The operator, Eric, introduces the Chubb Limited Fourth Quarter 2023 Earnings Conference Call and welcomes everyone. Karen Beyer, Senior Vice President of Investor Relations, mentions that the call will contain forward-looking statements and non-GAAP financial measures. Evan Greenberg, Chairman and CEO, and Peter Enns, CFO, will be speaking, followed by a question-and-answer session. The company had an outstanding quarter and a record year.

The company's quarterly results were impressive, with double digit premium growth, record underwriting and investment income, and strong life operating income. The full year results were even more impressive, with core operating income reaching $9.3 billion, a 45% increase from the previous year. P&C underwriting income was a record $5.5 billion, and investment income was up 33%. All divisions and major geographies contributed to the outstanding results. The quarter's operating income was $2.3 billion, or $5.54 per share, and the one-time tax benefit added an additional $1.1 billion or $2.76 per share.

Chubb saw strong underwriting performance in the quarter, with increased earned premium growth and excellent underwriting margins. The company also had strong prior period reserve developments and relatively light CAT losses. On the investment side, Chubb had record adjusted net investment income and a strong portfolio yield. The company's consolidated net written premiums increased by 13%, with growth seen in both P&C and life insurance. Chubb's growth was well spread globally, with North America and high net-worth personal lines showing strong growth.

In the fourth quarter, international consumer P&C grew by 18%, international commercial P&C grew by over 11%, and life grew by 52%. The commercial P&C rate environment saw price increases, with property and casualty lines exceeding loss costs in both North America and the International division. In North America, premiums increased by 9.4% excluding agriculture, with personal insurance growing by 12.1% and commercial insurance growing by 4.4%. Within the commercial insurance segment, P&C lines were up 6.3% while financial lines were down 2.1%. The middle market division had a strong quarter with P&C premiums up 9.8%, while financial lines were essentially flat. The E&S business also had a strong quarter with 16% growth in wholesale brokerage lives. However, the division serving large corporates and major accounts only grew by 1.4% due to underwriting actions taken in the primary and excess casualty business. These actions are expected to contribute to future growth in underwriting income. Overall, North America commercial pricing increased by 7.3%, with a rate increase of 5.1% and an exposure change of 2.1%. The company expects to return to more robust growth in the first quarter.

The pricing for commercial property and casualty insurance was strong, with rates and exposure increasing. The underwriting environment for financial lines remains aggressive, with rates continuing to decline. The agriculture business had an elevated combined ratio due to drought-related developments. However, crop insurance has been a successful and profitable business for Chubb. On the consumer side, the high net-worth personal lines business had a great quarter and year, with premiums and new business growth increasing. This is attributed to the company's product, service, and capability.

In this paragraph, the speaker discusses the company's strong performance in the past year, with an 11% growth and a combined ratio of 89.7%. They also highlight the success in their homeowner's business with a 17% pricing increase and steady loss costs trend. The company's international general insurance operations also had an exceptional quarter with a 19.3% growth and a combined ratio of 85.9%. All major regions showed double digit growth, with Asia leading the way with a 37% increase. The company achieved improved rate to exposure across their international commercial portfolio and their international consumer P&C business had strong growth in both A&H and personal lines divisions. In their international life insurance business, premiums were up 26% for the quarter and they reported a record life income of over $1 billion for the year. Overall, the company had an outstanding quarter and is well positioned for continued success in the future.

The underwriting conditions are favorable, and the company is confident in its ability to continue growing operating earnings. The fourth quarter had record results in all three sources of earnings, and the company's book value and book value per share reached all-time highs. The company also recognized a one-time deferred tax benefit of $1.14 billion, which will be realized over a 10-year period starting in 2025. Excluding this benefit, book and tangible book value per share increased significantly due to strong operating results and net realized and unrealized gains in the investment portfolio.

The increase in investments for the year was mainly due to the consolidation of Huatai on July 1. The company also saw record operating cash flows and unrealized gains on their portfolio. The portfolio yield was the highest it has been since 2011. The underwriting business had pretax catastrophe losses and favorable prior period development. The paid-to-incurred ratio for the year was 87% and the reported effective tax rate was impacted by a Bermuda deferred tax benefit.

The company's core operating effective tax rate was slightly below their guided range for the quarter and year, but they expect it to be in the range of 18.75% to 19.25% in 2024. The call was then turned back over to Karen for questions. The first question was about loss cost trend, specifically in North America where short-tail trend came down and long-tail trend inched up. The company remains confident in their underwriting environment despite potential long-tail loss inflation. They have seen steady loss cost trend in casualty, with any changes being attributed to mix of business. Some pockets have been more elevated in recent years, but this is not new and the company has continuous visibility on loss cost.

The speaker discusses the stability of casualty loss costs and the impact of excess capital on earnings levels. They also mention that there is no connection between reserve changes and underwriting actions in North America commercial, and that the loss ratio was not impacted by these changes.

During a recent earnings call, Evan Greenberg, CEO of Chubb, discussed the company's growth in North America commercial and its expectations for 2024. When asked about the growth rate, Greenberg did not provide guidance but noted that the 7.5% growth rate in 2023 was more robust before the fourth quarter. He also mentioned that the company's loss reserves are strong and that the underwriting environment for their well-priced business is favorable.

Evan Greenberg, the CEO of Chubb, was asked about the company's strong reserves and if anything had changed in their reserving philosophy. He stated that nothing has changed and that their reserves are as strong as ever. He also mentioned that their reserves are independently reviewed by external actuaries and auditors. When asked about the large account excess casualty business, Greenberg explained that the target for litigation is often corporate America and that the company is aware of this and takes it into consideration. He also mentioned that there is a general attitude against corporations and that trial lawyers go after them because they have the most money.

The speaker discusses the trend of increased frequency and severity in primary and excess casualty claims, particularly in industries with vehicles. They clarify that this trend is not new and has been a focus in large accounts, but it does not significantly impact their franchise. The speaker also mentions actions they have taken to address this trend, which have not had a negative impact on their business.

Evan Greenberg discusses the strong performance of the company's book of business and its rate adequacy. He also mentions that the company is seeing growth in its E&S business and is focused on offering first admitted coverage, but will use E&S for customers who are more exposed to catastrophes.

Evan Greenberg, CEO of the insurance company, discusses the company's strategy for serving affluent customers who want to live in beautiful, natural places. He mentions using the E&S market to provide coverage, but expresses a desire for more flexibility within regulations to offer the product on an admitted basis. When it comes to managing climate change risks in the agriculture sector, Greenberg highlights the company's ability to select risk and operate efficiently due to its scale and technology. In response to a question about the E&S market and high net worth customers, Greenberg reiterates his desire for more flexibility in the regulations to offer coverage on an admitted basis.

Evan Greenberg, CEO of an insurance company, explains why he prefers the admitted market over the E&S market. He believes it is more customer-friendly and easier to place policies. However, he notes that the trend is shifting towards the non-admitted market due to climate change and government actions. He also discusses his company's asset management business in China and mentions that the majority of their assets are in fixed income.

In this paragraph, the speaker discusses their careful underwriting of credit exposure and their conservative approach as fiduciary managers. They also mention the current economic climate in China and how it affects their asset management business. The speaker believes that as the country returns to more rapid growth and confidence improves, their asset management business will be a great franchise to have. They also mention the outstanding performance rankings of their fixed income and the size of their asset management business in China. The speaker declines to provide further details on the workers' comp business, but mentions that it is running steadily with a higher medical loss trend.

The speaker, Evan Greenberg, responds to a question about geopolitical risk and its impact on the company's business in Europe and Asia. He believes that the risk in Europe is no greater than in the United States, and that the risk in Asia is more related to potential mistakes rather than intentional conflict. He also mentions the potential global impact of a conflict in Taiwan or North Korea. The next question is about the improvement in North America commercial's loss ratio in the quarter, and the speaker is asked if there were any prior quarter adjustments or favorable non-CAT weather that contributed to this improvement.

Evan Greenberg, CEO of Chubb, explains that the company's strong results in the quarter were not due to any one-time adjustments. The improvement is a combination of a change in the mix of business and rate increases across most of the business. There is no way to predict how the Bermuda tax rate increase in 2025 will affect Chubb's tax rate. The company expects double-digit growth in operating earnings in 2024, excluding the one-time tax benefit in the quarter. The premium growth for the quarter is not available due to technical difficulties.

Evan Greenberg, CEO of Huatai, discusses the company's premium benefit in the quarter and how it will be disclosed in the 10-K MD&A. He also addresses the ongoing issue of high severity in the long-haul trucking business in the U.S. and states that the solution is to get enough rate, but there are also other factors at play, such as state laws and litigation funding, that contribute to the problem.

The speaker questions the use of sympathetic individuals in lawsuits and suggests that it may be a ploy to secure a large payout for those funding the lawsuit. They also mention the challenges of finding a federal solution and the influence of the trial bar in Congress. The speaker then moves on to discuss the financial lines market in North America, but does not have an expectation for when pricing may bottom out. They mention the potential challenges of collecting from multiple players on a D&O tower and state that there are other areas of the business to focus on.

Karen Beyer thanks the audience for attending and invites them to ask any additional questions. She then wishes them a good day and thanks them again.

This summary was generated with AI and may contain some inaccuracies.