10-KPeriod: FY2022

Chubb Ltd Annual Report, Year Ended Dec 31, 2022

Filed February 24, 2023For Securities:CB

Summary

Chubb Limited reported solid performance in 2022, demonstrating resilience despite a challenging economic environment. The company achieved a P&C combined ratio of 87.6%, an improvement from the previous year, driven by strong underwriting and record net investment income. Net premiums written grew by 10.3% to $41.8 billion, supported by premium retention, rate increases, exposure growth, and the strategic acquisition of Cigna's Asian business. The company's diversified business segments, including North America Commercial P&C, North America Personal P&C, Overseas General Insurance, and Global Reinsurance, all contributed to this growth. Net income, however, decreased to $5.3 billion from $8.5 billion in 2021, primarily due to $791 million in after-tax mark-to-market losses on equities compared to gains in the prior year. Chubb also returned significant capital to shareholders through $3.0 billion in share repurchases and $1.4 billion in dividends. The company's capital position remains strong, with shareholders' equity at $51 billion. Looking ahead, Chubb anticipates continued growth in investment income as it reinvests cash flow at higher rates, particularly benefiting its Asian life insurance operations. The company's proactive risk management, underwriting discipline, and focus on long-term value creation position it favorably for future performance.

Financial Highlights

42 data points
Beta

Revenue

$43.10B

Net Income

$5.25B

12.2% Net Margin

EPS (Diluted)

$12.39

Total Assets

$199.02B

Cash & Equivalents

$2.01B

Free Cash Flow

$11.26B

Financial Statements
Beta
Revenue$43.10B
Interest Expense$570.00M
Net Income$5.25B
EPS (Basic)$12.50
EPS (Diluted)$12.39
Shares Outstanding (Basic)419.78M
Shares Outstanding (Diluted)423.53M

Key Highlights

  • 1Chubb reported a P&C combined ratio of 87.6% for 2022, an improvement from 89.1% in 2021, indicating strong underwriting performance.
  • 2Consolidated net premiums written increased by 10.3% to $41.8 billion, reflecting growth across most business lines and the acquisition of Cigna's Asian business.
  • 3Net income decreased to $5.3 billion in 2022 from $8.5 billion in 2021, largely due to mark-to-market losses on equities compared to gains in the prior year.
  • 4Net investment income reached a record $3.7 billion, driven by higher reinvestment rates on fixed maturities.
  • 5The company returned $4.4 billion in capital to shareholders through share repurchases ($3.0 billion) and dividends ($1.4 billion).
  • 6Shareholders' equity decreased by $9.2 billion due to unrealized investment losses and foreign exchange translation, but remained substantial at $51 billion.
  • 7Chubb increased its ownership in Huatai Group to 64.2%, signaling a strategic expansion in the Asian market.

Frequently Asked Questions

In 2022, Chubb demonstrated strong underwriting results and record net investment income, although net income decreased to $5.3 billion from $8.5 billion in 2021. This decrease was primarily attributed to mark-to-market losses on equity investments, which offset the positive performance in other areas. Net premiums written grew by 10.3% to $41.8 billion, showcasing the company's ability to expand its business and market reach.

The acquisition of Cigna's Accident & Health and life insurance operations in several Asian markets, completed on July 1, 2022, significantly contributed to Chubb's growth. It added $1.43 billion to net premiums written and $0.13 billion to net premiums earned in 2022, as well as boosting the Life Insurance segment's performance. This strategic move expands Chubb's presence and growth opportunities in the Asian market.

Chubb actively manages market risk, including interest rate risk. The company maintains a high-quality portfolio of primarily fixed-income investments with a relatively short duration to mitigate the impact of interest rate changes. As of December 31, 2022, a hypothetical 100 basis point increase in interest rates was estimated to decrease the fair value of the fixed-income portfolio by approximately $4.4 billion. Chubb also uses derivative instruments to hedge foreign currency exposures and manage its investment portfolio.

Chubb returned $4.4 billion in capital to shareholders in 2022 through $3.0 billion in share repurchases and $1.4 billion in dividends. Despite a decrease in shareholders' equity due to unrealized investment losses, the company maintained a strong capital position with $51 billion in shareholders' equity. The company also increased its ownership in Huatai Group, indicating continued strategic investment.