UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from             to             

Commission File No. 1-11778

CHUBB LIMITED

(Exact name of registrant as specified in its charter)

Switzerland	98-0091805
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

Baerengasse 32
Zurich, Switzerland CH-8001
(Address of principal executive offices) (Zip Code)

+41 (0)43 456 76 00

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares, par value CHF 24.15 per share	CB	New York Stock Exchange
Guarantee of Chubb INA Holdings Inc. 0.30% Senior Notes due 2024	CB/24A	New York Stock Exchange
Guarantee of Chubb INA Holdings Inc. 0.875% Senior Notes due 2027	CB/27	New York Stock Exchange
Guarantee of Chubb INA Holdings Inc. 1.55% Senior Notes due 2028	CB/28	New York Stock Exchange
Guarantee of Chubb INA Holdings Inc. 0.875% Senior Notes due 2029	CB/29A	New York Stock Exchange
Guarantee of Chubb INA Holdings Inc. 1.40% Senior Notes due 2031	CB/31	New York Stock Exchange
Guarantee of Chubb INA Holdings Inc. 2.50% Senior Notes due 2038	CB/38A	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  ☑                                                 No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes  ☑                                                 No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☑	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  ☐                                               No  ☑

The number of registrant’s Common Shares (CHF 24.15 par value) outstanding as of July 22, 2022 was 417,641,404.

CHUBB LIMITED

INDEX TO FORM 10-Q

Part I.	FINANCIAL INFORMATION		Page
Item 1.	Financial Statements:
	Consolidated Balance Sheets (Unaudited) June 30, 2022 and December 31, 2021		3
	Consolidated Statements of Operations and Comprehensive Income (Unaudited) Three and Six Months Ended June 30, 2022 and 2021		4
	Consolidated Statements of Shareholders' Equity (Unaudited) Three and Six Months Ended June 30, 2022 and 2021		5
	Consolidated Statements of Cash Flows (Unaudited) Six Months Ended June 30, 2022 and 2021		6
	Notes to Consolidated Financial Statements (Unaudited)
	Note 1.	General	7
	Note 2.	Acquisitions	8
	Note 3.	Investments	9
	Note 4.	Fair value measurements	14
	Note 5.	Reinsurance	20
	Note 6.	Unpaid losses and loss expenses	21
	Note 7.	Commitments, contingencies, and guarantees	25
	Note 8.	Shareholders’ equity	29
	Note 9.	Share-based compensation	30
	Note 10.	Postretirement benefits	31
	Note 11.	Other income and expense	32
	Note 12.	Segment information	33
	Note 13.	Earnings per share	36
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		37
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		75
Item 4.	Controls and Procedures		77
Part II.	OTHER INFORMATION
Item 1.	Legal Proceedings		78
Item 1A.	Risk Factors		78
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds and Issuer Repurchases of Equity Securities		78
Item 6.	Exhibits		79

2

PART I FINANCIAL INFORMATION

ITEM 1. Financial Statements

CONSOLIDATED BALANCE SHEETS (Unaudited)

Chubb Limited and Subsidiaries

	June 30		December 31
(in millions of U.S. dollars, except share and per share data)	2022		2021
Assets
Investments
Fixed maturities available for sale, at fair value, net of valuation allowance - $78 and $14     (amortized cost – $88,516 and $90,493)	$	82,069	$	93,108
Fixed maturities held to maturity, at amortized cost, net of valuation allowance - $34 and $35     (fair value – $9,333 and $10,647)	9,532		10,118
Equity securities, at fair value	2,649		4,782
Short-term investments, at fair value (amortized cost – $3,433 and $3,147)	3,431		3,146
Other investments, at fair value	12,168		11,169
Total investments	109,849		122,323
Cash	7,122		1,659
Restricted cash	117		152
Securities lending collateral	1,658		1,831
Accrued investment income	829		821
Insurance and reinsurance balances receivable, net of valuation allowance - $50 and $46	12,758		11,322
Reinsurance recoverable on losses and loss expenses, net of valuation allowance - $341 and $329	17,777		17,366
Reinsurance recoverable on policy benefits	205		213
Deferred policy acquisition costs	5,602		5,513
Value of business acquired	221		236
Goodwill	15,045		15,213
Other intangible assets	5,272		5,455
Deferred tax assets	564		—
Prepaid reinsurance premiums	3,356		3,028
Investments in partially-owned insurance companies	3,002		3,130
Other assets	12,274		11,792
Total assets	$	195,651	$	200,054
Liabilities
Unpaid losses and loss expenses	$	74,092	$	72,943
Unearned premiums	20,386		19,101
Future policy benefits	5,940		5,947
Insurance and reinsurance balances payable	7,888		7,243
Securities lending payable	1,658		1,831
Accounts payable, accrued expenses, and other liabilities	14,516		15,004
Deferred tax liabilities	—		389
Repurchase agreements	3,411		1,406
Short-term debt	1,474		999
Long-term debt	14,311		15,169
Trust preferred securities	308		308
Total liabilities	143,984		140,340
Commitments and contingencies (refer to Note 7)
Shareholders’ equity
Common Shares (CHF 24.15 par value; 459,555,714 and 474,021,114 shares issued; 418,474,087 and 426,572,612 shares outstanding)	10,666		10,985
Common Shares in treasury (41,081,627 and 47,448,502 shares)	(6,794)		(7,464)
Additional paid-in capital	7,707		8,478
Retained earnings	48,363		47,365
Accumulated other comprehensive income (loss) (AOCI)	(8,275)		350
Total shareholders’ equity	51,667		59,714
Total liabilities and shareholders’ equity	$	195,651	$	200,054

See accompanying notes to the Consolidated Financial Statements

3

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited)

Chubb Limited and Subsidiaries

	Three Months Ended				Six Months Ended
	June 30				June 30
(in millions of U.S. dollars, except per share data)	2022		2021		2022		2021
Revenues
Net premiums written	$	10,302	$	9,546	$	19,501	$	18,208
Increase in unearned premiums	(745)		(733)		(1,198)		(1,174)
Net premiums earned	9,557		8,813		18,303		17,034
Net investment income	888		884		1,710		1,747
Net realized gains (losses) (includes $(442), $12, $(578), and $36    reclassified from AOCI)	(504)		(33)		(403)		854
Total revenues	9,941		9,664		19,610		19,635
Expenses
Losses and loss expenses	5,408		5,006		10,195		10,059
Policy benefits	159		185		304		352
Policy acquisition costs	1,739		1,698		3,476		3,363
Administrative expenses	818		775		1,596		1,519
Interest expense	134		122		266		244
Other (income) expense	101		(777)		(209)		(1,267)
Amortization of purchased intangibles	71		73		142		145
Cigna integration expenses	3		—		3		—
Total expenses	8,433		7,082		15,773		14,415
Income before income tax	1,508		2,582		3,837		5,220
Income tax expense (includes $(77), $(6), $(99), and $(2) on unrealized gains and losses reclassified from AOCI)	293		317		648		655
Net income	$	1,215	$	2,265	$	3,189	$	4,565
Other comprehensive income (loss)
Unrealized appreciation (depreciation)	$	(4,786)	$	706	$	(9,574)	$	(1,587)
Reclassification adjustment for net realized (gains) losses included in net income	442		(12)		578		(36)
	(4,344)		694		(8,996)		(1,623)
Change in:
Cumulative foreign currency translation adjustment	(777)		308		(710)		330
Postretirement benefit liability adjustment	5		(9)		24		(37)
Other comprehensive income (loss), before income tax	(5,116)		993		(9,682)		(1,330)
Income tax (expense) benefit related to OCI items	245		(129)		1,057		283
Other comprehensive income (loss)	(4,871)		864		(8,625)		(1,047)
Comprehensive income (loss)	$	(3,656)	$	3,129	$	(5,436)	$	3,518
Earnings per share
Basic earnings per share	$	2.88	$	5.09	$	7.53	$	10.20
Diluted earnings per share	$	2.86	$	5.06	$	7.46	$	10.13

See accompanying notes to the Consolidated Financial Statements

4

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited)

Chubb Limited and Subsidiaries

	Three Months Ended				Six Months Ended
	June 30				June 30
(in millions of U.S. dollars)	2022		2021		2022		2021
Common Shares
Balance – beginning of period	$	10,666	$	11,064	$	10,985	$	11,064
Cancellation of treasury shares	—		—		(319)		—
Balance – end of period	10,666		11,064		10,666		11,064
Common Shares in treasury
Balance – beginning of period	(5,700)		(3,901)		(7,464)		(3,644)
Common Shares repurchased	(1,129)		(1,921)		(2,130)		(2,440)
Cancellation of treasury shares	—		—		2,510		—
Net shares issued under employee share-based compensation plans	35		50		290		312
Balance – end of period	(6,794)		(5,772)		(6,794)		(5,772)
Additional paid-in capital
Balance – beginning of period	7,988		9,318		8,478		9,815
Net shares issued under employee share-based compensation plans	4		5		(195)		(182)
Exercise of stock options	(6)		(6)		(27)		(30)
Share-based compensation expense	69		81		139		147
Funding of dividends declared to Retained earnings	(348)		(352)		(688)		(704)
Balance – end of period	7,707		9,046		7,707		9,046
Retained earnings
Balance – beginning of period	47,148		41,637		47,365		39,337
Net income	1,215		2,265		3,189		4,565
Cancellation of treasury shares	—		—		(2,191)		—
Funding of dividends declared from Additional paid-in capital	348		352		688		704
Dividends declared on Common Shares	(348)		(352)		(688)		(704)
Balance – end of period	48,363		43,902		48,363		43,902
Accumulated other comprehensive income (loss) (AOCI)
Net unrealized appreciation (depreciation) on investments
Balance – beginning of period	(1,584)		2,761		2,256		4,673
Change in period, before reclassification from AOCI, net of income tax     (expense) benefit of $292, $(107), $1,126, and $294	(4,494)		599		(8,448)		(1,293)
Amounts reclassified from AOCI, net of income tax expense of $(77),     $(6), $(99), and $(2)	365		(18)		479		(38)
Change in period, net of income tax (expense) benefit of $215, $(113),     $1,027, and $292	(4,129)		581		(7,969)		(1,331)
Balance – end of period	(5,713)		3,342		(5,713)		3,342
Cumulative foreign currency translation adjustment
Balance – beginning of period	(2,075)		(1,613)		(2,146)		(1,637)
Change in period, net of income tax (expense) benefit of $31, $(18),     $35, and $(16)	(746)		290		(675)		314
Balance – end of period	(2,821)		(1,323)		(2,821)		(1,323)
Postretirement benefit liability adjustment
Balance – beginning of period	255		(190)		240		(167)
Change in period, net of income tax (expense) benefit of $(1), $2,     $(5), and $7	4		(7)		19		(30)
Balance – end of period	259		(197)		259		(197)
Accumulated other comprehensive income (loss)	(8,275)		1,822		(8,275)		1,822
Total shareholders’ equity	$	51,667	$	60,062	$	51,667	$	60,062

See accompanying notes to the Consolidated Financial Statements

5

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

Chubb Limited and Subsidiaries

	Six Months Ended
	June 30
(in millions of U.S. dollars)	2022		2021
Cash flows from operating activities
Net income	$	3,189	$	4,565
Adjustments to reconcile net income to net cash flows from operating activities
Net realized (gains) losses	403		(854)
Amortization of premiums/discounts on fixed maturities	148		147
Amortization of purchased intangibles	142		145
Equity in net income of partially-owned entities	(290)		(1,271)
Deferred income taxes	110		(28)
Unpaid losses and loss expenses	1,980		2,165
Unearned premiums	1,584		1,533
Future policy benefits	59		110
Insurance and reinsurance balances payable	670		796
Accounts payable, accrued expenses, and other liabilities	110		(630)
Income taxes payable	(83)		50
Insurance and reinsurance balances receivable	(1,560)		(1,180)
Reinsurance recoverable	(650)		(47)
Deferred policy acquisition costs	(204)		(198)
Other	(448)		(76)
Net cash flows from operating activities	5,160		5,227
Cash flows from investing activities
Purchases of fixed maturities available for sale	(13,474)		(15,217)
Purchases of fixed maturities held to maturity	(380)		(211)
Purchases of equity securities	(664)		(642)
Sales of fixed maturities available for sale	8,053		3,469
Sales of equity securities	2,445		614
Maturities and redemptions of fixed maturities available for sale	5,753		9,410
Maturities and redemptions of fixed maturities held to maturity	820		1,163
Net change in short-term investments	(340)		(120)
Net derivative instruments settlements	117		(87)
Private equity contributions	(1,287)		(873)
Private equity distributions	448		640
Payment for Huatai Group interest	(113)		(65)
Other	(253)		(106)
Net cash flows from (used for) investing activities	1,125		(2,025)
Cash flows from financing activities
Dividends paid on Common Shares	(681)		(703)
Common Shares repurchased	(2,127)		(2,440)
Proceeds from issuance of repurchase agreements	3,002		550
Repayment of repurchase agreements	(1,000)		(550)
Proceeds from share-based compensation plans	170		178
Policyholder contract deposits and other	238		268
Policyholder contract withdrawals and other	(223)		(245)
Tax withholding payments for share-based compensation plans	(98)		(80)
Net cash flows used for financing activities	(719)		(3,022)
Effect of foreign currency rate changes on cash and restricted cash	(138)		(18)