AM Best Affirms Credit Ratings of Chubb Limited and Its Subsidiaries

Rhea-AI Summary

AM Best has affirmed the superior credit ratings of Chubb (NYSE: CB) and its subsidiaries, maintaining an A++ Financial Strength Rating and 'aa+' Long-Term Issuer Credit Ratings for its main insurance operations. The ratings reflect Chubb's strongest balance sheet strength, very strong operating performance, and favorable business profile.

The company demonstrates consistently profitable underwriting with a combined ratio in the mid-to-high 80% range, outperforming industry averages. Chubb operates in over 50 countries, leading in U.S. commercial, specialty, and high-net-worth insurance markets. The company maintains very strong risk-adjusted capitalization and a high-quality investment portfolio, though this is partially offset by elevated financial leverage and ongoing share repurchases.

Positive

• Maintains A++ (Superior) Financial Strength Rating
• Combined ratio in mid-to-high 80% range, outperforming industry averages
• Market leadership in multiple insurance segments across 50+ countries
• Strongest level of risk-adjusted capitalization
• High-quality investment portfolio with excellent reserve adequacy

Negative

• Elevated financial leverage relative to tangible capital
• Share repurchase program constraining capital growth

Insights

Financial Analyst

The A++ rating affirmation from AM Best, the highest possible rating, underscores Chubb's exceptional financial strength and market position. The company's consistent mid-to-high 80% combined ratio significantly outperforms industry averages, indicating superior underwriting discipline. Key strengths include strongest balance sheet assessment, very strong operating performance and extensive global presence across 50+ countries. The risk-adjusted capitalization remains at the highest level, supported by a high-quality investment portfolio and excellent reserve adequacy. While share buybacks have capital growth and financial leverage is somewhat elevated relative to tangible capital, these factors are well-managed within the company's strong financial framework.

Insurance Industry Analyst

Chubb's diversified business model stands out with market leadership in multiple segments - U.S. commercial, specialty, agricultural and high-net-worth personal lines insurance. The strategic positioning of key subsidiaries, particularly Chubb Bermuda Insurance in excess casualty and Chubb Tempest Reinsurance as an international multiline reinsurer, creates a robust operational framework. The stable outlook reflects the company's proven ability to maintain superior underwriting performance while expanding its global footprint. The enterprise risk management is deemed appropriate, suggesting effective control over the complex multinational operations.

OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has affirmed the Financial Strength Rating (FSR) of A++ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa+” (Superior) of the grouped subsidiaries of Chubb Limited (Chubb) (Zurich, Switzerland) [NYSE: CB]. These include Chubb’s rated U.S., Canada, Bermuda, Europe and Panama-based insurance and reinsurance subsidiaries (collectively Chubb Group of Insurance Companies, or Chubb Group). Concurrently, AM Best has affirmed the Long-Term ICRs of “a+” (Excellent) and the Long-Term Issue Credit Ratings (Long-Term IR) of Chubb Limited and Chubb INA Holdings LLC (Delaware). In addition, AM Best has affirmed the FSR of A+ (Superior) and the Long-Term ICRs of “aa-” (Superior) of Combined Insurance Company of America (Chicago, IL) and Combined Life Insurance Company of New York (Latham, NY) (together known as the Combined companies). AM Best also has affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” (Excellent) of ACE Life Insurance Company (ACE Life) (Stamford, CT). At the same time, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a+” (Excellent) of Chubb Life Insurance New Zealand Limited (Chubb Life NZ) (New Zealand). The outlook of these Credit Ratings (ratings) is stable. (Please see the link below for a detailed listing of the companies and ratings.)

The ratings of the Chubb Group reflect Chubb’s balance sheet strength, which AM Best assesses as strongest, as well as its very strong operating performance, favorable business profile and appropriate enterprise risk management (ERM). Chubb’s very strong operating performance is anchored in the group’s consistently highly profitable underwriting performance – as reflected in a combined ratio in the mid-to-high 80 percent range that notably outperforms industry averages for highly rated insurers – as well as consistently solid investment returns on a high-quality investment portfolio. Chubb’s business profile is notable for its product and geographic breadth and depth, as Chubb operates in more than 50 countries and jurisdictions worldwide. Through ACE American Insurance Company and its pooled and/or substantially reinsured U.S. affiliates, Chubb is a market leader in U.S. commercial, specialty and agricultural insurance, as well as personal lines insurance for high-net-worth customers. Chubb’s rated Bermuda operations – most notably Chubb Bermuda Insurance Ltd. (a leader in the excess casualty marketplace, with a leading position among national and multi-national corporations), and Chubb Tempest Reinsurance Ltd (an international multiline reinsurer that also serves as the intra-group reinsurance hub for many of Chubb’s subsidiaries throughout the world) – are highly capitalized and are strategic assets for the group. Chubb European Group SE is one of the group’s largest operating entities and the primary vehicle for providing a wide variety of coverages and lines of business across multiple markets to Chubb’s European clients, as do Chubb Canada and Chubb Panama in their respective markets.

AM Best notes that Chubb’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), has consistently stood at the strongest level, benefiting from a very high-quality investment portfolio and excellent historical reserve adequacy position, a solid reinsurance program, and a high quality of capital, in part reflecting relatively modest reliance on debt in the group’s capital structure. Tempering capital strength is a somewhat elevated financial leverage relative to tangible capital, and a share repurchase program that has constrained capital growth in recent years.

The ratings of the Combined companies reflect their balance sheet strength, which AM Best assesses as strong, as well as their strong operating performance, neutral business profile and appropriate ERM. The ratings also reflect the companies’ strategic role in supporting the organization’s global accident & health segment.

The ratings of ACE Life reflect its balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, very limited business profile and appropriate ERM. The ratings also reflect the continued financial support received from its parent.

The ratings of Chubb Life NZ reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate ERM. The ratings also factor in rating enhancement from the company’s parent and support from Chubb Limited.

A complete listing of Chubb Limited’s FSRs, Long-Term ICRs and Long-Term IRs also is available.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2024 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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Alan Murray

Director

+1 908 882 2195

alan.murray@ambest.com

Christopher Sharkey

Associate Director, Public Relations

+1 908 882 2310

christopher.sharkey@ambest.com

Michael Lagomarsino, CFA, FRM

Senior Director

+1 908 882 1993

michael.lagomarsino@ambest.com

Al Slavin

Senior Public Relations Specialist

+1 908 882 2318

al.slavin@ambest.com

Source: AM Best

FAQ

What credit rating did AM Best assign to Chubb (CB) in 2024?

AM Best affirmed Chubb 's Financial Strength Rating of A++ (Superior) and Long-Term Issuer Credit Ratings of 'aa+' (Superior) with a stable outlook.

What is Chubb's (CB) combined ratio performance?

Chubb maintains a combined ratio in the mid-to-high 80 percent range, which notably outperforms industry averages for highly rated insurers.

How many countries does Chubb (CB) operate in globally?

Chubb operates in more than 50 countries and jurisdictions worldwide.

What factors could affect Chubb's (CB) capital strength?

Chubb's capital strength is tempered by somewhat elevated financial leverage relative to tangible capital and a share repurchase program that has constrained capital growth.

What are Chubb's (CB) main market leadership positions?

Chubb is a market leader in U.S. commercial, specialty and agricultural insurance, as well as personal lines insurance for high-net-worth customers.