Chubb Limited

Thank you for standing by. My name is Greg, and I will be your conference operator today. At this time, I would like to welcome everyone to today's Chubb Limited second quarter 2025 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's 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. And if you'd like to withdraw your question, simply press star one again. Thank you. I would now like to turn the call over to Karen Beyer, Senior Vice President of Investor Relations. Karen, you have the floor.

Thank you, and welcome to our June 30, 2025 second quarter earnings conference call. Our report today will contain forward-looking statements, including statements relating to company performance, pricing, and business mix, growth opportunities, and economic and market conditions, which are subject to risk and uncertainties, and actual results may differ materially. Please see our recent SEC filings, earnings release, and financial supplement, which are available on our website at investors.shub.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 Entz, our Chief Financial Officer. And then we'll take your questions. Also with us to assist with your questions are several members of our management team. And now it's my pleasure to turn the call over to Evan.

Good morning. As you saw from the numbers, we had an excellent quarter. Core operating EPS was a record $6.14, up 14% from a year ago, supported by record underwriting, strong investment results, and good premium revenue growth. All of our businesses in regions of the world contributed to the quarter's growth, particularly in North America, our middle market, and small commercial. personal lines, and ENS businesses, and in international, both commercial and consumer P&C in all regions, and life insurance in Asia and the U.S. Core operating income of $2.5 billion was a record result, up 13%. The results demonstrate the broad-based, diversified nature of our company geographically, by customer segment and product area. Our balance of business and presence provides us a wide range of opportunities, which supports long-term sustainable and profitable growth. In the quarter, we produced record underwriting income on both a published and current accident year ex-cat basis, supported by premium growth and underwriting margin improvement. Published underwriting income of $1.6 billion was up 15% from a year ago, leading to a combined ratio of 85.6, more than a percentage point better than a year earlier. Current accident year underwriting income, excluding caps, was up almost 11.5%, supported by a combined ratio of 82.3, again, nearly a full point improvement from prior year. On the invested asset side, for the quarter, adjusted net investment income was nearly $1.7 billion, up 8%. Our fixed income portfolio yield is 5.1%, and our current new money rate is averaging 5.4%. Our operating cash flow in the quarter, which supports investments, was quite strong, $3.2 billion. Given federal deficits, a weakening dollar, and our country's trade policies, I expect the trend is towards higher inflation and a steeper yield curve, which is an issue for our country but will support our company's continued growth in investment income. Vangible book value growth, our primary measure of wealth creation, was up 23.7% per share from a year ago. and 8% from the previous quarter. Our annualized core operating return on tangible equity in the quarter was 21%. Very strong result. Peter will have more to say about financial items. Turning to growth, pricing, and the rate environment. Global PNC premiums, which exclude agriculture, grew 5.8% and 6.4 in constant dollars With commercial up 4.2 and consumer up 11.9, premiums in our life insurance division grew almost 17.5%. In terms of the U.S. commercial PNC underwriting environment, large account-related short-tail business, both admitted and ENS, has grown quite competitive. A lot more capital is chasing the property business and prices are softening, while terms and conditions remain steady. We're, of course, disciplined and we're not going to write business below an adequate price. While others are leaning in, we've begun walking away where necessary. On the other hand, middle market and small commercial property remain much more disciplined and orderly. Rates continue to rise, and we're growing property in this area. Casualty continues to firm in all areas that require rate. Retail and E&S, both large account and middle market. And again, we are growing. While financial lines remain soft, we're seeing signs of firming in discrete classes. That is backdrop. I'll give you some more color by division. Beginning with North America, PNC premiums excluding agriculture were up 5.3, including growth of 9.1 in personal insurance and 4.1 in commercial. PNC lines up 4.2 and financial lines actually up 3.6. In commercial, we had a good quarter for new business, up 7% versus prior year, driven by middle market across the board. and in large account and ENS casualty lines. Our renewal retention on a policy count basis was 86%. Premiums in our leading middle market division grew 8.4%, another excellent result, with P&C up 10% and financial lines up 2%. Our small commercial business grew about 10%. Premiums in our major accounts and specialty division grew 1.5%, with our large account business essentially flat and our E&S business up 5.6%. Both were heavily impacted by premium reductions in property. Overall commercial pricing for property and casualty, excluding financial lines and comp, was up 4.5%. with rates up 1.6 and exposure change of 2.9. Property pricing was down 2.5%, with rates down about 7, offset by exposure change of 4.9. Importantly, going a step further, property pricing was down more than 12% in large account business, both admitted and ENFs, and it was up over 8% in middle market and small commercial. Casualty pricing in North America was up 11.6, with rates up 10.6 and exposure up 0.9. Financial lines pricing was down 1.2%, and in workers' comp, primary comp pricing was essentially flat, while large account risk management pricing was up over 7.5%. In North America commercial, our selected loss cost trends remain steady across the board. No change from what I gave you last quarter. On the consumer side of North America, our high network personal lines business had a simply outstanding quarter with premium growth exceeding 9%. New business growth was more than 17%. Homeowners pricing was up 10.2 in the quarter. and ahead of loss costs, which remain steady at 8.9%. I expect the kinds of results we're showing in personal lines to endure and continue. Turning to our international general insurance operations, premiums were up 8.5%, or over 10% in constant dollar. Commercial lines grew about 7%, and consumer was up more than 15%. From a region of the world perspective, Asia grew over 12.5% in constant dollar. Europe grew over 8%, and Latin America grew over 17%. Premiums in our London wholesale business were up over 7%. In our international retail commercial business, PNC pricing was up just 0.5%, and financial lines pricing was down over 6.5%. The lost cost trend in our international retail business remains steady. Like in North America, large account commercial property, shared and layered, has become much more competitive, particularly in London. While in the rest of the world, property is growing more competitive, conditions remain reasonably orderly, though they vary by market. In our international life insurance business, which is fundamentally Asia, premiums were up 18% in constant dollar. And in North America, combined insurance companies' premiums grew over 17. Our life division produced $305 million of pre-tax income in the quarter, up about 10.5%. As you know, the economic and geopolitical environment is dynamic and evolving. We're in a period of greater uncertainty. The U.S. recently passed tax legislation and efforts towards deregulation should support economic growth. On the other hand, budget deficits, trade and immigration policies, and a weaker dollar are potential headwinds that can impact both economic growth and inflation. The picture is complex. With that as context, Chubb's fundamentals and our positioning are simply excellent Organizationally, we're performing at a high level, coupled with our broad-based global diversification and a disciplined, energized, and talented culture of professionals. As I observed at the beginning of the year, roughly 80% of our businesses have good growth and continued growth prospects. There is a lot of opportunity, and I have confidence in our ability to continue to grow both top bottom line at a superior rate, Hatch and FX notwithstanding. To reinforce from all I can see overall, I expect the company's pattern of growth, revenue, and earnings to continue. Now I'll turn the call over to Peter, and then we're going to come back and we're going to take some of your questions.