Chubb Limited Q2 FY2025 earnings call

• Excellent quarter with core operating EPS at record $6.14, up 14% y/y, supported by record underwriting, strong investment results, and premium growth.
• Core operating income $2.5 billion, a record, up 13%. Published underwriting income $1.6 billion, up 15%, combined ratio 85.6%. Current accident year underwriting income (excluding cats) up ~11.5%, combined ratio 82.3%.
• Adjusted net investment income $1.7 billion, up 8%; fixed income portfolio yield 5.1%, new money rate avg 5.4%. Operating cash flow $3.2 billion.
• Global P&C premiums (excluding agriculture) grew 5.8% (6.4% constant dollar), commercial up 4.2%, consumer up 11.9%. Life Insurance division premiums up ~17.5%.
• Discussed rate environment: U.S. commercial P&C underwriting environment varies by line; large account property competitive, middle market/small commercial property disciplined with rates rising, casualty firming, financial lines soft but some classes firming.
• Mentioned acquisition of Liberty Mutual's P&C business in Thailand, which diluted tangible book value by ~$230 million.
• Board authorized new $5 billion share repurchase program effective July 1.

North America P&C: Premiums excluding agriculture were up 5.3%, with personal insurance up 9.1% and commercial up 4.1%. Commercial new business was up 7% driven by middle market, renewal retention on policy count basis was 86%. Middle market P&C grew 8.4%, Small Commercial grew ~10%, Major Accounts and Specialty P&C grew 1.5% with E&S up 5.6%. Property pricing was down in large account but up over 8% in middle market and small commercial. Casualty pricing up 11.6%, financial lines down 1.2%, Workers' Comp primary comp flat, large account risk management up over 7.5%. International General Insurance: Premiums up 8.5% (over 10% constant dollar), commercial lines up ~7%, consumer up over 15%. Asia up over 12.5%, Europe up over 8%, Latin America up over 17%, London wholesale up over 7%. International retail commercial P&C pricing up 0.5%, financial lines down over 6.5%. Life Insurance: Asia and North America Life premiums up, North America combined insurance companies premiums up over 17%, Life division pretax income $305 million, up ~10.5%.

• Adjusted net investment income expected ~$1.72 billion to $1.74 billion next quarter.
• Annual core operating effective tax rate expected in range of 19% to 19.5%.
• Board authorized $5 billion share repurchase program with no expiration date.
• Expect continued growth in top and bottom line, supported by broad-based global diversification and disciplined culture.

• Litigation challenges impacting the industry, affecting coverages like casualty and general liability, with tort reform challenging to address at federal or state level.
• Potential impact of FEMA phase-out on high-net-worth coastal business, though private flood market growing selectively.
• Social inflation affecting coverages and terms, particularly in areas like middle market commercial auto and casualty lines.
• Competitive dynamics in reinsurance and large account property markets, with soft pricing in some areas and impact of capital influx.