investor presentation chubb limited

Investor Presentation Chubb Limited December 2016 The New Chubb: A - PDF document

Investor Presentation Chubb Limited December 2016 The New Chubb: A Unique Global P&C Franchise Substantial Scale #1 P&C insurer by market cap globally $36B gross written premium; Wide Custom er & Product Geographic $4.5B

  1. Investor Presentation Chubb Limited December 2016

  2. The New Chubb: A Unique Global P&C Franchise Substantial Scale  #1 P&C insurer by market cap globally  $36B gross written premium; Wide Custom er & Product Geographic $4.5B - $4.6B operating income (2016E) Diversification Presence  9 businesses with $2B+ premium  ~31,000 employees  64% commercial, 36% consumer  54 Countries, 658 Offices  62% U.S., 38% International  $7B premium and deposits Asia & Latin America (2016E) Respected Brand In-Depth Balance Sheet Capabilities Strength 1  Talent and culture – underwriting,  $48B equity; $62B total capital Financial claims, engineering Outperform ance 2  Financial leverage ~22%  Products  Excellent ratings  Distribution (“AA” S&P, “A++” A.M. Best)  Last 10 years:  Technology and analytics – TRS > 8x vs. peers – Market cap >3x Note: 2016 figures inclusive of first 14 days of January 1. As of September 30, 2016 1 2. As of November 30, 2016

  3. Well Diversified by Product and Customer Product & Custom er Mix Geographic Mix Asia life insurance business ($2B) 1 Large Asia & Latin America presence ($7B) 1 One of the largest supplemental - One of the largest P&C portfolios A&H providers globally ($4B) Com m ercial: 64.1% Life Latin 5.9% America Leading major and multinational A&H 7.3% accounts insurer ($7B) 11.8% Asia Pacific Comm. P&C - N.A. #3 U.S. excess & surplus ($2B) Major & Spec. Consum er: 12.5% Personal P&C - 25.5% 35.9% Int'l 4.6% #1 U.S. commercial lines ($15B) U.K. / Europe Personal P&C - U.S. 13.5% N.A. Comm. P&C - N.A. 61.6% 13.6% Mid Market & Small Comm. #1 Global professional lines ($4B) #1 U.S. high net 13.9% Canada / worth insurer ($5B) Bermuda Global Re 2.0% 5.1% Agr. 5.9% Leading U.S. mid-market Comm. P&C - Int'l insurer ($5B) 16.8% #1 U.S. crop insurer ($2B) Leading international commercial P&C insurer ($6B) ~85% retail in 54 countries ~15% London wholesale (longstanding Lloyd’s presence) Total 20 16E GPW and Deposits: $37 billion 1 1. Life insurance production includes $1B of deposits collected on universal life and investment contracts. Consistent with 2 GAAP, premiums collected on universal life and investment contracts are considered deposits and excluded from revenues

  4. A Strong Start: The First 9 Months Legacy ACE New Chubb 9/ 30 / 15 9/ 30 / 16 Change ($ in billions, except per share am ounts) Gross Prem ium s Written 1 $18.2 $27.1 1.5x P&C Com bined Ratio 1, 2 87.2% 88.2% -- Operating Incom e 1 $2.4 $3.5 1.5x Shareholders’ Equity $29.1 $48.4 1.7x Operating Cash Flow $2.7 $3.8 1.4x Operating Incom e per Share 1 $7.38 $7.42 +1% Book Value per Share 3 $89.88 $103.96 +16% -17% Tangible Book Value per Share 3 $72.25 $60.26 (vs. -29% at close) Market Capitalization $33.5 $58.5 1.7x 1. 2016 YTD includes the 14 day period in January prior to transaction closing 2. 2016 YTD combined ratio does not include any impact from purchase accounting adjustments 3 3. Includes unrealized appreciation/ depreciation on investment portfolio

  5. Our Key Objectives Integrate and realize efficiencies, unify culture, improve operating and earnings power Remain a growing and vital industry leader that serves Generate customers attractive Realize potential growth and globally diversification shareholder returns Create a unified and exciting culture for employees Invest for the long term Manage risk exposure in line with capital and balance sheet asset and liability risk 4

  6. The Year 1 Story: Integration, Customers and Growth  Management team put in place before closing with detailed plans in hand  Senior management led 16 work streams with 450 people, actively managing all geographies, lines of business and functions: real estate, IT, culture and people, HR, finance, branding  Merger-related expense savings ahead of plan: $800M annualized by end of 2018 versus $650M announced; related costs of $0.62 per $1 of savings ($497M total) Operational  Nearly 2,000 positions eliminated globally through October 2016, ~60% of targeted total Integration 20 16E 20 17E 20 18 E Annualized Savings $515M $740M $800M Realized Savings $310M $580M $760M  Harmonized underwriting risk appetite and risk guidelines  Underwriting actions taken in certain portfolios not meeting standards or exceeding risk appetite. Actions, which include cancelling or reinsuring certain business, reduce premium but improve risk/ reward profile  Integrated and rebalanced investment portfolio to improve investment performance at reduced cost (~ $120M more investment income) Risk & Balance Sheet 20 16E Integration Chubb-cancelled business $220M Additional reinsurance purchased $430M Estimated business lost due to concentration $165M Total NPW Impact $815M  Retained customers – renewal retention rate in line with or at historic highs: N.A. major accounts 92%; N.A. mid-market 88%; international P&C 85%; N.A. personal lines 94% (excluding Fireman’s Fund)  Custom ers & Building cross-sell and up-sell momentum: power of the new company generated revenue synergies of circa $300M NPW in 2016 Growth  Focused on customers and distribution partners  Launched new products – small commercial 5

  7. Portfolio Well Balanced to Perform in All P&C Market Conditions 22% More Favorable Int’l Personal A&H Life Agriculture 33% N.A. 6% Term s & Conditions Personal Global Mid-Market Global Sm all Com m ercial N.A. Major & Specialty 39% International Large P&C Less Favorable U.S. & London Wholesale, Berm uda E&S, Global Re Lesser Pricing Power Greater Commercial Consumer 6 Note: bubble size based on relative GPW and deposits of business; market conditions vary by product and territory

  8. Global P&C Industry Expected to Increase $1.7T over Next 10 Years Global P&C Direct Prem ium s Written, 20 15 to 20 25E ($ in billions) 2015 2025E Growth Europe $1,322 China $945 North Am erica 4.5% p.a. $631 4.6% p.a. $473 $340 14.1% p.a. $463 $605 $849 $169 $470 6.2% p.a. $213 Asia Pacific $256 $172 Latin 6.8% p.a. Am erica $83 $89 Plenty of Room for Sm art Growth  Global P&C market expected to grow from $2.0T to $3.7T by 2025  Fragmented market: top 10 insurers have only ~20% market share, virtually unchanged from 5 years ago – no single player dominates  Asia life market represents ~$900B of premium growing to nearly $2T by 2025 Chubb is positioned to capitalize on growth. With just 11 countries with $40 0 M prem ium or m ore, plenty of room to grow over tim e given local presence, deep underwriting culture and product and distribution capabilities. 7 Source: Swiss Re

  9. Significant Opportunities for Growth and Diversification Segm ent Opportunity Chubb Capability  Combine complementary product and  Breadth of traditional, specialty and package Mid-Market and Small distribution capabilities to grow and serve products Commercial new and existing customers in select  Deep expertise in specific industries markets globally Com m ercial  Agency and broker distribution  Expand business with large, multinational  Operations in 54 countries and knowledge of Major and Global corporations that have complex, territories Accounts interconnected risks globally – only few carriers can serve  Local underwriting globally  Claims handling and risk engineering expertise  Combine complementary product and Cross-sell and Up-sell  Technology: Worldview, global risk straight-through distribution capabilities to grow and serve (Revenue Synergies) processing, digital technology/ mobile (micro) existing large and mid-market customers  Growth of middle-income consumers in International A&H select markets  Comprehensive product offering  Large untapped market: $40B, U.S. High Net Worth  Local underwriting globally < 20% with dedicated HNW carriers  Exceptional claims and risk control capabilities and Consum er reputation  International Personal Select markets in Europe, Asia and Latin  Insights from deep and expanded data pools Lines America  Multi-channel distribution capabilities: brokerage,  Under-served lower middle income agency, direct marketing, captive agency force, North America market; mid-market worksite voluntary worksite marketing, bancassurance Combined Insurance benefits and Hispanic market  Technology  $900B market in region with largest Asia Life wealth creation potential next 20-30 years 8

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