2009 ar text 03012010 gac224.qcx:layout 1 3/1/10 11:18 am ... · w...

About ChubbIn 1882, Thomas Caldecot Chubb and his son Percy

opened a marine underwriting business in the seaport districtof New York City. The Chubbs were adept at turning risktransfer into business success, often by helping policyholdersprevent losses before they occurred. Chubb also establishedstrong relationships with the insurance agents and brokerswho placed their clients’ business with Chubb underwriters.

“Never compromise integrity,” a Chubb slogan, captures the spirit of ourcompany. Each of our 10,200 employees in North America, South America,Europe, Asia and Australia works toward the goal of satisfying customers bybringing professional excellence and fairness to each transaction.

Today, Chubb stands among the largest property and casualty insurers in theworld. The principles of financial strength, proficient underwriting, conservativeinvestment and excellent service, executed by our market-leading employees, havebeen the mainstays of our organization for 127 years.

NoteSome 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 harborprovisions of the PSLRA and include statements regarding the impact of theeconomic downturn on insurance exposures and our investment portfolio; ourexposure to claims arising out of the crisis in financial markets; the impact ofcurrency fluctuations; the property and casualty insurance market environment,rates, pricing and new business opportunities; and our ability to succeed in a varietyof market conditions. Such statements speak only as of the date of the review andare not guarantees of future performance. Various risks and uncertainties may causeactual results to differ materially. These risks and uncertainties include thosediscussed 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 ExchangeCommission). For additional information regarding these non-GAAP financialmeasures, please refer to the inside back cover of this review.

The Chubb Corporation

On the CoverA new corporate advertising

campaign reminds commercial andpersonal insurance purchasers andtheir agents and brokers that aninsurer is only as good as its financialstrength and its willingness to payits claims in a fair, prompt and hassle-free manner.

The campaign’s developmentwas driven by the insight that somecustomers view insurance as acommodity product...until themoment when they have a claim. Itis then that Chubb’s superior claimservice makes them appreciate thedifference that Chubb makes in theirlives. The ads are also highly relevantin these turbulent times wheninsurance buyers and recommendersmust also consider the insurancecompany’s financial strength. Thenew ad campaign was the subject of alaudatory article in The New York Timeson October 2, 2009.

Four ads that make up thecampaign bring these thoughts to lifein a simple but powerful headline:“Who insures you doesn’t matter.Until it does.” The tagline “FinancialStrength and Exceptional ClaimService” provides Chubb’s keydifferentiators.

The four ads that make up thecampaign are running in nationalbusiness, finance and consumermagazines, and national and regionalinsurance trade publications. To viewthe entire advertising campaign,please visit www.chubb.com, click onAbout Us, then Current Advertising.

Insurance is provided throughthe property and casualty subsidiariesof The Chubb Corporation referredto for marketing purposes as theChubb Group of InsuranceCompanies (“Chubb”). For a list ofthese subsidiaries, please visit ourwebsite at www.chubb.com. Actualcoverage is subject to the languageof the policies as issued. Chubb,Box 1615, Warren, NJ 07061-1615.

2009 AR Text_03012010_gac224.qcx:Layout 1 3/1/10 12:08 PM Page Cv2

Wehope that you are as pleased with your Company’s

outstanding financial results in 2009 as we are. Despite

the uncertainties and fragility of the global economy during the year,

Chubb produced:

• the second-best year of operating income per share in our

127-year history;

• a 23% increase in book value per share; and

• a 15% return on equity.

We believe these results were achieved as a result of our disciplined

and unique operating model, our focus on capital management, our

capacity to harness science and technology for enhanced business results,

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

CEOReport

John D. FinneganChairman, President and Chief Executive Officer

Net Income per Share

$7.01

$4.47

200420032002 2005 2006 2007 2008 2009

$5.98$6.18

$4.92

$4.01

$2.23

$0.64

2009 AR Text_03012010_gac224.qcx:Layout 1 3/1/10 9:47 PM Page 1

thoughts about each of these factors, but first, a little more detail about

our 2009 financial results.

Net incomewas $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 theU.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 OperatingModel that Manages for the Bottom Line

Simply stated, wemanage our operations to achieve profitable

bottom-line results, and we did so again in 2009. 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, wemet our goal and adhered to our operating

model.

At the core of that model is our insistence that each of our three

Strategic Business Units produce an underwriting profit.We encourage

each of them to grow premiums when and where they can but never at

the expense of our goal of bottom-line profitability. For each of them to

deliver profitable results in a marketplace like 2009 characterized by

strong competition and softening prices required extraordinary

discipline and commitment.

Of course, Chubb starts from a position of relative strength; we

have never been a provider of undifferentiated, commodity products

where price alone so often determines placement decisions. Instead, we

2

Simply stated, we manageour operations to achieveprofitable bottom-lineresults. The turmoil in theinsurance marketplace andthe global recession thatprevailed during mostof the year certainlypresented additionalchallenges but, as ourresults demonstrate, wemet our goal.

Combined Loss &Expense RatioPercentage of premium dollarsspent on claims and expenses

82%

84%

88%

86%

92%

90%

98%

96%

94%

100%

102%

104%

106%

108%

92.3% 92.3%

200420032002 2005 2006 2007 2008 2009

82.9%

88.7%

84.2%86.0%

98.0%

106.7%


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

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 primemeasure

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

our customers with insurance for their homes, cars, yachts, jewelry, fine

art and antiques, as well as personal excess liability coverage and group

accident & health products. Our premier Masterpiece® product for high-

net-worth families is the gold standard of the industry. Although we

hope our customers never have a loss, those who have experienced our

claim service become our most loyal customers and best spokespeople.

It’s why our agents and brokers place their most important customers

with Chubb.

ChubbCommercial Insurance produced net written premiums

of $4.7 billion, down 7%, with a combined ratio of 89.9%. In theU.S.,

average renewal rates for CCIwere up 2%. CCI provides property,

liability, auto, workers’ compensation andmarine insurance, with a

John J. Degnan, Vice Chairmanand Chief Operating Officer

3

Shareholders’ Equity(in billions)

$14.4

$12.4

200420032002 2005 2006 2007 2008 2009

$13.9

$15.6

$13.4

$10.1

$8.5

$6.8


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%. AverageU.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 Chubbwith

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 per-

centage points. In 2009, the S&P 500 staged a partial recovery while

Chubb held its own. As a result, the S&P 500 outperformedChubb in

4

Over the two-year periodending December 31, 2009,Chubb’s cumulative totalreturn outperformed theS&P 500 by 16 points.Over the seven yearsending on that date,Chubb’s cumulative totalreturn beat the S&P 500by 76 points.

$15.00

$30.00

$45.00

$60.00

$26.10

$19.93

Market Valueper Share$49.18

$47.09Book Valueper Share

2003 2004 2005 2006 2007 2008 20092002

December 31

Book Value and Market Value per Share


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, 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.

5

$10,000

$12,000

$14,000

$16,000

$18,000

$20,000

$22,000

$24,000Chubb$22,250

S&P 500$14,570

S&P P&C$12,375

2002 2003 2004 2005 2006 2007 2008 2009December 31

Value of $10,000 invested on December 31, 2002 in Chubb common stock, S&P 500 Index andS&P Property & Casualty Index, including share price appreciation and reinvested dividends.Past results are no guarantee of future returns.

Total Return to Shareholders

We increased our dividendby 6% in 2009, the 27thconsecutive year in whichwe have had an increase.


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.

Science, enabled bytechnology, now plays anintegral role in our valueproposition. Pricing risksand establishing optimalclaim outcomes for ourinsureds are being aided bysophisticated analytics suchas predictive modeling.

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 theUnited 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

canmatch our global reach, and the barriers to becoming a global

insurer today are relatively high.

We are pleased with the contributions beingmade by our

international colleagues throughout our network.We look forward to

their enhancing our ability to seize the opportunities that will be

available to Chubbwhen 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 wemake 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, andChubb

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

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

have been dampened as less-sophisticated buyers seemwilling to absorb

the operational risks inherent in companies whose policies and practices

7

The need of our financiallytroubled competitors forbailouts by the federalgovernment has trulydistinguished thoseproperty & casualtycompanies whoseoperations and investmentswere responsibly managedso as not to jeopardize thefundamental promise wemake to honor ourcommitments.

2009 Business Mixby Net Written Premiums($ in billions)

SpecialtyInsurance

$2.7

CommercialInsurance

$4.7

PersonalInsurance

$3.7

25%

42%

33%


8

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 onmarket 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,

JohnD. Finnegan

Chairman, President andChief Executive Officer

February 25, 2010

Our excellent capitalposition, conservativeinvestment portfolio,strong credit ratings, andunparalleled products andservices will allow us toleverage our underwritingtalent to generate attractivereturns in an uncertaineconomic environment.


Seamless Global Service

UNITED STATES

Eastern TerritoryAtlanta RegionAtlanta, GANashville, TN

Boston RegionBoston, MANew Haven, CTPortsmouth, NHSimsbury, CT

New Jersey RegionNJ RetailNew York, NYWhitehouse Station, NJ

Philadelphia RegionHarrisburg, PAPhiladelphia, PAPittsburgh, PA

Tampa RegionBirmingham, ALMaitland, FLSunrise, FLTampa, FL

Washington, DCRegionBaltimore, MDCharlotte, NCChesapeake, VAColumbia, SCRaleigh, NCRichmond, VAWashington, DC

Westchester RegionLong Island, NYRochester, NYWestchester, NY

Western TerritoryChicago RegionChicago, ILGrand Rapids, MIItasca, ILMilwaukee, WITroy, MI

Cincinnati RegionCincinnati, OHCleveland, OHColumbus, OHIndianapolis, INLouisville, KY

Dallas RegionAustin, TXDallas, TXHouston, TXTulsa, OK

Denver RegionDenver, COPhoenix, AZPortland, ORSeattle, WA

Los Angeles RegionLos Angeles, CANewport Beach, CANorthern CaliforniaSan Francisco, CA

Minneapolis RegionDes Moines, IAKansas City, MOMinneapolis, MNSt. Louis, MO

CANADACalgary, ABMontréal, QCToronto, ONVancouver, BC

BERMUDAHamilton

LATIN AMERICAArgentinaBuenos Aires

BrazilBelo HorizonteBrasiliaCuritibaPorto AlegreRio de JaneiroSão Paulo

ChileSantiago

ColombiaBarranquillaBogotáCaliMedellín

MéxicoGuadalajaraMéxico CityMonterrey

EUROPEAustriaVienna

BelgiumBrussels

DenmarkCopenhagen

FranceBordeauxLilleLyonParis

GermanyDüsseldorfHamburgMunich

IrelandDublin

ItalyMilan

NetherlandsAmsterdam

SpainBarcelonaMadrid

SwedenStockholm

SwitzerlandZurich

United KingdomBelfastBirminghamGlasgowLeedsLondonManchesterReading

ASIA/PACIFICAustraliaBrisbaneMelbournePerthSydney

ChinaBeijingHong KongShanghai

JapanTokyo

KoreaSeoul

SingaporeTaiwanTaipei

ThailandBangkok

Worldwide Headquarters: Warren, NJ

9


10

OfficersChairman andChief Executive OfficerJohn D. Finnegan

President andChief Operating OfficerJohn J. Degnan

Executive Vice President andChief Underwriting OfficerPaul J. Krump

Executive Vice President andChief Global Field OfficerHarold L. Morrison, Jr.

Executive Vice President andChief Administrative OfficerDino E. Robusto

Executive Vice President andChief Financial OfficerRichard G. Spiro

Executive Vice President andGeneral CounselMaureen A. Brundage

Executive Vice PresidentsGerard M. ButlerRobert C. CoxChristopher J. GilesSunita HolzerJames P. KnightAndrew A. McElwee, Jr.Gary C. PetrosinoSteven R. Pozzi

Administrative CommitteeW. Brian BarnesMaureen A. BrundageGerard M. ButlerRichard A. CiulloRobert C. CoxJohn J. DegnanJohn D. FinneganChristopher J. GilesMark E. GreenbergSunita HolzerJohn J. KennedyJames P. KnightPaul J. KrumpAndrew A. McElwee, Jr.Harold L. MorrisonGary C. PetrosinoSteven R. PozziDino E. RobustoRichard G. Spiro

Senior Vice PresidentsDerek AdamsJames E. AltmanJoel D. AronchickWilliam D. ArrighiGregory P. BarabasDonald E. BarbMark L. BerthiaumeJon C. BidwellPeter G. BoccherJulia T. BolandJames P. BronnerTimothy D. BuckleyJohn F. CasellaMichael J. Casella

Michael A. ChangRichard A. CiulloGardner R. Cunningham, Jr.David S. DaltonJames A. DarlingGary R. DelongKathleen M. DubiaMark D. DugleAlexis R. Durcan, Jr.Mary M. ElliottKathleen S. EllisMichele N. FincherPhilip W. FiscusThomas V. FitzpatrickPhilip G. FolzJill A. FrancisPaul W. FranklinAnthony S. GalbanThomas J. GanterJohn C. Gibson, Jr.Baxter W. GrahamJeffrey S. GrangeRick A. GrayMark E. GreenbergDonna M. GriffinCharles S. GunterMarc R. HacheyJames R. HamiltonLorraine C. HeinenSteven D. HernandezJeffrey HoffmanKevin G. HoganKim D. HogrefePatricia A. HurleyGerald A. IppolitoMark S. JamesHope JarvisDoris M. JohnsonBettina F. KellyJohn J. KennedyCaroline KingMark P. KorsgaardEric T. KrantzUlli KrellAndrew N. LaGraveneseJames V. LalorKathleen S. LangnerPaul A. LarsonKevin J. LeidwingerPaul L. LewisBeverly J. LuehsAmelia C. LynchMichael J. MaloneyMichael L. MarinaroDavid P. Mc KeonMichelle D. MiddletonRobert P. MidwoodJeffrey J. MillerJohn J. MizziEllen J. MooreFrank MorelliDee A. NunleyFrances D. O’BrienMoses I. OjeisekhobaKelly P. O’LearyMichael W. O’MalleyRolando A. OramaDaniel A. PaciccoNancy D. Pate-NelsonJane M. PetersonEdward J. RadzinskiMichael K. Reicher, IIChristoph C. RittersonEric M. Rivera

James C. RomanelliEvan J. RosenbergJudith A. SammarcoEric D. SchallL. Joshua ShamanskyTimothy M. ShannahanMichael A. SlorKevin G. SmithGail W. SojaRichard P. SojaJody E. SpechtEdward G. SpellStuart A. SpencerScott R. SpencerKurt R. StemmlerKenneth J. StephensJohn M. SwordsJoel M. TealerClifton E. ThomasBruce W. ThorneKathleen M. TierneyJoel S. TownsendGary TrustPeter J. TuckerWilliam P. TullyWilliam C. Turnbull, Jr.Michele E. TwymanJeffrey A. UpdykeSusan M. VellaPeter H. Vogt, IICharles J. WalkonisSusan C. WaltermireCarole J. WeberJames L. WestJeremy N.R. Winter

Senior Vice President andChief ActuaryW. Brian Barnes

Senior Vice Presidents andActuariesPeter V. BurchettRobert J. HopperShu C. LinMichael F. McManusKeith R. Spalding

Senior Vice President andDeputy General CounselJudith A. Heim

Senior Vice Presidents andAssociate General CounselsMatthew CampbellKirk J. RaslowskyLinda F. Walker

Senior Vice President andCoverage CounselLouis Nagy

Senior Vice President andTreasurerDouglas A. Nordstrom

Vice PresidentsJames R. AbercrombieJill A. AbereWilliam M. AdamsMichael K. AdkinsElizabeth A. AguinagaJames D. AlbertsonBrenda I. Albiar

Christie S. AldermanNicky J. AlexanderGeorge N. AllportAngela W. AlperMary S. AquinoMichael ArcuriRonald J. ArigoBrendan ArnottDorothy M. BadgerSybil O. BaffoeKirk O. BaileyGregory W. BangsAchiles I. BarbatsoulisDavid A. BarclayFrances M. BarfootRichard W. BarnettWilliam E. Barr, Jr.David BaumanArthur J. BeaverWilliam R. Bell, IIIDonna A. BelvedereChristopher J. BenderR. Kerry BesniaDavid H. BissellStanley V. BloomJulie BondOdette M. BonvouloirDaniel J. BosoldDennis L. Bostedo, Jr.Michael J. Bronzino, Sr.Jeffrey M. BrownJeff H. BrundrettJohn A. Burkhart, IIIJames D. ButchartHeather S. CabraSabine B. CainWalter K. CainRonald CalavanoAlan M. CarlsonJames M. CarsonJohn C. CavanaughLyria CharlesBarnes L. ChatelainKenneth ChungThomas C. ClansenLaura B. ClarkDebra L. Codd MulikinArthur W. CohenRichard N. ConsoliBrian B. CottoneMonika H. CoxEdwin E. CreterRaymond L. Crisci, Jr.William S. CrowleyTimothy E. DadikChristine A. DartMichael D. DaughertyCarl V. DavidsonMark W. DavisJohann C. D’CostaJanet DecostroDavid S. DeetsCarol A. DeFranceJudith A. DelarosaJoseph F. DeluccoPhillip C. DemmelSusan Devries AmelangJoanne C. DiamondDebra A. DikenJames S. DobsonCatherine A. DonahueBrian J. DouglasWendy J. DowdAlfred C. Drowne

Keith M. DunfordLeslie L. EdsallRichard J. EdsallPatricia J. EgglestonTimothy G. EhrhartJames P. EkdahlRobert C. Ellis, Jr.Victoria S. EspositoCraig M. FarinaTimothy J. FarrThomas J. FazioMichael FeighanDrew A. FeldmanAmy L. FellerAlison M. FerrellKaren E. FeuerhermJeffrey B. FischerJames A. FiskeBrian J. FlynnPeter A. FlynnJohn B. FuossFrederick W. GaertnerEileen L. GallagherTrevor S. GandyScott D. GarneyDonald M. Garvey, Jr.Mark D. GatliffIrene T. GaughanPatrick GerrityNed I. GerstmanRalph GiordanoKaren R. GladdenChristine GomesEugene B. GoodridgeFrank F. GoudsmitCraig M. GrantKevin J. GuinanPatricia L. HallNancy Halpin-BirknerRobert A. HamburgerNoel P. HannonRichard W. HaranPatricia F. HarrisStephen B. HarrisPeter J. HarrisonWilliam R. HarrisonMichael W. HeembrockLynne J. HeidelbachRandolph L. HeinRaymond HendricksonRichard D. HesselmanFrederick P. HessenthalerSteven M. HillDebra Ann HochronPamela D. HoffmanEdward I. HowardThomas B. HowlandJoaquin O. HoyosNeil A. HuberAnthony IovineRobert A. IskolsMichael E. JacksonSteven JakubowskiJohn M. JeffreyColleen A. JenningsLatrell JohnsonKenneth C. JonesLisa M. JonesJohn J. Juarez, Jr.John P. KaasCeline E. KacmarekArvind KapoorDennis C. KearnsJames R. Kebbekus

Robert G. KellyTimothy J. KellyAmy F. KendallThomas R. KerrElsbeth KirkpatrickJeffrey KneeshawCille KochJoseph M. KorkuchDieter W. KorteJoseph E. KozlowskiEdgar KroezeRalph La CannaBarbara J. LangioneTerri L. LathanMary M. LeahyJames W. LenzKelly LewisRobert A. LippertJames R. LittererFrederick W. LobdellMark A. LockeDonna M. LombardiMatthew E. LubinRichard P. LuongoJohn W. LuthringerRobert LynchDavid E. MackMichael G. ManginiLeona E. MantieKeith D. MarksJohn C. MarquesJames MartuscelliPatricia S. MartzBrian MatesEileen G. MathewsRichard D. MaukAnthony McCullerElizabeth McDaidSandra K. Mc DanielKathleen M. Mc DonoughPreston McGowanPenny L. McGuireMonique L. McKeonMichelle McLaughlinEdward J. McLoughlin, Jr.Joanna B. McNamaraNeil W. McPhersonRobert MeolaAllison W. MetaScott D. MeyersAnn M. Minzner ConleyJoseph D. MiskellAndrea M. MollicaGregory E. MonroeTerry D. MontgomeryMichael K. MooneyPaul N. MorrissetteRichard P. MunsonPatrick P. MurphyGerald MyersRuth T. NelsonJennifer K. NewsomCatherine J. NikodenDaniel NoceraDavid B. Norris, Jr.Nancy A. O’DonnellStephen S. OhThomas P. OlsonMichael D. OppeJohn S. OsabenCatherine M. PadalinoPeter PalermoMichael PalumboChristopher Parker

Chubb & Son, a division of Federal Insurance Company

OfficersChairman, President andChief Executive OfficerJohn D. Finnegan

Lead DirectorJames M. Zimmerman

Vice Chairman andChief Operating OfficerJohn J. Degnan

Executive Vice PresidentsNed I. GerstmanRobert M. Witkoff

Executive Vice President andChief Financial OfficerRichard G. Spiro

Executive Vice President andGeneral CounselMaureen A. Brundage

Senior Vice PresidentsDaniel J. ConwayFrederick W. GaertnerPaul R. GeyerMark E. Greenberg

Andrew A. McElwee, Jr.Glenn A. MontgomerySteven M. Versaggi

Senior Vice President andChief Accounting OfficerJohn J. Kennedy

Vice PresidentsStephen A. FullerThomas J. GanterMarc R. HacheySunita HolzerMarylu KorkuchThomas J. Swartz, IIIThomas J. Walsh, Jr.

Vice President, CorporateCounsel and SecretaryW. Andrew Macan

Vice President and TreasurerDouglas A. Nordstrom



00

OfficersMary ParzychLouise T. PatregnaniJonathan L. PensaAnthony F. PerroneAudrey L. PetersenJeffrey PetersonIrene D. PetilloMichael S. PhillipsMary Beth PittingerKristen E. PoplarRobert J. PriceRamona D. PringleJennifer L. ProceJames H. ProferesHeidi L. ProodianWilliam J. PuleoDavid L. PychMarlin J. QuickRobert S. RaffertyRichard D. ReedRichard P. ReedRobert ReedyWalead A. RefaiJames L. Rhyner

Merrily RiesebeckGary V. RispoliNicholas RizziMark J. RobinsonAnne RoccoEdward F. RochfordBenjamin J. RockwellMarylou RoddenThomas J. RoesselJorge A. RosasJune A. RoseVictoria S. RossettiJeffrey W. RyanRuth M. RyanCarolyn M. SalapaBarbara N. SandelandsFranklin D. Sanders, Jr.Melissa P. SchefflerRobert F. SchmidMichael A. SchraerRobert D. SchuckRussell J. SchurenMark L. Schussel

Roma K. SeudatMary T. SheridanLeigh A. ShermanKristine A. ShieldsAnthony W. ShineDonald L. Siegrist, Jr.Jason SkrantPatricia S. SmithScott E. SmithT. Clarke Smith, IIIRichard E. SoleauVeronica SomarribaVictor J. SordilloChristine M. StaronWilliam J. StickleLloyd J. StoikBeth A. StrappDorit D. StrausJacquelyn C. StrobelRobert D. StroupPatrick F. SullivanScott B. TellerJames S. Thieringer

Jonathan ThomasCharles E. ThompsonEric W. ThompsonMark L. ThompsonPeter J. ThompsonJohn J. TomaineDionysia G. ToregasRichard E. TowlePeter TribulskiJ. Tracy TuckerRoy C. Tyson, IIIRichard L. UghettaPaula C. UmreikoJ. Scott UsiltonLouise E. ValleeLouise Van DyckNivaldo VenturiniBennett C. VernieroTracey A. VispoliJohn T. VolanskiKevin M. WaldronChristine WartellaWalter B. Washington

Maureen B. WaterburyBradley J. WatsonRyan L. WatsonGregory WellsJanece E. WhiteDavid B. WilliamsGrenes Eugene WilliamsMichael A. WilliamsOwen E. WilliamsSuzanne L. WittBarbara A. WittickBert Wolff, Jr.Archyne S. WoodardGary C. WoodringSteven YacikJeffrey B. YaoDawna A. YontRegina YorkJack S. ZachariasStephen J. ZappasCynthia ZegelYelena ZeltserDominick Zenzola

Vice President and SecretaryW. Andrew Macan

Vice Presidents and ActuariesJason R. AbramsJoseph E. FreedmanScott E. HenckHye-Sook KangKevin A. KesbyKraig P. Peterson

Vice Presidents andAssociate CounselsGail ArkinMaura M. CaliendoJames W. GunsonJames SharkeyWendy TaylorRobert F. Tuohy

Chubb & Son, a division of Federal Insurance Company (continued)

OfficersChairman, President,Chief Executive Officer andChief Operating OfficerJohn J. Degnan

Senior Vice President andChief Underwriting OfficerPaul J. Krump

Senior Vice President andChief Global Field OfficerHarold L. Morrison, Jr.

Senior Vice President andChief Financial OfficerRichard G. Spiro

Senior Vice President andChief Administrative OfficerDino E. Robusto

Senior Vice President andGeneral CounselMaureen A. Brundage

Senior Vice PresidentsBrendon R. AllanStephen BlasinaStanley V. BloomPaul ChapmanIan CookAndre DallaireShasi GangadharanChristopher J. GilesChristopher Hamilton

Mark T. LingafelterFrederick W. LobdellKevin O’ShielGary C. PetrosinoDoreen Yip

Vice PresidentsJames E. AltmanPaul BaldacchinoKemsley BrennanRoger C.P. BrookhouseMichael J. CasellaAmy ChaiStephen Ming Sum ChanBay Hon ChinRichard A. CiulloWilliam C. ClarksonMichael Collins

Ann Maree CookStephen De GruchyGregory D. DoddsJonathan P. DohertyMatthew T. DoquileTin Yau FungFrederick W. GaertnerThomas J. GanterNed I. GerstmanPaul R. GeyerAndrew R. GourleyBaxter W. GrahamRick A. GrayJason HowardGeorge X.Z. HuangJohn J. KennedyMah Swee KeongHelen Koustas

Christopher R. LeesAmelia C. LynchDermot McComiskeyDavid P. Mc KeonGlenn A. MontgomeryDavid B. Norris, Jr.Rolando A. OramaSteven J. OrdEmma OsborneMatthew PasterfieldJorge A. RosasFrancis RowAndrew RussellLeo A. SchmidtJohn X. StabelosKevin M. StevensLeo TakagiSteven M. Versaggi

Kyle WilliamsRobert M. WitkoffEsther WongJeff Jun WuKiyoshi Yamamoto

Vice President and ActuaryW. Brian Barnes

Vice President and SecretaryW. Andrew Macan

Vice President and TreasurerDouglas A. Nordstrom

Federal Insurance Company

OfficersChairman, President andChief Executive OfficerEllen J. Moore

Senior Vice President andChief Financial OfficerGrant McEwen

Senior Vice President,General Counsel andSecretaryJohn F. Cairns

Senior Vice PresidentsJean Bertrand

Nicole BrouillardGiovanni DamianoPatricia EwenAndrew SteenSusan WattsDavid B. Williams

Vice PresidentsBarry BlackburnLeeAnn BoydDale ChowPaul JohnstoneGale Lewis

Mary MaloneyJeffrey MaritChristina McavellaRobert MurrayMichel RousseauZorica Todorovic

Vice President andActuaryPhilip Jeffery

Chubb Insurance Company of Canada

OfficersPresident andChief Executive OfficerMichael J. Casella

Senior Vice PresidentsJan AuerbachPaul ChapmanGardner R. Cunningham, Jr.Thierry DaucourtJohannes EttenChristopher J. GilesCarolyn HamiltonCarlos Merino

Jeremy MilesJalil RehmanFred ShurbajiBernardus Van Der VossenPaul R. Van Pelt

Senior Vice President andActuaryColin Crouch

Senior Vice President andChief Financial OfficerKevin O’Shiel

Senior Vice President,General Counsel and SecretaryRanald T. I. Munro

Vice PresidentsRon BakkerHubert BelangerThierry BourguignonBernhard BuddeRobert CageFiona CoxBijan DaftariGuillaume Deal

Kevin DochertyMark EdmondsonRichard EveleighJoaquin FraguelaAndrew FrancisLynn GeorgeDavid GibbsMarta Gomez-LlorenteBrian HardwickSimon HayterIsabelle HilaireMonique KooijmanRichard Lambert

Neil Lee-AmiesAndreas LuberichsJulie MarcelloSimon MobeyMiguel MolinaTom NewarkRene NieuwlandStuart PayneBjorn PetersenHugh PollingtonJonathan PooleFeliciano RuizHenrik Schwiening

Covington ShacklefordAlan SheilChris TaitMichael ThyssenLynn TwinnMonique Van Der LindenSophie Van Til LeedhamBrian VoslohBernd WiemannNigel Williams

Chubb Insurance Company of Europe SE

11


12

Directors

Zoë BairdPresidentThe Markle Foundation

Sheila P. BurkeResearch FacultyJ.F. Kennedy School ofGovernment,Harvard University

James I. Cash, Ph.D.Professor EmeritusHarvard Business School

Joel J. CohenRetired Chairman andCo-Chief Executive OfficerSagent Advisors Inc.

John D. FinneganChairman, President andChief Executive OfficerThe Chubb Corporation

Dr. Klaus J. MangoldFormer Member of the BoardDaimler AG

Martin G. McGuinnRetired Chairman andChief Executive OfficerMellon Financial Corp.

Lawrence M. SmallFormer SecretarySmithsonian Institution

Jess SøderbergRetired Partner andGroup CEOA.P. Moller-Maersk

Daniel E. SomersRetired Vice ChairmanBlaylock and Partners LP

Karen Hastie WilliamsRetired PartnerCrowell & Moring LLP

James M. ZimmermanLead DirectorThe Chubb CorporationRetired Chairman andChief Executive OfficerFederated Dept. Stores, Inc.

Alfred W. ZollarGeneral ManagerTivoli SoftwareIBM Corporation


Committees of the Board

Audit CommitteeDaniel E. Somers (Chair)Zoë BairdJoel J. CohenMartin G. McGuinnAlfred W. Zollar

Organization &CompensationCommittee

Martin G. McGuinn (Chair)Sheila P. BurkeDaniel E. SomersKaren Hastie WilliamsJames M. ZimmermanAlfred W. Zollar

Executive CommitteeJohn D. Finnegan (Chair)James I. Cash, Ph.D.Martin G. McGuinnDaniel E. SomersJames M. Zimmerman

Finance CommitteeJohn D. Finnegan (Chair)Sheila P. BurkeDr. Klaus J. MangoldJess Søderberg

Corporate Governance &Nominating Committee

James I. Cash, Ph.D. (Chair)Zoë BairdJoel J. CohenLawrence M. SmallKaren Hastie Williams


The Chubb Corporation15 Mountain View RoadP.O. Box 1615Warren, NJ 07061-1615Telephone (908) 903-2000www.chubb.com

Stock ListingThe common stock of theCorporation is traded on theNew York Stock Exchangeunder the symbol CB.

Dividend Agent, TransferAgent and RegistrarBNY MellonShareholder Services480 Washington BoulevardJersey City, NJ 07310Telephone (877) 251-3569www.bnymellon.com

Explanation of Non-GAAP and Other Financial Measures

Operating income is net income excluding after-tax realized investmentgains and losses. Management uses operating income, among other measures,to evaluate its performance because the realization of investment gains andlosses in any given period is largely discretionary as to timing and canfluctuate significantly, which could distort the analysis of trends.

Property and casualty investment income after income tax is a financialmeasure that management uses to evaluate its investment performancebecause it reflects the impact of any change in the proportion of theinvestment portfolio invested in tax exempt securities and is therefore moremeaningful for analysis purposes than investment income before income tax.

The combined loss and expense ratio (or combined ratio), expressed asa percentage, is the key measure of underwriting profitability. Managementuses the combined loss and expense ratio calculated in accordance withstatutory accounting principles applicable to property and casualty insurancecompanies to evaluate the performance of the underwriting operations. It isthe sum of the ratio of losses and loss expenses to premiums earned (lossratio) plus the ratio of statutory underwriting expenses to premiums written(expense ratio) after reducing both premium amounts by dividends topolicyholders. Statutory accounting principles applicable to property andcasualty insurance companies differ in certain respects from generallyaccepted accounting principles. Under statutory accounting principles,policy acquisition and other underwriting expenses are recognizedimmediately, not at the time premiums are earned.

Net written premiums growth (decrease) excluding the impact ofcurrency fluctuation is used by management to evaluate the trends in netwritten premiums, exclusive of the effect of fluctuations in exchange ratesbetween the U.S. dollar and the currencies in which our internationalbusiness is transacted. In net written premiums growth (decrease) excludingthe impact of currency fluctuation, the effect of fluctuations in the exchangerates is excluded as these rates may fluctuate significantly and could distortthe analysis of trends. Net written premiums growth (decrease) excluding theimpact of currency fluctuation is determined by using the same exchangerate to translate each foreign currency denominated net written premiumamount in both periods.

Return on equity is the ratio of net income divided by averageshareholders’ equity. Average shareholders’ equity is the average of thebeginning and all quarter-end balances within the year.

Photography: Peter Vidor


The Chubb Corporation15 Mountain View Road, P.O. Box 1615Warren, New Jersey 07061-1615Telephone (908) 903-2000www.chubb.com


2009 ar text 03012010 gac224.qcx:layout 1 3/1/10 11:18 am ... · w...

Documents