The Chubb Corporation
Annual Review 2009
Who insures you doesn’t matter.
Until it does.
Financial Strength and Exceptional Claim Service
Property | Liability | Executive Protection | Workers Compensation | Marine | Surety
Homeowners | Auto | Yacht | Jewelry | Antiques | Accident & Health
The Chubb Corporation
On the Cover
About Chubb
A new corporate advertising
campaign reminds commercial and
personal insurance purchasers and
their agents and brokers that an
insurer is only as good as its financial
strength and its willingness to pay
its claims in a fair, prompt and hasslefree manner.
The campaign’s development
was driven by the insight that some
customers view insurance as a
commodity product...until the
moment when they have a claim. It
is then that Chubb’s superior claim
service makes them appreciate the
difference that Chubb makes in their
lives. The ads are also highly relevant
in these turbulent times when
insurance buyers and recommenders
must also consider the insurance
company’s financial strength. The
new ad campaign was the subject of a
laudatory article in The New York Times
on October 2, 2009.
Four ads that make up the
campaign bring these thoughts to life
in a simple but powerful headline:
“Who insures you doesn’t matter.
Until it does.” The tagline “Financial
Strength and Exceptional Claim
Service” provides Chubb’s key
differentiators.
The four ads that make up the
campaign are running in national
business, finance and consumer
magazines, and national and regional
insurance trade publications. To view
the entire advertising campaign,
please visit www.chubb.com, click on
About Us, then Current Advertising.
Insurance is provided through
the property and casualty subsidiaries
of The Chubb Corporation referred
to for marketing purposes as the
Chubb Group of Insurance
Companies (“Chubb”). For a list of
these subsidiaries, please visit our
website at www.chubb.com. Actual
coverage is subject to the language
of the policies as issued. Chubb,
Box 1615, Warren, NJ 07061-1615.
In 1882, Thomas Caldecot Chubb and his son Percy
opened a marine underwriting business in the seaport district
of New York City. The Chubbs were adept at turning risk
transfer into business success, often by helping policyholders
prevent losses before they occurred. Chubb also established
strong relationships with the insurance agents and brokers
who placed their clients’ business with Chubb underwriters.
“Never compromise integrity,” a Chubb slogan, captures the spirit of our
company. Each of our 10,200 employees in North America, South America,
Europe, Asia and Australia works toward the goal of satisfying customers by
bringing professional excellence and fairness to each transaction.
Today, Chubb stands among the largest property and casualty insurers in the
world. The principles of financial strength, proficient underwriting, conservative
investment and excellent service, executed by our market-leading employees, have
been the mainstays of our organization for 127 years.
Note
Some of the statements in this review may be considered forward-looking
statements as defined in the Private Securities Litigation Reform Act of 1995
(PSLRA). These forward-looking statements are made pursuant to the safe harbor
provisions of the PSLRA and include statements regarding the impact of the
economic downturn on insurance exposures and our investment portfolio; our
exposure to claims arising out of the crisis in financial markets; the impact of
currency fluctuations; the property and casualty insurance market environment,
rates, pricing and new business opportunities; and our ability to succeed in a variety
of market conditions. Such statements speak only as of the date of the review and
are not guarantees of future performance. Various risks and uncertainties may cause
actual results to differ materially. These risks and uncertainties include those
discussed in the filings we make with the Securities and Exchange Commission.
We assume no obligation to update such forward-looking statements.
This review discusses operating income and certain other measures that are
“non-GAAP financial measures” (as defined by the Securities and Exchange
Commission). For additional information regarding these non-GAAP financial
measures, please refer to the inside back cover of this review.
CEO Report
John D. Finnegan
Chairman, President and Chief Executive Officer
W
e hope that you are as pleased with your Company’s
outstanding financial results in 2009 as we are. Despite
Net Income per Share
the uncertainties and fragility of the global economy during the year,
Chubb produced:
$7.01
• the second-best year of operating income per share in our
$6.18
$5.98
127-year history;
$4.92
• a 23% increase in book value per share; and
$4.47
$4.01
• a 15% return on equity.
We believe these results were achieved as a result of our disciplined
$2.23
and unique operating model, our focus on capital management, our
capacity to harness science and technology for enhanced business results,
$0.64
the diversity of our people, products and services, and the degree to
which we have become a global insurer. I want to share with you some
2002 2003 2004 2005 2006 2007 2008 2009
Simply stated, we manage
our operations to achieve
profitable bottom-line
results. The turmoil in the
insurance marketplace and
the global recession that
prevailed during most
of the year certainly
presented additional
challenges but, as our
results demonstrate, we
met our goal.
thoughts about each of these factors, but first, a little more detail about
our 2009 financial results.
Net income was $2.2 billion or $6.18 per share, compared with
$1.8 billion or $4.92 per share in 2008. Operating income, which we
define as net income excluding after-tax realized investment gains
and losses, was $2.2 billion or $6.14 per share in 2009, compared to
$2.0 billion or $5.58 per share in 2008.
Largely because the global recession resulted in lower levels of
insurable exposures, net written premiums in 2009 were down
throughout the property & casualty industry for the third consecutive
year. At Chubb they decreased 6% to $11.1 billion; excluding the impact
of currency fluctuation, premiums were down 4%. Premiums written
outside the U.S., which were up 3% in local currencies, represented
about a quarter of our total net written premiums in 2009, evidence of
the global span of our operations.
Property & casualty investment income after tax declined 3% in
2009 to $1.3 billion, reflecting both the effect of currency fluctuation and
lower yields primarily on short-term investments.
An Operating Model that Manages for the Bottom Line
Simply stated, we manage our operations to achieve profitable
Combined Loss &
Expense Ratio
bottom-line results, and we did so again in 2009. The turmoil in the
Percentage of premium dollars
spent on claims and expenses
insurance marketplace and the global recession that prevailed during
most of the year certainly presented additional challenges but, as our
108%
106.7%
106%
results demonstrate, we met our goal and adhered to our operating
104%
model.
102%
At the core of that model is our insistence that each of our three
100%
98%
Strategic Business Units produce an underwriting profit. We encourage
98.0%
each of them to grow premiums when and where they can but never at
96%
the expense of our goal of bottom-line profitability. For each of them to
94%
92.3%
92%
deliver profitable results in a marketplace like 2009 characterized by
92.3%
90%
strong competition and softening prices required extraordinary
88.7%
88%
discipline and commitment.
86%
86.0%
84%
84.2%
82%
2002
2
have never been a provider of undifferentiated, commodity products
82.9%
2003
2004 2005 2006 2007 2008
Of course, Chubb starts from a position of relative strength; we
2009
where price alone so often determines placement decisions. Instead, we
excel in value-added, highly differentiated products and services where
our financial strength, our broad terms and conditions, and our
unparalleled claims service are factors in the placement decision in
addition to price. That is important because we will not chase market
share by reducing prices. Rather, we price our products to the exposure
we assume. Although securing an appropriate price is of paramount
importance to us, we do work hard to retain the right accounts. So,
where our customer wants or needs to reduce their exposures in order
to reduce their cost, we will work with our producer and the customer
to do just that in an effort to retain a good account. That, no doubt,
contributed to our ability to retain well in excess of 80% of our U.S.
renewal premiums, even in the context of our goal of rate adequacy.
What we will not do, however, is underprice our products to land
new, or retain current, accounts if the best price we can get is
John J. Degnan, Vice Chairman
and Chief Operating Officer
inadequate. Easy to say; hard to deliver. It requires a culture of
disciplined underwriting in which premium growth is never an excuse
for unprofitability. Such a culture cannot be created in response to
marketplace exigencies. It needs to be nurtured over time and be
embedded in a company’s operating model, and at Chubb it is. How
else could we have achieved the following exceptional results?
Our 2009 combined loss and expense ratio — the prime measure
of underwriting profitability — was an excellent 86%.
Chubb Personal Insurance produced net written premiums of
$3.7 billion, down 4%, and a combined ratio of 84.1%. CPI provides
Shareholders’ Equity
our customers with insurance for their homes, cars, yachts, jewelry, fine
(in billions)
art and antiques, as well as personal excess liability coverage and group
$15.6
$14.4
accident & health products. Our premier Masterpiece® product for high-
$13.9
$13.4
net-worth families is the gold standard of the industry. Although we
$12.4
hope our customers never have a loss, those who have experienced our
$10.1
claim service become our most loyal customers and best spokespeople.
$8.5
It’s why our agents and brokers place their most important customers
with Chubb.
$6.8
Chubb Commercial Insurance produced net written premiums
of $4.7 billion, down 7%, with a combined ratio of 89.9%. In the U.S.,
average renewal rates for CCI were up 2%. CCI provides property,
liability, auto, workers’ compensation and marine insurance, with a
2002 2003 2004 2005 2006 2007 2008 2009
3
Over the two-year period
ending December 31, 2009,
Chubb’s cumulative total
return outperformed the
S&P 500 by 16 points.
Over the seven years
ending on that date,
Chubb’s cumulative total
return beat the S&P 500
by 76 points.
specialty in serving niche markets primarily for mid-sized businesses.
Innovative coverages and expert loss control services are two features
of the value proposition that make Chubb a leader in the market niches
of our choice.
Chubb Specialty Insurance produced net written premiums of
$2.7 billion, down 6%, and its combined ratio was 84.1%. Average U.S.
renewal rates for CSI’s professional liability lines were up 3%. CSI
provides highly specialized insurance for directors & officers’ liability,
errors & omissions, employment practices liability, fidelity, crime,
kidnap & ransom and surety.
That we were able to achieve such profitability in each of our
business units in the fifth year of a soft market demonstrates the
effectiveness of our model.
Meeting Shareholder Expectations
We appreciate the fact that our shareholders invest in Chubb with
the expectation they will earn a superior rate of total return (share price
appreciation plus reinvested dividends), and we strive to meet that goal.
In 2008, Chubb shares escaped the devastation of capital markets,
outperforming the total return of the S&P 500 by a stunning 33 percentage points. In 2009, the S&P 500 staged a partial recovery while
Chubb held its own. As a result, the S&P 500 outperformed Chubb in
Book Value and Market Value per Share
$60.00
Market Value
per Share
$49.18
$47.09
Book Value
per Share
$45.00
$30.00
$26.10
$19.93
$15.00
2002
4
2003
2004
2005
2006
December 31
2007
2008
2009
2009 by 27 points. However, over the two-year period ending December
31, 2009, Chubb’s cumulative total return outperformed the S&P 500 by
16 points. Over the seven years ending on that date, Chubb’s cumulative
total return beat the S&P 500 by 76 points.
We increased our dividend
by 6% in 2009, the 27th
consecutive year in which
we have had an increase.
We increased our dividend by 6% in 2009, the 27th consecutive
year in which we have had an increase, producing at year-end 2009 an
effective dividend yield of 2.8%.
We believe Chubb is in the enviable position of having excess
capital. In the current environment, we are unable to deploy that excess
capital at an acceptable rate of return. The prevailing market conditions
of the property & casualty industry and the soft market preclude our
ability to use it to support growth in our core businesses. In addition,
there are fewer attractive investment opportunities for our conservative
portfolio given the current capital market environment. Finally, our
stock is trading at a ratio of price to book value which is lower than our
historical valuation. So, we used excess capital in 2009 to repurchase
22.6 million shares of our common stock at an average price of $47.09.
In fact, from December 2005 through year-end 2009, we repurchased
118.8 million shares of our common stock at a total cost of $6 billion, all
the while ensuring Chubb had sufficient capital on hand to maintain
our high credit ratings, which are the envy of our industry, and to take
advantage of business opportunities should they arise.
Total Return to Shareholders
$24,000
Chubb
$22,250
$22,000
$20,000
$18,000
$16,000
S&P 500
$14,570
$14,000
S&P P&C
$12,375
$12,000
$10,000
2002
2003
2004
2005
2006
December 31
2007
2008
2009
Value of $10,000 invested on December 31, 2002 in Chubb common stock, S&P 500 Index and
S&P Property & Casualty Index, including share price appreciation and reinvested dividends.
Past results are no guarantee of future returns.
5
Science, enabled by
technology, now plays an
integral role in our value
proposition. Pricing risks
and establishing optimal
claim outcomes for our
insureds are being aided by
sophisticated analytics such
as predictive modeling.
Science and Technology Driving Business Results
As you might expect, there are a host of technology-driven
initiatives underway at Chubb which, over time, are transforming the
way in which we process our business and the manner in which our
customers and producers interact with us.
There is one particular phenomenon taking hold at Chubb which
holds great promise for our results in the future. Historically,
underwriting has been more art than science, and we pride ourselves on
hiring, training and developing the best talent in the industry. We still
do. But, like all industries, ours is ever-changing, and science, enabled by
technology, now plays an integral role in our value proposition. Pricing
risks and establishing optimal claim outcomes for our insureds are
being aided by sophisticated analytics such as predictive modeling.
Increasingly, Chubb’s underwriting expertise is being enhanced by
cutting-edge science, leading to faster, more efficient and uniquely
tailored insurance solutions for our customers based on their needs
and risk profiles.
Risks, and the need to insure them, are not static. We work hard
to anticipate, assess and mitigate them and then to underwrite them
responsibly with the help of our state-of-the-art tools.
Diversity of People, Products and Services
Chubb’s global network is staffed with local insurance experts,
making our organization diverse in people and thought. We leverage
that diversity and share best practices to achieve a depth and breadth of
more than 200 products: they range from monoline auto to Fortune 500
directors & officers liability; from accident & health insurance to large
hospital and property programs; from kidnap & ransom and
cybersecurity to large art and jewelry schedules; and from surety bonds
for large contractors to property & casualty package policies for smaller
companies. As I mentioned earlier, we target the niches around the
world which will benefit from our value-added approach and our
exceptional claim service. We are not a commodity provider. We are a
full product and service provider for the niches in which we specialize.
6
Global Reach of Our Operations
It is becoming increasingly clear that Chubb’s investment over the
last 50 years to develop our international operations has provided us with
a substantial competitive advantage. In 2009, 24% of our premiums
emanated from outside the United States.
We believe we did it the right way. The 27 countries in which we
have offices account for over 90% of the global market for property &
casualty premiums. Our global branch network is well capitalized, well
staffed and highly profitable. There are very few of our competitors who
can match our global reach, and the barriers to becoming a global
insurer today are relatively high.
We are pleased with the contributions being made by our
international colleagues throughout our network. We look forward to
The need of our financially
troubled competitors for
bailouts by the federal
government has truly
distinguished those
property & casualty
companies whose
operations and investments
were responsibly managed
so as not to jeopardize the
fundamental promise we
make to honor our
commitments.
their enhancing our ability to seize the opportunities that will be
available to Chubb when the market does turn.
Challenges and Outlook
The competitive marketplace of property & casualty insurance
has been unalterably changed by the financial crisis. The need of our
financially troubled competitors for bailouts by the federal government
has truly distinguished those property & casualty companies whose
operations and investments were responsibly managed so as not to
jeopardize the fundamental promise we make to honor our
commitments to pay claims for the policies we write.
The opportunities for financially strong companies to absorb the
business of weakened competitors were initially compelling, and Chubb
did indeed benefit from decisions by sophisticated buyers to avoid the
credit risk of weakened insurers. This is as it should be in a free market
unimpeded by federal intervention. But the willingness of the federal
2009 Business Mix
by Net Written Premiums
($ in billions)
Specialty
Insurance
$2.7
Personal
Insurance
$3.7
25%
33%
government to prop up weakened competitors by artificially injecting
capital is troubling. The short-term prospects of growth for financially
strong companies with sufficient capital to meet the needs of all insureds
42%
have been dampened as less-sophisticated buyers seem willing to absorb
the operational risks inherent in companies whose policies and practices
Commercial
Insurance
$4.7
7
Our excellent capital
position, conservative
investment portfolio,
strong credit ratings, and
unparalleled products and
services will allow us to
leverage our underwriting
talent to generate attractive
returns in an uncertain
economic environment.
are dictated now by political forces rather than the best interests of
customers and shareholders. Time will tell, of course, but we believe that
in the end, prudent management, underwriting discipline and capital
strength will trump federal bailouts and oversight. In the meantime, we
will compete vigorously on a for-now unlevel playing field. We are in this
business for the long haul and have found that doing the right things for
our shareholders, our policyholders and our employees yields significant
and sustainable value.
We expect 2010 to continue to present major challenges for the
industry related to the lingering effects of the recession and exacerbated
by the likelihood that catastrophe losses will increase this year to levels
more in line with historical experience. Accordingly, we expect earnings
to decline in 2010, but to levels that will still be very attractive by
historical and competitive standards, especially given that we are in what
appears to be the sixth year of a soft market. We continue to believe that
our excellent capital position, conservative investment portfolio, strong
credit ratings, and unparalleled products and services will allow us to
leverage our underwriting talent to generate attractive returns in an
uncertain economic environment. Likewise, we believe no company is
better positioned than Chubb to capitalize on market opportunities and
rate increases as they materialize.
I am deeply grateful to all our employees for another job well done
in 2009. Our underwriters, claim service and loss control providers,
investment professionals and administrative support experts form a
terrific team; we strive every day to make Chubb the preferred workplace
of the very best people in their respective areas of proficiency, for they are
the key to our performance. Many thanks as well to our customers,
agents, brokers, suppliers and shareholders for your continued support.
Sincerely,
John D. Finnegan
Chairman, President and Chief Executive Officer
February 25, 2010
8
Seamless Global Service
UNITED STATES
Worldwide Headquarters: Warren, NJ
Eastern Territory
Atlanta Region
Atlanta, GA
Nashville, TN
Boston Region
Boston, MA
New Haven, CT
Portsmouth, NH
Simsbury, CT
New Jersey Region
NJ Retail
New York, NY
Whitehouse Station, NJ
Philadelphia Region
Harrisburg, PA
Philadelphia, PA
Pittsburgh, PA
Tampa Region
Birmingham, AL
Maitland, FL
Sunrise, FL
Tampa, FL
Washington, DC
Region
Baltimore, MD
Charlotte, NC
Chesapeake, VA
Columbia, SC
Raleigh, NC
Richmond, VA
Washington, DC
Westchester Region
Long Island, NY
Rochester, NY
Westchester, NY
Western Territory
Chicago Region
Chicago, IL
Grand Rapids, MI
Itasca, IL
Milwaukee, WI
Troy, MI
Cincinnati Region
Cincinnati, OH
Cleveland, OH
Columbus, OH
Indianapolis, IN
Louisville, KY
Dallas Region
Austin, TX
Dallas, TX
Houston, TX
Tulsa, OK
Denver Region
Denver, CO
Phoenix, AZ
Portland, OR
Seattle, WA
Los Angeles Region
Los Angeles, CA
Newport Beach, CA
Northern California
San Francisco, CA
Minneapolis Region
Des Moines, IA
Kansas City, MO
Minneapolis, MN
St. Louis, MO
CANADA
Calgary, AB
Montréal, QC
Toronto, ON
Vancouver, BC
BERMUDA
Hamilton
LATIN AMERICA
Argentina
Buenos Aires
Brazil
Belo Horizonte
Brasilia
Curitiba
Porto Alegre
Rio de Janeiro
São Paulo
Chile
Santiago
Colombia
Barranquilla
Bogotá
Cali
Medellín
México
Guadalajara
México City
Monterrey
EUROPE
Austria
Vienna
Belgium
Brussels
Denmark
Copenhagen
France
Bordeaux
Lille
Lyon
Paris
Germany
Düsseldorf
Hamburg
Munich
Ireland
Dublin
Italy
Milan
Netherlands
Amsterdam
Spain
Barcelona
Madrid
Sweden
Stockholm
Switzerland
Zurich
United Kingdom
Belfast
Birmingham
Glasgow
Leeds
London
Manchester
Reading
ASIA/PACIFIC
Australia
Brisbane
Melbourne
Perth
Sydney
China
Beijing
Hong Kong
Shanghai
Japan
Tokyo
Korea
Seoul
Singapore
Taiwan
Taipei
Thailand
Bangkok
9
The Chubb Corporation
Officers
Chairman, President and
Chief Executive Officer
John D. Finnegan
Executive Vice Presidents
Ned I. Gerstman
Robert M. Witkoff
Executive Vice President and
General Counsel
Maureen A. Brundage
Andrew A. McElwee, Jr.
Glenn A. Montgomery
Steven M. Versaggi
Lead Director
James M. Zimmerman
Executive Vice President and
Chief Financial Officer
Richard G. Spiro
Senior Vice Presidents
Daniel J. Conway
Frederick W. Gaertner
Paul R. Geyer
Mark E. Greenberg
Senior Vice President and
Chief Accounting Officer
John J. Kennedy
Vice Chairman and
Chief Operating Officer
John J. Degnan
Vice Presidents
Stephen A. Fuller
Thomas J. Ganter
Marc R. Hachey
Sunita Holzer
Marylu Korkuch
Thomas J. Swartz, III
Thomas J. Walsh, Jr.
Vice President, Corporate
Counsel and Secretary
W. Andrew Macan
Keith M. Dunford
Leslie L. Edsall
Richard J. Edsall
Patricia J. Eggleston
Timothy G. Ehrhart
James P. Ekdahl
Robert C. Ellis, Jr.
Victoria S. Esposito
Craig M. Farina
Timothy J. Farr
Thomas J. Fazio
Michael Feighan
Drew A. Feldman
Amy L. Feller
Alison M. Ferrell
Karen E. Feuerherm
Jeffrey B. Fischer
James A. Fiske
Brian J. Flynn
Peter A. Flynn
John B. Fuoss
Frederick W. Gaertner
Eileen L. Gallagher
Trevor S. Gandy
Scott D. Garney
Donald M. Garvey, Jr.
Mark D. Gatliff
Irene T. Gaughan
Patrick Gerrity
Ned I. Gerstman
Ralph Giordano
Karen R. Gladden
Christine Gomes
Eugene B. Goodridge
Frank F. Goudsmit
Craig M. Grant
Kevin J. Guinan
Patricia L. Hall
Nancy Halpin-Birkner
Robert A. Hamburger
Noel P. Hannon
Richard W. Haran
Patricia F. Harris
Stephen B. Harris
Peter J. Harrison
William R. Harrison
Michael W. Heembrock
Lynne J. Heidelbach
Randolph L. Hein
Raymond Hendrickson
Richard D. Hesselman
Frederick P. Hessenthaler
Steven M. Hill
Debra Ann Hochron
Pamela D. Hoffman
Edward I. Howard
Thomas B. Howland
Joaquin O. Hoyos
Neil A. Huber
Anthony Iovine
Robert A. Iskols
Michael E. Jackson
Steven Jakubowski
John M. Jeffrey
Colleen A. Jennings
Latrell Johnson
Kenneth C. Jones
Lisa M. Jones
John J. Juarez, Jr.
John P. Kaas
Celine E. Kacmarek
Arvind Kapoor
Dennis C. Kearns
James R. Kebbekus
Robert G. Kelly
Timothy J. Kelly
Amy F. Kendall
Thomas R. Kerr
Elsbeth Kirkpatrick
Jeffrey Kneeshaw
Cille Koch
Joseph M. Korkuch
Dieter W. Korte
Joseph E. Kozlowski
Edgar Kroeze
Ralph La Canna
Barbara J. Langione
Terri L. Lathan
Mary M. Leahy
James W. Lenz
Kelly Lewis
Robert A. Lippert
James R. Litterer
Frederick W. Lobdell
Mark A. Locke
Donna M. Lombardi
Matthew E. Lubin
Richard P. Luongo
John W. Luthringer
Robert Lynch
David E. Mack
Michael G. Mangini
Leona E. Mantie
Keith D. Marks
John C. Marques
James Martuscelli
Patricia S. Martz
Brian Mates
Eileen G. Mathews
Richard D. Mauk
Anthony McCuller
Elizabeth McDaid
Sandra K. Mc Daniel
Kathleen M. Mc Donough
Preston McGowan
Penny L. McGuire
Monique L. McKeon
Michelle McLaughlin
Edward J. McLoughlin, Jr.
Joanna B. McNamara
Neil W. McPherson
Robert Meola
Allison W. Meta
Scott D. Meyers
Ann M. Minzner Conley
Joseph D. Miskell
Andrea M. Mollica
Gregory E. Monroe
Terry D. Montgomery
Michael K. Mooney
Paul N. Morrissette
Richard P. Munson
Patrick P. Murphy
Gerald Myers
Ruth T. Nelson
Jennifer K. Newsom
Catherine J. Nikoden
Daniel Nocera
David B. Norris, Jr.
Nancy A. O’Donnell
Stephen S. Oh
Thomas P. Olson
Michael D. Oppe
John S. Osaben
Catherine M. Padalino
Peter Palermo
Michael Palumbo
Christopher Parker
Vice President and Treasurer
Douglas A. Nordstrom
Chubb & Son, a division of Federal Insurance Company
Officers
Chairman and
Chief Executive Officer
John D. Finnegan
President and
Chief Operating Officer
John J. Degnan
Executive Vice President and
Chief Underwriting Officer
Paul J. Krump
Executive Vice President and
Chief Global Field Officer
Harold L. Morrison, Jr.
Executive Vice President and
Chief Administrative Officer
Dino E. Robusto
Executive Vice President and
Chief Financial Officer
Richard G. Spiro
Executive Vice President and
General Counsel
Maureen A. Brundage
Executive Vice Presidents
Gerard M. Butler
Robert C. Cox
Christopher J. Giles
Sunita Holzer
James P. Knight
Andrew A. McElwee, Jr.
Gary C. Petrosino
Steven R. Pozzi
Administrative Committee
W. Brian Barnes
Maureen A. Brundage
Gerard M. Butler
Richard A. Ciullo
Robert C. Cox
John J. Degnan
John D. Finnegan
Christopher J. Giles
Mark E. Greenberg
Sunita Holzer
John J. Kennedy
James P. Knight
Paul J. Krump
Andrew A. McElwee, Jr.
Harold L. Morrison
Gary C. Petrosino
Steven R. Pozzi
Dino E. Robusto
Richard G. Spiro
Senior Vice Presidents
Derek Adams
James E. Altman
Joel D. Aronchick
William D. Arrighi
Gregory P. Barabas
Donald E. Barb
Mark L. Berthiaume
Jon C. Bidwell
Peter G. Boccher
Julia T. Boland
James P. Bronner
Timothy D. Buckley
John F. Casella
Michael J. Casella
10
Michael A. Chang
Richard A. Ciullo
Gardner R. Cunningham, Jr.
David S. Dalton
James A. Darling
Gary R. Delong
Kathleen M. Dubia
Mark D. Dugle
Alexis R. Durcan, Jr.
Mary M. Elliott
Kathleen S. Ellis
Michele N. Fincher
Philip W. Fiscus
Thomas V. Fitzpatrick
Philip G. Folz
Jill A. Francis
Paul W. Franklin
Anthony S. Galban
Thomas J. Ganter
John C. Gibson, Jr.
Baxter W. Graham
Jeffrey S. Grange
Rick A. Gray
Mark E. Greenberg
Donna M. Griffin
Charles S. Gunter
Marc R. Hachey
James R. Hamilton
Lorraine C. Heinen
Steven D. Hernandez
Jeffrey Hoffman
Kevin G. Hogan
Kim D. Hogrefe
Patricia A. Hurley
Gerald A. Ippolito
Mark S. James
Hope Jarvis
Doris M. Johnson
Bettina F. Kelly
John J. Kennedy
Caroline King
Mark P. Korsgaard
Eric T. Krantz
Ulli Krell
Andrew N. LaGravenese
James V. Lalor
Kathleen S. Langner
Paul A. Larson
Kevin J. Leidwinger
Paul L. Lewis
Beverly J. Luehs
Amelia C. Lynch
Michael J. Maloney
Michael L. Marinaro
David P. Mc Keon
Michelle D. Middleton
Robert P. Midwood
Jeffrey J. Miller
John J. Mizzi
Ellen J. Moore
Frank Morelli
Dee A. Nunley
Frances D. O’Brien
Moses I. Ojeisekhoba
Kelly P. O’Leary
Michael W. O’Malley
Rolando A. Orama
Daniel A. Pacicco
Nancy D. Pate-Nelson
Jane M. Peterson
Edward J. Radzinski
Michael K. Reicher, II
Christoph C. Ritterson
Eric M. Rivera
James C. Romanelli
Evan J. Rosenberg
Judith A. Sammarco
Eric D. Schall
L. Joshua Shamansky
Timothy M. Shannahan
Michael A. Slor
Kevin G. Smith
Gail W. Soja
Richard P. Soja
Jody E. Specht
Edward G. Spell
Stuart A. Spencer
Scott R. Spencer
Kurt R. Stemmler
Kenneth J. Stephens
John M. Swords
Joel M. Tealer
Clifton E. Thomas
Bruce W. Thorne
Kathleen M. Tierney
Joel S. Townsend
Gary Trust
Peter J. Tucker
William P. Tully
William C. Turnbull, Jr.
Michele E. Twyman
Jeffrey A. Updyke
Susan M. Vella
Peter H. Vogt, II
Charles J. Walkonis
Susan C. Waltermire
Carole J. Weber
James L. West
Jeremy N.R. Winter
Senior Vice President and
Chief Actuary
W. Brian Barnes
Senior Vice Presidents and
Actuaries
Peter V. Burchett
Robert J. Hopper
Shu C. Lin
Michael F. McManus
Keith R. Spalding
Senior Vice President and
Deputy General Counsel
Judith A. Heim
Senior Vice Presidents and
Associate General Counsels
Matthew Campbell
Kirk J. Raslowsky
Linda F. Walker
Senior Vice President and
Coverage Counsel
Louis Nagy
Senior Vice President and
Treasurer
Douglas A. Nordstrom
Vice Presidents
James R. Abercrombie
Jill A. Abere
William M. Adams
Michael K. Adkins
Elizabeth A. Aguinaga
James D. Albertson
Brenda I. Albiar
Christie S. Alderman
Nicky J. Alexander
George N. Allport
Angela W. Alper
Mary S. Aquino
Michael Arcuri
Ronald J. Arigo
Brendan Arnott
Dorothy M. Badger
Sybil O. Baffoe
Kirk O. Bailey
Gregory W. Bangs
Achiles I. Barbatsoulis
David A. Barclay
Frances M. Barfoot
Richard W. Barnett
William E. Barr, Jr.
David Bauman
Arthur J. Beaver
William R. Bell, III
Donna A. Belvedere
Christopher J. Bender
R. Kerry Besnia
David H. Bissell
Stanley V. Bloom
Julie Bond
Odette M. Bonvouloir
Daniel J. Bosold
Dennis L. Bostedo, Jr.
Michael J. Bronzino, Sr.
Jeffrey M. Brown
Jeff H. Brundrett
John A. Burkhart, III
James D. Butchart
Heather S. Cabra
Sabine B. Cain
Walter K. Cain
Ronald Calavano
Alan M. Carlson
James M. Carson
John C. Cavanaugh
Lyria Charles
Barnes L. Chatelain
Kenneth Chung
Thomas C. Clansen
Laura B. Clark
Debra L. Codd Mulikin
Arthur W. Cohen
Richard N. Consoli
Brian B. Cottone
Monika H. Cox
Edwin E. Creter
Raymond L. Crisci, Jr.
William S. Crowley
Timothy E. Dadik
Christine A. Dart
Michael D. Daugherty
Carl V. Davidson
Mark W. Davis
Johann C. D’Costa
Janet Decostro
David S. Deets
Carol A. DeFrance
Judith A. Delarosa
Joseph F. Delucco
Phillip C. Demmel
Susan Devries Amelang
Joanne C. Diamond
Debra A. Diken
James S. Dobson
Catherine A. Donahue
Brian J. Douglas
Wendy J. Dowd
Alfred C. Drowne
Chubb & Son, a division of Federal Insurance Company (continued)
Officers
Mary Parzych
Louise T. Patregnani
Jonathan L. Pensa
Anthony F. Perrone
Audrey L. Petersen
Jeffrey Peterson
Irene D. Petillo
Michael S. Phillips
Mary Beth Pittinger
Kristen E. Poplar
Robert J. Price
Ramona D. Pringle
Jennifer L. Proce
James H. Proferes
Heidi L. Proodian
William J. Puleo
David L. Pych
Marlin J. Quick
Robert S. Rafferty
Richard D. Reed
Richard P. Reed
Robert Reedy
Walead A. Refai
James L. Rhyner
Merrily Riesebeck
Gary V. Rispoli
Nicholas Rizzi
Mark J. Robinson
Anne Rocco
Edward F. Rochford
Benjamin J. Rockwell
Marylou Rodden
Thomas J. Roessel
Jorge A. Rosas
June A. Rose
Victoria S. Rossetti
Jeffrey W. Ryan
Ruth M. Ryan
Carolyn M. Salapa
Barbara N. Sandelands
Franklin D. Sanders, Jr.
Melissa P. Scheffler
Robert F. Schmid
Michael A. Schraer
Robert D. Schuck
Russell J. Schuren
Mark L. Schussel
Roma K. Seudat
Mary T. Sheridan
Leigh A. Sherman
Kristine A. Shields
Anthony W. Shine
Donald L. Siegrist, Jr.
Jason Skrant
Patricia S. Smith
Scott E. Smith
T. Clarke Smith, III
Richard E. Soleau
Veronica Somarriba
Victor J. Sordillo
Christine M. Staron
William J. Stickle
Lloyd J. Stoik
Beth A. Strapp
Dorit D. Straus
Jacquelyn C. Strobel
Robert D. Stroup
Patrick F. Sullivan
Scott B. Teller
James S. Thieringer
Jonathan Thomas
Charles E. Thompson
Eric W. Thompson
Mark L. Thompson
Peter J. Thompson
John J. Tomaine
Dionysia G. Toregas
Richard E. Towle
Peter Tribulski
J. Tracy Tucker
Roy C. Tyson, III
Richard L. Ughetta
Paula C. Umreiko
J. Scott Usilton
Louise E. Vallee
Louise Van Dyck
Nivaldo Venturini
Bennett C. Verniero
Tracey A. Vispoli
John T. Volanski
Kevin M. Waldron
Christine Wartella
Walter B. Washington
Maureen B. Waterbury
Bradley J. Watson
Ryan L. Watson
Gregory Wells
Janece E. White
David B. Williams
Grenes Eugene Williams
Michael A. Williams
Owen E. Williams
Suzanne L. Witt
Barbara A. Wittick
Bert Wolff, Jr.
Archyne S. Woodard
Gary C. Woodring
Steven Yacik
Jeffrey B. Yao
Dawna A. Yont
Regina York
Jack S. Zacharias
Stephen J. Zappas
Cynthia Zegel
Yelena Zeltser
Dominick Zenzola
Vice President and Secretary
W. Andrew Macan
Mark T. Lingafelter
Frederick W. Lobdell
Kevin O’Shiel
Gary C. Petrosino
Doreen Yip
Ann Maree Cook
Stephen De Gruchy
Gregory D. Dodds
Jonathan P. Doherty
Matthew T. Doquile
Tin Yau Fung
Frederick W. Gaertner
Thomas J. Ganter
Ned I. Gerstman
Paul R. Geyer
Andrew R. Gourley
Baxter W. Graham
Rick A. Gray
Jason Howard
George X.Z. Huang
John J. Kennedy
Mah Swee Keong
Helen Koustas
Christopher R. Lees
Amelia C. Lynch
Dermot McComiskey
David P. Mc Keon
Glenn A. Montgomery
David B. Norris, Jr.
Rolando A. Orama
Steven J. Ord
Emma Osborne
Matthew Pasterfield
Jorge A. Rosas
Francis Row
Andrew Russell
Leo A. Schmidt
John X. Stabelos
Kevin M. Stevens
Leo Takagi
Steven M. Versaggi
Kyle Williams
Robert M. Witkoff
Esther Wong
Jeff Jun Wu
Kiyoshi Yamamoto
Vice Presidents
Barry Blackburn
LeeAnn Boyd
Dale Chow
Paul Johnstone
Gale Lewis
Mary Maloney
Jeffrey Marit
Christina Mcavella
Robert Murray
Michel Rousseau
Zorica Todorovic
Vice President and
Actuary
Philip Jeffery
Kevin Docherty
Mark Edmondson
Richard Eveleigh
Joaquin Fraguela
Andrew Francis
Lynn George
David Gibbs
Marta Gomez-Llorente
Brian Hardwick
Simon Hayter
Isabelle Hilaire
Monique Kooijman
Richard Lambert
Neil Lee-Amies
Andreas Luberichs
Julie Marcello
Simon Mobey
Miguel Molina
Tom Newark
Rene Nieuwland
Stuart Payne
Bjorn Petersen
Hugh Pollington
Jonathan Poole
Feliciano Ruiz
Henrik Schwiening
Covington Shackleford
Alan Sheil
Chris Tait
Michael Thyssen
Lynn Twinn
Monique Van Der Linden
Sophie Van Til Leedham
Brian Vosloh
Bernd Wiemann
Nigel Williams
Vice Presidents and Actuaries
Jason R. Abrams
Joseph E. Freedman
Scott E. Henck
Hye-Sook Kang
Kevin A. Kesby
Kraig P. Peterson
Vice Presidents and
Associate Counsels
Gail Arkin
Maura M. Caliendo
James W. Gunson
James Sharkey
Wendy Taylor
Robert F. Tuohy
Federal Insurance Company
Officers
Chairman, President,
Chief Executive Officer and
Chief Operating Officer
John J. Degnan
Senior Vice President and
Chief Underwriting Officer
Paul J. Krump
Senior Vice President and
Chief Global Field Officer
Harold L. Morrison, Jr.
Senior Vice President and
Chief Financial Officer
Richard G. Spiro
Senior Vice President and
Chief Administrative Officer
Dino E. Robusto
Senior Vice President and
General Counsel
Maureen A. Brundage
Senior Vice Presidents
Brendon R. Allan
Stephen Blasina
Stanley V. Bloom
Paul Chapman
Ian Cook
Andre Dallaire
Shasi Gangadharan
Christopher J. Giles
Christopher Hamilton
Vice Presidents
James E. Altman
Paul Baldacchino
Kemsley Brennan
Roger C.P. Brookhouse
Michael J. Casella
Amy Chai
Stephen Ming Sum Chan
Bay Hon Chin
Richard A. Ciullo
William C. Clarkson
Michael Collins
Vice President and Actuary
W. Brian Barnes
Vice President and Secretary
W. Andrew Macan
Vice President and Treasurer
Douglas A. Nordstrom
Chubb Insurance Company of Canada
Officers
Chairman, President and
Chief Executive Officer
Ellen J. Moore
Senior Vice President and
Chief Financial Officer
Grant McEwen
Senior Vice President,
General Counsel and
Secretary
John F. Cairns
Senior Vice Presidents
Jean Bertrand
Nicole Brouillard
Giovanni Damiano
Patricia Ewen
Andrew Steen
Susan Watts
David B. Williams
Chubb Insurance Company of Europe SE
Officers
President and
Chief Executive Officer
Michael J. Casella
Senior Vice Presidents
Jan Auerbach
Paul Chapman
Gardner R. Cunningham, Jr.
Thierry Daucourt
Johannes Etten
Christopher J. Giles
Carolyn Hamilton
Carlos Merino
Jeremy Miles
Jalil Rehman
Fred Shurbaji
Bernardus Van Der Vossen
Paul R. Van Pelt
Senior Vice President and
Actuary
Colin Crouch
Senior Vice President and
Chief Financial Officer
Kevin O’Shiel
Senior Vice President,
General Counsel and Secretary
Ranald T. I. Munro
Vice Presidents
Ron Bakker
Hubert Belanger
Thierry Bourguignon
Bernhard Budde
Robert Cage
Fiona Cox
Bijan Daftari
Guillaume Deal
11
00
The Chubb Corporation
Directors
Zoë Baird
President
The Markle Foundation
John D. Finnegan
Chairman, President and
Chief Executive Officer
The Chubb Corporation
Daniel E. Somers
Retired Vice Chairman
Blaylock and Partners LP
Sheila P. Burke
Research Faculty
J.F. Kennedy School of
Government,
Harvard University
Dr. Klaus J. Mangold
Former Member of the Board
Daimler AG
Karen Hastie Williams
Retired Partner
Crowell & Moring LLP
James I. Cash, Ph.D.
Professor Emeritus
Harvard Business School
Martin G. McGuinn
Retired Chairman and
Chief Executive Officer
Mellon Financial Corp.
James M. Zimmerman
Lead Director
The Chubb Corporation
Retired Chairman and
Chief Executive Officer
Federated Dept. Stores, Inc.
Joel J. Cohen
Retired Chairman and
Co-Chief Executive Officer
Sagent Advisors Inc.
Lawrence M. Small
Former Secretary
Smithsonian Institution
Alfred W. Zollar
General Manager
Tivoli Software
IBM Corporation
Jess Søderberg
Retired Partner and
Group CEO
A.P. Moller-Maersk
Committees of the Board
Audit Committee
Daniel E. Somers (Chair)
Zoë Baird
Joel J. Cohen
Martin G. McGuinn
Alfred W. Zollar
Executive Committee
John D. Finnegan (Chair)
James I. Cash, Ph.D.
Martin G. McGuinn
Daniel E. Somers
James M. Zimmerman
Organization & Compensation
Committee
Martin G. McGuinn (Chair)
Sheila P. Burke
Daniel E. Somers
Karen Hastie Williams
James M. Zimmerman
Alfred W. Zollar
Finance Committee
John D. Finnegan (Chair)
Sheila P. Burke
Dr. Klaus J. Mangold
Jess Søderberg
12
Corporate Governance &
Nominating Committee
James I. Cash, Ph.D. (Chair)
Zoë Baird
Joel J. Cohen
Lawrence M. Small
Karen Hastie Williams
Explanation of Non-GAAP and Other Financial Measures
The Chubb Corporation
Operating income is net income excluding after-tax realized investment
gains and losses. Management uses operating income, among other measures,
to evaluate its performance because the realization of investment gains and
losses in any given period is largely discretionary as to timing and can
fluctuate significantly, which could distort the analysis of trends.
Property and casualty investment income after income tax is a financial
measure that management uses to evaluate its investment performance
because it reflects the impact of any change in the proportion of the
investment portfolio invested in tax exempt securities and is therefore more
meaningful for analysis purposes than investment income before income tax.
The combined loss and expense ratio (or combined ratio), expressed as
a percentage, is the key measure of underwriting profitability. Management
uses the combined loss and expense ratio calculated in accordance with
statutory accounting principles applicable to property and casualty insurance
companies to evaluate the performance of the underwriting operations. It is
the sum of the ratio of losses and loss expenses to premiums earned (loss
ratio) plus the ratio of statutory underwriting expenses to premiums written
(expense ratio) after reducing both premium amounts by dividends to
policyholders. Statutory accounting principles applicable to property and
casualty insurance companies differ in certain respects from generally
accepted accounting principles. Under statutory accounting principles,
policy acquisition and other underwriting expenses are recognized
immediately, not at the time premiums are earned.
Net written premiums growth (decrease) excluding the impact of
currency fluctuation is used by management to evaluate the trends in net
written premiums, exclusive of the effect of fluctuations in exchange rates
between the U.S. dollar and the currencies in which our international
business is transacted. In net written premiums growth (decrease) excluding
the impact of currency fluctuation, the effect of fluctuations in the exchange
rates is excluded as these rates may fluctuate significantly and could distort
the analysis of trends. Net written premiums growth (decrease) excluding the
impact of currency fluctuation is determined by using the same exchange
rate to translate each foreign currency denominated net written premium
amount in both periods.
Return on equity is the ratio of net income divided by average
shareholders’ equity. Average shareholders’ equity is the average of the
beginning and all quarter-end balances within the year.
15 Mountain View Road
P.O. Box 1615
Warren, NJ 07061-1615
Telephone (908) 903-2000
www.chubb.com
Photography: Peter Vidor
Stock Listing
The common stock of the
Corporation is traded on the
New York Stock Exchange
under the symbol CB.
Dividend Agent, Transfer
Agent and Registrar
BNY Mellon
Shareholder Services
480 Washington Boulevard
Jersey City, NJ 07310
Telephone (877) 251-3569
www.bnymellon.com
The Chubb Corporation
15 Mountain View Road, P.O. Box 1615
Warren, New Jersey 07061-1615
Telephone (908) 903-2000
www.chubb.com