10-KPeriod: FY2020

Chubb Ltd Annual Report, Year Ended Dec 31, 2020

Filed February 25, 2021For Securities:CB

Summary

Chubb Limited reported net income of $3.5 billion for the year ended December 31, 2020, a decrease from $4.5 billion in 2019, primarily due to a significant increase in catastrophe losses, including a $1.2 billion after-tax impact from the COVID-19 pandemic. Despite the challenging environment, net premiums written grew 4.8% to $33.8 billion, driven by a 9.5% increase in North America Commercial P&C Insurance and strong performance in Overseas General Insurance. The company's P&C combined ratio deteriorated to 96.1% from 90.6% in the prior year, largely due to higher catastrophe losses and lower favorable prior period development. However, the current accident year loss ratio, excluding catastrophes, improved, indicating underlying underwriting strength. Chubb continues to focus on disciplined underwriting and global diversification, with commercial lines showing resilience while consumer lines were more impacted by the pandemic. The company also maintained a strong capital position, with shareholders' equity increasing by 7.4%.

Financial Highlights

40 data points
Beta

Revenue

$35.99B

Net Income

$3.53B

9.8% Net Margin

EPS (Diluted)

$7.79

Total Assets

$190.77B

Cash & Equivalents

$1.75B

Free Cash Flow

$9.79B

Financial Statements
Beta
Revenue$35.99B
Interest Expense$516.00M
Net Income$3.53B
EPS (Basic)$7.82
EPS (Diluted)$7.79
Shares Outstanding (Basic)451.60M
Shares Outstanding (Diluted)453.44M

Key Highlights

  • 1Net income for 2020 was $3.5 billion, down from $4.5 billion in 2019, impacted by significant catastrophe losses.
  • 2Net premiums written increased by 4.8% to $33.8 billion, driven by growth in commercial lines globally.
  • 3The P&C combined ratio worsened to 96.1% in 2020 from 90.6% in 2019, largely due to higher catastrophe losses, including $1.2 billion after-tax from COVID-19.
  • 4Despite pandemic impacts, the current accident year loss ratio excluding catastrophes improved, reflecting better underlying underwriting performance.
  • 5The company continued its strategy of increasing ownership in Huatai Group, reaching a 47.1% stake by year-end 2020.
  • 6Shareholders' equity grew by 7.4% during the year, demonstrating a strong capital position.
  • 7Chubb repurchased $516 million of its common shares in 2020 and announced a new $2.5 billion repurchase program.

Frequently Asked Questions

The COVID-19 pandemic had a significant adverse impact on Chubb's financial results in 2020. Net catastrophe losses included a $1.2 billion after-tax charge primarily from business interruption, liability, and workers' compensation claims. Net premiums written in consumer lines globally declined by 1.9%, with Accident & Health lines down 10.6% due to reduced travel and economic contraction.

Chubb's P&C combined ratio increased to 96.1% in 2020 from 90.6% in 2019. This deterioration was mainly driven by higher catastrophe losses, including COVID-19 related claims, and lower favorable prior period development. However, the current accident year loss ratio, excluding catastrophe losses, improved to 86.7% from 89.2% in 2019, indicating improved underlying underwriting profitability.

Chubb maintained a strong capital position, with shareholders' equity increasing by 7.4% to $59 billion. The company paid dividends throughout the year and repurchased $516 million of its common shares. In February 2021, Chubb's Board approved an increase in its share repurchase program, authorizing up to $2.5 billion through December 31, 2021, demonstrating a commitment to returning capital to shareholders.

In 2020, Chubb completed the purchase of an additional 16.2% ownership interest in Huatai Insurance Group, increasing its aggregate ownership to 47.1%. This strategic investment in China's insurance market is expected to be consolidated in the future, providing an avenue for further growth. The company also continued to manage its global operations across various segments, including Commercial P&C, Personal P&C, Agricultural, Overseas General, Global Reinsurance, and Life Insurance.