Annual Report 2005 - Chubb Group of Insurance Companies

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The Chubb Corporation In 1882, Thomas Caldecot Chubb and his son Percy opened a marine underwriting business in the seaport district of New York City. The Chubbs were adept at turning risk into success, often by helping policyholders prevent disasters before they occurred. By the turn of the century, Chubb had established strong relationships with the insurance agents and brokers who placed their clients’ business with Chubb underwriters. “Never compromise integrity,” a Chubb principle, captures the spirit of our companies. Each member of the Chubb organization seeks to stand apart by bringing quality, fairness and integrity to each transaction. The Chubb Corporation was formed in 1967 and was listed on the New York Stock Exchange in 1984. Today, Chubb stands among the largest property and casualty insurers in the United States and the world. Chubb’s 10,800 employees serve customers from offices throughout North America, Europe, South America and the Pacific Rim. The principles of financial stability, product innovation and excellent service combined with the high caliber of our employees are the mainstays of our organization. Contents 1 Letter to Shareholders 8 Chubb’s Global Field Operations 20 Employee Profiles 22 Corporate Directory 25 Form 10-K On the cover: Texans Red and Charline McCombs depend on Chubb to insure their elegant home, antique furnishings and collections. See page 14.
Letter to Shareholders John D. Finnegan, Chairman, President and Chief Executive Officer Dear Fellow Shareholder: Net Income ($ in millions) 1900 $1,826 I am pleased to report that 2005 was our third consecutive year of $1,548 record results despite higher than expected catastrophe losses. Net income grew to $1.8 billion, and net income per share rose to $8.94. Operating income, which we define as net income excluding realized investment 950 $809 gains and losses, increased 13% to $1.6 billion. Operating income per $112 $223 share grew 6% to $7.73. 0 2001 2002 2003 2004 2005
Page 1: THE CHUBB CORPORATION Annual Report
Page 5 and 6: Letter to Shareholders John J. Degn
Page 7 and 8: Letter to Shareholders With the imp
Page 9 and 10: Letter to Shareholders • In Janua
Page 11 and 12: Featured in this year’s report ar
Page 13 and 14: California From the moment they dec
Page 15: Pennsylvania Among acoustic guitari
Page 18 and 19: Canada Ellen Moore, Canada Aglobal
Page 20 and 21: Nebraska Timothy Szerlong, U.S. Nor
Page 22 and 23: Employee Profiles Meet six Chubb ma
Page 24 and 25: Chubb & Son, a division of Federal
Page 26 and 27: The Chubb Corporation Directors Zo
Page 28 and 29: CONTENTS ITEM DESCRIPTION PAGE PART
Page 30 and 31: Indemnity), Executive Risk Specialt
Page 32 and 33: those reinsurers with strong balanc
Page 34 and 35: ANALYSIS OF LOSS AND LOSS ADJUSTMEN
Page 36 and 37: that is of value to the insured. Th
Page 38 and 39: Another area of potential regulatio
Page 40 and 41: However, there are inherent limitat
Page 42 and 43: Intense competition for our product
Page 44 and 45: Purported class actions arising out
Page 46 and 47: PART II. Item 5. Market for the Reg
Page 48 and 49: Item 7. Management's Discussion and
Page 50 and 51: ‚the eÅects of disclosures by, a
Page 52 and 53:
PROPERTY AND CASUALTY INSURANCE A s
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Net premiums written by business un
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loss ratio. Losses from catastrophe
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premiums, multiple peril premiums w
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Our specialty insurance business pr
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District of New York. We are cooper
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Our loss reserves include signiÑca
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We regularly review the loss reserv
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theory, insurance coverage is deeme
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The following table presents the nu
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alance sheets and superior underwri
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On an after-tax basis, property and
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CORPORATE AND OTHER Corporate and o
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The writedowns of Ñxed maturities
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Ratings Chubb and its insurance sub
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The above table also excludes estim
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At December 31, 2004 Total Estimate
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Item 8. Consolidated Financial Stat
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PART III. Item 10. Directors and Ex
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SIGNATURES Pursuant to the requirem
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THE CHUBB CORPORATION INDEX TO FINA
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THE CHUBB CORPORATION Consolidated
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THE CHUBB CORPORATION Consolidated
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NOTES TO CONSOLIDATED FINANCIAL STA
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In 2005, the Corporation transferre
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(b) The components of unrealized ap
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(7) Unpaid Losses and Loss Expenses
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In establishing toxic waste reserve
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(b) Interest costs of $134.8 millio
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(11) Stock-Based Employee Compensat
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The following table sets forth the
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(13) Commitments and Contingent Lia
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Revenues, income before income tax
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(17) Fair Values of Financial Instr
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In the event that any person or gro
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THE CHUBB CORPORATION Schedule I CO
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THE CHUBB CORPORATION Schedule II (
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THE CHUBB CORPORATION Schedule III
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Exhibit Number THE CHUBB CORPORATIO
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Exhibit Number Description 10.18 Am
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Exhibit Number Description 10.44 Fo
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Exhibit 23.1 THE CHUBB CORPORATION
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Exhibit 31.2 I, Michael O'Reilly, c
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Exhibit 32.2 CERTIFICATION OF PERIO
Page 140:
The Chubb Corporation • Annual Re
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Annual Report 2005 - Chubb Group of Insurance Companies

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