Chubb Limited (CB) Earnings

Management highlights

- Core Financial Results * Core operating earnings of $2.8 billion ($7.26 per share), up 14.6% and 18.2% respectively year-over-year * Tangible book value per share up 17.1% year-over-year; annualized core operating return on tangible equity was 21.2% * Pre-tax catastrophe losses were $475 million, mostly from U.S. weather events; favorable prior period development of $441 million in active operating businesses * Book value per share reached an all-time high of $195.45 at quarter-end - Capital Management * Issued $2.2 billion of debt across multiple currencies at a 4.2% weighted average cost and 7.5 year average term, for general corporate purposes including debt refinancing * Board authorized a new $7.5 billion undated share repurchase program effective July 1 * Returned $1.4 billion of capital to shareholders in the quarter, including $979 million in share repurchases and $395 million in dividends * Ended the quarter with $69 billion in net loss reserves, up 4% year-over-year; core operating effective tax rate was 19.2% for the quarter - Investment Strategy * Maintains a conservative, disciplined strategy centered on high-quality liquid investment-grade assets and conservative duration positioning * The current 5.5% reinvestment rate is structurally attractive, driving growing investment income and book value compounding * Positioned to quickly capitalize on market dislocations as opportunities emerge - Competitive and Market Positioning * Maintains intentional disciplined underwriting: continues to shrink inadequately priced U.S. large account and E&S property business, while most other business lines grow * The company's broad global and product diversification provides significant resilience to soft market conditions in certain commercial P&C lines * Small and middle market commercial benefits from a strong, broad distribution footprint, industry-specific underwriting expertise, and technology advantages, creating a durable competitive moat * High net worth personal lines competes on rich coverage, specialized claims service, and sophisticated risk selection rather than pure price, insulating it from general personal lines pricing pressure

Guidance

- Full-year 2026 core operating effective tax rate is expected to fall in the 19.5%-20% range, maintaining prior guidance (the Q2 19.2% rate was below this range due to temporary mix shifts and discrete tax benefits) - Adjusted net investment income for Q2 came in above prior guided ranges, driven by faster invested asset growth and higher-than-projected private equity income - Management maintains a long-term confidence in the company's ability to generate strong double-digit growth in tangible book value per share, and strong growth in operating earnings and EPS, even amid current soft market conditions. The long-term expected range of EPS outcomes was modestly broadened to reflect market conditions, but still includes double-digit EPS growth

Segment performance

1. Global Property & Casualty (P&C): Total global P&C premiums grew 3% year-over-year (6.3% excluding U.S. large account and E&S property). P&C underwriting income reached more than $1.9 billion, up almost 19% year-over-year, with an overall combined ratio of 83.8% (82.2% on a current accident year basis excluding catastrophes). 2. Overseas General Division: Grew 10.2% year-over-year (4.8% in constant dollars). The international retail segment (90% of the division, ~$17 billion annual gross premiums) grew almost 12% (6% constant dollar): consumer A&H and personal lines up over 12%, commercial lines up over 11%. Regional growth: Latin America +15.6%, Asia +12%, Europe +7.5%. London wholesale (10% of international P&C) premiums were down ~1% year-over-year. 3. North America Commercial: Overall premiums up ~0.5% year-over-year. Middle market and small commercial division grew almost 9% (~$9.5 billion annual gross premiums), with P&C lines up 12% and financial lines down ~3%. Major account and specialty/E&S premiums declined 9% due to intentional pruning of inadequately priced property business. Pricing: commercial P&C (excluding financial lines and workers comp) up 1.3% overall; property down ~6% (down 12% for shared/layered major specialty business, down 2.3% for middle/small commercial); casualty up 7.1%; financial lines up 0.3%. 4. North America Consumer: High net worth personal lines (over $8 billion annual gross premiums) grew 6% with 90% account retention. Overall personal lines and A&H each grew 6% year-over-year. 5. Life Insurance: Premiums and deposits rose almost 14.5% year-over-year, with most growth coming from North Asia (China, Hong Kong, Korea, Taiwan). Pre-tax income reached $332 million, up 9% year-over-year, and the division now produces over $8 billion in annual premiums (up from $2.5 billion five years prior). Chubb Worksite Benefits premiums in North America grew 14%. 6. Investment: Total invested assets reached $175 billion, up from $161 billion year-over-year. Adjusted net investment income hit a record $1.88 billion, up over 11% year-over-year. Public fixed income generated $1.63 billion of income, up 12% year-over-year, with a portfolio yield of 5.1% and a new money reinvestment rate of 5.5%. Private investments (12% of the portfolio) contributed $250 million of income, up 9.5% year-over-year.

Risks & headwinds

- Soft market conditions have spread beyond property to casualty lines (particularly E&S, large account, and middle market), with pricing failing to keep pace with rising loss costs: U.S. primary casualty loss costs rise 6%-7% annually, and excess casualty loss costs rise 9.5%-12% annually, making pricing inadequate quickly - Financial lines remain soft, with new inexperienced market entrants (including MGAs and smaller carriers) writing business at inadequate prices and terms that experienced underwriters abandoned decades ago - London wholesale markets are increasingly writing U.S. casualty at unsustainable rate levels, repeating a cycle that has resulted in past losses - Investment markets face structural risks: longer-term yields face upward pressure from rising federal deficits, corporate credit demand, persistent inflation, and potential foreign rotation out of U.S. assets, which could lead to wider credit spreads and pressure on risk asset valuations - Adverse prior period reserve development of $158 million was recorded in the corporate runoff portfolio, over two-thirds of which came from molestation-related claims

Analyst Q&A

• Q: Do recent regulatory changes to A&H deductibles in Singapore and investment product rules for mainland visitors in Hong Kong have any material impact on Chubb's results or require product redesign? /

  A: There is no material impact to Chubb from either change. Singapore's regulatory changes apply to traditional major medical health insurance, which Chubb does not write; Chubb only sells supplemental health products there. In Hong Kong, regulatory actions targeted bad actors abusing existing capital flow and product rules, and there has been no impact on Chubb's business, with no impact expected going forward.

• Q: Why does Chubb have a more sober view of current P&C market conditions than many competitors, and how does Chubb expect to perform going forward? /

  A: Management cannot speak to competitors' perspectives, as all firms face the same market realities. Chubb's long-built breadth of global, product, and customer diversification allows it to outperform even amid soft commercial P&C conditions, and management remains fully confident in Chubb's ability to continue delivering strong results.

• Q: Why has ceded premium grown over 20% year-over-year in North America Commercial, and would expanding written reinsurance (or acquiring a larger reinsurance platform) provide strategic benefit? /

  A: Higher reinsurance spending varies by line, with more reinsurance purchased for property and certain financial lines where the market is irrationally hungry for capacity, so it makes strategic sense for Chubb to cede this business. Expanding or acquiring a large reinsurance platform makes no strategic sense for Chubb, whose strategy focuses on growing its core primary insurance business in the opposite direction.

• Q: Does the steady improvement in overseas general accident year loss ratios stem from faster growth in higher-margin Asia/Latin America relative to Europe, driven by business mix improvement? /

  A: The accident year loss ratio improvement is indeed driven by business mix shift, but not purely geographic: the shift is toward faster-growing consumer lines (A&H and personal lines) and mid/small commercial business versus large commercial accounts across all regions. Chubb grows mid/small commercial meaningfully in Europe as well, so the geographic framing is less accurate than product and size mix shift.

• Q: Why is small and middle market commercial growing faster, and is technology eroding the historic incumbent competitive advantage in this segment? /

  A: Technology, data, scale, and breadth of insight are structural, secular competitive advantages for incumbents like Chubb, not disadvantages. Chubb's existing large scale, broad distribution footprint, and industry-specific expertise paired with technology has allowed it to accelerate growth in this segment sustainably.