Annual Report 2001 - Chubb Group of Insurance Companies

underwriting results were proÑtable in 2001 as evidenced
by a 95.3% combined loss and expense ratio.
Executive protection results were proÑtable in each of
the past three years due to favorable development of
prior year loss reserves, particularly in the directors and
oÇcers and Ñduciary liability components. However,
proÑt margins have narrowed in the most recent
accident years. Our employment practices liability business
for large employers was unproÑtable in each of the
past three years. Overseas results were modestly unprofitable
in 2001 due to several large directors and oÇcers
liability losses, compared with highly proÑtable results in
the prior two years.
1997
1998
1999
2000
2001
160%
140%
Specialty Insurance
NET PREMIUMS WRITTEN (in millions of dollars)
Executive Protection
$1,503
$1,576
Financial
Institutions
$1,796
* Excludes Reinstatement Premiums Related to
September 11 Attack
COMBINED LOSS & EXPENSE RATIOS
Other
Other
$2,270
$2,454*
Our Ñnancial institutions business was proÑtable in each
of the last three years due to favorable loss experience in
the Ñdelity component of this business. Results from our
errors and omissions business were unproÑtable in 2001
due to an increase in loss severity. The standard
commercial business written on Ñnancial institutions
produced proÑtable results in 2001 compared with
120%
100%
80%
60%
1997 1998 1999 2000 2001*
* Excludes Impact of September 11 Attack
Financial
Institutions
Executive
Protection
breakeven results in 2000 and unproÑtable results in
1999. We have in force several gas forward purchase surety
bonds similar to those issued to Enron. The total
Results in our other specialty classes were highly
amount of bonds with one principal is $570 million,
unproÑtable in 2001 due to the Enron surety losses. which far exceeds the combined amount of all other
Excluding the Enron surety losses, other specialty results similar surety bonds. The principals under these surety
were near breakeven in 2001 compared with unproÑta- bonds continue to perform at this time and we have no
ble results in 2000 and proÑtable results in 1999. Our reason to doubt their continued ability to perform.
reinsurance assumed business generated by Chubb Re
produced a modest underwriting loss in each of the past LOSS RESERVES
three years. Aviation results were highly unproÑtable in Loss reserves are our property and casualty subsidiaries'
each of these years. We have reduced our participation largest liability. Loss reserves at December 31, 2001
in aviation business which will reduce our exposure to included signiÑcant amounts related to the September 11
any future losses.
attack and to our Enron surety exposure. The components
of loss reserves were as follows:
Surety results were highly proÑtable in 1999 and 2000
and, excluding the Enron surety losses, were highly
proÑtable in 2001. As a result of disarray in the surety
reinsurance market caused in large part by the Enron
bankruptcy, the availability of surety reinsurance in the
near term will be signiÑcantly reduced. As a result, our
future surety results could be more volatile.
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