10-KPeriod: FY2014

Chubb Ltd Annual Report, Year Ended Dec 31, 2014

Filed February 27, 2015For Securities:CB

Summary

Chubb Ltd. (formerly ACE Limited) presents its 2014 annual report, detailing a globally diversified insurance and reinsurance organization with $98 billion in total assets and $30 billion in shareholders' equity as of December 31, 2014. The company operates across five segments: Insurance – North American P&C, Insurance – North American Agriculture, Insurance – Overseas General, Global Reinsurance, and Life. Significant strategic acquisitions in Brazil and Thailand during 2014 underscore the company's growth strategy in emerging markets. ACE emphasizes a disciplined underwriting approach, focusing on quality and risk management, and maintains a strong capital position and global platform for growth. The company's financial performance in 2014 saw net premiums earned increase to $17.4 billion, though net income decreased by 24.1% to $2.9 billion, partly due to accounting impacts from its living benefit variable annuity reinsurance business. The company returned value to shareholders through $1.4 billion in share repurchases and dividends. Management expresses confidence in its strategy, highlighting investments in future growth and a focus on operational excellence.

Financial Highlights

40 data points
Beta

Revenue

$19.17B

Net Income

$2.85B

14.9% Net Margin

EPS (Diluted)

$8.42

Total Assets

$98.25B

Cash & Equivalents

$655.00M

Free Cash Flow

$4.50B

Financial Statements
Beta
Revenue$19.17B
Interest Expense$280.00M
Net Income$2.85B
EPS (Basic)$8.50
EPS (Diluted)$8.42
Shares Outstanding (Basic)335.61M
Shares Outstanding (Diluted)338.99M

Key Highlights

  • 1Chubb Ltd. (ACE Limited) is a global insurance and reinsurance company with $98 billion in assets and $30 billion in shareholders' equity as of December 31, 2014.
  • 2The company operates across five segments: Insurance – North American P&C, Insurance – North American Agriculture, Insurance – Overseas General, Global Reinsurance, and Life.
  • 3In 2014, Chubb made strategic acquisitions in Thailand and Brazil, expanding its presence in emerging markets.
  • 4Net premiums earned increased by 4.9% to $17.4 billion in 2014.
  • 5Net income decreased by 24.1% to $2.9 billion in 2014, impacted by accounting for a variable annuity reinsurance business.
  • 6The company returned $1.4 billion to shareholders through share repurchases in 2014.
  • 7The combined ratio for P&C operations was 88.1%, indicating profitable underwriting.

Frequently Asked Questions

Chubb operated through five segments: Insurance – North American P&C (35% of net premiums earned), Insurance – North American Agriculture (9%), Insurance – Overseas General (39%), Global Reinsurance (6%), and Life (11%). The Insurance – Overseas General and Insurance – North American P&C segments were the largest contributors to net premiums earned.

In 2014, Chubb saw a 4.9% increase in net premiums earned to $17.4 billion. However, net income decreased by 24.1% to $2.9 billion. This decrease was partly attributed to mark-to-market accounting adjustments related to its living benefit variable annuity reinsurance business, influenced by changing interest rates.

Chubb's strategy involved continued premium growth through increased volume, product expansion, and geographic reach. The company actively pursued acquisitions, notably in Thailand and Brazil, to strengthen its presence in emerging markets. In terms of capital allocation, Chubb returned value to shareholders by repurchasing approximately $1.4 billion of its common shares and increasing its quarterly dividend.

Key risks include the occurrence of natural and man-made disasters, the potential for claims to exceed loss reserves, uncertainty from emerging claim and coverage issues, the failure of loss limitation methods, the reliance on and potential non-payment from reinsurers, market volatility impacting investment performance, and disruptions from operational or IT system failures. The company also noted risks related to regulatory changes and geopolitical developments in its global operations.