Chubb(US:CB)2025-07-28 20:20Part I. FINANCIAL INFORMATION Item 1. Financial Statements This section presents Chubb Limited's unaudited consolidated financial statements, including balance sheets, statements of operations, comprehensive income, shareholders' equity, and cash flows, along with detailed notes on accounting policies and key financial components Consolidated Balance Sheets The consolidated balance sheets show the company's financial position as of June 30, 2025, and December 31, 2024 Consolidated Balance Sheet Highlights (in millions USD) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Investments | $158,314 | $150,650 | | Total Assets | $261,563 | $246,548 | | Unpaid Losses and Loss Expenses | $86,376 | $84,004 | | Total Liabilities | $187,116 | $178,154 | | Total Chubb Shareholders' Equity | $69,395 | $64,021 | | Total Shareholders' Equity | $74,447 | $68,394 | - Total assets increased to $261.6 billion as of June 30, 2025, from $246.5 billion at year-end 2024, driven by growth in total investments and insurance-related receivables8 - Total Chubb shareholders' equity rose to $69.4 billion from $64.0 billion, primarily due to net income and an increase in accumulated other comprehensive income8 Consolidated Statements of Operations and Comprehensive Income This section details the company's financial performance, including revenues, expenses, and net income, for the three and six months ended June 30, 2025, and 2024 Key Operating Results (in millions USD, except EPS) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Premiums Earned | $13,125 | $12,292 | $25,125 | $23,875 | | Total Revenues | $14,836 | $13,835 | $28,189 | $26,729 | | Income Before Income Tax | $3,716 | $2,706 | $5,380 | $5,342 | | Net Income Attributable to Chubb | $2,968 | $2,230 | $4,299 | $4,373 | | Diluted EPS Attributable to Chubb | $7.35 | $5.46 | $10.63 | $10.68 | - Net income attributable to Chubb for Q2 2025 increased to $2.97 billion from $2.23 billion in Q2 2024, a 33.1% increase, while for the six months ended June 30, net income slightly decreased to $4.30 billion in 2025 from $4.37 billion in 20249 - Comprehensive income attributable to Chubb saw a significant increase to $4.55 billion in Q2 2025 from $1.31 billion in Q2 2024, largely driven by a positive swing in Other Comprehensive Income from a loss of $961 million to a gain of $1.59 billion9 Consolidated Statements of Shareholders' Equity This section outlines changes in the company's shareholders' equity, including net income, share repurchases, and dividends - Total Chubb shareholders' equity increased from $64.0 billion at the beginning of the period to $69.4 billion at the end of Q2 202510 - For the six months ended June 30, 2025, the company repurchased $1.06 billion of its common shares and declared dividends of $754 million10 - Accumulated other comprehensive income (AOCI) improved significantly, moving from a loss of $8.64 billion at the start of the year to a loss of $6.06 billion at the end of Q2 2025, mainly due to positive changes in unrealized appreciation on investments and foreign currency translation adjustments10 Consolidated Statements of Cash Flows This section details the cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025, and 2024 Cash Flow Summary (in millions USD) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $5,117 | $7,299 | | Net Cash Used for Investing Activities | ($3,625) | ($6,066) | | Net Cash Used for Financing Activities | ($1,887) | ($1,184) | | Net Decrease in Cash | ($178) | ($53) | - Net cash from operating activities decreased to $5.1 billion for the first six months of 2025 from $7.3 billion in the prior year period, primarily due to changes in unpaid losses, insurance balances receivable, and other operating items11 - Cash used for financing activities increased, driven by higher common share repurchases ($1.44 billion in 2025 vs. $1.06 billion in 2024) and net repayment of long-term debt11 Notes to Consolidated Financial Statements This section provides detailed explanations and disclosures supporting the consolidated financial statements, including significant accounting policies, acquisitions, and financial instruments - On April 1, 2025, Chubb completed the acquisition of LMG Insurance in Thailand from Liberty Mutual for $321 million, recognizing $183 million in goodwill, with the acquisition of Liberty Insurance in Vietnam expected to close by early 20261819 - Chubb increased its aggregate ownership interest in Huatai Group to approximately 87.2% as of June 30, 2025, after closing on an incremental 1.6% interest in Q2 202520 - The company established a commercial paper program in Q2 2025, allowing it to issue up to $2.0 billion in short-term, unsecured notes, supported by its $3.0 billion credit facility, with no commercial paper outstanding as of June 30, 2025848586 - Shareholders approved an annual dividend of up to $3.88 per share at the May 2025 meeting, to be paid in quarterly installments of $0.97 per share119 Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) This section provides management's perspective on Chubb's financial condition and operating results, analyzing performance drivers across consolidated and segment levels, capital resources, liquidity, and critical accounting estimates Overview This section provides a high-level summary of Chubb's global operations and financial scale - Chubb is a global insurance and reinsurance organization with total assets of $262 billion and total Chubb shareholders' equity of $69 billion as of June 30, 2025154 - The company 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 Insurance154 Consolidated Operating Results This section analyzes Chubb's overall financial performance, including premium growth, underwriting results, and net income, for the reported periods Consolidated Operating Highlights (in millions USD) | Metric | Q2 2025 | Q2 2024 | % Change | YTD 2025 | YTD 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Premiums Written | $14,196 | $13,360 | 6.3% | $26,842 | $25,581 | 4.9% | | Net Premiums Earned | $13,125 | $12,292 | 6.8% | $25,125 | $23,875 | 5.2% | | Net Income Attributable to Chubb | $2,968 | $2,230 | 33.1% | $4,299 | $4,373 | (1.7)% | - Q2 2025 net income attributable to Chubb rose to $2.97 billion, driven by double-digit growth in P&C underwriting income, Life segment income, and higher income from private equity investments157 - Net catastrophe losses were $630 million in Q2 2025 and $2.27 billion for the first six months of 2025, with the six-month figure significantly impacted by $1.47 billion in California wildfire losses163167 - The P&C combined ratio was 85.6% for Q2 2025, an improvement from 86.8% in Q2 2024, and the P&C current accident year (CAY) combined ratio excluding catastrophe losses also improved to 82.3% from 83.2%170 Segment Operating Results This section provides a detailed analysis of the financial performance of each of Chubb's six operating segments - North America Commercial P&C: Segment income grew 5.8% in Q2 2025 to $1.79 billion, with net premiums written increasing 4.1%, driven by 8.5% growth in the Commercial (middle market and small) business175176 - North America Personal P&C: Segment income surged 57.2% to $561 million in Q2 2025, with the combined ratio improving significantly to 73.5% from 83.5% in Q2 2024, though for the first six months, the segment recorded a loss of $258 million due to $1.48 billion in catastrophe losses, primarily from California wildfires186 - Overseas General Insurance: Net premiums written grew 8.5% (10.2% constant dollar) in Q2 2025, with strong performance in Europe, Asia, and Latin America, but the combined ratio increased to 90.3% from 88.2% due to higher catastrophe losses200202 - Life Insurance: Segment income increased 10.4% (15.3% constant dollar) to $305 million in Q2 2025, with net premiums written growing 14.1% (17.3% constant dollar), driven by strong new business in Asia and the Combined Insurance worksite business218220221 Net Realized and Unrealized Gains (Losses) This section details the gains and losses from investment activities, distinguishing between realized and unrealized components Net Realized and Unrealized Gains (Losses) Summary (in millions USD) | Category | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Realized Gains (Losses) | $160 | $104 | $44 | $3 | | Net Unrealized Gains (Losses) | $1,627 | ($990) | $2,674 | ($1,604) | | Total Net Impact, Pre-tax | $1,787 | ($886) | $2,718 | ($1,601) | - Pre-tax net unrealized gains of $986 million in Q2 2025 were primarily driven by lower interest rates impacting the fixed maturities portfolio230 - Pre-tax net realized gains of $160 million in Q2 2025 were driven by mark-to-market gains on equity securities and gains on investment derivatives, partially offset by foreign exchange and fixed maturity losses231 Investments This section provides an overview of the company's investment portfolio, including its composition, credit quality, and changes over the period - Total investments increased by $7.7 billion to $158.4 billion in the first six months of 2025, mainly due to investing operating cash flow and gains in fixed maturities249 - The investment portfolio remains primarily in publicly traded, investment-grade fixed income securities with an average credit quality of A/A as of June 30, 2025248 - Below-investment grade and non-rated securities comprised approximately 15% of the corporate fixed income portfolio, diversified across over 1,600 issuers256 Capital Resources This section discusses Chubb's capital structure, including financial debt, hybrid debt, shareholders' equity, and capital management activities like share repurchases and dividends Capitalization Summary (in millions USD) | Component | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Financial Debt | $14,976 | $15,179 | | Total Hybrid Debt | $420 | $419 | | Total Chubb Shareholders' Equity | $69,395 | $64,021 | | Total Capitalization | $84,791 | $79,619 | | Ratio of Financial Debt to Total Capitalization | 17.7% | 19.1% | - The company repurchased $1.1 billion of its Common Shares in the first six months of 2025, and a new $5.0 billion share repurchase authorization was approved by the Board, effective July 1, 2025275 - The quarterly dividend was increased by $0.06 to $0.97 per share, following shareholder approval of an annual dividend of up to $3.88 per share at the May 2025 meeting278 Liquidity This section describes Chubb's ability to meet its short-term and long-term financial obligations, including operating cash flow, credit facilities, and intercompany dividends - Operating cash flow was $5.1 billion for the first six months of 2025, down from $7.3 billion in the prior year period, mainly due to higher net losses paid and income taxes paid286 - The company maintains a $3.0 billion syndicated credit facility, which supports a $2.0 billion commercial paper program, with usage of $931 million in letters of credit and no commercial paper outstanding as of June 30, 2025281282 - Chubb Limited received dividends of $510 million from its Bermuda subsidiaries and $207 million from other international subsidiaries during the first half of 2025284 Quantitative and Qualitative Disclosures About Market Risk This section details Chubb's management of market risks, particularly foreign currency risk and the risks associated with its Market Risk Benefits (MRB) reinsurance business, including sensitivity analyses - Chubb's policy is to generally match assets, liabilities, and required capital in local currencies to manage foreign currency risk292 - The company provides sensitivity analysis for its Market Risk Benefits (MRB) portfolio, estimating that a flat interest rate environment combined with a 20% decline in worldwide equity markets would result in an estimated $46 million decrease in net income295 - The net amount at risk for the MRB portfolio is limited by annual or aggregate claim limits in the reinsurance treaties, with Guaranteed Living Benefits (GLB) net amount at risk increasing from $909 million to $1.67 billion following an immediate 40% decline in equity markets296298 Controls and Procedures Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures as of June 30, 2025, concluding they are effective with no material changes to internal controls over financial reporting during the quarter - The CEO and CFO concluded that Chubb's disclosure controls and procedures were effective as of June 30, 2025300 - No material changes were made to the company's internal controls over financial reporting during the second quarter of 2025301 Part II. OTHER INFORMATION Legal Proceedings Information regarding legal proceedings is incorporated by reference from Note 13 h) to the Consolidated Financial Statements, indicating that the company is subject to various claims and lawsuits not likely to be material to its financial condition - The company is subject to claims litigation and other lawsuits typical to the insurance industry, with management's opinion that the ultimate liability from these matters is not likely to be material to the company's consolidated financial condition and results of operations116302 Risk Factors There have been no material changes to the risk factors previously disclosed in the company's 2024 Form 10-K - No material changes to the risk factors described in the 2024 Form 10-K have occurred303 Unregistered Sales of Equity Securities and Use of Proceeds This section details the company's repurchases of its common shares during the second quarter of 2025, including the number of shares, average price, and the authorization of a new repurchase plan Share Repurchases for Q2 2025 | Period | Total Shares Purchased | Average Price Paid per Share | Shares Purchased as Part of Plan | | :--- | :--- | :--- | :--- | | April 2025 | 518,333 | $280.32 | 511,000 | | May 2025 | 731,293 | $289.73 | 598,000 | | June 2025 | 1,232,506 | $292.82 | 1,230,727 | | Total | 2,482,132 | $289.30 | 2,339,727 | - The total value of shares repurchased under the publicly announced plan in Q2 2025 was $676 million304 - A new $5.0 billion share repurchase authorization was approved by the Board, effective July 1, 2025304 Other Information During the second quarter of 2025, no director or officer of Chubb adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the three months ended June 30, 2025305 Exhibits This section lists the exhibits filed with the Form 10-Q, including certifications by the CEO and CFO pursuant to the Sarbanes-Oxley Act of 2002 and financial data formatted in Inline XBRL - The report includes required certifications from the CEO and CFO under Sections 302 and 906 of the Sarbanes-Oxley Act306 - Financial statements and notes are provided in Inline XBRL format as part of the filing306