loss)																		$	(1,379	)	$	3,861

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)	2019		2018		2017
North America Commercial P&C Insurance
Property & other short-tail lines	$	1,987	$	1,861	$	1,899
Casualty & all other	10,136		9,773		9,554
A&H	799		768		738
Total North America Commercial P&C Insurance	12,922		12,402		12,191
North America Personal P&C Insurance
Personal automobile	829		803		742
Personal homeowners	3,183		3,127		3,014
Personal other	682		663		643
Total North America Personal P&C Insurance	4,694		4,593		4,399
North America Agricultural Insurance	1,795		1,569		1,508
Overseas General Insurance
Property & other short-tail lines	2,244		2,134		2,076
Casualty & all other	2,494		2,429		2,266
Personal lines	1,896		1,784		1,609
A&H	2,248		2,265		2,180
Total Overseas General Insurance	8,882		8,612		8,131
Global Reinsurance
Property & other short-tail lines	131		123		132
Property catastrophe	142		170		198
Casualty & all other	381		377		374
Total Global Reinsurance	654		670		704
Life Insurance
Life	1,101		1,022		980
A&H	1,242		1,196		1,121
Total Life Insurance	2,343		2,218		2,101
Total net premiums earned	$	31,290	$	30,064	$	29,034

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
2019	70	%	11	%	12	%	7	%
2018	70	%	11	%	12	%	7	%
2017	70	%	11	%	12	%	7	%

⁽¹⁾

Europe includes Eurasia and Africa regions.