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Taxation
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Taxation Taxation
Under Swiss law through December 31, 2023, a resident company is subject to income tax at the federal, cantonal, and communal levels that is levied on net worldwide income. Income attributable to permanent establishments or real estate located abroad is excluded from the Swiss tax base. Furthermore, participation relief (i.e., tax relief) is granted to Chubb Limited at the federal, cantonal, and communal level for qualifying dividend income. Chubb Limited is subject to an annual cantonal and communal capital tax on the taxable equity of Chubb Limited in Switzerland.

Chubb has two Swiss operating subsidiaries, an insurance company, Chubb Insurance (Switzerland) Limited and a reinsurance company, Chubb Reinsurance (Switzerland) Limited. Both are subject to federal, cantonal, and communal income tax and to annual cantonal and communal capital tax.

Under Bermuda law, Chubb Limited and its Bermuda subsidiaries are not required to pay any taxes on income or capital gains. However, on December 27, 2023, the Government of Bermuda enacted the Corporate Income Tax Act of 2023 which established a 15 percent income tax on net taxable income of Bermuda entities effective January 1, 2025. Chubb's Bermuda subsidiaries will pay taxes on their income beginning in 2025.

Income from Chubb's operations at Lloyd's is subject to United Kingdom (U.K.) corporation income taxes. Lloyd's is required to pay U.S. income tax on U.S. connected income written by Lloyd's syndicates. Lloyd's has a closing agreement with the Internal Revenue Service (IRS) whereby the amount of tax due on this business is calculated by Lloyd's and remitted directly to the IRS. These amounts are then charged to the accounts of Chubb's Corporate Members in proportion to their participation in the relevant syndicates. Chubb's Corporate Members are subject to this arrangement but, as U.K. domiciled companies, will receive
U.K. corporation tax credits for any U.S. income tax incurred up to the value of the equivalent U.K. corporation income tax charge on this income.

Chubb Group Holdings and its respective subsidiaries are subject to income taxes imposed by U.S. authorities and file a consolidated U.S. Federal income tax return. Should Chubb Group Holdings pay a dividend to Chubb Limited, withholding taxes would apply. Currently, however, no withholding taxes are accrued with respect to such un-remitted earnings as management has no intention of remitting these earnings. Similarly, no taxes have been provided on the un-remitted earnings of certain foreign subsidiaries (Chubb Life Insurance Hong Kong and Chubb Life Insurance Korea Company Ltd.) as management has no intention of remitting these earnings. Finally, we have made a partial reinvestment assertion on historical earnings for LINA Life Insurance Company of Korea and Huatai Insurance Group Co., Ltd. The cumulative amount that would be subject to withholding tax, if distributed, as well as the determination of the associated tax liability are not practicable to compute; however, such amount would be material.

Certain international operations of Chubb are also subject to income taxes imposed by the jurisdictions in which they operate. Chubb's domestic operations are in Switzerland, the jurisdiction where we are legally organized, incorporated, and registered.

The following table presents pre-tax income and the related provision for income taxes:
Year Ended December 31
(in millions of U.S. dollars)202320222021
Pre-tax income:
      Switzerland$44 $234 $349 
      Outside Switzerland9,482 6,251 9,445 
      Total pre-tax income$9,526 $6,485 $9,794 
Provision for income taxes
Current tax expense:
      Switzerland$25 $15 $65 
      Outside Switzerland1,570 1,066 1,294 
      Total current tax expense1,595 1,081 1,359 
Deferred tax expense (benefit):
      Switzerland(63)34 (15)
      Outside Switzerland(1,021)124 (75)
      Total deferred tax expense (benefit)(1,084)158 (90)
Provision for income taxes$511 $1,239 $1,269 

The most significant jurisdictions contributing to the overall taxation of Chubb are calculated using the following rates in 2023: Switzerland 19.7 percent, U.S. 21.0 percent, U.K. 23.5 percent, and Bermuda 0.0 percent.

The following table presents a reconciliation of the difference between the provision for income taxes and the expected tax provision at the Swiss statutory income tax rate:
Year Ended December 31
(in millions of U.S. dollars)20232022 2021 
Expected tax provision at Swiss statutory tax rate$1,872 $1,274 $1,929 
Permanent differences:
Taxes on earnings subject to rate other than Swiss statutory rate(389)(243)(743)
Bermuda tax law enactment
(1,135)— — 
Net withholding taxes15 75 78 
Other148 133 5 
Provision for income taxes$511 $1,239 $1,269 
The following table presents the components of net deferred tax assets and liabilities:
December 31
(in millions of U.S. dollars)2023 2022 
Deferred tax assets:
Loss reserve discount$1,643 $1,048 
Unearned premiums reserve678 424 
Foreign tax credits19 76 
Loss carry-forwards149 104 
Investments— 62 
Unrealized depreciation on investments662 1,387 
Depreciation37 126 
Other147 85 
Total deferred tax assets 3,335 3,312 
      Valuation allowance716 916
      Deferred tax assets, net of valuation allowance2,619 2,396 
Deferred tax liabilities:
Deferred policy acquisition costs675 311 
Other intangible assets, including VOBA1,444 2,213 
Un-remitted foreign earnings176 249 
Investments138 — 
Total deferred tax liabilities 2,433 2,773 
Net deferred tax assets (liabilities)
$186 $(377)

The valuation allowance of $716 million and $916 million at December 31, 2023 and 2022, respectively, reflects management's assessment, based on available information, that it is more likely than not that a portion of the deferred tax assets will not be realized due to the inability of certain subsidiaries to generate sufficient taxable income. Adjustments to the valuation allowance are made when there is a change in management's assessment of the amount of deferred tax assets that are realizable.

For the year ended December 31, 2023, the tax benefit on certain unrealized losses in our investment portfolio was reduced by a valuation allowance of $441 million necessary due to limitations on the utilization of these losses. As part of evaluating whether it was more likely than not that we could realize these losses, we considered realized gains, carryback capacity and available tax planning strategies.

At December 31, 2023, Chubb has net operating loss carry-forwards of $497 million which, if unused, will expire starting in 2024, and a U.S. life capital loss carry-forward of $25 million which, if unused, will expire starting in 2028.

The following table presents a reconciliation of the beginning and ending amount of gross unrecognized tax benefits:
Year Ended December 31
(in millions of U.S. dollars)2023 2022 
Balance, beginning of year$67 $64 
Additions based on tax positions related to prior years9 4 
Reductions for settlements with taxing authorities(3)(1)
Balance, end of year$73 $67 

At December 31, 2023 and 2022, the gross unrecognized tax benefits of $73 million and $67 million, respectively, can be reduced by $19 million and $21 million, respectively, associated with foreign tax credits. The net amounts of $54 million and $46 million at December 31, 2023 and 2022, respectively, if recognized, would favorably affect the effective tax rate. It is reasonably possible that over the next twelve months, that the amount of unrecognized tax benefits may change further resulting
from the re-evaluation of unrecognized tax benefits arising from examinations by taxing authorities and the lapses of statutes of limitations.

Chubb recognizes accruals for interest and penalties, if any, related to unrecognized tax benefits in Income tax expense in the Consolidated statements of operations. Tax-related interest expense and penalties reported in the Consolidated statements of operations were $7 million, $4 million, and $1 million at December 31, 2023, 2022, and 2021, respectively. Liabilities for tax-related interest and penalties in our Consolidated balance sheets were $25 million and $18 million at December 31, 2023 and 2022, respectively.

In March 2017, the IRS commenced its field examination of Chubb Group Holdings’ U.S. Federal income tax returns for 2014 and 2015 which is still ongoing. In July 2020, the IRS commenced its field examination of Chubb Group Holdings' U.S. Federal income tax returns for 2016, 2017 and 2018 which is also still ongoing. No material adjustments have been proposed by the IRS for any year under examination. As a multinational company, we also have examinations under way in non-US jurisdictions. With few exceptions, Chubb is no longer subject to income tax examinations for years prior to 2012.

The following table summarizes tax years open for examination by major income tax jurisdiction:
At December 31, 2023
Australia2017-2023
Brazil2017-2023
Canada2012-2023
China
2020-2023
France 2021-2023
Germany2016-2023
Italy2019-2023
Korea
2018-2023
Mexico2016-2023
Spain2012-2023
Switzerland2019-2023
United Kingdom2015-2023
United States2014-2023