Chubb Q3 2026 Earnings Call Transcript

Chubb (NYSE:CB) reported third-quarter financial results on Wednesday. The transcript from the company’s third-quarter earnings call has been provided below.

This transcript is brought to you by Benzinga APIs. For real-time access to our entire catalog, please visit https://www.benzinga.com/apis/ for a consultation.

View the webcast at https://events.q4inc.com/attendee/223782092

Summary

Chubb Limited reported strong Q3 2026 results with core operating earnings of $2.98 billion or $7.66 per share, despite a 2% year-over-year decrease in earnings due to light CAT losses last year.

The company achieved a combined ratio of 84.1, with P&C underwriting income of nearly $2.1 billion, and noted improvements in investment income, with fixed income portfolio yields at 5.2%.

Chubb’s strategic focus includes growth in international markets, particularly in Asia, and continued investment in technology for operational efficiencies.

The company has been managing its risk exposure by shedding property and financial lines with inadequate pricing while investing in sectors like Middle and Small Commercial.

Chubb anticipates improved growth in North America Commercial due to diminishing headwinds and emerging market opportunities, despite competitive pricing pressures in various segments.

Management highlighted the impact of rising interest rates on future income and discussed strategic moves, such as the sale of an investment in USI Insurance Services.

The company’s global diversification and disciplined underwriting are positioned to continue delivering strong margins and growth, with a focus on sustainable value creation.

Full Transcript

JL (Conference Operator)

Thank you for standing by. My name is JL and I will be your conference operator today. At this time, I would like to welcome everyone to the Chubb Limited third quarter 2026 earnings call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. If you’d like to ask a question during this time, simply press star followed by the number one on your telephone keypad.

If you would like to withdraw your question, simply press star one again. Now I’d like to turn the conference over to Susan Spivak, Senior Vice President, Investor Relations. You may begin.

Susan Spivak (Senior Vice President, Investor Relations)

Thank you, and welcome to our September 30, 2026 third quarter earnings conference call. Our report today will contain forward-looking statements, including statements relating to the company’s performance, pricing and business mix, growth opportunities, and economic and market conditions, which are all subject to risks and uncertainties, and actual results may differ materially. See our recent SEC filings, earnings release, and financial supplement, which are all available on our website at investors.chubb.com, for more information on factors that could affect these matters.

We will also refer today to non-GAAP financial measures, reconciliations of which to the most direct comparable GAAP measures and related details are provided in our earnings press release and financial supplement. Now I’d like to introduce our speakers. First, we have Evan Greenberg, Chairman and Chief Executive Officer, followed by Peter Enns, our Chief Financial Officer. Then we will take your questions. Also with us to assist with your questions are several members of our management team, and now it is my pleasure to turn the call over to Evan.

Evan Greenberg (Chairman and Chief Executive Officer)

Good morning. As you could see, we had a really strong quarter. Our sources and quality of earnings, starting with world-class underwriting margins, speak to Chubb’s excellent competitive profile, including our geographic and business diversification, our growing invested asset, and an enduring culture of underwriting discipline, a hallmark of who we are. These distinguishing attributes have all contributed to a long record of sustainable and growing value creation.

P&C underwriting, investment, and life income results led to core operating earnings of $2.98 billion, or a record $7.66 per share. That was down about 2% and up about 1%, respectively, due to exceptionally light CAT losses last year. From a more meaningful perspective, looking to the first nine months of the year, core operating income was $8.6 billion, up 21% from the prior year, and core operating EPS was $21.94, up 24.5% from last year. Annualized core operating return on tangible equity was 21.6% for the quarter, and core operating ROE was 14.9% for the quarter.

P&C underwriting income of nearly $2.1 billion led to a combined ratio of 84.1. We had strong contributions from all of our businesses. Year to date, we have produced record underwriting income of $5.8 billion, up nearly 34%. Our global P&C ex-CAT combined ratio was a world-class 81.8%, essentially flat with the prior year, and included a reduction in our loss ratio and our admin ratio offset by an increase in acquisition ratio. This speaks to our increasing efficiencies and mix of business.

On the investment side of our business, adjusted net investment income was a record $1.89 billion, supported by a materially improved fixed income investment environment and record cash flows. Fixed income-related exposure is 88% of our invested asset and equity-related is 12%. Our current and future operating income benefits from a rising interest rate environment, which we have expected for some time given growing fiscal deficits, inflation, and the public and private sector competition for money.

We position ourselves with that in mind by maintaining a moderate duration and a conservative approach to credit quality. We are a buy-and-hold investor of a high-quality investment-grade portfolio. Rising rates produced a third quarter mark of $4.5 billion in net realized and unrealized losses. Given our duration and higher reinvestment rates, the mark will amortize away reasonably quickly. It is ephemeral. The third quarter fixed income portfolio yield was 5.2%, and our current new money rate averages 6.2% as of September 30th.

Excuse me. On the alternative asset side, as was publicly announced in the quarter, strategic holdings in our holding company partnership with KKR agreed to sell our investment in USI Insurance Services to Aon. This is expected to result in a realized gain of $460 million on an investment of $740 million. Our invested asset stands at over $175 billion, up from $168 billion a year ago. Life income of $369 million this quarter was up about 11.5% from last year.

Year to date, life income is just over $1 billion, up over 9% from a year earlier. Peter’s going to have more to say about financial items. Now turning to underwriting, pricing, and growth. The substantial majority of our businesses are growing, with the balance flat or purposely shrinking due to inadequate pricing or terms. There’s nothing new there. In the quarter, we again shed more property and financial lines exposure, which affected growth. The most visible example again is in the U.S. North America. Middle and Small Commercial grew in the quarter, as did North America Personal Lines and Agriculture.

Overseas General had good growth across all major regions, both consumer and commercial, particularly Middle and Small Commercial, while North America E&S and Major Accounts shrank. This pattern of growth again speaks to the breadth of our business and our diversified sources of growth and opportunity globally. While total P&C premiums were up 1.9%, Overseas General grew 6.7%, North America Personal Lines was up 5.3%, and Agriculture was up over 5. Agriculture was a meaningful contributor to growth this quarter. North America Commercial was down 2.7%, impacted again by Large Account and E&S Property and Financial Lines where we non-renewed certain business and purchased additional reinsurance. The adverse impact on growth was about four and a half points.

And with that said, I fully expect North America Commercial growth to improve materially in future quarters. In terms of pricing, the market continues to grow more competitive in commercial P&C across the globe, in particular the U.S. and London. Beyond property, competitive market conditions are spreading to more casualty lines where pricing in numerous areas is failing to keep pace with loss costs, which, while steady, continue to well outpace general inflation. There is a lot of hungry and extremely naive capacity available. Our broad diversification, including a deep local presence in so many countries and lines of business, leave us relatively well positioned with many areas of opportunity.

With that as a baseline, I’m going to give you more color on the quarter by division and region. In International P&C, a $17 billion business, our consumer-related businesses, both A&H and Personal Lines, were up 7.2%, and Commercial was up 6.3. Latin America grew 11.7, Asia grew 7.5%, and Europe grew almost 7. In our London wholesale business, which is about 10% of International P&C, premiums were up 13.5% for the quarter, benefiting in particular from our Gulf War marine-related activities.

Turning back to North America, premiums in our $10 billion Middle Market and Small Commercial division grew about 1%, with P&C lines up 2.6, or 4% adjusting for a smaller annual workers’ comp-related premium adjustment than we had last year. And Middle Market Financial Lines was down 5.9%, or up about 1.8 adjusted for exposure change from additional use of reinsurance and non-renewal of inadequately priced business. In our $16 billion Major Accounts and Specialty division, premiums declined 5%, and adjusting for property were up about 1%.

Gross premium pricing in North America for commercial Property was down 4.2%, Casualty was up 5.7, and Financial Lines was up 2.1. Going a step further, for the business we wrote, property pricing was down 11% in shared and layered major and specialty, and up a little over a half a percent in Mid and Small. On the consumer side of North America, our nearly $8.5 billion high net worth personal lines business, the clear market leader in that category, had another really good quarter with premium growth of almost five and a half percent. Our combined ratio was 60.3, which speaks to the strength of our risk selection, underwriting, and sophisticated segmentation in pricing. And of course, a lighter-than-average quarter for CATs.

In our international life insurance business, premiums and deposits rose over 15.5%. The vast majority of our life exposure, as you know, is in Asia, and the majority of growth is coming in North Asia, meaning China, Hong Kong, Korea, and Taiwan, though I’d like to call out Thailand as well. This quarter, premiums in our North America Chubb Worksite Benefits business were up over 11.5%. Our international life division produced $277 million of pre-tax income in the quarter, up 7% from last year, with income up almost 11% year to date.

In sum, our global diversification, our presence and capabilities globally, our large and growing invested asset along with rising interest rates, and our operating discipline provide us with strong margins, continued growth opportunities, and sustainability of value creation. We are a consistent compounder of wealth and an all-weather firm with many sources of opportunity on both the liability and asset side of the balance sheet. And we are patient on the CAT and FX side.

As I look out over the medium term, I am confident in our ability to continue to outperform and to generate strong growth in operating earnings and EPS and, most important, double-digit growth in tangible book value. Now I’m going to turn the call back over to Peter, and then we’re going to come back and we’re going to take your questions.

Peter Enns (Chief Financial Officer, Chubb Group)

Thank you, Evan, and good morning. Our third quarter results were driven by strong underlying business performance and continued strength in our investment results. We continue to effectively manage our balance sheet and remain in a financially strong position with book value of 73 billion and excellent liquidity as evidenced by a record 12.8 billion in adjusted operating cash flow over the last nine months. During the quarter we issued approximately 400 million Swiss francs of debt at a weighted average cost of 1.1% and an average term of five years. The use of proceeds is for general corporate purposes, which includes the repayment and refinancing of debt. For the quarter we returned 1.6 billion of capital to shareholders, including 1.2 billion in share repurchases at an average price of $344.32, and $393 million in dividends. For the first nine months, we have returned about 4.5 billion of capital to shareholders.

Book and tangible book value per share excluding AOCI grew 2.6% and 3.5%, respectively, for the quarter. Intangible book value per share adjusting for AOCI was up 15.4% from the prior year. Pre-tax catastrophe losses were 705 million for the quarter, principally from a variety of weather-related events globally and an earthquake in Latin America. Cat losses were 1.7 billion through nine months versus 2.6 billion over the same period last year. Pre-tax prior period development in the quarter was favorable: 562 million, comprising 575 million of favorable development in short-tail lines and 13 million of unfavorable development in long-tail lines.

As you know, and Evan has said repeatedly, we are slow to recognize favorable development and quick to recognize unfavorable development. Our corporate runoff portfolio had adverse development of 51 million, predominantly environmental-related. Overall, our loss reserves, which are now over 71 billion, are conservatively constructed and remain extremely strong. Our paid-to-incurred ratio for the quarter and year to date was 80% and 86%, respectively.

Our core operating effective tax rate was 19.9% for the quarter, which is near the top end of our previously guided range due to shifts in mix of income and the impact of discrete tax items. We continue to expect our core operating effective tax rate for the full year to be in the range of 19.5% to 20%. Effective this quarter, we have excluded the amortization of certain M&A-related intangible assets from our core operating income. This change, which has a de minimis impact on growth and ROE, better represents the true economics of past acquisitions and improves our comparability with peers globally.

All prior periods have been recast accordingly. I’ll now turn the call back over to Susan.

Susan Spivak (Senior Vice President, Investor Relations)

Thank you, Peter. At this point we’re happy to take your questions. Operator, first question please.

OPERATOR

Thank you. The floor is now open for questions. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. If you’re called upon to ask a question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking a question. We do request for today’s session that you do restrict yourself to one question and one follow-up.

Your first question comes from the line of Meyer Shields of KBW. Your line is open.

Meyer Shields (Analyst at KBW)

Great, thanks so much, and good morning. Evan, I was hoping we can get a little bit more color on the increasing risk that you’re transferring to reinsurers.

Evan Greenberg (Chairman and Chief Executive Officer)

In what regard?

Meyer Shields (Analyst at KBW)

So you mentioned that one of the headwinds to North America commercial growth was more insurance purchasing. And I was wondering which lines that’s focused on.

Evan Greenberg (Chairman and Chief Executive Officer)

Yeah, it’s—well, as you know and I think we discussed it, it’s in financial lines, certain areas of financial lines, and it’s in property. In both of those we took advantage of opportunities to place additional reinsurance, which also gives us the opportunity to maintain presence and provide service and coverage to customers and at the same time spread risk. And it was in those two areas.

Meyer Shields (Analyst at KBW)

Okay, great, that’s helpful. And second question, we saw admin expenses actually down year over year again in North America.

Evan Greenberg (Chairman and Chief Executive Officer)

Commercial. And I was hoping to get a sense as to whether there’s anything unusual there or this is just technology-based efficiencies. Yeah. You know, and let’s put the lens beyond North America—look at it globally—and I think that, you know, zoom out of North America and just look at the company as a whole, North America included. Our operating expense ratio has been trending lower and continues to improve. Our digital transformation programs and other efficiencies are visibly appearing, and that’s all around employing foundational tech and data and a smart layer of technology—algorithmic, large language, and agentic-related.

And we’re on track in terms of the medium and longer term efficiencies and an improvement to our competitive profile, which goes beyond efficiencies that we have described in the past. And by the way, it’s impacting underwriting, it’s impacting marketing, claims, finance, sales—all areas of the company—and it’s impacting broadly across the globe.

OPERATOR

Thank you. Your next question comes in line of Matthew Heimerman of Citi. Your line is open.

Matthew Heimerman (Analyst at Citi)

Hi. Good morning, everybody. I guess, Evan, I’d appreciate your perspective on the current debate related to coverage for AI liability, which from my perspective seems quite nuanced, although the brokers seem to suggest the status quo is quite reasonable. So maybe more specifically, how to think about the utility of new standalone rates and forms versus simply incremental changes to language or sublimits in existing forms versus no changes at all.

Evan Greenberg (Chairman and Chief Executive Officer)

Yeah, thank you for that question. Look, AI liability, you know, it’s all over the papers generally. It’s emerging as a topic beyond the insurance industry. And AI liability is a growing and emerging exposure that is not contemplated in casualty underwriting really to date. And it needs to be understood, it needs to be managed, and it needs to be addressed as we call underwriting. And that’s what the insurance company does in managing the risk. I imagine we’re going to have a combination of coverage clarifications, ultimately exclusions, and separate AI-related liability coverages. This will all emerge along with underwriting and pricing to discern between risks. AI-related liability exposures will vary between insureds and type of insureds, and frankly, when you think beyond that to assist business generally and add to greater certainty overall in the liability environment as it emerges, I can imagine a regimen around model certification standards emerging.

I can imagine best practices in management and governance of AI and agentics emerging quickly and evolving from there. And these will be tools that will also assist in insurance underwriting. So, you know, while that’s a mouthful, I think that gives you all the elements of how the industry will approach and address AI liability. As an industry we have to put our arms around this, and frankly we’ve had to do this with emerging liabilities over the last 50 years, and there’s a pretty good template to follow.

Matthew Heimerman (Analyst at Citi)

Thank you for that. There’s a number of follow-ups I’d love to explore on that, but I think in the interest of time and other topics I wonder if you or Peter could clarify, just in the Asia Life production this quarter, was there anything either in the quarter or the prior year quarter that was impacting the comps there, and just relative to whatever you think the underlying expectation for us should be with, you know, historically it’s been pretty strong production.

Evan Greenberg (Chairman and Chief Executive Officer)

Yeah. In the third quarter—sorry, Peter. In 3Q25 there was an acquisition of effectively a closed block of business in New Zealand. We disclosed that the impact is approximately 8%. So the production really is more like 10.5% on a construction comparable basis for net written premium, which we think is more at a normal level.

Peter Enns (Chief Financial Officer, Chubb Group)

It was well over 100 million last year. It’s very large, and we disclosed that. Yeah.

OPERATOR

Thank you. Your next question comes from the line of Brian Meredith of UBS. Your line is open.

Brian Meredith (Analyst at UBS)

Yeah, thank you, Evan. First question, I’m wondering if you could unpack your comments about the improving growth in North America commercial a little bit. Is it because the headwinds in property are going away, or are there really now emerging opportunities in the North American commercial business?

Evan Greenberg (Chairman and Chief Executive Officer)

You know, I think it’s a combination of both. The negative impact from the actions that we have taken will diminish, and areas of opportunity, the impact of those will increase—middle and small commercial in particular. But our advantages from product breadth, local geography, massive capabilities up and down the chain, from largest companies to small business, and our data and technology and the power of it, that continues to emerge in spite of, and of course in context of, soft marketing.

So, you know, I see it between diminishing headwinds and our own opportunities.

Brian Meredith (Analyst at UBS)

Great, thanks. And then my follow-up question: I’m just curious, Evan, can we get your perspective on some of this alternative capital that continues to come into the industry, particularly as it relates to casualty sidecars and some of these broker facilities? Is this something you see having an impact on market conditions here, going forward?

Evan Greenberg (Chairman and Chief Executive Officer)

Well, of course, what drives cycles—drives cycles in insurance—is supply and demand. And so sidecars and broker facilities, blind-follow facilities, more MGAs with capital behind them other than, you know, professional insurance—and frankly a lot with professional insurance behind it—this is all throwing out of balance the supply relative to demand. And it’s a lot of very naive capacity. And even where it’s other than traditional insurance, it’s investor capital.

There’s two brands of it to me. There’s one brand where they’re cleverly going to make a trade, even in casualty sidecars, and they’re going to try to pass, or they have it arranged to pass, the tail back to the carrier that’s fronting it, who’s going to end up holding the trash, and they may make a turn. On the other hand, I think a lot of that clever capital doesn’t understand the pricing versus the loss cost environment, and I don’t think they’re going to end up making the turn that they think they might make.

But in a word, we’re living in a world where the cost of money is cheap and there’s a lot of money looking for absolute return, not risk-adjusted. As you know, generally the world is beginning to change that way. But in the meantime a lot of it has found its way—or a fraction of it has found its way—into insurance as sort of an alternative investment asset class. It has different forms now than we’ve seen to some degree in the past, but the themes are the same.

OPERATOR

Thank you. Your next question comes from the line of Bob Huang of Morgan Stanley. Your line is open.

Bob Huang (Analyst at Morgan Stanley)

Hi, good morning. I’d like to kind of unpack a little bit about your commentaries around overseas general insurance. I noticed that several countries you called out were in Asia for the quarter, specifically Thailand and such. Just given the prolonged conflict in Iran and oil price volatility has been fairly long-lasting so far, can you maybe help us think about your view on Asia opportunities and have that changed over the years so far in 2026? Just curious how you think about the go-forward there first.

Evan Greenberg (Chairman and Chief Executive Officer)

Yeah, Bob, thank you. First, of all the countries that I cited, that was in the Life business. I didn’t cite countries in Overseas General P&C.

Bob Huang (Analyst at Morgan Stanley)

Sorry. Yep.

Evan Greenberg (Chairman and Chief Executive Officer)

But if I did, I would cite those plus even a larger number of countries. I just returned with my colleagues from two weeks in Asia. We were through Southeast Asia, China and Korea. So let me help you with your model. There are two regions of the world that are really growing right now, exceptionally, that is North America, particularly the United States and Asia. And when you look at the growth in Asia, Southeast Asia, Korea, Taiwan, a lot of it is tied to the US capital investment sort of super cycle that we’re in as we build out AI and AI-related infrastructure and invest to remake our economy that way. Asian countries are a beneficiary of that. They’re all tied into the supply chain. Asia is growing and I see sustainability. You know, it varies by country. But the dynamism that I see and the opportunity that presents for Chubb’s business, rising middle class, digitization, growth of small and mid-sized businesses.

I was in Vietnam. It’s a beehive of development. Thailand overall, though it has its idiosyncrasies related to domestic credit and maybe underperforms the region, Thailand is still very solid. Singapore, Malaysia is growing well. Taiwan, our business in Hong Kong and China, in spite of a soft domestic environment, P&C and life is growing double digit. The Korean economy, the Korean economy is growing between 3 and 4% right now, again tied to the supply chain of the United States in particular.

So I’m bullish on Asia right now, both medium and longer term and shorter term. Of course, you know, it has a certain volatility signature to it. Emerging markets do. But overall, our presence, our capabilities, the breadth of our business, the depth of it through countries, I’m very optimistic for Chubb in Asia. Really appreciate that. Well, let’s unpack it in a couple ways. Right now in the cycle of data center development, particularly hyperscalers and medium-sized, we’re more in the construction phase with the operation phase more in front of us than behind us. That’s to come. A lot of projects announced—as you know, only a percentage of those are actually shovel in the ground right now—and delays due to a combination of things: permitting, energy, labor, supply chain, etc. But we are quite active. We’re quite active in the physical property-related construction. We’re active in marine, surety—it’s a huge opportunity for us in surety. We’ve quite a bit. But more important, it’s the pipeline of what’s outstanding to bind, because you don’t really bind until the shovel goes in the ground. And that’s in front of us, as I said, with many projects that are delayed.

When you think about values—and I think you’re alluding to that in concentration of exposure—we manage it technically no differently than we manage any other concentration of exposure. We manage how much we could imagine that we’d have as a loss from a single event, and we imagine that across perils. So, you know, it’s technical, it’s engineering, and I’m comfortable with the way that Chubb is approaching this.

OPERATOR

Thank you. Your next question comes from.

Evan Greenberg (Chairman and Chief Executive Officer)

By the way, we’re a leader across the board globally in data center development. We have the broadest capabilities.

OPERATOR

Your next question comes from the line of Ryan Tunis of Cantor. Your line is open.

Ryan Tunis (Analyst at Cantor)

Thanks. Good morning. So North America Commercial, there’s been about a point of underlying loss ratio deterioration year to date. Is it fair to attribute that magnitude to the impact of pricing versus loss transfers, or anything else going on there?

Peter Enns (Chief Financial Officer, Chubb Group)

No, I wouldn’t say that. It’s the reduction in property, period.

Ryan Tunis (Analyst at Cantor)

So there’s a mix shift element.

Peter Enns (Chief Financial Officer, Chubb Group)

That’s all it is. You’ve seen the reduction in property, and so property as a percentage is down. That’s the whole loss ratio.

Ryan Tunis (Analyst at Cantor)

And I guess relatedly—this is the follow-up—Overseas General, we’re not seeing a deterioration dynamic so far year to date. So just curious for some color around the stability there, just given the pricing environment.

Evan Greenberg (Chairman and Chief Executive Officer)

Well, there is no one pricing environment in Overseas General. Overseas General insures the world. It’s throughout Europe, it’s throughout the UK—Europe is more stable than the UK is. Our growth in middle and small commercial business throughout the globe. Latin America goes to a different beat than Europe or the UK does, and it varies by country, and again it’s more middle and small commercial for us there, and then the same with Asia Pacific. So that’s one part of the story.

But the other part of the story, which I think is more important, is the balance between consumer and commercial within Overseas General. Consumer is growing more quickly—the size of the consumer business relative to the commercial business. So large account is only a piece, and when you get to the consumer, when you get the balance, most of Overseas General in commercial is mid and small, and then you get to the consumer side, which is half the business.

It’s accident and health, which grew, by the way, globally—our A&H business grew at about 6% this quarter. It’s personal lines overseas, which is everything from automobile insurance in Mexico—we’re the number three writer insuring over 2 million autos—to insuring cell phones and computers in Asia, and automobile in Thailand and Malaysia, and homeowners and high net worth insurance in Australia and the UK. It’s a variety of opportunities in a huge world out there where we have fabulous capability.

So our direct marketing business in Asia and Latin America—we are the largest direct marketers of insurance digitally and by phone—of consumer businesses up and down the chain, as I explained it, from lower middle income people to middle middle income.

OPERATOR

Your next question comes to the line of Andrew Kligerman, TD Cowen. Your line is open.

Andrew Kligerman (Analyst at TD Cowen)

Hey, good morning. High net worth personal lines—again a spectacular quarter. Premiums up over 5%, combined reported at 60. Any changes, Evan, in the competitive landscape with these types of returns with AI coming into the picture? I mean, do you see these kinds of results as sustainable over the intermediate to long term?

Evan Greenberg (Chairman and Chief Executive Officer)

I do. High net worth is, on the business we do, it’s not about the price you charge as much as it is the richness of coverage and the services you provide. It’s about the complexity of those coverages. It’s really like selling a small commercial or middle-sized commercial account in the management of it. This is not something you buy over the internet or some agent shops for you for insurance. This is far more bespoke and it is a trust business. It is an agent-driven business and relationship business between the customer and us.

This is not a trade. These are our customers, our long-term clients. So I start with that. Yes, there are always cyclical competitive pressures that emerge because CAT reinsurance becomes cheaper, per risk insurance becomes cheaper—excuse me—and so competitors may employ more of that to chase business at a cheaper price on the margin. But overall I see steady as she goes with some variability now and again, and that’s it.

Andrew Kligerman (Analyst at TD Cowen)

Got it. And then just moving over to reserve adequacy, and prior-year development was also spectacular, but in the long-term lines I think Peter called out 13 million adverse. Could you share with us any color on the, say, 2021 to 2025 accident years and, you know, just your general confidence going forward in longer-tail lines and how adequate those reserves are?

Evan Greenberg (Chairman and Chief Executive Officer)

Yeah, and thank you for that question. Look, as Peter said—you know, I’ve repeated it ad nauseam—we’re slow over the years, we’re slow to recognize favorable development and very quick to recognize adverse. Casualty underwriting is not for optimists. And as you know, the stinger is in the tail in development. The more recent accident years, while they may be developing more favorably, they’re green. We wouldn’t touch them. While the development that we did see was in more older accident years—and think more 2019 to 2022.

And by the way, the amount was reasonably modest when I look at our overall reserves as a percentage; it was very small. I think that maybe gives you the kind of color you’re looking for.

OPERATOR

Your next question comes from the line of Tracy Bengigi of Wolfe Research.

Tracy Bengigi (Analyst at Wolfe Research)

Morning. The market yield rose to 6.2% from 5.5% in June and you extended your duration five years from 4.8 years, so that’s remarkable. I’m wondering what your expectations are on adjusted net investment income going forward. I thought I would ask since this is the second quarter we stopped getting guide for that.

Peter Enns (Chief Financial Officer, Chubb Group)

Thanks, Tracy. It’s Peter, and as you just said, we’re not providing specific guidance. The way I’d frame it is the reinvestment environment, as Evan said in his speech, is much more attractive. When you look at this quarter’s results, how I’d frame it is we had extremely strong performance of fixed income-related net investment income, and alternative—in particular PE—was actually less than what might be normal. And as you know, it’s very, very volatile, that specific asset class.

And so over time we’re confident that will continue to return well. So with that as the backdrop, I think you can have a perspective around certainly the fixed income piece of this continuing to grow.

Tracy Bengigi (Analyst at Wolfe Research)

Thank you. Maybe just a quick follow-up. I know Brian had touched on this in the beginning of the questions about the North American Commercial growth improving materially in future quarters, but maybe you could just unpack the glide path there. I’m wondering how much of the finishing line you’ve reached in terms of the underwriting actions you’re taking in financial lines and large account property. Thank you.

Evan Greenberg (Chairman and Chief Executive Officer)

Nice try, Tracy. I gave as much as I’m going to give on.

OPERATOR

Thank you. Your next question comes in line of Gregory Peters of Raymond James. Your line is open.

Gregory Peters (Analyst at Raymond James)

Good morning, everyone. So, stepping back to the technology piece, it seems like with some rising frequency we keep hearing about security protocols being violated, breaching of data security, etc. You’re managing a global enterprise. Your data assets are unique and special to your company. Maybe you could just give us some perspective on how you’re managing the data, securities, large language models, and these other tools that are out there, and how you protect data assets.

Evan Greenberg (Chairman and Chief Executive Officer)

Yeah, you know, look, we’re employing all of the best practices around governance and management of not simply our data, but the tools that we employ at the smart layer, which is algorithmic, but more to the point, large language model and agentic, and how we control and limit what they can do, where they can do it, how they can do it, how we instruct for it, and then protecting our own perimeter and multiple layers of detection and defense against third-party or external use of agentic and AI that could imperil Chubb’s own data or systems.

We invest significantly in this, we pay very close attention to it. It’s fundamental to how we think. And by the way, to give you a sense, it’s evolved over a long period of time. Think about actuarial models before AI—we’ve always had to employ model management from a regulatory point of view and for our own use to create governance management over the efficacy of those models. Traditional math, as those evolve past algorithmic and to AI-related, we have used the same template and the same governance processes. We’ve improved the tools, we’ve improved the techniques that we use and the automation and humans in the loop to manage all of that.

And it continues. The harnesses and our ability to provide instruction precisely all continue to evolve.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.